So, what all is included in Corruption…in India ?

This article covers the scope and types of corruption in India as well some trends. We shall attempt to cover proposed solutions in a separate piece.

Corruption is defined in Webster Dictionary as “Dishonest or fraudulent conduct by those in power, typically involving bribery” or “The action of making someone or something morally depraved or the state of being so.”

The first definition is more transactional and easy-to-understand. The second one is more encompassing and could transcend beyond simple acts of bribery etc – that is almost a commentary on the moral fabric of the society.

I shall focus on the first definition in this piece, but would love to pick up the second one at a later time. To the first definition, I shall be adding below a few more types of corruption which may not explicitly involve a bribe being exchanged, but involves embezzlement of funds or avoiding taxes.

Even the first definition is shockingly one-sided and implicates the “bribe taker” as the corrupt person. But as is increasingly being discussed, the bribe-giver is part of this act and may not be as guilty as the taker, but is not clean either.

Corruption typically “happens” in transactions of a few types in India, which I shall try to cover here:

1. Common man bribing a Govt official for personal benefits
Govt official here is a loose term covering the Traffic cop, civil servants, employees of municipal corporations, PSU employees. This would typically be done for speeding up some process or to circumvent some “problems” in paper-work. Many of us must have experienced this in the passport office in the 1990s, when no amount of paper-work used to be correct and each visit was spent standing in three different queues. Others may have seen this while making a birth certificate, marriage certificate. There are some such incidents when wealthy people want to skip queues in crowded places – these could be Tata Memorial Hospital or even Siddhi Vinayak temple. There was a Maharashtra ST Bus officer who used to make us kids visit the office 3-4 times before he would give us the students pass – we used to call him the Na-pass officer – it only dawned to me many years later that he must be seeking (and getting from some) something in return to give the pass in one visit…and he was not such a jerk after all, as much as we thought him to be. Yes sir, he was not a jerk, he was just looking for a perk.
This type of corruption might be the highest in terms of numbers of instances since these affect a billion people in the country, but as you would see from description of other types, this type may not be the biggest in terms of total “Amount Under Corruption” (AUC) because the per transaction value of this type of corruption won’t be so high.

2. A Private sector business owner bribing a politician / bureaucrat
According to me, this is the most dangerous type of corruption since the amounts involved are quite significant. Also, typically, this would mean giving some government contract to an undeserving private sector company. This would also mean a better company would have got the short shrift. Further, the quality of the final product – possibly, a road, port, hospital may come out sub-standard and could be a potent risk to the lives of people. This will be the final outcome since the company having paid a significant amount to get the contract will cut corners on quality to make up for that amount.
This type of corruption also covers influencing regulation itself when policies are being made – it has been alleged that the policy has been brought out to favour one or a group of companies, which rules out another bunch of companies from being eligible itself.
Examples of transactions falling under this category are 2G scam, Bofors, Koda case of Jharkhand, Mining scam of Karnataka, bullet-proof vest scam of Mumbai police, buying 10x expensive time-pieces in Commonwealth games, buying coffins for army jawaans, MIG/Sukhoi problem (or if there’s no problem in sourcing these aircrafts, then in the training programs of airforce procurement department or that for pilots).

3. Pvt sector Company employees bribing a Govt official for speeding up transactional processes or for “looking the other way”
These cover smaller transactions that private sector companies have to get done in the course of their normal business. The recipients are smaller than a politician or a civil servant but typically cover local Govt officials, cops etc.. This type of corruption cover instances like Restaurant owners giving money to Food Authorities for getting clearances, small shops and establishments giving hafta to the local cops, especially if there is some problem in their legality and existence.

4. A Private sector business owner bribing PSU management
This arises in case some business owner needs a loan from PSU banks and his paper-work is not perfect. Or at a larger scale, by private sector companies influencing Govt incumbents in the same sector to slow down their business – could have been seen in the decline of companies like BSNL, Air India. Sometimes the same is affected by influencing regulation at the Govt level and the poor incumbent does not even know what hit them. But the earlier example of private sector business owners reaching out to PSU officials directly is one grade worse in the moral scale, in my mind.

5. Politician or Govt official taking away funds meant for giving to the common citizens or for creating facilities for them.
This possibly is allegedly the largest item in AUC terms (Amount Under Corruption). This covers siphoning of funds budgeted by central and state government and let only part of that reach the intended section of people. The number quoted in some newspaper articles was that out of 250bn $ of funds ear-marked for such developmental purpose, only 100bn$ eventually reaches the people. That’s why I am not confident that the people in power will ever let Projects succeed like UID-Addhaar and direct transfer to bank accounts.

This type of corruption includes fodder scam in which thousands of crores never reached people, PWD engineers making roads to nowhere, medical supplies never reaching Govt hospitals.

6. Avoiding paying taxes by not declaring correct taxable income
This is again a rampant type of behavior, especially in cash businesses like retail shops, restaurants, tour and travel. This would also cover supposed icons like film stars, sportspersons who might decide to under-report income. At a more sophisticated level, large companies may develop multi-layered multi-jurisdiction company structures to avail themselves of loop-holes in tax laws and avoid large sums of taxes. The salaried class – middle class or higher – get stuck with the responsibility of contributing taxes for building roads, schools, hospitals…and clearly, that’s not enough.

Some reports indicate that almost Rs 1 lac crore of benefits are given away per year through the above routes. Make no mistake – all this comes at the cost of potholes on roads not getting repaired, medical supplies being short in government hospitals, heart attack patients dying in ambulances in traffic jams, no toilets for half the country. If you are reading this on your personal computer or smartphone, then chances are that you may not be affected by many of these problems stated above. But one day, we will ourselves get stuck in some cop problem or a bomb blast (no funds to invest in security), and possibly then start getting angrier at the Rs 1 lac crore per year getting wasted and not having been invested in these areas.

A 2005 study done by Transparency International (TI) in India found that more than 50% of the people had firsthand experience of paying bribe or peddling influence to get a job done in a public office (Wikipedia).

The good news is that some surveys show that corruption is reducing in India as the country is becoming richer. I had read in an article some months back in ToI by Swaminathan Ankalesaria Aiyar in which he had mentioned that the annual corruption perception index (Transparency International (TI)) for India had improved from 2.75 to 3.3 over 15-year period ending 2010. This index is on a scale of 10 – higher the index, lesser corrupt is the country.

Another survey he had mentioned done by CMS suggested that the proportion of Indians saying they paid a bribe in the 12 months literally halved from 56% to 28% between 2005 and 2010. The CMS survey had covered four government services – the public distribution system for food, education, water supply and health.

So, unfortunately, corruption in India does not seem to be relegated to a few powerful types. It seems to have permeated the mass DNA. Fortunately, majority of the millions “giving bribes” to petty officials are doing that involuntarily and would love to stop if the Govt rules and processes are stream-lined and made transparent. Some work is being done by central and state Govts in this regard.
Computerisation of records and putting them on internet is solving half of these problems. Right to Information is another superb tool brought about by the Govt as a deterrent to such acts. For me, when the RTO cop stops taking bribes, we will win. But chasing big guys only is not enough. Gandhi-type evangelization is possibly required.

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