"Is-se to peene ke paani ka bhi daam nahin nikalna" (This post will not give enough to cover the cost of water), Railway Board Member Mahesh Kumar, who is now behind bars, is heard telling Vijay Singla, the nephew of former railway minister Pawan Kumar Bansal.
The world of kickbacks is murky and difficult to unravel.
The rot runs deep. In 2012, of the 1,048 cases which CBI registered, 790 - that's more than 75 per cent - involved kickbacks received by public servants. This year, till April 30, 284 cases out of 376 - that's over 77 per cent - involved kickbacks. The Central Vigilance Commission received 7,227 complaints (including 1,696 cases brought forward from the previous year) of corruption (which includes kickbacks) against government employees in 2012. In 2011, CVC received as many as 8,805 complaints against Railways employees, followed by 8,430 against bank employees and 5,026 against income tax officers.
In the pre-liberalisation era, politicians and bureaucrats made enormous amounts of money in granting licences and permits. That source has diminished in the last 22 years, though it hasn't dried up. That's why contracts and orders have become the new Kamdhenu, the mythical cow that fulfills all wishes. Businessmen do not have a choice. One from Coimbatore, the country's engineering hub, fears that he would get blacklisted on grounds of sub-standard quality if he refuses to meet the demands.
The cases CBI is probing suggest the width of the malaise. Thus, a general manager of ONGC demanded Rs 40,000 for awarding a contract; two chief engineers and an officer of the Border Roads Organisation procured several variable messaging systems at exorbitant rates through limited tender to favour a private party, thus causing a loss of Rs 1.49 crore to the government; officers of the Department of Telecommunications, BSNL and MTNL gave undue favours to a private firm in granting licence for international long distance calls, resulting in a loss of Rs 219.62 crore, Rs 8.60 crore and Rs 15.63 crore to BSNL, MTNL and DoT, respectively; officers of the ministry of defence/army headquarters and Bharat Earth Movers favoured a private player for supplying spares for Tatra Trucks, even though he was not an original manufacturer or an authorised agent for it.
To get empanelled as an advertising agency for a government department or ministry too, it appears, one has to pay one's way through. An industry insider, who has been the image consultant for leading politicians, says: "In advertising, there are kickbacks after the contract has been handed out."
A retired officer of the Indian army says 2 to 5 per cent of kickbacks in cash are routine in the Military Engineer Services, or MES, which is responsible for providing accessory services such as military roads, water and electricity supply, drainage, furniture et cetera.
Activist-turned politician Arvind Kejriwal of Aam Aadmi Party has a point when he says: "Some departments might appear less corrupt than the others, but that's only because they have less opportunity for corruption.
Rules require all government purchases to be made through tenders. But the manner in which tenders are rigged is so simple that it's almost laughable.
"There is almost a standard formula for sharing the kickback at different levels," says Jayaprakash Narayan, former IAS officer who founded the Lok Satta Party and is now a member of the Andhra Pradesh Legislative Assembly. "The contractor makes 6 per cent down payment to the minister before bagging the contract. An additional 6 per cent is distributed among the superintending engineer, junior engineer and other officials after he wins the contract. Add to this another 3 per cent for project clearance, pollution control and subsidy clearance. That's 15 per cent in all."
Along with cash, gold and real estate are the new modes of payment.
Buying shares of a company run by the relatives or friends of a politician or bureaucrat at inflated rate is another trick.
While investigating the 2G spectrum scam, CBI also unearthed a complex money trail from DB Realty to Kalaignar TV, the DMK channel. There were allegations that Telecom Minister Andimuthu Raja (2007-10), of DMK, had favoured DB Realty in granting telecom licences and the inexpensive spectrum that came with it. Once the scam broke out, the money was returned through the same circuitous route. All the dramatis personae, on their part, have called it a genuine business deal. These aren't isolated incidents. In one case, Rs -10 shares in a politician's newly-formed company were bought for Rs 8,000 per share, says Somaiya.
Favours can also be extended by contracting the minister's or bureaucrat's relatives, friends or brokers for allied services that the company needs, like cranes, cabs or vendors. "We have hired a large number of cars from a travel agent who is close to a politician. While the market rate is Rs 10 per km, we are paying him Rs 15 a km - that extra Rs 5 per kilometre is the kickback," says a senior official of a private company which does business with the government.
A robust donation to an NGO run by a politician or his relative is another way of paying for favours. Last year, while investigating the Karnataka mining scam, CBI found that JSW Steel had donated Rs 10 crore to an NGO run by the family of former state chief minister BS Yeddyurappa.
Is e-procurement the answer to kickbacks?
But e-procurement and e-tendering is hardly foolproof. Uttar Pradesh Lokayukta Justice (retd) N K Mehrotra, who is probing several high-profile cases, including the sale of government sugar mills and allotment of farmhouses in Noida, says in most cases the tendering process was found to be unfair, even though e-tendering had been introduced. "Manipulation ensures that tenders are awarded to the minister's cronies who can divert funds at will," he says.
Chandigarh-based activist Hemant Goswami cites ways in which e-procurement and e-tendering can be manipulated. "First, advertisements inviting tenders are not placed in newspapers, national or regional. So, you limit the number of people who get to know about it." Step two: conditions like "the vendor must have an electronic or digital signature are imposed to eliminate smaller vendors. Why, even the police commissioner doesn't have an electronic signature!" says Goswami. Besides, he adds, the tender often aren't opened till the last date; the chosen ones are informed secretly about the brief period when the page will open. "Specifications for the bid are also fixed to suit a particular company." This is allegedly what happened in the multi-crore Chandigarh amusement-cum-theme park scam which CBI is now investigating.
As Narayan of Lok Satta says, "All this is not just undermining the quality of goods and fleecing the exchequer - it is eliminating integrity from the system."