India must break the politician-bureaucrat-business nexus of corruption

India's culture of corruption is far more complicated than what meets the eye. MOIN QAZI examines this deeply rooted problem and how law needs to combat it.

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A survey conducted by Transparency International (TI) has recently found that India has the highest rate of bribery in Asia. It should embarrass and shame us.

The survey, Global Corruption Barometer-Asia (GCB),   found that India has the highest overall bribery rate (39%) and the highest rate of citizens using personal connections (46%).

Indonesia and China have the second and third highest rates of people using personal connections with 36% and 32% respectively.

Bribery gives access to services that should normally be public: the procurement of official documents, provision of public services, and connection to the electricity grid, issuing a driver's licence, assistance from the police and getting hospital treatment. The business sector complains about corruption too, though it is the subject of many criminal investigations — compromised businessmen have had to flee the country — and links between politicians and obscure financiers constitute a nether world.

India's eager quest for economic dynamism has been severely stifled by chronic corruption. The country needs to urgently modernize its institutions and end the culture of rent-seeking and cutting corners if it is to allow the economic wheels to roll seamlessly.

Corruption is both anti-national and anti-poor because the resources meant for development get siphoned off by corrupt politicians and bureaucrats.

The Culture of Corruption in India

India is now caught in a situation where many sectors are steeped in endemic corruption, including those charged with controlling corruption itself, from the legislators who write the laws to the judiciary which makes them roadworthy and the police which are charged with enforcing them.

Why is India so corrupt? The main reason is that the country's politics has become a passage to quick riches and influence-peddling. Smalltime leaders float regional caste-based parties just as entrepreneurs float ventures to gain positions of power. Many of these political elites flaunt a lifestyle so rich and luxurious that it could be the envy of any Hollywood star.

The corrupt political elites have also made the Indian bureaucracy their partners and the politician-bureaucrat nexus has been extended to the business world.

Corporate efficiency has propelled India to become one of the world's fastest-growing economies. However, it has become one of the world's most corrupt nations aided by a politician-bureaucrat-business nexus along with inefficient and dishonest governance.

Creative Loopholes

Large multinational companies have developed creative ways of overcoming operational constraints to allocate amounts to be used for bribes. The payments usually involve creative practices such as using agents or dealers to make payments, tapping unaccounted pools of cash, or slush funds, providing extravagant gifts or entertainment, sponsoring foreign travel, and making charitable contributions to nongovernmental organisations recommended by government officials and politicians.

No political or administrative theoretician has come up with methods to flush out the cholesterol of partisan politics. Disruptive political practices and ineffective laws stymied by vested interests in all spheres of governance have been responsible for the people losing faith in the system and becoming gradually nonchalant towards good governance.

The people learn by the example of their leaders—not by the precepts they hypocritically profess and proclaim.

While the poor do not have the money to purchase services that are their right or to bribe the public servant, they have a vote that the politician wants.

The politician does a little bit to make life a little more tolerable for his poor constituents– a seat in a good school for the lucky few, on occasion the unexpected munificence of a loan waiver, or more commonly, a phone call that helps them get a police case registered. For all this, the politician gets the gratitude of his voters. However, he also has little reason to improve their lot more broadly by reforming the system—for that would do him out of his current job.

No wonder so few politicians express enthusiasm about reforms.

In the last four decades, despite several government programmes for the welfare of the impoverished, poverty remains endemic. Either the nets were not cast wide or there were too many holes blown in them.

Poor Shortchanged

The cruel reality is that money has become irrelevant. Much of the spending does not reach the poor. It is either sponged off by the delivery mechanism—spread over consultants, advisers, their equipment and studies—or it gets pocketed. This has become a touchstone for all government programmes and is now parroted in all Indian development literature. Low-level graft remains pervasive.

Much of the western world aid is running down bureaucratic ratholes. Corruption is a huge, insidious problem in India that has eaten into every aspect of life. It can lead to pervasive distrust in the government, generating civil strife, violence, and conflict. The results are disastrous for the people. Corruption erodes the quality of life for ordinary citizens, devastates the moral fabric of society, and impedes growth.

The poor understand that the politician needs money to offer them these services. So they are willing to look the other way if he extorts bribes from corporations or the wealthy, or if he is a criminal.

Moreover, the system is self-sustaining. Every local official must be paid not just to expedite the application form for development schemes but specifically not to obstruct it.

A middle-class idealist can stand for office promising reforms, but the poor voters know there is little one person can do. Moreover, who will provide the patronage while the incorruptible, but consequently poor, the idealist is fighting the system? Why not stay with the devil you know?

No Easy Solution

There is no easy solution to the problem. The corrupt police officials have a rollicking time at the expense of helpless citizens. In fact, there is no link between corruption and poverty.

It is easier to convert a corrupt constable rather than a rank officer into an honest person. Rank officers get so carried away by the glamour and competition evident among their peers, and the aspirations of their families, that corruption and bribes become a part of their lives. Surely education is a failure here.

Indian voters favour a familiar family pedigree, partly because of a cultural reverence for the family and because of feudal habits that trace back centuries. These traditions are more important in politics than individual qualities or merits in India and they strike at the very core of democracy.

Activists from the grassroots and student leaders with no patronage matter little, and given the huge money and muscle power involved in elections, outsider upstarts can only dream of power from the sidelines. In fact, the impact of nepotism goes beyond politics, with the reign of dynasties extending to most businesses too.

Law's failure in addressing corruption

Like the mythological hydra, corruption is a many-headed foe that insinuates itself into every part of the social fabric—weakening the body politic and jeopardising prospects for economic growth. It can be weakened only after the heads are lopped off.

Corruption has been a long-standing problem in India that successive regimes and governments have battled with and mostly failed to quell. In his magnum opus Arthashastra, written nearly three centuries before the Christian era, Kautilya, the classical master of statecraft observed: "Just as it is impossible to know when a fish moving in water is drinking it, so it is impossible to find out when government servants in charge of undertakings misappropriate money."

The phrase, "probity in public life" has become an oxymoron.

Although national anti-corruption agencies can be crucial in preventing corruption before it becomes rampant, not only are they difficult to set up but they often fail to achieve their goals once they have been established. They may be so beholden to their political masters that they dare not investigate even the most corrupt government officials; they may lack the power to prosecute or they may be poorly staffed or may lack the courage and will to initiate action.

Astonishingly there is a rising intolerance for corruption. People have become sick of avarice on a scale that flies in the face of reason.  For the law to be effective in scaring politicians, the legal system must be totally overhauled so that verdicts are reached in a reasonable time frame.

Fast and draconian punishment alone can effectively deal with the greed psychosis that afflicts Indian politicians.

Criminals Game the System

If there is one reason that can best explain the audacity of politicians over corruption, it is the interminable legal delays that allow most criminals to game the system. As for corrupt politicians, they can swan around for years-standing for election and holding office for consecutive terms before they get convicted.

The country's economic system is fused with many strands of corruption and organized systems of tax evasion. It is now an acknowledged fact that India's system is deeply corroded by the influence of corruption. Petty corruption includes slipping banknotes to the police and government officials to get the paperwork done.

Businessmen have to offer "seed money" to avoid red tape.

A writer and former diplomat, Pavan Varma suggest that the persistence of corruption in India also reflects a strain of amorality in our character: a willingness to tolerate corner-cutting and rule-breaking in the successful pursuit of wealth and power. "Corruption, of course, is not unique to India," he writes in Being Indian. He says, "What is unique is the level of its acceptance and the creative ways in which it is sustained. Indians do not subscribe to antiseptic definitions of rectitude… Their understanding of right and wrong is related far more to efficacy than absolute notions of morality."

The ability to bribe their way into medical school or a government job has become a key skill and asset and enables the practitioners of this skill to get coveted positions and postings in the government too. This is precisely the reason why we have unqualified and incompetent doctors and other professionals.

Most Indian businesses cannot survive or remain competitive without stashing away undeclared earnings. Almost everybody who has sold a house has taken one part of the payment in cash and evading tax on it. Huge quantities of secret wealth are still a part of our system.

India's generally patchy law enforcement has much to do with this malaise. The solution lies in ensuring that the Central Bureau of Investigation remains free of government interference and those whistle-blowers, witnesses, and journalists working on corruption cases are protected.

The government must realize that increasing corruption can act as a speed-breaker in the Indian growth story. There is a need for a strong political will to untangle it.

Without a strong civil society or an independent judiciary to check government power, the political class can become complacent.  It may be true that every journey begins with a single step. However, we have a long distance to cover to rid society of the termites of corruption and it may require longer sprints as time is running out.

(Moin Qazi is a development professional. The views are personal.)