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T N Ninan: Kaushik had better idea

Source : BUSINESS_STANDARD
Last Updated: Fri, Oct 12, 2012 19:01 hrs

The prime minister wants to change the law on corruption. He wants to better define corruption; to tackle the problem of “consensual bribery” and the bribe-payer going “scot free”; to include corporate failure to prevent bribery as an offence; and to protect honest officers by distinguishing between bona fide mistakes and the colourable exercise of power. Manmohan Singh also made two general comments. One was on “the mindless atmosphere of negativity and pessimism that is sought to be created over the issue of corruption”. The other was the interesting link that he drew when he said “…faster economic growth and new areas of economic activity…led to newer opportunities for corruption, ones associated with specialisation and expansion of our economy”. Everyone will have his or her take on these issues; here’s mine.

First off, the assumption that those outside the government are responsible for “mindless…negativity” is contentious. And all bribery is either “consensual” or a result of extortion. More specifically, corruption cannot be rooted out without tackling political corruption, which the prime minister does not mention (perhaps a meeting of police officers was not the right forum). Every (alleged) scandal has involved politicians and/or people linked to politicians — in the spectrum scam, the Commonwealth Games, Adarsh, coal allocations, Maharashtra’s irrigation projects, and now Gurgaon real estate. While some of these individuals have been investigated and/or charged, no senior politician has addressed the rampant spoils system that has manifestly been institutionalised. Many years ago, Dr Singh headed a Congress committee to clean up political funding; nothing seems to have come of it. Instead, “coalition dharma” is now the thinly disguised code-word for sharing of loot.

Second, whatever gave the prime minister the idea that people who give bribes go scot free because the law has it that way? Officials from Reliance Communications, DB Realty and Unitech have all spent time in jail. But Dr Singh has made the broader, and important, point that companies which fail to prevent corruption must also be arraigned. This would be welcome as it would take responsibility for action all the way to the board of directors. But so much of bribery in India is with unaccounted money, or takes place overseas, that one cannot be sure this will be an effective solution. For instance, no money trail has yet been found leading to Mr Raja, so which company is to be accused of failing to prevent bribery? The Radia tapes certainly did not establish any bribery although businesses did give money to people under different guises. Will any corporate money trail be found leading to Mr Pawar?

The associated problem is that the Central Bureau of Investigation does not have a reputation for conducting probes impartially; a company could find itself subjected to a witch-hunt for extraneous reasons — indeed, even for refusing to bribe. A key problem is political control, another is the charge heard sometimes from those being investigated that officials demand bribes for letting them off the hook. So how about freeing CBI from political control and having a proper system of internal safeguards? Without that, when we already have many elements of a predatory state, adding to police powers makes the state more predatory.

The government would be better off adopting the quite different stance recommended by its former chief economic advisor, Kaushik Basu, who said that an effective way to tackle corruption would be to protect bribe-givers — thereby making all of them potential whistle-blowers and raising the risk dramatically for bribe-takers. The millions of citizens who have suffered at the hands of officialdom — being forced to pay for routine income tax clearances, land transfers, electricity connections, or other government services — will cheer the Basu solution. Another solution would be systemic reform, as with passport issuance. In short, the prime minister’s solutions are less than convincing.




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