The idea of corruption is one that every citizen understands, unlike some of the other complex concepts that require a lot of background and training. People understand that corruption occurs when public services are available not on the payment of legitimate fees but when a lot of additional money that has not been mandated by government rules has to be paid. There are other facets of corruption, such as illegitimate money being made in the implementation of government schemes or award of contracts or public procurement, and allocation of natural resources like mining leases.
Recently, several people have argued that the economic liberalisation has given rise to increased corruption. With greater public awareness, a strong Press and electronic media portraying the gaps in governance, a strong impression has emerged that corruption has become worse. The rising expectations of people for good governance and a cleaner system of administration have strengthened this view.
Let us contrast this perception with the assessment of organisations that are measuring corruption globally. One of the organisations that does this is Transparency International (TI). It publishes Indices of corruption for various countries on a scale of 1 to 10. Admittedly there are inadequate measures as these involve perception-based measurement. As a secular trend of rising expectations of good governance, however, it may be useful. The data shows that the Corruption Perception Index (CPI) for India has improved from 2.8 in 2000 to 3.3 in 2010. As against this, the global average has worsened by 15.6 per cent during this period. The Indices showed that perception in China has marginally improved. For the other major emerging economies like Brazil, this Index has gone down from 3.9 to 3.7.
The World Bank Index that is measured on a scale of (-)2.5 to (+)2.5 showed a marginal improvement from (-)0.41 to (-)0.33 for India. For China, it showed a sharp worsening from (-)0.23 to (-)0.53. The data also shows that India, which was in the last quartile of most corrupt countries, is now somewhere in the middle according to the TI Index. This data does not support the view of worsening corruption. If anything these show a marginal improvement in Indian economic structure in respect of corruption. We are perhaps measuring ourselves against a rising benchmark of people’s expectations.
Economic reforms dismantled the licence-permit raj. The philosophy behind this policy was to abolish opportunities for corruption. Prevention of corruption through systemic change was critical to these changes. Huge transaction costs involved in the process disappeared at one go. The reduction of rates of both income tax and customs demolished another wall of corruption. Economic reforms enabled faster growth and brought economic prosperity. I recall the seventies and eighties when getting a telephone connection was considered a huge privilege. One was always in the queue which was almost never-ending. I recall the massive shortage of cotton yarn for weavers in the seventies. I also recall how edible oil was so scarce that even well-off people had to wait for months before using the limited stocks. For better-off middle class families getting a Vespa scooter was a privilege. All this has changed because of the faster growth of the economy and expansion of production. The growth process has, however, thrown up new challenges. We need to apply the “prevention of opportunity for corruption” philosophy and need further reforms.
Economic growth has led to bigger revenues and new or expanded areas of economic activity. Mobile telephony, PPP in infrastructure sector, coal and iron ore mining are some such areas. It has led to the rapid expansion of government budgets. These changes have provided new areas for corruption. Transparency in decision-taking in all these areas is an important and critical requirement for reducing corruption. The procedures have to be such that effective competition is promoted. Reducing competition on grounds of some procedural infirmity will not serve people’s interest. Putting the list of qualified bidders on the websites in public procurements would go a long way in doing so. Similarly, in the case of natural resources, transparent procedures including e-auctions have to be devised. There are other areas of public policy that may give rise to corruption. The watchword in all these has to be transparency, equity and social audit.
Recent experience has shown that good governance can improve public service delivery and reduce corruption. Common citizens are harassed much more by poor governance than any other factor. For this, laws and procedures have to be simplified so that citizens get services without having to run from one official to the other. Systemic changes are extremely crucial for reducing corruption. Public services delivery that involves discretion with officials or too many complicated forms often leads to intermediary agents requiring illegal money. Technology can change this. Use of Information Technology (IT) by Railways has led to very sharp reduction in corruption in Railway reservations. Recent improvements in tax refunds to income tax payers are another example. The use of IT and UID can bring in major changes for delivery of public services. The effective implementation of simplified IT procedures, abolishing unnecessary certifications and trusting citizens can reduce corruption enormously. It is much more important to prevent corruption rather than to punish people after it has occurred. Citizens do not benefit very much if they know that an individual who had used illegal methods has been punished. Rather, they would be interested in the faster and easy delivery of services made available efficiently.
An important part of systemic change is setting up new courts and appointing an adequate number of judges to try the guilty. If people who are accused of corruption are punished quickly, it acts as a deterrent. If, however, these linger on then the effectiveness of punishment gets drastically reduced. Special courts, a larger number of courts and special independent investigative wings that ensure this are important components of punishing the guilty. Measures for confiscation of property of public servants who are accused of corruption is another important measure. This needs to be pursued relentlessly so that the culprits cannot get away with ill-gotten wealth. An effective Lok Pal Act will address many of these concerns.
No single measure can reduce or finish corruption. That any single measure will bring a corruption-free society is clearly a myth. The experience, especially in Hong Kong and Singapore, has shown that there are no parallels to it. The reality is that a strong independent Lok Pal is a cardinal and key component of reforms on corruption. However, this has to be supported by a whole host of measures on systemic reforms for preventing corruption. The myth that corruption has increased because of economic reforms is unfounded. The demolition of the licence-permit raj and expansion of the economy led to rapid growth, increased individual incomes and improved service delivery of a range of public goods including telephones and gas connections. What is, however, required now is a move forward and a new set of reforms to ensure that economic reforms attain their objective fully.
The author is Member, Planning Commission. These views are personal