Corruption" - the act of doing something illegal or illegitimate in return for money or other favours - has attracted much attention recently. It is, therefore, worthwhile to examine the causes of corruption, its extent and, most importantly, the methods to minimise - if not eliminate - it.
Causes
(1) Low remuneration of those exercising discretionary power: Until a few years ago, salaries of civil servants in India were kept at such low levels that even senior officials who were honest found it difficult to meet the legitimate expenses of any Indian family, such as educating children, supporting aged parents, etc. In fact, a major reason why there is much less corruption among civil servants in the United Kingdom and France is that their civil servants are paid well.
Recently, though, after decades of neglect, the government revised the salaries of civil servants. It is essential that such revisions be made periodically. At the same time, it is important to maintain some measure of parity with the prevailing pay structures in other sectors of the economy. Also, the number of hierarchical layers in the civil services should be curtailed substantially. What is the point of having so many under-secretaries, joint secretaries, deputy secretaries, additional secretaries, special secretaries and, finally, secretaries? A more transparent and well-defined system of delegation would remove the need for so many layers, so that the overall level of expenses can be maintained at reasonable levels even after an increase in individual remuneration.
(2) Scope for discretion: Another cause of corruption is the scope of discretion given to individual officials or government institutions. Curtailing such discretion will be counterproductive. The challenge is to balance the likely conflict between the need for such delegation of power and the resultant increase in the scope for corruption.
(3) Greed: Last but not least, pure and simple greed is another cause of corruption. Merchant bankers in New York even went to the extent of proclaiming that "greed is good". Inevitably, it also led to their downfall and bankruptcy.
How to minimise corruption
(1) Higher remuneration for public servants: For the past several decades, our government has been misguided by the Gandhian philosophy of renunciation of wealth and comforts. Most individuals, however, are not Mahatma Gandhi; they have to be treated as normal human beings who have certain obligations. Increasing the level of remuneration of civil servants, ministers and other elected representatives will remove the need for them to seek additional sources of income. Additionally, adequate provision should be made for their retirement benefits based on the years of service they have put in. This will ensure that they feel secure and capable of avoiding the temptations to seek other forms of income.
(2) Review the rules on election expenses: In the case of elected politicians, a major cause for corruption is the need to meet election expenses. His performance in bringing benefits to the electorate does play a part in campaigns, but he has to communicate this to the electorate by holding rallies and using various forms of media. This takes him into competition against his rivals and lures him into matching or exceeding their expenditure. The limits imposed by the Election Commission can prove to be unrealistically low. Therefore, the whole policy on election campaign funding should be revised to provide for the following:
* The limits for tax exemption on contributions to election funds of parties recognised by the Election Commission by individuals and corporations should be eased. By pretending that elections can be fought using meagre funds, we are burying our heads in the sand.
* The limits on election expenses should be revised substantially upwards and reviewed periodically to provide for inflation.
(3) Modernise some of the archaic methods in government: One of the major transactions between citizens and the government is in relation to property. It's no exaggeration to say that no land transaction can be carried out without bribe or favours. This is because all land records are stored manually. If land records are computerised, then every property owner can confirm his ownership of a particular survey number with a click of the mouse. One more example is the payment of stamp duty and registration fee for every sale and purchase of land or property. For each of those transactions, one has to visit the local sub-registrar's office to pay the applicable stamp duty. The customary speed money has to be paid for registration. Our leading IT companies can design an alternative method for e-payment with necessary security features. The whole process can be completed by the seller or the buyer from their respective locations without having to be present at the registrar's office. Another advantage of computerisation is that it will reveal the large landholdings where a lot of black money is currently parked. Since agricultural income is not taxed in India, farmland is seen as a relatively safe mode of parking black money.
Finally, it cannot be denied that India has progressed considerably in the last two decades. It is, therefore, high time that we stopped our habitual self-flagellation and gave ourselves some credit for this achievement. Combining a strong democratic political set-up with such creditable economic progress is rare. When older people like me look ahead to the future of our grandchildren, we almost feel jealous that we will not be around to share that golden future. But then, we have the satisfaction of witnessing the transition of our country from the "garibi hatao" (end poverty) phase of the India Gandhi years to the current dawn of "dhan banao" (make money).
The writer is a past chairman of Hindustan Unilever
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
