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Overhaul the system to stem failure

The Chief Vigilance Commissioner, N. Vittal, has over the past weeks succeeded in significantly rocking the boat – or perhaps more accurately, the luxury liner – of the deeply entrenched brotherhood of corruption in India. We have reports of Members of Parliament seeking to exclude themselves from the CVC’s jurisdiction, the government itself denying as ‘false and baseless’, Vittal’s public disclosure of allegations of tax violations by the hawala accused, including four Union ministers, and a number of State administrative officers’ associations protesting against his strategy of exposing the identity of the corrupt over the Internet. There is now some evidence that the fight-back may well have begun, and motives are widely being ascribed to the CVC’s initiatives – usually the first move in a smear and destroy campaign. The most uncharitable comment so far has been that he is trying to be ‘another Seshan’, looking for cheap publicity and self-projection. This is unfair both to T.N. Seshan and to Vittal. The worst of Seshan’s critics would have to concede that he did have a noticeable impact on election malpractices – an impact that is progressively being whittled away, often through the intervention of the Courts. And there is now little doubt that Vittal is getting under the skin of the corrupt.

It is important to remember that, as regards anti-corruption measures, India is a veritable novice. No government or institution in the past has made even a fleetingly serious effort to tackle the problem – other than at the level of making an example of a few subordinate officials – and even the judiciary has had an extremely formalistic approach to the few prominent cases that have been brought up before it. The recent conviction of an IAS officer in Tamil Nadu – the first in the State’s history – and the successful prosecution of Jayalalitha in the Pleasant Stay Hotel case are extraordinary breakthroughs. Nevertheless, their handling, particularly in the latter case, remains problematic, and the charges of a ‘politically motivated’ prosecution – irrespective of their truth – are beginning to stick in the public mind. This is both unfortunate and dangerous, and it is clear that governments have a great deal to learn about handling politically sensitive cases. The example of the Janata Party’s mishandling of allegations against Indira Gandhi in the post-Emergency era, and her ‘reconstruction’ as a national leader through the politically orchestrated showcase of the Shah Commission, underlines the danger of mixing politics with what is in essence an issue of law. Any political coloration to the anti-corruption campaign automatically defeats its purpose. It is, consequently, crucial that whatever is done should be seen to be done by an agency that is completely incorruptible, impartial and just, and whose operations are entirely transparent.

The difficulty here is that – with extremely feeble precedents – fighting corruption is completely unchartered territory, and any institution or individual who takes an initiative in this direction is bound to appear, at least in some of his actions, rather quixotic. This is a burden the CVC will have to bear. At the same time, it is essential for him to be highly flexible and responsive to public perceptions, lest the entire enterprise is undermined by a failed media exercise.

The exposure of individual wrongdoing – however high the individual or grave his transgressions – can only be a small part of the campaign against corruption. The CVC will, eventually, have to address the systemic failures that create the opportunities and imperatives for corruption – and worse, virtually penalise honesty. This may not lie within the CVC’s existing mandate, but creating an awareness of the character and penetration of this cancer certainly does. Superficially, it may seem that people know enough about corruption, and that it is the solution that is elusive. But this is far from the case – public attitudes are, in fact, the most insidious and corrosive part of the problem.

First, the sheer enormity of the danger is not understood. Corruption is not only an economic, legal and political problem, it constitutes a direct threat to national security and integrity. Any doubts on this count should be laid to rest by the clear linkages that existed between actors in the hawala case and terrorist groupings in Kashmir. It was only after the arrest of a Hizbul Mujahiddeen ‘Deputy Chief of Intelligence’ that a ‘money trail’ was discovered leading right up to some of the highest offices in the land. Corruption is, today, not only as grave a danger as terrorism, it often supports, encourages, and is indistinguishable from the latter.

Corruption, moreover, is not just about ‘bribe taking’. It comprehends a collective enterprise that goes far beyond government officials and politicians. India could, indeed, well be described as a vast and intricate co-operative of corruption. According to some estimates, the ‘black economy’ in the country constitutes as much as 60 per cent of total economic activity. In disturbed and terrorism affected areas this proportion would be even higher. This – and not the amounts taken or given as bribes – is the accurate index of corruption. The black economy creates an immense protective umbrella over the entire gamut of corrupt, criminal, subversive and anti-national enterprises that threaten the development, stability and security of the Indian republic. Worse still, this economy blurs the borders between legal and illegal businesses, allowing the latter to thrive under the cover of a wide spectrum of perfectly licit corporations, industries, entities and activities. It is fairly evident that few among India’s elite – or even the middle classes – have remained entirely untainted by this contaminating influence. A recent dispute between the Confederation of Indian Industries and some public sector banks resulted in the disclosure of a list of defaulters who had simply defrauded these banks of thousands of crores of rupees. The list read like a veritable who’s who of Indian Industry, and included some of its most revered names.

Underlying this comprehensive failure of character is our attitude to corruption. Whenever a leading industrialist is raided or prosecuted for tax evasion or financial fraud, there is a veritable cacophony of protests in the visibly controlled Press, and the argument is advanced that ‘economic offenders’ should not be treated as criminals. But what precisely is the difference – other than the scale of operations – between a thief and an ‘economic offender’. Both are simply helping themselves to what does not legally belong to them. If the one can be sent to jail for misappropriating a few hundred rupees, why should the other be exempted for ferreting away millions? And yet, ‘public opinion’ has stood firmly against any attempt to, in a sense, ‘criminalise’ economic offences and mandate prison sentences for such offenders.

Clearly, making an example out of a few corrupt politicians and administrators is not going to solve a problem that goes into the very core of the prevailing national psyche. While this consideration should not prevent us from making such an example, it should also impel us to explore the larger and systemic changes that are required to contain the black economy and its attendant criminal enterprises. A rationalisation of tax structures and complete transparency of all economic activity are the first imperatives in this direction. A great deal of hypocrisy and posturing has characterised taxation in India. Thus, absurdly high rates of taxation and ridiculously low rates of tax realisation – for example, under two per cent of the Indian population pays income tax – have been entirely consistent with our ‘socialist’ pretensions. Outright denial also marks our attitudes when it comes to a number of obviously inescapable activities that are illegalised. For instance, the rules on electoral and political expenditure are completely inconsistent with the reality and necessity of these activities – and it is this inconsistency that, at least sometimes, forces politicians and political parties into dubious transactions and deals like the hawala case. It is not possible, here, to list all the areas of such irrationality in our legal and economic regime, but it should be clear that our efforts to contain the canker of corruption are doomed to failure unless we change the very basics of this system.

(Published in The Pioneer, February 19, 2000)





Copyright © 2001 SATP. All rights reserved.