Corruption: Causes, Consequences and Cures

The current campaign against corruption provides a golden opportunity to Dr Manmohan Singh to lead from the front. There is an urgent need for speeding up the process of economic, administrative and judicial reforms, not only to push the economy to a higher growth path, but also to help reduce the scope for corruption. Being the Prime Minister of India, he must spell out the options before the country. Then it would be for the people to decide in a democracy, writes Barun Mitra.

Typically, corruption, or rent seeking, is a consequence of the gulf that exists between supply and demand for any goods or services due to regulatory interventions. Despite, two decades of economic reforms, the regulatory and policy environment in many areas of the economy continue to be quite restrictive, and discretionary powers prevail. It is particularly in those areas where corruption continues to prevail.

The current focus on corruption should help us investigate these details and come up with systemic reforms. Any anti-corruption agency has to be a part of this overall architecture, rather than being yet another body to monitor, investigate and prosecute those involved in corrupt practices. Otherwise, the Lok Pal, or any such agency, will inevitably become a Joke Pal, it wouldn’t matter which version of the bill gets passed in Passed in Parliament.

 The complete analysis is available here, "Cleaning up Corruption: An agenda for India"

Gandhians today, and Gandhi yesterday

Many of today’s anti-corruption protestors believe that they are participating in the second freedom struggle from misrule. Ambedkar had warned against extra-constitutional means of protests. But today, in the name of Gandhi, many believe that constitutional processes are expendable. Actually, It is good that Gandhi is back in the public memory. If this provides an opportunity to try and understand him, it will be even better. While the tumultuous protests we are witnessing today seem to cluster under the umbrella of Gandhism, how Gandhian is the Anna Hazare led movement?

In this article "Gandhism redux? Wanna be Gandhis and the original Gandhi", Barun Mitra attempt to understand the relevance of Mahatma Gandhi in today's India.

Corruption: How not to fight it

In the past few months, the debate over black money and corruption has been raging across the country. Some social activists and the government have been at loggerheads over the scope and structure of a new anti-corruption authority being proposed. There have been claims ranging from tens of billions of dollars to over a trillion dollar, money that may have been illegally acquired or wealth that evaded taxation. But the issue of corruption is not just about policing, but should be about about policies that help generate black money in the first place. The current focus on the Lok Pal, as a super cop, is only diverting attention from the real roots of corruption. Barun Mitra and Mohit Satyanand, co-authored, "Chasing Black Money: In search of red herrings".

Dealing with issues of impunity

The Rajya Sabha shows the way in the manner in which it handled the Prevention of Torture Bill, 2010.It is true that some of our Parliamentarians are indeed opportunist, corrupt and lazy. However, such notions are selective. The Rajya Sabha committee's work deserves commendation. Indeed, the formula stipulated by the committee should not be restricted to torture alone, writes Tarunabh Khaitan in The Hindu.

We like to berate our parliamentarians. It is true that some of them are indeed opportunist, corrupt and lazy. But it is also true that the media would selectively broadcast scenes of pandemonium in legislatures but often fail to report serious and sincere work done by parliamentarians. Who can then blame the politicians for thinking that there is no reward for hard work, and that the only way to attract attention is to turn up the vole?

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The journey of the much reviled Prevention of Torture Bill, 2010, in the Rajya Sabha so far is a good example of how legislators ought to perform their law-making function, and therefore deserves credit. The Bill, ostensibly designed to criminalise acts of torture by public servants, was rightly condemned as a fig-leaf, the real purpose of which was to ensure that public servants could resort to torture with impunity. Among its many defects was the impunity provision contained in Clause 6 of the Bill, which required that no court could proceed with a complaint of torture unless the government of the day permits the prosecution of the suspect public servant.

This clause duplicated a colonial-era provision that is now recited unfailingly in most of our criminal statutes: from Section 197 of the Code of Criminal Procedure, 1973 to Section 19 of the Prevention of Corruption Act, 1988.

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The government managed to use its numbers to get the Prevention of Torture Bill passed in the Lok Sabha after a brief, late-evening debate last year. By the time the Bill reached the Rajya Sabha, however, civil society had had a chance to examine its deplorable provisions. At least some Rajya Sabha MPs listened, and were convinced that the provisions of the Bill needed to be scrutinised more closely. The government wisely conceded their demand and a Select Committee was set up under the chairpersonship of Ashwani Kumar.

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Adopting a sagacious approach to the problem of prior sanction requirements, the committee recognised the need to “insulate honest public servants from false, frivolous, vexatious and malicious prosecution.” At the same time, it felt that such a provision should not be used to shield those officials who have, in fact, “intentionally tortured or abetted the torture of individuals.” Thus, the committee captured the classic dilemma in prosecuting public servants — we want them to discharge their duties without fear and favour, but want to ensure that they are accountable for what they do (or fail to do). Impunity provisions such as Clause 6 of the original Torture Bill, or Section 197 of the Code of Criminal Procedure, only take into account the need to shield public servants. They give no consideration to the need to ensure accountability. Instead of finding a proportional solution that adequately caters to both concerns, it completely ignores the second.

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First, while retaining the general requirement of prior governmental sanction for prosecution of public servants, the committee recommends the inclusion of a deeming provision: if the government has not acted on a request for sanction for three months, sanction would be deemed to have been given. This will ensure that a government cannot frustrate prosecution by simply refusing to act on a request for sanction.

Second, the committee recommends that should the government refuse to sanction prosecution, it must record its reasons in writing. Under the current practice, the government has no obligation to justify publicly why it has refused to sanction the prosecution of any public servant. This opacity allows the government to use the power of sanction to settle political scores rather than to ensure accountability.

Third, and perhaps most importantly, the committee recommends that an order refusing such sanction may be appealed before a High Court by an aggrieved person. Currently, a person can only file for a judicial review of a decision to refuse sanction; there is no right to appeal. The difference between an appeal and a review is significant. The powers of a review court to correct a decision are much more limited than that of an appellate court. A review court mainly ensures that certain technical rules of decision-making were followed, and that the decision was not so unreasonable that no reasonable person could have made it. An appellate court, on the other hand, can examine the issue on merits and substitute its own judgment for that of the government. In sum, the possibility that its decision may be appealed will require the government to act on judicial rather than on political grounds while granting or refusing sanction.

Parliament is a difficult place: Proposal for reforms

When we Indians decry the state of our Parliament, we mostly focus on the symptoms, not the underlying causes. The undesirability of disruptions and the repeated adjournments of Parliament are obvious. It is important to shift the discussion to the root causes and possible solutions if we are to see any improvements. The first category of disruptions, involving smaller groups of MPs, will require implementing decisions that have already been taken as well as introducing certain modifications to parliamentary procedures. The second category of disruption, when large groups of MPs block parliamentary proceedings, requires deeper reform of parliament, writes Baijayant ‘Jay’ Panda in The Indian Express.

Members of the House routinely “pulled knives and guns on one another. There were shoving matches and canings, tables were flipped, inkwells and spittoons went flying.”

No, that’s not a description of India’s Parliament. Rather, it’s from an article by Joanne Freeman, an American professor of history at Yale University, describing typical behaviour in the United States Congress in the mid-nineteenth century.

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When we Indians decry the state of our Parliament, we mostly focus on the symptoms, not the underlying causes. The undesirability of disruptions and the repeated adjournments of Parliament are obvious and have been done to death. It is important to shift the discussion to the root causes and possible solutions if we are to see any improvements.

What changed in America? By the second half of the 19th century, the Industrial Revolution kicked in and transformed the US. From a country where the vast majority of the population made its living from agriculture, it went on to become the most developed economy in the world. This process was not always smooth. Neither was it uniformly “inclusive”, to use the buzzword of the decade here in India. The US had its share of labour exploitation and disproportionately wealthy robber barons. But the process did reach a point where the majority of the population described themselves as middle class.

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It is our burgeoning middle class that is most dismayed by the sub-optimal functioning of Parliament. While the growth of our middle class will gradually build pressure on legislators to adhere to better standards of public behaviour, there are specific steps that need to be taken in the meantime. To do that, it is important to understand the nature of parliamentary disruptions and deadlocks, most of which can be classified under two categories. First, many disruptions are caused by small groups of MPs who are usually grandstanding for audiences back home. The second category are deadlocks that involve large groups of MPs, sometimes even the entire opposition, as in the present dispute over whether to appoint a joint parliamentary committee on the 2G spectrum scandal.

The first category of disruptions, involving smaller groups of MPs, will require implementing decisions that have already been taken as well as introducing certain modifications to parliamentary procedures. Resolutions passed by successive presiding officers of both Houses of Parliament — that is, speakers and vice presidents— and leaders of parliamentary parties, provide the moral authority for presiding officers to have disrupters physically removed for a day or even more (the legal authority has always existed).

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The second category of disruption, when large groups of MPs block parliamentary proceedings, requires deeper reform of parliament. Take the current JPC imbroglio. The opposition’s stubbornness can be summed up in the argument, “If the largest ever allegation of malfeasance in the country’s history does not justify a JPC, then what does?” The government’s obduracy lies in the stand that “Parliamentary rules provide for JPCs to be set up by consensus. The opposition is trying to bulldoze the majority opinion. If they don’t agree with our stand, let them move a vote of no confidence.”

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Again a lesson can be taken from the US experience, where the Senate requires not a 51 per cent but a 60 per cent vote for the majority to override a filibuster, by which a member of the minority side can hold up legislation by speaking for an unlimited time. Our Parliament needs similar rule-based, not consensus, options where a significant minority — say 40 per cent as in the US Senate — should be able to press their point short of a no-confidence motion. This would take away the government of the day’s ability to dodge certain motions, or the formations of special committees like a JPC, and the country would no longer be held hostage to consensus between government and opposition.

Winning Strategies for Liberal Politics: Learning from South Africa

India FNF Alumni Network (IFAN) in partnership with Friedrich-Naumann-Stiftung für die Freiheit Invites you to a discussion on "Winning Strategies for Liberal Politics: Learning from South Africa" on Thursday, 20 January 2011, New Delhi.

Speaker: Ms. Katja M. Egger, FNF South Africa

Moderator: Barun Mitra, Liberty Institute

Registration: 1530 hrs onwards

Hi-Tea: 1530 hrs - 1600 hrs

Discussion: 1600 hrs – 1800 hrs

Venue: USO House, 6 Special Institutional Area, New Delhi 110 067

RSVP: India FNF Alumni Network, New Delhi

Mobile nos.: 9818499293 (Nupur Hasija, FNF New Delhi)

Email: nupur.hasija@fnst.org

Speaker Profile

Katja Egger is the Project Officer and head of the Friedrich-Naumann-Stiftung für die Freiheit Office in Cape Town, South Africa since 2008. In this capacity, she has managed the work of the Foundation with its long time partner-The Democratic Alliance (SA’s liberal party). Her areas of expertise are political consultancy and education, democracy, rule of law and human rights. She consults and trains South African and Southern African politicians at national, provincial and municipal level on organizational development, strategy, communication, leadership, team building and conflict management. She develops, designs, facilitates and moderating workshops on these themes on a regular basis within the region and also at the International Academy for Leadership in Germany. A lawyer by profession, she has also taught various law related subjects at the University of Berne in Switzerland.

Nupur Hasija

Executive, Coordination

Friedrich-Naumann-Stiftung für die Freiheit

Regional Office, South Asia

USO House, 6 Special Institutional Area

New Delhi, India

Tel.: +91-11-26862064, 26863846

Fax: +91-11-26862042

nupur.hasija@fnst.org

www.stiftung-freiheit.org

www.southasia.fnst.org

Assembly by-elections in five States announced

The Election Commission of India announced that by-elections to fill up six Assembly seats in five States will be held. In Kharsawan, by-elections will be held on on February 10, the notification being issues on January 17th and counting of votes on February 17th. In Chhattisgarh , Gujarat , Manipur and Madhya Pradesh, the election is scheduled for February 14 and the notification will be issued on January 21, reports The Hindu.

NEW DELHI: The Election Commission on Wednesday announced by-elections to fill up six Assembly seats in five States.

In the Kharsawan (ST) constituency in Jharkhand, the poll will be held on February 10 and the notification will be issued on January 17. The counting of votes will be on February 17.

In Chhattisgarh (Sanjari Balod constituency), Gujarat (Khadia), Manipur (Konthoujam) and Madhya Pradesh (Kukshi-ST and Sonkatch-SC), the election is scheduled for February 14 and the notification will be issued on January 21. The counting of votes will take place on February 17.

Regarding Jharkhand, the EC said the State government conveyed to the Commission that Chief Minister Arjun Munda, who assumed office on September 11, 2010, due to constitutional requirement had to become a member of the Legislative Assembly on or before March 10, 2011.

Election Commission may reduce minimum voting age to 16

The Election Commission of India is examining a proposal to reduce the minimum age of voting right to 16 years from the present age of 18. Chief Election Commissioner Y S Quraishi said "We may recommend to the government to reduce the minimum voting age to 16 years, if more youths, particularly new voters, participate in the electoral process," in a meeting organized by Youth United for Voter Awareness, an NGO, reports The Indian Express.

The Election Commission today said it was examining a proposal to reduce the minimum age for voting right to 16 years from the existing 18.

"We may recommend to the government to reduce the minimum voting age to 16 years, if more youths, particularly new voters, participate in the electoral process," Chief Election Commissioner Y S Quraishi told a meeting organised by Youth United for Voter Awareness (YUVA), an NGO.

Though above 35 per cent of voters were youths, their participation was the lowest, he said.

Quraishi said though the minimum voting right age was reduced to 18 from 21 years, participation of new voters was not up to expectation.

As the present day youths were well versed with technologies and comparatively better informed, there was no harm in reducing the minimum voting right age to 16 years, he said.

The EC will launch an awareness drive among students to inform about the rights and significance of participation, he said.

The awareness campaign would include meetings, rallies, seminars and other activities to attract youths to the electoral process, the CEC said after releasing a document prepared by YUVA on youth participation in elections.

Quraishi also said the EC was working on establishing the Indian Institute of Democratic Studies on the lines of IIT and IIM to educate government officials, students and others from within the country and abroad about various aspects of the democratic processes.

Sunlight to electric light

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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The Color Of Money

The Union cabinet cleared the proposal for public funding of elections around this time in 2005.Everyone wants India to initiate a thorough reform of its election processes. The Election Commission is the place to begin that process. Urban India often forgets that the panchayat election is the most contested of all elections and has more money spent per voter than in any other. Public funds should remain for public good, writes Manvendra Singh in The Indian Express.

As if on cue, India periodically begins the debate on public funding for elections. A memory recall reminds me that the Union cabinet cleared the proposal for public funding of elections around this time in 2005. And as far as memory serves, the proposal was sent to the law ministry for approval/processing. Now that sounds exactly like the Afzal Guru file, which is precisely the motive behind the periodical references to this route for electoral reforms.It is everybody’s case that India initiates a thorough reform of its election processes. The Election Commission is the place to begin that process.

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They are also the elections that have the highest polling percentages. In its obsession with the Parliament and legislature, urban India forgets that the panchayat election is the most contested of all elections. Per voter there is more money spent in a panchayat election than any other. And in fact the Parliament election becomes the cheapest in that sense. And that matches the polling figures too, with panchayats leading the race, and Parliament bringing up the rear. There are various reasons why the panchayat election is the most contested of all, ranging from prestige in the village to the fact of influencing more development funds than any other elected post. All of this stays under the radar, for it doesn’t make good daily conversation in urban India. This is the reality that the country will have to face before it can begin an honest debate on electoral funding reforms.

So where do the panchayat funds come from, when many states don’t have party symbols for those elections? Obviously the money is coming from somewhere, and in proportionately bigger quantities than it does for Parliament elections. Election funding reforms, therefore, must cover the entire gambit of the Indian scenario. It would be discriminatory and snobby if the attention to reform were aimed only at the Parliament or legislature levels. After all, the democratic process covers the entire gamut from panchayat to the Parliament levels.

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The general Indian attitude towards anything that carries a public fund label is that some of it is for the take. It is taken for granted that a portion can be diverted for other ends, and through other means. And with an impossible implementation procedure, it makes little sense to have public funds for elections. There are various proposals doing the rounds, but none that encompasses the sheer diversity and dynamism of Indian elections. Better let public funds remain for public good. The simplest solution, and one that encourages probity and honesty, is for a transparent and private, corporate, business or any other funding that is tracked by sourcing of monies. Let the funding be from any source, by cheques, and through a monitored bank account. There may be an individual bank account for each candidate, party etc. The sourcing for each constituency can be monitored, as also the vested interests that may exist. The vested interests can then be barred from benefiting financially or otherwise. It will then be known that for a particular panchayat election, the local PWD contractors contributed for a particular candidate. That is how it all begins. Let’s get the picture clear first.