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Swindle land


Hit by mega scams, India has undertaken anti-corruption legislation to combat graft. Its success, writes KS Narayanan, lies in rigorous implementation
KS NARAYANAN | Issue Dated: August 2, 2013, New Delhi
Tags : UPA II | Scams | Corruption | 2G scam | Adarsh Housing scam | Westland Helicopter deal | Coal scam | Transparency International | CVC | CAG |

India since UPA II came to power in May 2009 is now widely acknowledged as a nation of scams. If galloping inflation, policy paralysis and reverting to the time-failed licence raj tactics were not bad enough, the story of illegal gratification has acquired a hue and logic of its own. What began with the Commonwealth Games (CWG) moved on to the exposure of the 2G spectrum allocations, the Adarsh Housing scam, Westland Helicopter deal, the Coal Allocations Scam, the Banking and money laundering frauds, and has its latest addition, the Railways Appointment scam.

As a result, India now ranks 94 in Transparency International's famed Corruption Perception Index, which lists 183 nations from least to most corrupt. Despite the corruption epidemic taking a heavy toll on body politic itself, efforts have made to book scamsters and undertake intense legislation to combat the scourge. This has been facilitated on two counts – first, monitoring of anti-corruption investigations by the Supreme Court of India, and second, India's international commitments.

In May 2011, India ratified the UN Convention against Corruption (UNCAC), a legally binding global agreement for transparency and accountability. A wide range of acts of corruption are covered in the UNCAC, such as bribery, embezzlement, influence peddling, and money laundering. Under its terms, a peer review is slated for India in 2014 and the central government has been working towards meeting the mandated requirements. A number of new laws have been proposed to align the Indian system as per the UNCAC, including the Right of Citizens for Time Bound Delivery of Goods & Services and Redressal of Grievances Bill. (see box for details)

For investigators, the Right to Information Act (RTI) has emerged as a bulwark against graft. Says K Saleem Ali, monitoring several important cases as special director Central Bureau of Investigation (CBI), “People are getting information and analysing it. So corruption is getting exposed. What will be the game changer is the Right of Citizens for Time Bound Delivery of Goods and Services and Redressal of Grievances Bill. Once this bill is enacted, the bureaucracy will be transformed from enforcement to delivery mode. Once it happens corruption will reduce, people will become assertive”. Pointing out that both the CBI and the Central vigilance Commission (CVC) were tackling merely one per cent of the graft cases, Ali said rest of it is in the private sector and asked corporate India to adopt the Whistle Blowers Act.

Realizing India's emergence as a foreign investment destination, the government has also stepped up its efforts to combat bribery in international business transactions. Interestingly The Prevention of Bribery of Foreign Public Officials and Officials of Public International Organizations Bill, 2011, comes down heavily on Indian business house that contracts using corrupt means. These proposed Bills are key to bringing India on par with the UK and US that have already enforced acts (US Foreign Corrupt Practices Act (FCPA) and UK Bribery Act respectively) to prevent corruption-related crimes. Experts have warned to the dangers that scandals are posing emerging economies. After high growth rates India’s GDP has tumbled to below six percent. The global consultancy firm, KPMG, contends that scandals deter foreign investment, undermine investor confidence and threaten to derail India's long-term economic growth. The multitude of scams in the infrastructure sector is characterized by complex sector regulations, large number of contractual relationships and involvement of a large number of government agencies for approvals/clearance, and significant political involvement during the entire project life cycle.

Infrastructure projects face a higher degree of public scrutiny. Recently, the Comptroller and Auditor General of India (CAG) came out with observations on NELP blocks, 2G licensing and spectrum allocation, coal block allocation, the Adarsh Housing Society allocation of flats, approval of PPP model of operations in an Airport and many other examples. The focus of these reports has primarily been on the decision making process of the government. The lack of transparency and inconsistency in decision making, combined with political interference and possible favouritism, makes bribery and corruption a rampant issue in the infrastructure and real estate sector in India.

How does India confront this vexed and deep-rooted issue? Arun Maira, Member Planning Commission stresses on the need to change the concept of values. “Value today is considered money and so the value of a company is measured by wealth. We create role models who have value in terms of money and are in a system where ends expressed in value terms justify the means”, he pointed out recently addressing the CII-OECD conference on Fighting Bribery in Business Transactions. Echoing similar concerns Dhanendra Kumar, former chairman of Competition Commission said: “Several laws may be passed but it is the overall societal culture against malpractices that needs to be improved.”

JM Garg, vigilance commissioner, CVC - the anti-corruption body that is readying a new action plan to fight the menace both in the government and business sector, acknowledges that past efforts have been inadequate. “Delays in adjudication of cases, accountability of auditing and legal evaluation firms and the need to amend bribery law to punish bribe giver, are some areas that need immediate attention,” he says.

Another significant issue highlighted by Garg is cases of corrupt Indian officials who had given green signals to several foreign projects in India in lieu of financial favours. “The CVC has knowledge of many global companies operating in India who have admitted of paying bribes in India. But the problem is how do you identify those officials, names and designations. The firms are not disclosing it in their country. In the absence of a proper law we are not able to proceed further,'' says Garg.

The vigilance commissioner also pointed how senior bureaucrats are tweaking laws and guidelines to favour one bidder or one contractor besides the issue of cost and time over-run.

Pointing out how crony capitalism has crept into the system Salil Singhal, Chairman of PI Industries and member CII called for an overarching national policy on demarcating resources for development. “There is a need for transparent and efficient independent mechanism for use of common resources for commercialisation. Such resources include land, minerals, water, spectrum, forests, etc. It is in these areas where no proper mechanism exists for apportioning and regulating the use of resources that the current troubles are arising.’’

There are some, however, who say that sound businesses can be run without paying bribes. Chanakya Choudhury, chief resident executive Tata Steel points out that “Every body wants an easy way out as there is money to make. Is industry or its stakeholders totally clean? Answer is a big No and it takes two hands to clap. All of them cannot be rotten or clean. So you have to decide you want to work with”.

Choudhury points out that Tata refused to pay bribes during the 1990’s for reviving 100 chrome mining sites in Odisha. Though there was a business loss, the company gained in upholding the values they believed in and practised.’’ For all you know, the fight against corruption in India may have just begun.

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Issue Dated: Feb 5, 2017