Thursday, September 02, 2010

A Lost Nation

This post was triggered by this innocent mail from one of my students
Sir, i want to know your views regarding corruption in CWG (Common Wealth Games).

I read that a lot corruption is happening in CWG? like
1:Renting a chair for Rs 8400.
2:Renting a 100 litre refrigerator for Rs 42000.
3:Buying a roll of tissue for Rs 4100.
4:Renting a treadmill for Rs 10 lakh.

sir,is it a reality that such kind of corruption is happening.
If India is unable to host CWG well...sir it would be a really shame for our country..

DO u think India did right in hosting CWG despite the fact that we lack infastructure to host such big event???
Got me thinking and Googling - here are some randomly organised results (brace yourself for a long post)

Chattisgarh government decided to grant exploration and mining rights in a dozen iron ore-rich pockets in Hahaladdi to a Rs one-lakh firm with zero experience (later quashed by the courts). The underlying method is that such companies would sell the mining rights at obscene profits to real mining companies. Who will be the beneficiary - well !! if someone goes deep one shall invariably find the same officials/politicians who awarded the rights in clear violation of rules/laws.

(Source - TOI)
The mining scam in Karnataka could easily be worth Rs 2,500 crore (Rs 2.5 billion) says Justice Santosh Hegde, the state's Lokayukta, who has been investigating the scam for the past three years.

The scale of corruption is of a magnitude that India has not witnessed, he says. Chief Minister B S Yeddyurappa has recently admitted that 35 lakh (3.5 million) metric tonnes of iron ore have gone unaccounted for. Let us not just sit back and think that is the entire extent of the scam.

(Source - rediff)

MP CM Mr. Chouhan is now in the eye of a storm over an alleged Rs 100-crore land scam in Indore. Ever since an anti-corruption court in Indore on April 6 ordered the Lokayukta to register a case and probe the allegations against his Commerce & Industry Minister Kailash Vijayvargiya, regarded as Chouhan's second-in-command. He is accused of clearing the sale of a plot of land owned by the Indore Municipal Corporation (IMC) while he was mayor in 2004.

The IMC had leased out the three-acre plot in downtown Indore to Dhanalaxmi Chemicals for 30 years in 1980. It is alleged that Vijayvargiya had presided over the sale of lease to Nanda Nagar Credit Cooperative Society headed by his lieutenant and MLA Ramesh Mendola for Rs 1.28 crore while the prevailing market price was more than Rs 65 crore. Mendola was a member of the mayor-in-council of the IMC. It is alleged that since the industry was a mere tenant, it had no right to sell the lease, nor was the IMC empowered to sanction it.
(Source -
The biggest corporate scam in India has come from one of the most respected businessmen.

Satyam founder Byrraju Ramalinga Raju resigned as its chairman after admitting to cooking up the account books. His efforts to fill the "fictitious assets with real ones" through Maytas acquisition failed, after which he decided to confess the crime. With a fraud involving about Rs 8,000 crore (Rs 80 billion), the epicenter of the fraud has just achieved bail after incarceration of more than a year and half.
(Source - rediff)
The Telgi case is another big scam that rocked India. The fake stamp racket involving Abdul Karim Telgi was exposed in 2000. The loss is estimated to be Rs 171.33 crore (Rs 1.71 billion), it was initially pegged to be Rs 30,000 crore (Rs 300 bilion), which was later clarified by the CBI as an exaggerated figure. In 1994, Abdul Karim Telgi acquired a stamp paper license from the Indian government and began printing fake stamp papers.
Telgi bribed to get into the government security press in Nashik and bought special machines to print fake stamp papers. Telgi's networked spread across 13 states involving 176 offices, 1,000 employees and 123 bank accounts in 18 cities.
(Source - rediff)
‘Mr Lalit Modi has had a trail of failed ventures and defaults till four years back but has a lifestyle now that includes a private jet, a luxury yacht and a fleet of Mercedes S class and BMW cars all acquired in the last three years.
(Source - Economic TImes)
Actually I can go on and on and on and on....................... and then we have this current one (or has it already gotten stale) the Common Wealth Shame.

Where am I headed? We have become a country in the grips of the corrupt. A system that is Corrupt down to the last bone. And what's happening in the name of common wealth games is just one more in the series of ever larger, ever more brazen, ever more engulfing - an all encompassing corruption personifying an increasingly hollow nation with those millions of honest people - helplessly living through a maze of paying 10-20 rs. through everyday street level corruption.

So friends, the issue is much beyond the Common Wealth Games. No we did not commit any error in taking the responsibility to conduct them. And given the Indian spirit of getting things done - I have a hunch that they will be successfully conducted. Yeah !! I really believe that. The issue is that we are fast turning into a country where your very survival is going to depend on how many politicians, goons and Policeman are you networked with (read - how many of them are greased by you). And how do you grease their palms by just being another in the chain - use corrupt means, dodge taxes, corner deals illicitly or simply encroach in public/pvt. properties. Which means your growth will be restricted by the strength of determination to remain honest. The more honest you remain - the more rare your breed - and the more difficult for you to grow beyond what you are.

"Come on, it can't be that bad. I know of so many people who are honest in our country. " Some of you would protest.Yeah !! I also know quite a few. Most of them are not even in the mainstream of this country's affairs - keep aside they having some power to make a difference. The rare few in the establishment who try to initiate cleansing are conveniently sidelined into obscure corridors pushing papers. Tax officials, auditors, anyone "sarkari" when they visit you or check your books they assume a minimum percentage of evasion - even when your books appear to be perfectly in order. And so if everything is in order you are supposed to pay the bottom of the inverted pyramid rates (of bribe - if you did not already guess it). Nobody believes you if you claim that everything that you earn is reflected in your balance sheet. You will often get that coy smile and an irreverent - "Aisa thodi hota hai" (It does not happen in this manner).

According to an estimate the Indian black economy is 40% of our GDP. Economic Times estimates "If black money is declared by individuals or corporate houses as income, it becomes legal and would be taxed at 30%. If all the estimated black money is declared, it could generate a tax revenue of Rs 7,50,000 crore for the government! This is more than total tax collection at Rs 6,41,000 crore for 2009-10. Kumar puts the potential tax revenue figure much higher at around Rs 10,00,000 crore." The burden on the common man - honest tax payers will probably reduce by upto 80% if we are able to wipe out corruption in all its form. Ambitious??? OK !! Reduce corruption to less than half of current levels and still the common man is looking at a substantially better life.

So why does it not happen? Surely there are well meaning people who want to cleanse the rot. The problem is that the cancer of corruption is far too wide and deep, even in the Indian psyche, that small steps would not matter, neither would big action matter. Nothing short of a revolution will help this scenario. What would be the shape of this revolution - Economists have already named it - "The Third Generation Reforms".

Notice that in all cases that I listed above and in those I did not list - the villain of the case finally went unpunished. Media raked up the issue - it was fed to the masses - villain arrested/resigned/cornered, enquiry commissions, committees, investigation teams etc. appointed, and then suddenly the whole issue goes out of the media. Agencies move on to next cases and the fleeting public memory is fed with another scandal, another person/organisation. The question that faces us is what happened to the earlier cases.

There are reasons to believe that what happens is that all relevant parties right from the investigation teams, to the police to various politicians will probably be managed (read bribed) and so they will all connive to use dilatory techniques taking one step at a time, till the time an entire issue is washed out of public memory. Quietly then, toothless charges are framed, a sham courtroom drama happens which if needed can be extended infinitum and the guy in question will be released of all charges.

Yeah !! all too familiar. Whats wrong?
First, the corruption in police. Police would first like to avoid registering cases and when they do, the investigation done is sloppy. Second, slow pace of executing so many thousands of cases piling up with the judiciary.

Proactive reforms in these two critical components is probably the only way for our vibrant and functioning democrcy. Thats our last hope - the Third generation of reforms.

Reforms in policing would mean to train and motivate personnel in police to enable them to develop competence of conducting copy book investigating; paying the police force better, equipping them better with physical and conceptual infrastruture; increasing transparency by computerising police operations and  making available to public, concrete information on status of all cases/complaints registered; and to catch the lazy, slothful and corrupt from the forces and to weed them out - forget punishing them, simply retire them with all there retirement benfits - there punishing will cost the exchequer more.

Judiciary needs to be galvanised into ensuring that it includes speed as an equally important parameter to other tenets of justice. Actually it appears that in India - the speed of judicial system is poor more because of slow and sloppy investigation and meandering techniques of the legal fraternity. There might be administrative bottlenecks as well - but computerisation and online dissemination of information should help that.

I would simply end this piece by a very thoughtful quote from J Mulraj
The India story keeps looking good except for the sorry state of governance. Leading tennis players have not been paid past dues, and are threatening to boycott the CWG, yet the OC has the money to pay Rs 4000 for a toilet roll! (Several of its deals include a return of the asset after a 15 day use; one hopes the same is not the case for the toilet paper). BJP MPs are protesting rampant corruption in the mid day meal programme, and pointing to the 'unfit for human consumption' food given to school children; yet there is a surplus of foodgrain rotting in open fields for want of storage. There is enough money to hike MPs who walk out half the time from their job, but not enough to keep India in defence preparedness. The only aircraft carrier we have is inadequate and we haven't bought a major gun since the Bofors purchase. This abysmal governance is the key risk factor. Otherwise, as Aamir Khan would sing, aaaaaal is well
I hope the Government is listening and may be they will do something about it.