India is a democracy, but without flaws. Disclosure of information could be not just of public servants, but of corporate sector or educational institutions and media. It need not be coercive. It can even be voluntary. Because of Election Commission affidavits, we know 543 MPs in the 15th Lok Sabha have a combined wealth of Rs 3,075 crore, Namma Nageswara Rao leading the field with Rs 174 crore. The battle that there should be disclosure and that disclosure should be in the public domain, is far from over, writes Bibek Debroy in
The Indian Express.
Most people will have heard of Brandeis University, not necessarily of US Supreme Court Justice Louis Brandeis (1856-1941). Justice Brandeis is credited with the quote, “Sunlight is the best disinfectant.” In any democracy, information and disclosure are like light. Most debates about disclosure have concerned public servants. Consequently, because of Election Commission (EC) affidavits, we know 543 MPs in the 15th Lok Sabha have a combined wealth of Rs 3,075 crore, Namma Nageswara Rao (TDP) leading the field with Rs 174 crore.
Disclosure need not only be about public servants. Much of corporate governance is about disclosure of information, and eventual regulation of educational institutions and the media will be along similar lines. Nor does disclosure have to be mandated by law; it can be voluntary. However, rarely does anyone voluntarily part with information, even if there is no culpability.
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There is a difference between disclosure and information being placed in the public domain. There is greater reluctance to place information in the public domain. Witness the case of ministers or the judiciary.
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India is becoming richer. It is democratic, with all the warts and blemishes. And despite some recent question marks, it has a free press. Yet the battle that there should be disclosure and that disclosure should be in the public domain, is far from over. Perhaps this is understandable. The Right to Information Act is a little over five years old and the Official Secrets Act is 87 years old.
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It divides assets into moveable and immoveable. In the moveable category are cash, deposits, bonds, other financial instruments, motor vehicles, jewellery and other assets (values of claims/ interests).
Cash and deposits should be straightforward enough, though even there, we may have a problem.
Babulal Agrawal is a 1988 batch Chhattisgarh cadre IAS officer. When there was an income-tax raid, it was revealed he possessed 220 bank accounts, with several in names of his peons and maid-servants. But in principle, it should be possible to track down this kind of stuff, even without income tax raids. The EC guidelines state: “Value of Bonds/ Shares/ Debentures as per the latest market value in Stock Exchange in respect of listed companies and as per books in the case of non-listed companies should be given.” Apart from wilful non-declaration, understatement of moveable assets occurs because jewellery is declared at historical costs at which they have been acquired. The guidelines merely state that weight and value of jewellery has to be declared.
If weight is known, it should be a simple matter to revalue jewellery at current market prices. If nothing else, they can be indexed to inflation. By the same token, motor vehicles can be reported at depreciated values. This becomes even more of an issue when it comes to immoveable assets, divided into agricultural land, non-agricultural land, buildings (commercial and residential), houses/ apartments and others (interest in property).
If we raise our eyebrows at perceived under-declaration of assets by MPs, that is primarily because these are undervalued. This is not an MP phenomenon alone, since there is consistent undervaluation of property in registration deeds, partly driven by tax evasion motives and partly by high stamp duties. The point is that present EC guidelines make no attempt to link these to market prices, unlike bonds/ shares/ debentures. Once one accepts that this should be done, one can figure out ways of doing it.
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While avoiding subjectivity, it is possible to objectively determine current market prices for immoveable assets too. As is the case with circle rates, there will continue to be undervaluation. But at least the quantum of undervaluation will decrease.”
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