Introduction
Perception of corruption in India
‘Corruption’, is universally perceived as the abuse of power by individuals or groups, for private gain. Corrupt behaviour – because it is publicly derided and often illegal – often takes place privately (Choi and Thum 2005); making it difficult to measure or reliably estimate its actual social and economic costs (Galtung 2006). India has gained notoriety as a country where corruption is more visible than in others because of the pervasiveness of low level corruption that people encounter routinely as a part of daily life as well as a number of high profile corruption scandals (Parry 2000; Vittal 2012). When Kisan Baburao Hazare (also known as Anna Hazare) launched his public protest against corruption in August 2011, it garnered wide public support from across the social spectrum in India particularly the middle class (Banerjee 2011). From the poor who are often victims of abuses of power by law enforcement officials, to the burgeoning middle class who are often forced to bribe rent-seeking officials to access public services and the rich who often profit or lose based on political patronage; corruption is a visible and tangible reality for a majority of Indians.
Recent scandals have exposed politicians who had subverted due process (Acharya 2012), allegations of fraud levelled against organisers of the Delhi Commonwealth Games (Majumdar 2011) and Indian Cricketers who were convicted of match-fixing (ESPNcricinfo 2013). These indicate that corruption pervades many aspects of public life and a broad range of institutions in the country. They contribute to the perception of India as a country where corruption is pervasive (Srivastava 2001).
Research outline
This research will examine the historical, structural and social underpinnings of corruption in India. Given that corruption is often rooted in political and economic systems, the historical analysis will focus on India’s political transition from the British Raj to independent democracy as well as its economic liberalisation two decades ago. A key argument in this paper will be that the pervasiveness and magnitude of corruption in India is a result of policy imbalances caused by rapid political and economic transformations.
It will also draw on recent cases to illustrate the most prevalent forms of corruption as well as their magnitude. The impact of corruption in India will be discussed in terms of both the social risks and economic cost for a rapidly developing democracy with a burgeoning middle class. However, the role that corruption plays in keeping the enormous state machinery of India functioning despite shortcomings will also be examined, highlighting the institutional reforms that must precede action aimed at eliminating corruption. Finally, the emergence of anti-corruption movements and their impact will be analysed. The scope of this research is to analyse the spread, intensity, variety and future outlook of corruption in India. Analysis of specific anti-corruption measures and prescription of policy alternatives is not in scope.
Literature review
HISTORICAL PERSPECTIVE
The spread of corruption in a society – as much as its eradication – is often a gradual process. Depending on the level of awareness, tolerance of, and attitude towards corruption, they may eventually become a feature of bureaucratic culture (Simpser 2013). Therefore, understanding corruption in a country or an institution requires a historical perspective and recognition of the specific conditions that spawned it. Any analysis of corruption in India must consider the broad social impacts of the two most pivotal events in India’s recent history: independence from the British Raj in 1947 and the liberalisation of its economy in 1991.
Political Transition
Historically - before western colonisation, social organisation in India was based on a class hierarchy that inhibited social mobility and avenues for realising political or economic aspirations of citizens (Heller 2013). The British Raj largely maintained the status quo – supplanting aristocrats with a colonial administration with broad discretionary powers (Lee 2013). Realising India’s vast capacity for wealth generation, the British government ensured that its colonial officials were well paid, but also imposed heavy penalties for dishonesty (Jones 2013).
Independence in 1947 brought sweeping changes to the social structure of India in a short time. It also inherited from British rule, a population that was no longer as tightly bound by their caste or class, and had aspirations of social mobility – and an education system that would elevate a vast portion of the population from the largely oppressive class hierarchy (Das 2013). Running the massive state machinery required a powerful bureaucracy, so the Indian government retained much of the powers that were once vested in its colonial officials but slashed their salaries (Sabharwal and Berman 2013) - creating an imbalance between the broad powers they exercised and the wealth they could access. The educated masses who sought to advance their social status by joining the public sector found themselves underpaid (Roy 2013). The confluence of excess power and low remuneration of public officials proved to be fertile ground for bureaucrats to use their powers to relax the strict regulations imposed on citizens by the state in exchange for bribes.
The left leaning Nehru government also imposed taxes - sometimes as high as 93% - on the rich and sought to enforce them through underpaid bureaucrats who exercised a broad range of discretionary powers (Kattumuri and Singh 2013). Such policies created incentives for officials and their constituency to profit by subverting due process. The taxation system in India continues to be one of the most corrupt public institutions (Das-Gupta and Andrade 2013). A high degree of State intervention in trade and manufacturing also spawned massive public enterprises which were vulnerable to political interference (Roy 2013). Furthermore, the geographic scale and cultural diversity within the federation of Indian states inhibited monitoring and control of power exercised by elected as well as appointed public officials (Patel 2013). With minimal oversight, elected officials were in a position to personally profit from state enterprises with minimal risk.
Economic liberalisation
After centuries of economic exploitation by the west through colonial occupation, the newly independent Indian government remained suspicious of foreign investment. Its socialist leaning economic policies curtailed private enterprise and market competition (Nilekani 2013). Therefore, until its commencement of landmark liberal economic reforms in 1991, the largest Indian enterprises and most valuable assets were owned and controlled by the state. Historical and cultural factors explained above had already enabled the permeation and normalisation of high-level corruption in the public sector. The privatisation agenda of the early 90s presented unprecedented opportunities for them to exploit public assets for private gains. As the government’s economic liberalisation policies began to kick in and investment in high-value public assets and enterprises were opened to private investment, those with close ties to political elites stood to profit the most (Vittal 2012).
It is worth noting that some industries such as technology companies that emerged and grew faster than government regulations could keep up, were relatively unconstrained by public sector interference and undue regulation. They have grown rapidly to become world leaders and a backbone of industry in India’s economy despite government corruption. A key innovation by India’s technology sector in recent years has been the introduction of a biometric personal identification platform for all citizens – which has the potential to minimise corruption and streamline bureaucratic processes across many public service institutions (Gelb and Clark 2013). If successful, it will help automate public services and thereby help minimise the need for bureaucratic intervention and slash service delivery costs (Kapoor 2013).
LAW
Corrupt behaviour and bribery have been criminalised in India under its penal code since 1860 and the Prevention of Corruption Act specifically targeting corrupt behaviour was introduced in 1988. However, much of meaningful action against corruption in India has been made possible by the Right to Information (RTI) act that was passed in 2005 (Relly and Schwalbe 2013; Suthar 2013). It has helped relax provisions of the Official Secrets Act 1923 that previously inhibited public access to government information and mandated the regular proactive reporting of certain government information – minimising the need for citizens to raise formal RTI requests. Under provisions of the RTI, citizens are entitled to receive government information within 30 days of a specific request – provided it does not adversely impact national security (Jain and Saraf 2013).
The campaign conducted by Anna Hazare in 2011 for a ‘Jan Lokpal’ or People’s Ombudsman on corruption – having revived popular demand for an independent office with broad anti-corruption powers two years ago – has not yet achieved its goal. The bill was passed by the Indian lower house but has been blocked in the upper house. It will be a test of integrity for key Indian policy leaders including Prime Minister Manmohan Singh. More importantly, it will help gauge the momentum in public opinion against corruption. Those who criticise the bill points out however, that it is not a sufficient or critically important policy tool for combating the culture of institutionalised corruption in the country (Banerjee 2011).
RECENT HIGH-PROFILE CASES OF CORRUPTION
In February 2012, India's Supreme Court annulled 122 telecom licenses after it was revealed that then minister of communications and IT - A. Raja – had corruptly subverted due process in awarding them (Acharya 2012). Instead of being sold at public auction, the wireless phone licenses were sold at a colossal loss to the state, to a few privileged companies which the minister had tipped off ahead of their competitors. Raja was jailed for 15 months but has since been granted bail – even after perpetrating a scam that Time Magazine rated second behind Watergate in its ‘Top 10 abuses of power’ list (Tharoor 2011). The spectrum was later auctioned for $27 billion confirming the estimated value as per India's Comptroller and Auditor General (CAG). In April this year, Raja submitted a statement indicating that Prime Minister Manmohan Singh and Finance Minister P. Chidambaram were fully aware of the 2G bandwidth allocation process and approved of his decisions at the time (Singh 2013). Presently, there are also allegations of subverting due process in the allocation of coal blocks to public and private enterprises between 2004 and 2009, but it is not clear whether they are linked to corruption.
In March 2011, a diplomatic cable released by whistle-blowing website Wikileaks revealed an American official’s description of witnessing "chests of cash" shown to him by an official of the Congress party (WikiLeaks 2011). The cable further revealed the cash being described as reserved for bribing MPs to buy their support for a vote of confidence on the US-India nuclear deal.
Even sports have not been spared from the corrosive influence of corruption. The Indian government was seriously embarrassed by allegations corruption and fraud connected with its hosting of the 2010 Commonwealth Games in Delhi (Majumdar 2011). Indian politician and member of the ruling Congress party Suresh Kalmadi faced a life sentence for his alleged role in the scandal. However, Kalmadi was granted bail in early 2012 after serving a 10 month prison term and the trial has not progressed since, further highlighting possible irregularities in the criminal justice system (TNN 2012). In 2012, the International Olympic Committee (IOC) suspended India's Olympic Association over claims of corruption surrounding its internal election process. Also, four high profile Indian Cricketers were convicted of match-fixing last September (ESPNcricinfo 2013). A court order has been issued to investigate the President of the Board of Control for Cricket in India and his son-in-law regarding their possible involvement in the scandal (Correspondent 2013).
The scale of corruption in India is partly made possible by the globalised financial services sector. Trillions of dollars' worth of proceeds from corrupt activity in India is estimated to be held in offshore bank accounts, though the exact figure may not be known (Kumar 2013). This highlights the fact that high-level corruption is a truly global issue – and its prevalence in India or any other country reflects more on a global system that enables, fosters and profits from it.
FIGHT AGAINST CORRUPTION
Social activists such as Anna Hazare and Kiran Bedi have recently gained prominence and broad following in Indian public life for their anti-corruption advocacy and campaigning (Khandekar and Reddy 2013). This highlights a growing and potent public discontent of the Indian government’s inability and sometimes unwillingness to tackle issues of corruption proactively (Goodwin 2013). There are indicators that the correlation between a growing middle class and reducing levels of corruption may hold true for India – as long as the middle class is actively engaged in the anti-corruption movement (Webb 2013). But little progress has been made so far and even symbolic victories such as the Lokpal bill of 2011 have stalled in the legislature. Much of the anticipated progress in the fight against corruption has not yet fully materialised, but increasing levels of social awareness and civil engagement provide cause for optimism.
Technological innovations such biometric identification for all citizens - promise to streamline bureaucratic processes and promote citizen empowerment by enabling easier access to public services for a large number of the population that have remained marginalised for generations (Kapoor 2013). Cheap and robust technological solutions have the potential to become a key ally in the fight against corruption, but they remain a fair distance from reaching fruition (Karna 2013).
Analysis
Continued failure of successive administrations to tackle corruption effectively, and the dominance of a political class that has benefited from it, have allowed corrupt behaviour to permeate many aspects of public life in India. Subsequent generations who have been born into the system have grown to accept corruption as part of public life (Simpser 2013). However, neither specific examples nor perceptions of the pervasiveness of corruption are symptoms of moral decadence; but signs of broader public policy failures, weak institutions and erosion of the rule of law. Even though they have a corrosive social impact in isolation, some have evolved as means of circumventing bad or inefficient policies, and have evolved to be net positive outcomes at least economically.
Lack of public accountability has historically been a key enabler of corruption in India, but RTI legislation coupled with heightened public awareness is increasing the risks for senior officials who engage in corrupt behaviour. Reducing high level corruption can deter corruption at lower levels (Bhattacharyya and Jha 2013). A higher degree of automation that can minimise the need for bureaucratic intervention in public service delivery, citizen empowerment through education and political organisation are proving to be more effective in the fight against corruption in India.
Nepotism and cronyism
Despite being a democracy for three generations, India’s historical social organisation paradigms of class hierarchy, caste clans and family ties have not been supplanted by egalitarian principals. As a result of the cultural primacy of the family, aspirations of the family and community are often inseparable from the aspirations of the individual. India is by no means unique in this regard, but its religious traditions and culture foster instincts that favour the greater good of the group over the individual (Gupta 2013). The ethical constraints on nepotism and cronyism based on egalitarian principles sometimes contradict the fundamental human instinct to favour those with familial ties or shared identity over those who we cannot relate to. As evident in the stark contrasts in levels of opulence and poverty lying side by side in its population centres, and irregularities in its justice system, few Indian citizens – if any – can subscribe to egalitarian ideas about equal opportunity and fairness for all. Nepotism and cronyism have gained credence in a society that is equally defined by the absence of policies that advance egalitarianism and meritocracy.
Political structure
The scale of India’s democracy, the collective demands of its citizen’s political and economic aspirations and the scale of diversity in Indian society have mandated devolution of political power to regions defined by distinct language and cultural traditions. Successive Indian central governments have depended on broad coalitions of federal level power brokers with diverse interests to gain and retain power. Such interdependencies have weakened checks and balances in the Indian legislature that would otherwise enable corruption among politicians to be prosecuted more proactively. For example, it is alleged that the Indian Prime Minister knew of irregularities in the 2G spectrum auction, but failed to take action against the relevant minister as that may have destabilised the ruling coalition.
Economic impact
The actual economic cost of corruption in India would be difficult to measure or estimate – not merely because corruption at most levels is invisible but also because of the scarcity of information. Variations in public awareness of corruption across the immense scale, diversity and geographic spread of the population and lack of reliable information channels would pose significant challenges in the collection as well as collation of data (Galtung 2006). However, there are two salient points that are relevant.
One is that the growing middle-class is rapidly building up a critical mass of people who are aware of corruption at all levels in society and articulate open dissatisfaction about the status quo (Harindranath and Khorana 2013). High profile corruption scandals contribute to a growing perception of the Indian market as one of high-risk as much as it is one of great opportunities (Gill and Mand 2013). There is a significant risk that such an environment may attract the wrong type of investors. Both these factors can have highly destabilising effects on the political climate and economy in India respectively.
The second point worth noting is that corruption in India has been spawned by imbalances in its policy framework caused by rapid political and economic transformations. It is perhaps a sad reality that India’s public infrastructure has not expanded to keep up with its growing population (Swerts et al. 2013). Intensifying competition for limited resources exacerbate certain ingrained forms of corruption that have gained legitimacy by evolving to offer better alternatives to bad social policies. Policies and regulations such as laws that refer minor traffic infringements to court are outdated, and have a negative impact on workforce productivity and judicial efficiency. Bribing a police officer in such instances - though illegal and corrupt - may have a positive economic impact.
