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India tries to root out bureaucratic
corruption
By Indrajit Basu
Last week,
India's Central Bureau of Investigation (CBI) arrested I
P Venkataraman on charges that he had somehow managed
since 1983 to work full-time simultaneously as a senior
official for both India's federal government and the
Karnataka state government and be promoted in both jobs.
For a full 20 years, the CBI charged, the
55-year-old Venkataraman had worked as a scientist in
the government's prestigious National Aerospace
Laboratories and as an assistant controller with the
Karnataka state government’s department of legal
metrology (weights and measures). He allegedly attended,
albeit irregularly, the offices of both government
organizations, which are situated in the same city.
Audacious as it may seem, the Venkataraman
affair is emblematic of the work culture - or the lack
of it - in India's vast bureaucracy. It is a culture
that has plagued the country ever since India separated
from the British Empire in 1949. His ability to
illegally retain two senior government jobs despite
prolonged spells of absence demonstrates the corruption
and inefficiency endemic to the country's 20-million
strong civil servants.
Alarmed by the increasing
menace of corruption and lack of deterrence, the office
of Prime Minister Atal Bihari Vajpayee has established a
committee to explore revamping the civil service to
conform to best global practices. A government source
says that the committee's blueprint for revamping the
civil services to bring in best global practices
"promises to turn the bureaucrats' world upside down".
Notwithstanding the fact that India's civil
servants take their cues from their politicians, who
rank amongst the world's most corrupt, the government is
pushing ahead with reform. Under the plan, performance,
competence and specialization would replace seniority,
automatic promotion, and job security. Nonperforming
government officers would be forcibly retired at the end
of two decades of service. The committee has also
identified and recommended a separation scheme for
administrative, police and forest department deadwood.
Three categories of officers are to be counted
as deadwood: the medically unfit, those who have faced
three vigilance inquiries, and those who fail to receive
promotions after a maximum of three attempts. "Very
simply, we are reaching a point of no return," says a
critic. "It is up to the political leadership to decide
if India is to be a just society or force its citizens
to be party to crime."
Lack of accountability
and patronage of corrupt politicians and greedy
businessmen have made the Indian bureaucracy a law unto
itself. History says the Indian bureaucracy owes its
origin to the colonial period when the British rule did
not trust its Indian subjects and made rules for each
eventuality. To create and administer such a regulatory
regime, they created an all-pervasive bureaucracy that
has survived even to today in all of its forms.
Transparency International, a global watchdog
body, ranked India at a low 73 out of the 102 countries
in its Corruption Perception Index, while the World
Economic Forum ranked India 44 among 49 countries
surveyed. One recent study by the Center for Media
Studies, New Delhi, on corruption in urban services
reveals that "nearly half of those who avail the
services of the most frequently-visited public
departments of government in the country have had first
hand experience of greasing palms at least once". It is
this pervasiveness that has forced many to charge that
bureaucrats have "created such a steel frame around them
that even the might of the state can't dismantle it".
It isn't that the Indian civil service has
assumed new powers. Rather, post-liberalization
government officers have realized that their decisions
can make others rich. Their logic: If greedy Indian
businessmen can evade taxes, influence policies and make
money through devious means, why should not the
government officer who moves their files get a share of
the booty?
It didn't come as much of a surprise
therefore, when a recent secret survey conducted by a
government agency found that over 100 very senior
secretary-level government officials have joined, either
as full-time executives or as board members, companies
with whom they had done official business.
Besides lack of accountability and transparency,
inadequate salaries appears to be one of the main
reasons for the growing corruption in India. On average,
a secretary-level officer takes home a mere US$521 per
month plus subsidized accommodation and transport, which
many consider grossly inadequate to maintain an average
family of four. Middle and junior level officers get
even less.
Others say yet another big reason for
bureaucratic corruption in India is the country's
lopsided administrative structure. Although India has
more than 17 million state and federal government
employees, about 20,000-odd federal officers control the
collection and disbursement of over $71 billion of
federal revenues every year. Of these, 6,000 senior
administrative officers and an equal number of revenue
officers dictate the flow of funds throughout the
country.
Even if a handful of these officials
were to allow 10 percent leakage in revenue, it would
cost the government $7 billion. And, assuming corrupt
officials get a cut of just 10 percent, the Indian
bureaucracy gets over $700 million a year - the amount
of money that the Central Bureau of Investigation
estimates is spent towards greasing the palms of Indian
bureaucrats.
Nonetheless, corruption is not just
an India-centric phenomenon; it is a global problem. It
was a concern discussed in detail even at the recent G8
summit. However, what worries India is its spread and
magnitude. Perhaps Naresh Chandra, a former high-level
government officer and India's Ambassador to the United
States, wasn't exaggerating when he said, "the size of
the problem is far worse than the exaggerations of the
most cynical".
Between 1996 and 2000, the CBI
and the Central Vigilance Commission investigated 13,265
individuals for corruption. And, between 1998 and 2001,
the CBI registered 2,256 cases under the Prevention of
Corruption Act. Of these 41 were from administrative
departments, four were from the police and 23 from the
revenue department.
Corruption in Indian
bureaucracy has now come to be accepted as part of the
machinery that governs India. Millions are at the
receiving end of this phenomenon in their every day
lives, whenever they come in contact with any arm of the
government at any level anywhere in India. But the
categories that are affected most are businessmen,
investors, including foreigners, and foreign travelers.
"Although the investment climate in India has
improved over the last decade," says Mathew Thomas, a
German information technology entrepreneur of Indian
origin, who has been trying to establish a venture in
India for the last 18 months, "the world has moved on
and we are perhaps not keeping pace. And the biggest
frustration for potential investors into India is the
bureaucracy."
According to Thomas, even in
sectors where 100 percent foreign ownership is allowed
under the so-called automatic route, a non-resident
Indian (NRI) corporate investor like him must get
Foreign Investment Promotion Board (FIPB) permission to
purchase even one share in an Indian company, even if
the owners of the shares are willing to sell at an
agreed price.
"Curiously, if the same NRI
investor were to subscribe to the equity of the company
as a personal investor, there is no need to obtain FIPB
approval," he says. "FIPB is supposed to meet once a
week. If the finance secretary who is the chairman is
not available, the meeting is adjourned to the following
week."
"But the saga doesn't end there," Thomas
adds. "The company then has to apply to the federal
bank, the Reserve Bank of India for its approval for
receiving foreign exchange into the country. They also
raise their own questions. New RBI rules do not allow
anyone to go and meet the officer concerned to deal with
any queries. Therefore, all queries have to be dealt
with through correspondence. In RBI it takes 10 days for
a file to move from the reception to the section dealing
with foreign direct investments, which is located on the
eleventh floor of the same building."
Therefore,
according to Thomas, complicated procedures like these,
typically result in delays of three to four months for
even the initial process to get completed by when,
"market conditions change and so do the economics for
investments".
(Copyright 2003 Asia Times Online
Co, Ltd. All rights reserved. Please contact content@atimes.com for
information on our sales and syndication policies.)
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