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Corruption in India: People or the state?
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(The views expressed in this column are the author’s own and do not represent those of Reuters)
Corruption is again dominating the news in India. Long-standing issues, such as broad attempts to avoid taxes, have simmered back to the surface and been joined by new accusations against the wealthy, major companies, and the government. Scandals have crossed finance, property, and telecom.
Crimes have been committed and the guilty should face justice. The biggest culprit, however, faces no punishment and, indeed, is looking to further recent gains. That culprit is the Indian state.
Earlier this year, criticism began to be leveled in India at the underground or “black” economy. This includes illegal activities but also legal activities that are not declared.
All economies have black markets and developing economies tend to have bigger ones. But the size of the formal Indian economy is now such that estimates of the underground economy at 40-50% of GDP generate very large numbers, in the neighborhood of $600 billion. This, in turn, spurs outrage at black marketeers supposedly robbing the Indian people.
Except the black marketeers *are* the Indian people, tens of millions of them. And the ones being “robbed” are only the federal and state governments. Moreover, it’s often the governments’ own fault.
Banned activity doesn’t represent lost revenue for the government, since the idea is that it shouldn’t occur at all. Where revenue is lost is in legal activity that is hidden. But avoiding taxes isn’t the only or even the main reason for individuals to hide activities from the government. Rather, it’s the difficulty of setting up a business.
India ranks an awful 165th out of 183 countries in the World Bank’s measure of the difficulty of starting a business, and this is actually an improvement over previous years.
Rather than face endless delays and high costs, many ordinary Indians decide to proceed without the necessary authorization and then must hide their businesses. This black market activity is due to a predatory state which seeks to control Indian entrepreneurship.
Grabbing headlines this month was a similar story about how India has “lost” over $450 billion due to illegal capital flows. Some of this is again money raised in crimes, which was illegally earned and ideally would never have existed in the first place. The other funds are deemed lost only because the Indian federal government tries to restrict capital movement.
Despite progress in the reform era, India retains among the tightest controls on capital movement among emerging markets. What would count in most countries merely as citizens and companies investing overseas — and bringing much of the benefits back home in terms of financial returns, resources, corporate assets and so on — is not permitted in India. As happened in all economies throughout history, people followed their self-interest and invested abroad, anyway, only no benefits flowed back to India because the investment has been deemed illegal by the interventionist Indian state.
At the general level, due to the state’s jealous protection of its prerogatives, Indian entrepreneurs cannot start a business freely and cannot invest freely. It is hardly a surprise that corruption is rampant.
Indeed, the Heritage Index of Economic Freedom scores India highly in a number of important categories but very low in the connected areas of business freedom, investment freedom, and freedom from corruption.
In several particular incidents of corruption, the government’s guilt is directly apparent. The Commonwealth Games were plagued by overspending, due to lack of transparency and competition in state contract awards. State-run financials have made loans in exchange for bribes, a problem which would be eased if the state did not dominate the banking system.
The big one is telecom. Improprieties in the government’s auction of second-generation (2G) telecom spectrum may have cost as much as $40 billion in fiscal revenue.
Those government and corporate officials who did not follow the law must be punished. But lost in the outrage is the point of a telecom industry. It is not supposed to be a money-making tool for the government. It is supposed to improve people’s lives, both directly and indirectly through strengthening the economy. And the Indian telecom industry has done just that. It has outperformed expectations in its transformation of Indian society, from medicine to farming. It is a major part of the Indian success story.
There’s no telecom failure or betrayal here, quite the opposite. There’s only a failure and betrayal of federal coffers. And even there the unwarranted cheapness of 2G spectrum contributed to a far more dynamic industry and thus led directly to the government’s windfall at this year’s 3G spectrum auction.
In most cases, the state is causing the problem. In others, the problem is harm to the state, not the people. India is now wrestling with how to deal a decisive blow against corruption. The answer is plain: deal a decisive blow against state interference in the economy.
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I was looking for the name of the author and could not find it. Is it the practice on Reuters not to name the author or Have I missed it?
In any case the facts in the article are all fairly coherently put together. Except when it comes to a couple of contrived simplistic inferences toward the end, the author impresses me.
Author represents a completely diverse and fresh view on rampant corruption. India must wake up to the responsibilties that come along when it is moving towards the road to becoming the top growth eingine in the world. widespread Corruption in the political, legislatve and Judiciary can derail the whole process of development.
A different view and good thought. But corruption in India is not something new for the people. They come across it everyday. It has been unknowingly encouraged by many means.Its very different thought in this article and especially “the state is causing the problem. In others, the problem is harm to the state, not the people” wonderful lines.
This does not surprise me. I have often wondered about the success of large Indian companies. Is it true that once they get past these hurdles mentioned in this article, that they can grow unencumbered by competition?
Corruption is the business of state in India, at least most of us in India acknowledge this to be the case. The institutions of state are protected by laws that prevent their prosecution. The state(s) record on prosecuting corruption speaks for itself, India is openly considered one of the most corrupt states in the world, the misdeeds of politicians and bureaucrats are common knowledge, yet how many have suffered as a consequence?
Laws in India are created or manipulated by the state to produce more corruption. The whole system of politics is based on corruption and affiliations that are bonded by the exchange of money. There is no level too low for corruption to seep, witness the government distribution of low cost food to those on the edge of survival which is riddled with corruption from the top down and impacts the most needy in the country. Nothing escapes.
The people of India live at war with their government in a clearly demarcated “us” and ‘them” scenario. If we want something from the government we are expected to pay, whether it be a driving license or an industrial license. Nothing is due by right to the common man and those representing government consider it a right to collect.
We have democracy on one day every 4 or 5 year, at the time of an election, when the opportunity is often used to disenfranchise the incumbent government, for the rest of the time we have no voice.
The system appears to be broke and have no future in its current form, but this assumption would be incorrect. What will make the difference is a rising force of educated and informed people with access to the truth who’s numbers will increase in time and defeat the corrupt. We may have to wait a while but, we shall get there, most Indians are decent and honourable and deplore the state of our political system. Eventually the voice of the people will prevail.
Most of the communities in India (such as Bengali), are succumbed in ‘Culture of Poverty’(a theory introduced by an American anthropologist Oscar Lewis), irrespective of class or economic strata, lives in pavement or apartment. Nobody is at all ashamed of the deep-rooted corruption, decaying general quality of life, worst Politico-administrative system, weak mother language, continuous absorption of common space (mental as well as physical, both). We are becoming fathers & mothers only by self-procreation, mindlessly & blindfold. Simply depriving their(the children) fundamental rights of a decent, caring society, fearless & dignified living. Do not ever look for any other positive alternative behaviour (values) to perform human way of parenthood, i.e. deliberately co-parenting of those children those are born out of ignorance, real poverty. All of us are being driven only by the very animal instinct. If the Bengali people ever be able to bring that genuine freedom (from vicious cycle of ‘poverty’) in their own life/attitude, involve themselves in ‘Production of Space’(Henri Lefebvre), at least initiate a movement by heart, decent & dedicated Politics will definitely come up.
- Siddhartha Bandyopadhyay, 16/4, Girish Banerjee lane, Howrah-711101, India.
Today while parking my car, I was offered a token which had the registration number for some other car. It was only at the exit when the parking staff denied that I can keep the token, did I realise that how these people are running a scam, by using the same ticket to park more than 1 car.
And these corrupt people were no government officials or politicians, they were just our simple common men.
Corruption in IIT Kanpur
Everybody will be thinking that how and why I am against the administration of I.I.T. Kanpur what I have personal benefits. You are thinking, I say no? But this is not true. I wish to clearly state here that I am fully against the corruption as well as Administration till rectification in the entire process and moreover if anybody will be gainer, only & only I will. I am watching the future of our country in the students of I.I.T.K. Although I passed my childhood as well as young hood because I am aged about 60 years.
I have seen so many circumstances/incidents with my naked I in current passed in my life and became helpless with tears in eyes. The Administration in corruption still gradually day by day and the entire I.I.Tians/ Employee are watching and understand the whole process on deaf and dump.
In last Eight years, I have seen which I have not seen before? I found scene the fear able faces of either Prof. or students a unforeseen lines of their faces always, which drastically hamper their working style, who is not knowledgeable but backbone of future of our country. The knowledgeable professor/ students/administrator are forcibly set-aside. A person not know the administration rules, conducts etc. simply by a upper division clerk run the entire I.I.T.K. in the shadow of our Hon’ble Director. I became stund and curious to knowing the original picture behind the original facts. The actual facts which was run in a very planned way was simply ‘corruption’ and hidden the other unparliamently way by our Hon’ble C.P. Singh ‘Assistant Registrar’ (Legal Cell) of mercy hand of our Hon’ble Director Sri S.G. Dhandhe.
During the course of investigation I found the misuse of National money/property in Hitlersahi way (andaj) more than 500 crores in past Eight years. Even though they do not hesitate to violate the prescribed process, norms of Administration, for exemplary account one, which is completely under control by Govt. of India. Accounts two and Projects Accounts is not highlighted and in future the bundles of scandals will be opened.
In this context, I have served a legal notice to Chief Secretary, M.H.R.D. which is annexed herewith, in which the entire stories can easily readout.
Importantly, I pin down with tear eyes that the brilliant students belongs to middle class family are maximum harass and mentally and financially way to inspire and put the position for suicide in last three years.
As example, no students come forward and say/speak a word in any way, otherwise and humiliation and hitlersahi is behind the whole career will be spoiled by the Administration.
A media lab is one of the major projects of I.I.T.K., a senior technician (Telephone) appointed as In-charge Media spoke person/contact person inspite of so much so talents in this fields are available there but to my surprise how and why the qualitative person aforesaid appointed named Sri Ravi Shukla Ji. Here most importantly pointed out the reason behind ‘National Money’ as flow like water. Student can not meet with media during the course of suicide.
To my great surprise the Warden’s are residing 3 to 5 Km. from the Hostel. It is necessary to highlighted that after suicide by the student I.I.T.K. firstly investigated and assure that they are completely safe and thereafter they reported to police to do the rest formalities.
Recently a case of suicide was a student, who allegate the whole Administration of I.I.T.K., in this connection a committee form by Administration in their own safeguard.
The whole aforesaid information is not for entertainment, Gossip or a story, requested to please read it and try to understand the feelings of sufferer. I am awaiting your valuable opinions, suggestions in the interest of IITK.
Encl. Below attached scanned copy of notice which is issued to several authorities related to IIT kanpur and Indian Government.
R. P. Mishra