Corruption costs business

Parliament has not been functioning for many days, which leads to severe costs and loss of reputation. The fight against corruption is not rhetorical matter.For decades, India has winked at corruption. The political order has fostered it and financed itself out of corruption. We are caught in a vicious circle where the private sector has to bribe ministers and civil servants if they are to carry on business. Unless all co-operate in exposing the corruption, a few will suffer and the rest will free-ride, writes Meghnad Desai in The Financial Express.

Parliament has not been functioning for many days. Leave alone the daily cost of its operation, but does anyone know or care about its effect on India’s reputation? The UPA or at least the Congress trumpets its virtue in forcing the resignation of Ashok Chavan and Kalmadi and then also belatedly Raja, but is that enough?

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But leave that aside. The CWG scam was discovered only because the British tax authorities found something dodgy in the tax claims of the company favoured by Kalmadi. This was noticed sharply in the UK. What India does with the CWG scam will affect its chances for winning future sports events contracts. So far, no one has been charged and Kalmadi’s resignation from some footling Congress post is neither here nor there.

And then we have the Raja scandal. Again, the embarrassment at non-action or, at best, delayed action is being taken out on the companies that won the contracts. Trai is threatening to cancel the dubious contracts. Surely, again, that is not only overkill but killing the wrong party. The spectrum allocations were an international event.

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The issue is simple. As Obama said, India is no longer emerging. It has emerged. With such status, go get some responsibilities. The fight against corruption is not rhetorical matter. It is not about quoting Gandhiji or claiming virtue against the BJP. For decades, India has winked at corruption. The political order has fostered it and financed itself out of corruption. This is well known. The shock at Ratan Tata’s statement that someone had asked him to bribe the minister to get a licence was not that such things go on. But that even as big an industrialist as Ratan Tata is subject to such squalid behaviour. We note that Tata has not got a licence for his airline business.

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The question is who will bell the cat? Politicians will not do it. Many in the NGO community try their best to disseminate the information. But as Tehelka’s example showed, the political system can fight viciously and destroy you. The private sector has to take the initiative. Thus far, the Indian private sector organisations have been too shy or too afraid to raise the issue. Business pays the price either in cash or in missed contracts, as Ratan Tata’s example shows. If the apex bodies such as Ficci and CII were to open up a debate on this issue and if many more businessmen were to come forward as Ratan Tata did and relate their experience, we may get some action. It is not easy to do, of course. We are caught in a vicious circle (or a degenerate equilibrium, if you like a fancy expression) where the private sector has to bribe ministers and civil servants if they are to carry on business. Unless all co-operate in exposing the corruption, a few will suffer and the rest will free-ride.

The rest of the world is watching. Remember that Raju’s scam in Satyam was spotted on the NYSE. India does not have the luxury of time. It is time for the market to work. The state has failed demonstrably.

The politics of money

The wind is blowing in favour of the ruling coalition in the Bihar Legislative Assembly when the last phase of the Bihar Legislative Assembly polls is drawing to a close. The assets of the JD (U)’s MLA candidates’ average have seen a three fold spike. It could even be that new and richer individuals are being put forward as candidates. Being rich is not a factor of importance in predicting election outcomes. MLAs are truly representative of their states’ progress, writes Nikhila Gill in The Indian Express.

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With campaigning for the last phase of the Bihar Legislative Assembly polls drawing to a close today, and the results due on November 24, the wind seems to be blowing strongly in favour of the ruling coalition. In addition to Nitish Kumar’s ‘SSS’ policy of sadak, shiksha, suraksha, the pro-Nitish sentiment can be attributed to the overall clean reputation of the JD (U) government. The fact that the JD (U)’s MLA candidates’ average assets have spiked from Rs 19,71,998 in 2005 to Rs 64,60,088 in 2010, a three-fold increase, does make this claim look a bit hollow. But it doesn’t necessarily imply corruption; a possible explanation for this is that new and richer individuals are being put forward as candidates.

Interestingly, the rise in asset values isn’t restricted to Bihar, with the average assets of MLAs seeing an upward swing in almost all states across India. The hikes range from 141% in Chhattisgarh and 283% in Rajasthan (the states that bring up the lower order) to 1,000% in Haryana and 1,170% in Andhra Pradesh between 2003 and 2009. Not surprisingly, Andhra Pradesh is home to the richest MLAs in the country, with average declared assets worth Rs 22.6 crore per candidate.

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Back at the state level, a closer examination reveals the performance of individual states and parties. Haryana has some of the richest MLAs in the country (save for Andhra Pradhesh), whose average assets range from Rs 3.87 crore (for the Congress) to Rs 16.28 crore (for independent candidates). This not surprising, given that Haryana has one of the highest per capita incomes in India (excluding small states and Union territories like Goa and Delhi) and, on average, its MLAs declared assets worth Rs 7.74 crore in the 2009 assembly elections.

Chhattisgarh, where MLA wealth has gone up on average by about two times, from Rs 44 lakh to 1.08 crore between 2003 and 2008, still has one of the lowest average MLA asset bases. This is despite the fact that the state has been one of the fastest growers in GSDP terms, averaging about 20% in the same period. In contrast, although Madhya Pradesh’s per capita GDP is about a fourth less than Chhattisgarh’s and its GSDP growth rate 11.6%, its MLAs are 1.5 times richer than those from Chhattisgarh. Similarly, the assets of the MLAs of Uttar Pradesh—a state notorious for lawlessness and slow growth, with one of the lowest per capita incomes—weigh in at Rs 1.46 crore, about 1.5 times that of Chhattisgarh.

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So is being rich a factor of importance in predicting election outcomes? It appears not. In Karnataka, the richer Congress-JD(S) alliance was voted out in the 2008 assembly elections. There are other instances of richer candidates being defeated—in Rajasthan, the BJP lost out to the Congress even though its MLAs were 1.8 times as rich as those belonging to the Congress. In Andhra Pradesh, the TDP candidates were almost 10 times richer than the Congress candidates and still lost out. So money cannot buy all; it’s parties that matter, not their assets.

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So, is it fair to say that MLAs are truly representative of their states’ progress? The answer, contrary to popular perception, is yes. For the most part, anyway. The same, however, doesn’t hold true for MPs. By and large, the poorer the state, the richer the MP and vice-versa.

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Corruption trips India's rise

India's effort to break free of it's socialist past of threatened by its failure to create and enforce private property rights. It started with the Adarsh Housing Society in the mid-90's. It recieved 3,800 square meters of land at 15 % of the market price on the claim that it would provide low cost housing to soldiers and families who made sacrifices for the country. The society includes defense officials and relatives of politicians and bureaucrats.The root of all these ills could be traced back to the lack of private property rights in India, writes Barun Mitra in The Wall Street Journal.

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Just a few days ago, U.S. President Barack Obama was in Mumbai applauding India on its economic renaissance. Now his host in India's financial capital, Chief Minister of Maharashtra Ashok Chavan, has resigned due to serious allegations of malpractices concerning an apartment tower in the heart of the city. As well as presenting a startling juxtaposition between the hype over India's development and the rather more sobering reality, this case illustrates how the failure to create and protect property rights threatens the country's best efforts to overcome its socialist past.

It all started with an organization called the Adarsh Housing Society, which started in the mid-1990s with just a few members. The real action started in 1999, when Indian soldiers were fighting valiantly to push back an intrusion by Pakistani forces into the Kargil hills of the Kashmir region. A group of officials, military and civil, strategized to use this incident to lay their hands on a prime piece of real estate in downtown Mumbai.

The society claimed that it would provide low-cost housing to the soldiers and widows of soldiers who had sacrificed so much in the Himalayas. For this noble effort, it received 3,800 square meters of land at 15% of the market price so that it could build a six-storey block. Neither the state government nor the defense ministry was sure about the ownership of the plot.

This is hardly unusual in India, since in most of the country land settlement has not been undertaken since the departure of the British. Land records are in a pathetic state, and so are very easy to manipulate. Hardly any land transactions, particularly in urban areas, take place completely legally. In major cities like Delhi and Mumbai it is believed that typically 60% of the payment for high-end properties is made in cash under the table.

Today, the Adarsh Housing Society oversees a 31-storey tower, with 103 apartments, for which owners have paid between $140,000 and $180,000 for units between 625 and 1000 square feet. Market rates for these apartments are believed to be more than 10 times that value. None of the owners seems to have fought in Kargil or be related to those who did, and in addition to defense officials, the society includes relatives of senior bureaucrats and politicians.

The scandal has been brewing for the past two years, but it really hit the headlines in the past couple of months. Today, every department of the state and central governments, from the defense and environment ministries to land and revenue, are competing to point out the various violations by the society. Yet, the same departments by their acts of omission and commission allowed the tower to be built in the first place.

It is time to recognize that the legal and regulatory framework in India, particularly that surrounding land, is tailor-made to facilitate the wheeling and dealing of the powerful and privileged class, all in the name of providing the poor with affordable housing.

More than anything else, India's poverty can be traced to this single most important factor—the lack of respect for private property rights. This greatly limits the ability of the majority of Indians to harness the potential of the assets under their control. Coupled with arbitrary regulatory regimes, this allows powerful middlemen to extract value from transactions which in a society ruled by law would be routine.

President Obama may have pleased India's political leaders by praising India's rise, but most ordinary Indians will be unable to rise as long as they are weighed down by the systemic corruption of their regulatory regime.

Judges who will deliver the Ayodhya verdict

The Ayodhya verdict is scheduled to be delivered on Friday, unless last-minute interventions come through. The Union government has appealed for calm and banned the transmission of bulk SMS and MMS to avert the spread of mischievous rumours. TAPAS CHAKRABORTY portrays the three judges – and their life away from the bench and law books — who are on the threshold of delivering the judgment, in The Telegraph.

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Armed policemen stand guard outside 24 Gautam Pally — the address in the heart of Lucknow that houses a 62-year-old judge.

Justice Dharam Veer Sharma, the senior-most judge on the special bench of Allahabad High Court that is due to give its verdict on September 24, shares the house with his elder sister.

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Colleagues speak of his austere lifestyle.

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Spondylitis has caused him immense physical discomfort in the past few months.

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Sharma graduated in arts in 1967 and got his law degree in 1970 from a college in Bulandshahr. In 1972, he got through the judicial service to become a district court judge.

Before joining Allahabad High Court, he had worked as the chief law officer, Uttar Pradesh Financial Corporation, Kanpur Nagar, from July 1989 to October 1991 and then as joint secretary, legal remembrance, for the state government in the late nineties.

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In 2002, he was promoted as district and sessions judge, and joined the Lucknow bench of the high court in 2005.

Justice Sudhir Agarwal, at 52 the youngest of the three judges on the special bench, could not have been more dissimilar to Justice Sharma. He’s well turned out, likes to read comics and watch soaps on TV, and enjoys spending time with friends from the Bar and the Bench.

Unlike the senior judge, who sticks to Hindi, Justice Agarwal is mostly heard speaking in English even outside the courtroom.

The judge, who lives with his wife and children on Beli Road in Allahabad, is known for his incisive and precise judgments.

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Agarwal graduated with science from Agra University in 1977, then studied law at Meerut University, earning his degree in 1980. He joined the Allahabad High Court Bar in October the same year. Starting out as a tax advocate, he later shifted to service laws.

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“His verdicts are always marked by earthy legal wisdom and rarely contradicted by the Supreme Court,” an advocate said.

Justice Sibghat Ullah Khan, the third member of the special bench, was Justice Agarwal’s colleague in the Allahabad High Court Bar and is known for his razor-sharp wit. “He has always been aided by a strong sense of history and the role of law in altering history. He is not ready to put a foot wrong,” says advocate D.P. Gupta.

Justice Khan, 58, earned his law degree from Aligarh Muslim University in 1975 and enrolled himself as an advocate the same year. He specialised in the civil, service and revenue areas of law for 25 years before being elevated as permanent judge of Allahabad High Court in 2002.

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Originally from Etah in western Uttar Pradesh, the judge now lives with his wife and children on Dramond Road in Allahabad. He lives a simple life, is usually turned out in shirt and trousers in sober colours and equally at ease in Hindi and English.

Known to push for out-of-court settlements of civil cases, he is said to have settled 2,000 cases through negotiations. Justice Khan, who was not even born when the Ayodhya title dispute was brought to court 60 years ago, has been vocal in asking the advocates to let the special bench deliver the verdict this week and not delay it any further.

How political parties raise funds, officially

The Indian National Congress is going to fund itself by building a corpus, which is the largest one among the Indian political parties. Congress had generated funds through selling coupons when other political parties relied on voluntary donations. Other major sources of income for the parties analysed for last two years were "Levy" for CPM and receipt from sale of coupons for NCP, reports The Indian Express.

The Indian National Congress has taken the next step in politics by moving away from the old era of donations to fund its activities to one of selling coupons to build up a corpus – the largest one among parties in India.

Congress sold coupons worth Rs 600 crore to generate funds during 2007-09 while most of the other political parties were dependent on voluntary donations for fund raising.

The oldest political party, Congress, generated Rs 598.4 crore during 2007-08 and 2008-09 through the sale of coupons while it received donations of Rs 72 crore. The party also generated Rs 38 crore as interest during the period, reveal income tax returns filed by the party.

Funds for Bharatiya Janta Party were mainly sourced from voluntary donations during the period which amounted to Rs 297.7 crore while interest of Rs 21.29 crore and "Ajiwan Sahyog Nidhi" were the other sources.

Bahujan Samaj Party also relied on "contributions" of Rs 202.94 crore while membership and interest worth Rs 43.20 crore and Rs 5.18 crore contributed respectively, the data received by Association of Democratic Reforms, a voluntary group, through RTI revealed.

Other major sources of income for the parties analysed for 2007-08 and 2008-09 were "Levy" for CPM Rs 46 crore and receipt from sale of coupons for NCP Rs 50 crore, it shows.

Major expenditure of the Congress party during the period was incurred on election -- Rs 215 crore -- while on publicity it spent early Rs 58 crore. The party also distributed aid worth Rs 56 crore to "others".

The BJP spent maximum funds worth Rs 89.16 crore on advertising and publicity while the BSP made purchases worth Rs 85 crore on immovable properties.

During the period, Congress has declared the "maximum aggregate income" of Rs 718 crore followed by BJP which has declared assets worth Rs 344 crore and BSP Rs 252 crore, it said.

Mayawati's BSP has shown maximum growth in terms of total income of Rs 69.74 crore in 2007-08 to Rs 182 crore in 2008-09 which is nearly 161 per cent while NCP shows a growth of nearly 130 per cent followed by Congress which shows an increment of 125 per cent.

Communist Party of India is the only party whose income dipped during the period. From Rs 1.24 crore in 2007-08, the income of the party has dipped to Rs 1.16 crore in 2008-09 which is a decline of 6.45 per cent.

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MPs salary bill cleared

The Rajya Sabha cleared the bill raising the salaries of MP's to Rs. 50,000 a month frm Rs. 16,000. The constituency and office expenses allowance was dooubled to Rs. 40,000 a month. The bill was passed by the Lok sabha recently. CPIM members walked out of the hall protesting against this, reports The Hindu.

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NEW DELHI: The Rajya Sabha on Tuesday passed the Bill raising the salaries of its members to Rs.50,000 a month from Rs.16,000 and doubling the constituency and office expenses allowance to Rs.40,000 a month. With this, Parliament gave its approval to the Salary, Allowances and Pension of Members of Parliament (Amendment) Bill, 2010, passed by the Lok Sabha earlier.

Communist Party of India (Marxist) members, including Sitaram Yechury and Brinda Karat, and D. Raja (Communist Party of India) walked out of the House protesting the manner in which the hike was being effected with MPs giving themselves a raise and the absence of an independent mechanism to take a view on it.

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EC seeks Press Council's help

The Election Commission of India seeks the help of the Press Council of India in monitoring paid news during election time.Chief Election Commissioner S.Y. Quraishi said in a press conference‘paid news' “has assumed serious proportions and is more pronounced in some States.". The candidate's expenditure monitoring cell will be tightened by the commission, reports The Hindu.

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PANAJI: The Election Commission of India (ECI) has sought the help of the Press Council of India (PCI) in monitoring the media-related malpractices like “paid news” during elections as its jurisdiction is limited to going into candidate's election spending.

Chief Election Commissioner S.Y. Quraishi told a press conference here on Tuesday that ‘paid news' indulged in by some sections of the media “has assumed serious proportions and is more pronounced in some States.”

As far as the Commission was concerned, it was making all efforts to tighten the candidate's expenditure monitoring cell which is headed by an Income Tax Officer. This cell would work in close cooperation with the PCI to monitor practices like “paid news” which were eventually directly related to the influence of money power in the elections, he said.

Mr. Quraishi was in Goa along with Election Commissioner V.S. Sampath to chair a conference of chief electoral officers from the west zone which includes Gujarat, Maharashtra, Madhya Pradesh, Goa and the Union Territories of Daman and Diu and Dadra and Nagar Haveli.

He said the ECI was going ahead with a nationwide programme to increase the participation of youth in the electoral process as it was noticed that often they were not aware of their voting right or seemed to be disillusioned for diverse reasons and kept away from the election process.

“We want to give the youth a sense of participation in the election process. This segment is generally omitted from the voters' list because very often they are cynical about democratic processes,” he said.

“We are celebrating National Voter's Day on January 25, when the Election Commission was founded 60 years ago, one day before the country became a republic,” Mr. Quraishi said.

He said a nationwide drive would be conducted on January 25 in an attempt to induct 2 crore youngsters turning 18 that month into the electoral process.

A programme covering 8.5 lakh voting booths across the country would be held that day to distribute photo identity cards to as many as 2.5 crore eligible voters.

The ECI has so far issued 714 million voting cards across the country.

Reliability

On the reliability of electronic voting machines (EVMs), Mr. Quraishi reiterated his complete faith in the EVM technology which he said had stood the test of time since it was first introduced in 1982.

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Election commission can't control paid news during elections: SY Qureshi

Chief election commissioner of India SY Quraishi said that the commission cannot control paid news during the elections."Our role comes in picture only when the candidate exceeds the expenditure ceiling. We cannot question the media, our powers extend only to candidates," he said. He added that a special body should be formed covering all media, reports Daily News And Analysis.

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Chief election commissioner of India SY Quraishi today said the commission cannot control media players indulging in paid news practices during the elections.

"Our role comes in picture only when the candidate exceeds the expenditure ceiling. We cannot question the media, our powers extend only to candidates," Quraishi told reporters here.

He said it is for the Press Council of India (PCI) to set guidelines for the media.

When pointed out that the electronic media is out of PCI's ambit, Quraishi said there is a lacunae and a special body needs to be formed covering all the media.

The chief election commissioner said the paid news issue extends beyond the election period.

"Paid news and money power are a big concern for the commission. We are trying to address these issues through proper ways," he said.

"Money power and paid news have attained serious proportion. In some states, it's widespread," the chief election commissioner said.

He said a special expenditure monitoring cell has been formed and detailed guidelines are prepared to control the money power.

Responding to a question, Quraishi said the commission is also probing the issue of names of foreigners being included in the voters' list. Goa is among the states which faces this problem, he added.

Besides Goa, a few other states have also pointed out similar instances of foreigners getting enrolled as voters, he said.

"Each and every complaint received by the commission is investigated. We see that each and every person is attended to," he added.

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Poll panel to discuss money power during elections

A conference of electoral officers and administrative officials to be held in Goa will discuss monitoring of election-related expenditure and working out effective means to tackle excessive use of money power during the polls.'The conference will deliberate on various election-related issues. The aim of the conference will be to put together a comprehensive document on best electoral practices in the country,' said Election Commission Director General Akshay Rauth, reports Yahoo News.

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Panaji, Aug 29 (IANS) Monitoring of election-related expenditure and working out effective means to tackle excessive use of money power during the polls will be among the major issues to be deliberated on at a conference of electoral officers and administrative officials to be held in Goa Tuesday-Wednesday, a senior Election Commission official said Sunday.

Election Commission Director General Akshay Rauth said that Chief Election Commissioner S.Y. Quraishi will also attend the two-day conference.

'The conference will deliberate on various election-related issues. The aim of the conference will be to put together a comprehensive document on best electoral practices in the country,' Rauth said.

'One of the major issues of focus is to monitor election-related expenditure and tackling money power,' the official also said.

The conference will be attended by district magistrates and police superintendents from Goa, Maharashtra, Gujarat, Madhya Pradesh and other union territories located in western India, apart from other electoral officers from the respective states.

'District magistrates and district superintendent are officials who actually conduct elections on ground. They will be giving us inputs on the most effective electoral practices during the conference,' Rauth said.

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No election has been stolen by tampering with EVMs

Hari Prasad, a technocrat who was arrested recently for stealing electronic voting machines and released yesterday, will present a controversial paper on how EVMs used in Indian elections can be tampered with at a conference on computer and communication safety.The conference in Chicago in October will be co-sponsored by IT majors like Google and Microsoft, reports Hindustan Times.

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Hari Prasad, who was arrested last week for stealing electronic voting machines and released on Saturday, will present a controversial paper on how EVMs used in Indian elections can be tampered with at a conference on computer and communication safety. The paper — Security Analysis of India’s
Electronic Voting Machines — is based on the first unauthorised analysis of an Election Commission EVM and co-authored by Alex Halderman of University of Michigan and Rop Gonggrijp, a technology expert instrumental in getting EVMs banned in Holland in 1993.

The conference in Chicago in October will be co-sponsored by IT majors like Google and Microsoft.

The paper shows how EVMs can be tampered with either by insiders or by using portable hardware devices, including mobile phones, to extract and alter vote records stored in the machine. This, the paper claims, can be done either by replacing the chips or inserting an additional one when the machines are being shifted. The replaced chips can escape the security test of election officers.

“It is just a possibility,” Halderman told HT. “Our study does not show that any election has ever been stolen by tampering with EVMs… nobody can reasonably claim, based solely on the results we have presented, that an election now settled should be overturned.”

The first doubts were raised by BJP leader L.K. Advani, who suggested that the country revert to ballot voting. He got support from parties including the CPM, RJD, AIADMK and TDP, who also met election commissioners. The Congress said the EC had the final authority over the mode of voting.

The EC was quick to rebuff the claims in the paper. “The demonstration has not shown any tamperability in the EVM. The EVM cannot be tampered with by any method shown in the demonstration,” K.N. Bhar, a commission secretary, told Hari Prasad, in a letter dated August 7. “It is not possible to replace any equipment in the EVM in the election scenario.”

PV. Indiresan former IIT director and member of both the committees, said the EVMs were examined by independent computer experts and tested for security.