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Why Have This Show - I?
Why Have This Show - II?
 54% of Indian users paid a bribe to at least one of nine selected service
providers in 2010 – TI, 2011

 49% Pakistanis, 11% Chinese, 62% Afghans, 4% Brazilians, 27% Russians,
63% Nigerians and 31% Mexicans too paid bribes – TI, 2011

 Yet 19% Indonesians, 17% Filipinos, 9% Malays, 4% Canadians, 2%
British and 5% Americans paid bribes – TI, 2011

 India scores 3.3, Brazil 3.7, China 3.5, Mexico 3.1 – TI, 2011

 Series of megabuck scams in last decade

 Very few convictions

 Virtually no forfeiture of ill-gotten wealth

 International reputation downhill
Why Have This Show - III?
  An international watchdog study shows India has been drained of
$462 billion between 1948 and 2008 - nearly 40% of India's annual
gross domestic product

 India tops the list for black money in the entire world with almost
US$1456 billion in Swiss banks

  Indian Swiss bank account assets are worth 13 times the country‘s
national debt

  ED probes US$ 24.86 billion transactions - enough to fund national
drinking water project in all 6,00,000) villages in India for the next 10
years

 The Economist: A rotten state (11th Mar, 2011)

ARE WE A POOR NATION BECAUSE WE ARE CORRUPT?
Why Have This Show - III?
What Causes Corruption – The Layman‘s View
 Absolute authority vested in political and administrative
bureaucracies

  Ineffective/antiquated and overburdened legal system leads to
skewing of power structures

 Ineffective anti-corruption mechanisms

 Ineffective ombudsmen

 Inadequate enforcement of laws and punishment

 Government rules and regulations encourage rent-seeking

 Privatization , Liberalization and Globalization
Defining Corruption - I
 Joseph Nye (1996):

 ―Behavior, which deviates from the formal duties of a public
role because of private-regarding (family, close family, private
clique) pecuniary or status gains; or violates rules against the
exercise of certain types of private-regarding influence. This
includes such behavior as bribery; use of a reward to pervert
the judgment of a person in a position of trust; nepotism
(bestowal of patronage by reason of ascriptive relationship
rather than merit); and misappropriation (illegal appropriation
of public resources for private-regarding uses).‖
Defining Corruption - II
Mushtaq Khan (1996):

―Behavior that deviates from the formal
rules of private-regarding motives such as
wealth, power, or status‖

Pranab Bardhan (1996):

 ―The use of public office for private
gains.‖
Defining Corruption - III
 Oxford     Unabridged    Dictionary   defines
corruption as ―perversion or destruction of
integrity in the discharge of public duties by
bribery or favor.‖


 Merriam Webster‘s Collegiate Dictionary
defines it as ―inducement to wrong by improper
or unlawful means (as bribery).‖
Defining Corruption - IV


 Can occur in either the public or private sector but
typically characterized as the use of public office for
private gain
 Economists claim that levels of corruption may
depend on discretionary power, economic rents, and
oversight and weak enforcement institutions
 May vary according to the scope of supervision and
the number of hierarchical levels in an organization
Typology of Corruption - I

Grand: Senior officials, major decisions or
contracts, and the exchange of large sums of
money, e.g. 2G & CWG
Petty: Low-level officials, the provision of
routine services and goods, and small sums of
money, e.g. licensing & enforcement
Systemic: Permeates an entire government or
ministry, e.g. DDA & MCD
Individual: Isolated and sporadic, e.g. traffic
constable & sanitation inspector
Typology of Corruption - II
Syndicated: Elaborate systems devised for receiving and disseminating
bribes, e.g. 2G, Bofors & New Nationalized Bank Branches

Non-syndicated: Individual officials may seek or compete for bribes in
an ad hoc and uncoordinated fashion, e.g. pension sanction & bank
loans

Internal: Interfere with the ability of a government agency to recruit
or manage its staff, make efficient use of its resources, or conduct
impartial in-house investigations, e.g. ED & CBI

External: Efforts to manipulate or extort money from clients or
suppliers, or to benefit from inside information, e.g. CPWD & SEBI

Administrative: Unwarranted interference in market operations, such
as the use of state power to artificially restrict competition and
generate monopoly rents, e.g. PSU IPOs & land sales to private sector
Illustrations of Corrupt Behavior - I
  Design or selection of uneconomical projects because
of opportunities for financial kickbacks and political
patronage, e.g. realigning rail track to inflate cost

  Procurement fraud, including collusion, overcharging,
or the selection of contractors, suppliers, and
consultants on criteria other than the lowest evaluated
substantially responsive bidder, e.g. cartelization & pre-
qualification of vendors

  Illicit payments of "speed money" to government
officials to facilitate the timely delivery of goods and
services to which the public is rightfully entitled, such as
permits and licenses, e.g. transfer of govt. lands
Illustrations of Corrupt Behavior - II
  Illicit payments to government officials to facilitate access to
goods, services, and/or information to which the public is not
entitled, or to deny the public access to goods and services to
which it is legally entitled, e.g. fire clearances & change of land
use

  Illicit payments to prevent the application of rules and
regulations in a fair and consistent manner, particularly in areas
concerning public safety, law enforcement, or revenue collection,
e.g. hafta & income tax refund advice

  Payments to government officials to foster or sustain
monopolistic or oligopolistic access to markets in the absence of
a compelling economic rationale for such restrictions, e.g.
limiting construction of new airports
Illustrations of Corrupt Behavior - III
  Misappropriation of confidential information for personal
gain, such as using knowledge about public transportation
routings to invest in real estate that is likely to appreciate, e.g.
extension of DMRC, location of SEZ & national highway
realignment

  Deliberate disclosure of false or misleading information on
the financial status of corporations that would prevent
potential investors from accurately valuing their worth, such as
the failure to disclose large contingent liabilities or the
undervaluing of assets in enterprises slated for privatization,
e.g. valuation of assets prior to disinvestment of PSU
shareholding by GOI

 Theft or embezzlement of public property and monies, e.g.
Railway property & preferment of duplicate bills
Illustrations of Corrupt Behavior - IV
  Sale of official posts, positions, or promotions;
nepotism; or other actions that undermine the creation of
a professional, meritocratic civil service, e.g. State PWD,
Irrigation, NHAI & Central Secretariat

  Extortion and the abuse of public office, such as using
the threat of a tax audit or legal sanctions to extract
personal favors, e.g. income tax notice & overstated excise
penalties

 Obstruction of justice and interference in the duties of
agencies tasked with detecting, investigating, and
prosecuting illicit behavior, e.g. ED & CBI
Illustrations of Corrupt Behavior - IV
•Sale of official posts, positions, or promotions; nepotism;
or other actions that undermine the creation of a
professional, meritocratic civil service, e.g. State PWD,
Irrigation, NHAI & Central Secretariat

•Extortion and the abuse of public office, such as using
the threat of a tax audit or legal sanctions to extract
personal favors, e.g. income tax notice & overstated excise
penalties

•Obstruction of justice and interference in the duties of
agencies tasked with detecting, investigating, and
prosecuting illicit behavior, e.g. ED & CBI
Corruption in History - I

―Just as it is impossible not to take the
honey (or the poison) that finds itself at
the tip of the tongue, so it is impossible
for a government servant not to eat up
at least a bit of the King‘s revenue. Just
as fish moving under water cannot
possibly be found out either as drinking
or not drinking water, so government
servants employed in the government
cannot be found out (while) taking
money (for themselves)‖ - Kautilya
Corruption in History - II
―This is the ―decree‖ or ―mandate‖ of heaven. If the
emperor or king, having fallen into selfishness and
corruption, fails to see to the welfare of the people,
heaven withdraws its mandate and invests it in
another. The only way to know that the mandate has
passed is the overthrow of the king or emperor; if
usurpation succeeds, then the mandate has passed to
another, but if it fails, then the mandate still resides
with the king‖ - The Chou c.1050-256 BC
Corruption in History - III
  Machiavelli: Discourses on the need for virtu in
republican government

  Rousseau: Government officials, selected by the people
to manage society‘s business, must carry out their duties
in a manner transcending personal interests

 Kautilya: Lists ―at least forty ways‖ of embezzling
money from the government in India

  Ancient China: Failed extra allowance to government
officials  called   Yang-lien,    meaning     ―nourish
incorruptness.‖

  Abdul Rahman Ibn Khaldun: Root of corruption was
―the passion for luxurious living within the ruling group‖
Corruption in History - IV
 The servants of the nation are
 to render their services without
 any taking of presents. … To
 form your judgment and then
 abide by it is no easy task, and
 it‘s a man‘s surest course to
 give loyal obedience to the law
 which commands, ‗Do no
 service for a present‘ - Plato
Corruption in History - V

 ―Corruption is worse than
 prostitution. The latter
 might endanger the morals
 of an individual the former
 invariably endangers the
 morals     of   the   entire
 country‖      - Karl Kraus
 (1874-1936)
Bishop Creighton:
―People in authority are not [to] be snubbed or
sneezed at from our pinnacle of conscious rectitude‖

           Lord EE Dalberg-Acton, 1887:
           ―If there is any presumption, it is the
           other way against holders of power,
           increasing as the power increases. Historic
           responsibility has to make up for the want
           of legal responsibility. Power tends to
           corrupt and absolute power corrupts
           absolutely‖
Where India Stands: Ends Justify Means

       ―Great men are almost always bad men,
       even when they exercise influence and not
       authority: still more when you superadd
       the tendency or the certainty of corruption
       by authority. There is no worse heresy than
       that the office sanctifies the holder of it.
       That is the point at which...the end learns
       to justify the means‖
Frameworks of Research & Practice of Corruption

Two alternative frameworks dominate research and
practice on corruption:

Economic perspective: Focuses limitedly on the roles of
rational self-interest, efficiency pressures, and explicit,
formal regulative structures in explaining and combating
corruption

Organizational behavior: Focuses on the normative and
cognitive aspects of corrupt behavior however, within
organizations and instead of on the wider institutional
orders that also influence the behavior of individuals and
organizations
Causes of Corruption - I
  Greater efficacy of common law in curbing
corruption than civil law

  Democratic and open political systems foster
freedom of association and of the press and
engender public interest groups to expose abuses

  Competitors for office have an incentive to
discover and publicize the incumbent‘s misuse
of office whenever an election beckons
  – Daniel Triesman (2000)
Causes of Corruption - II
  Federal structure in which each level has
its own police force can reduce the
vulnerability of any one law enforcement
agency (Rose-Ackerman, 1994)

  Relatively balanced power of central and
subnational officials over certain common
pool resources — the tax or ‗bribe‘ base in
a given region — leads to suboptimal over
extraction (Shleifer and Vishny, 1993)
Corruption: Driver or Retarder of Growth? - I
YES

Leff (1964) and Huntington (1968): Raises economic growth
rates .―Speed money‖ would speed up procedural delays in
government by encouraging civil servants to work harder for
such ―incentives‖ on a piece rate (Mauro, 1995).

NO

Shleifer and Vishny (1993): Corruption lowers economic
growth
Rose-Ackerman (1978): Difficulty in limiting corruption to
areas where it may be desirable.
Corruption: Driver or Retarder of Growth? - II
 If Bangladesh were to increase the level of integrity of its
bureaucracy to that of Uruguay, its investment rate would rise
by 5% and yearly GDP growth rate by 0.5%

  Bureaucracy efficiency index, 1 being the lowest grade and 10
the highest:

  India listed along with Bangladesh in the second lowest
category with a score of 4.5-5.5 with Pakistan in the lowest
category of 1.5-4.5 while Sri Lanka is slotted in the next higher
category of 6.5-7

  A one standard deviation improvement in the bureaucracy
efficiency rate was associated with a 4.75% annual rise in GDP
(Mauro, 1995, 696) and a 1.03% rise in GDP per capita
Paulo Mauro, IMF, 1995
Corruption: Driver or Retarder of Growth? - III
  Mauro, 1998: One standard-deviation improvement in the corruption index leads
education expenditure to rise by over six percentage points of total government
consumption expenditure

 Also affects government expenditure on health services

  Lambsdorff (1999): If corruption affects the productivity of capital, an adverse
impact on the ratio of investment to GDP will result

  Tanzi and Davoodi(1998): Retards growth by increasing public investment while
reducing its productivity

 Higher corruption associated with higher total expenditure on wages and salaries

  Retards growth by reducing the quality of the existing infrastructure by
increasing the cost of doing business for both government and private sector
leading to lower output and growth

  Lowers growth by lowering government revenue needed to finance productive
spending
Corruption & Inflation
    Al-Marhubi (1999): Faced with rising tax evasion and tax
collection costs in corrupt countries, governments sometimes
have a motive for creating inflation to generate seigniorage
(difference between face value and cost of circulation of a coin;
also referred to as inflation tax in some countries) as a source of
government revenue

    Force businesses underground thereby increasing reliance
on the inflation tax

  Capital flight, shrinking taxable assets and income of those
most able to meet government revenue requirements

    By reducing revenues and increasing public spending, may
also contribute to larger fiscal deficits, with attendant inflation
Corruption & Growth of Private Sector

  Fisman and Svensson (2007): Found a
negative correlation between the rate of
taxation and bribery and firm growth

  Concluded that ―a one-percentage point
increase in the bribery rate was
associated with a reduction in firm
growth of three percentage points, an
effect that was about three times greater
than that of taxation.‖
Corruption & Growth of Private Sector

  Fisman and Svensson (2007): Found a
negative correlation between the rate of
taxation and bribery and firm growth

  Concluded that ―a one-percentage point
increase in the bribery rate was
associated with a reduction in firm
growth of three percentage points, an
effect that was about three times greater
than that of taxation.‖
Corruption & Creditworthiness
 Increases likelihood of arbitrary government actions that reduce
profits and leave firms unable to repay loans

 May lower the effectiveness of government services, making it even
more difficult for firms to realize profits (Shleifer & Vishny, 1993).

 Reduce legal protection for bondholders as controlling shareholders
may divert resources from the firm to their own private ends.

 Higher risk premium when issuing bonds.

 An important source of default risk

  Surprisingly, corruption does not distinguish between firm spreads
and sovereign spreads to the same degree even though in theory
corruption should matter in very different ways for these two types of
borrowers (Cocchini, et al, 2003)
Corruption & Defense Expenditure - I
  From 1980-2007, global arms imports have
risen from $40.58 billion to $ 819.04 billion at
1990 constant prices (SIPRI, 2009)

  Tanzi (1998) estimated that bribes account for
as much as 15% of the total spending on
weapons acquisition

  Therefore based on purchases during 2007
may be as high as approximately $ 125 billion,
i.e. about the GDP of the UAE, New Zealand
and Egypt each in 2007 (World Bank, 2009).
Corruption & Defense Expenditure - II


Country    TI (CPI) Purchases      Country      TI (CPI) Purchases
           Ranking ($ billion)                  Ranking ($ billion)
            2008     in 2007                     2008     in 2007
Greece       57        19.27     China            71       29.02
Mexico       72        1.74      Saudi Arabia     80       18.95
India        85        25.01     Egypt            115      16.60
Vietnam      121       2.00      Pakistan         134       9.57
Yemen        141       1.95      Venezuela        158       2.32
Myanmar      178       2.35
Causes of Corruption in Defense Expenditure - I
Gupta, DeMello and Sharan (2001)

 Foreign suppliers may bribe officials of countries importing arms
and military equipment facilitated by the tax code of arms-exporting
countries, that allow bribery as a business expense

  Payment of bribes to foreign officials typically not considered as a
criminal act in many recipient countries

  Since the mid-1980s and the breakup of the former Soviet Union
the defense industry in Russia and the CIS had large idle capacities
and huge fixed sunk costs that prompted arms producers to scout
aggressively for markets abroad

 Regulations typically confer power on the officials in charge of
authorizing contracts
Causes of Corruption in Defense Expenditure – II
   Limited competition among suppliers encourages
 rent seeking and provides incentives for officials to
 engage in malfeasant behavior

   The secrecy surrounding defense outlays gives rise
 to corruption. Defense contracts are often excluded
 from freedom of information legislation, where
 available

   Administrative procedures in military spending are
 not closely monitored by tax and customs authorities
 and standard budget oversight like auditing and
 legislative approval
Causes of Corruption in Defense Expenditure – III
   Stock of defense assets—such as military-controlled
 land, hardware, testing grounds, transport vehicles
 and facilities such as housing and training centers,
 tends to be large and provides further opportunities
 for corruption

         Size of Global Defense Spending

   SIPRI: $1339 billion in 2007—a real-term increase
 of 6% over 2006 and 45 per cent since 1998

  Corresponds to 2.5 per cent of world gross domestic
 product (GDP) and $202 GDP per capita
Corruption & Inequity: Water Supply
Falsified meter readings

Distorted site selection of boreholes or abstraction points

Collusion and favouritism in public procurement

Bribes to cover up wastewater and pollution discharge

Kickbacks to accept inflated bills in production

Nepotism in allocation of public offices in water administration

Bribes for diversion of water for irrigation

Bribes for preferential treatment (spread, service level etc)
Corruption & Iniquity: Water




        Limited Potable Water in Rural Areas




Corruption = Monopoly + Discretion – Accountability
Corruption & Iniquity: Urban Poor




                 Burgeoning Slums




Corruption = Monopoly + Discretion – Accountability
Corruption & Iniquity: Rural Poor




              Rural & District Schools




Corruption = Monopoly + Discretion – Accountability
Corruption & Iniquity: Land Acquisition




   Transfer of Agricultural Land to Private Industry




Corruption = Monopoly + Discretion – Accountability
Corruption & Inequity: Social Security




        Social Security for Unorganized Sector




Corruption = Monopoly + Discretion – Accountability
Corruption & Inequity: Public Works - I




             Public-Private Partnership




Corruption = Monopoly + Discretion – Accountability
Corruption & Inequity: Public Works - II




               Government Executed




Corruption = Monopoly + Discretion – Accountability
National Integrity System – Institutional Layout

Non-government                      Government
  Political Parties       Legislature     Public Procurement
   International      Central Information Local & Regional
    Institutions         Commission         Governments
       Media           Central Election       Judiciary
                        Commission
    Civil Society           CAG               Police &
                                             prosecutors
   Private Sector        Public Sector       Ombudsman
                          Executive
National Integrity System – Institutional Layout
            Pillar                         Core Rules/Practices

Executive                  Conflict of interest; administrative law; judicial
                           review of official decisions
Legislature                Fair and transparent elections
Legislative Committees     Power to question senior officials
Auditor General            Public Reporting
Public Service             Public service ethics; monitoring assets and integrity
                           testing; conflict of interest, nepotism and cronyism
Judiciary
Media                      Access to information
Civil Society              Freedom of speech; the right to information and
                           giving citizens a voice
Anti-corruption/watchdog   Enforceable and enforced laws
agencies
Private Sector             Competition policy; public procurement;          good
                           financial management
International              Effective mutual legal/judicial assistance
National Integrity System

Objectives

 Combating corruption as part of the larger struggle
against misconduct and misappropriation

 Creating an efficient and effective government
working in the public interest. In fine, the ultimate
goal of the NIS is promoting good governance,

“. . . the aim is not complete rectitude or a one-time cure
or remedy, but an increase in the honesty or integrity of
government as a whole . . . (Pope, 1997)
National Integrity System – Oversight Layout




                           CAG




                     CBI         CVC



_______ Parliament
_______ Courts
National Integrity System – Legal Environment



                            CAGA



                     SPEA          PCA



                            CVCA


_______ Parliament
_______ Courts
National Integrity System – Vigilance Layout


                                   DCVO
                    CVO
                                   ACVO
   CVC
                  JS (Vig)
                                   Dir/DS
    VC             MoPT

    VC
National Integrity System – The Linkages

                       Parliament




CAG‘s (DPC)                                           PAC
                 CVC Act             SPE Act
   Act                                               COPU




Constitutional   Statutory                        Constitutional
                                    Enforceable
  Advisory       Advisory                           Advisory
National Integrity System – Some Pitfalls: I
 Line budget and accounting system are non-transparent, often arbitrary

 Key government data not available online to public

 Key public services not brought online including at the rural level

  Enforcement agencies must conform to civil service regulations – cannot
hire specialists at market rates – budget dependent on uncertain government
grants

 Conveyor belt recruitment by UPSC based merely on a third division BA
minima

  Ministries and Depts. expanded from 18 in 1947 to over 150 now –
decentralization may breed more corruption as number of employees in the
approvals chain increases manifold

 Non-standard contract specifications for identical stores, buildings, etc .

 Internal audit, statutory audit and accounts face charges of corruption
National Integrity System – Some Pitfalls: II
  Constitutional authority of Parliamentary Oversight Committees and CAG
eroded by their advisory powers

 Statutory authority of CVC eroded by advisory powers – also plagued by
charges of corruption

  CBI needs prior approval of cadre controller to investigate cases against
officers of Jt. Secretary and above – also charged with internal corruption

 Inadequate CBI courts

 Multiple layers of appeal – delays of several decades

 No higher courts for PCA cases – delays of several decades

 Non-transparent appointment of senior civil servants of Jt. Secretary and
above rank

 Senior civil service not trained to deal with demands of an opening economy
National Integrity System – Some Pitfalls: III
  Discretion in senior management in post-liberalization era, e.g. omission of
transfer clause in BOT PPP projects or CWG‘s OC

 Failure of public grievance redressing systems in Ministries/Depts

  Lack of transparency in government decisions – very little data and
justification available in public domain

  No exemplary punitive action for dismissing employees caught red-handed
taking a bribe or unable to explain disproportionate wealth within a stipulated
time frame;

 Corruption associated with outsourcing

 Delays in audit and submission of accounts

 Denial of documents to audit and investigative agencies by Ministries/Depts

 Ministers‘ powers to appoint senior civil servants without recording reasons
Jan Lokpal Bill: The Magic Potion?
  An intelligentsia-fuelled expression of mass
discontent

Lokpal: Too much on one table?

 Violates separation of powers in Constitution

  Merges executive and judicial authority

 Investigation + policy evaluation

  Omnibus Public Ombudsman

  Seeks to override existing National Integrity
institutions instead of strengthening them
Jan Lokpal Bill: Is it Enough - I?
 Pass Public Audit Bill of CAG

 Vest control of CBI in PMO?

 Statutory and binding status of CVC and
Parliamentary Oversight Committees

  Create a parallel legal framework to try PCA
cases headed by the Lok Pal

 All CBI courts to report to Lok Pal as
benches

 HR and financial autonomy for CBI, CAG &
CVC
Jan Lokpal Bill: Is it Enough - II?
 Like CVC, CAG too should be multi-member

  Mandatory professional and educational
qualifications to be prescribed for CAsG, CICs,
CVC & VCs + all posts at the rank of Jt.
Secretary and above in Central Secretariat

  Extend mandate of High Powered Committee
for CVC to include CAG and all Secretaries to
GOI

 Induct non-police specialists to man and head
CBI and other investigative agencies

 All public projects costing over Rs. 1000 crore
be preceded by public consultation
Jan Lokpal Bill: Is it Enough - III?
  Switchover to accrual accounting and
performance budgeting – both in public
domain

  Reduce Ministries and Depts by two-thirds
and classify them in five standalone groups, viz.
infrastructure & environment, social services,
security & foreign affairs, economic services
and miscellaneous

  Foreclose all public projects that have not
reached even 50% completion after five years

  Social Audit of government spending by
expert citizen groups
Jan Lokpal Bill: Is it Enough - IV?
  Prohibit re-employment of judges after
retirement

  Prohibit appointment of retired civil servants
to constitutional posts

  Re-look civil services recruitment system and
introduce professional requirements for
selection

  Shorten recruitment time for civil servants to
not more than three months to attract the best

  Invite outstanding people from the private
sector to head Ministries/public projects
Jan Lokpal Bill: Is it Enough - V?
  Pre-audit scrutiny of estimates for all public
projects and schemes of layout of Rs. 1000 crore and
above by CAG

  Earmark 20% of all GOI expenditure for
oversight, vigilance and Lok Pal

 Earmark 5% of GOI expenditure for training

  Repeal all obsolete Acts and Rules that induce
corruption within three months

  Evaluation of officers of Jt. Secretary and above
to GOI at 20, 25 and 30 years of service by multi-
member committees vested with statutory binding
powers
What is Enough - I?
  The day a corrupt officer is jailed and his ill-gotten property
forfeited within a month of his being caught – shift the onus of
disproving guilt on the employee

  Competent officers and outsiders drafted in to government by a
transparent process to provide governance – mandatory professional
qualification for each senior manager

  5,00,000 redundant govt. posts at a conservative median cost of Rs.
25 lakh per annum each abolished to save the nation Rs. 1,00,000
crore per annum and provide employment for 365 days with Rs.
200/day as minimum wage would employ 1.40 crore people with an
annual wage of Rs. 0.73 lakh per head

  Assuming 3 adults/family, annual income would be Rs. 2.19 lakh per
annum, several times over our present average national income for
over 45 lakh families
What is Enough - II?
 Strengthen vigilance and punishments for State civil servants too

  Remove prior sanction of Ministry for prosecuting officers of Jt.
Secretary to GOI and above

 Grant powers of a criminal court to the CVC, CAG & Ombudsmen

 At least 75% of public services made online even in rural areas

 Promote use of plastic cards for all payments

 Ban cash payment of government receipts/revenues

  Promote expert Citizens‘ Councils to mandatorily evaluate
government programs/schemes

 Replace obsolete Acts with contemporary ones
What is Enough - III?
  List all government contracts online with linkage of benefits to
each Parliamentary constituency

 Abolish all subsidies and introduce single-point subsidy of 50% on
POL

  Privatize government railways, hospitals, airports, public
transportation, non-NH highways on Build-Own-Operate Basis, etc.

  Rationalize personal and corporate tax structure by removing all
exemptions and substituting with lump sum deductions for personal
taxes and turnover percentage on corporate taxes

  Mandatory possession of PAN cards by all members of a family,
akin to Social Security No. in the USA

 Divest Ministers of their power to select bureaucrats
What is Enough - IV?
  Remove staff car concept in government – each car costs approx. Rs.
One lakh per month (with driver) – 50000 cars removed and
substituted with hired cars @ Rs. 40,000/month saves government Rs.
300 crore per annum from wastage, misuse and corruption

  Introduce annual quantitative work contracts between Minister and
Secretary to reduce Ministerial discretion

  Abolish Ministers‘ discretion to locate public projects in their
constituencies and reallocate budgetary provisions

 Abolish Ministers‘ powers to change end use of government land

 Government departments not to procure land for private projects

 Introduce licensing system for the real estate sector

 Release surplus government land to bring down real estate prices
Our Nation has suffered enough!
Corruption has:
Views expressed in this
presentation are personal

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Corruption

  • 1.
  • 2. Why Have This Show - I?
  • 3. Why Have This Show - II? 54% of Indian users paid a bribe to at least one of nine selected service providers in 2010 – TI, 2011 49% Pakistanis, 11% Chinese, 62% Afghans, 4% Brazilians, 27% Russians, 63% Nigerians and 31% Mexicans too paid bribes – TI, 2011 Yet 19% Indonesians, 17% Filipinos, 9% Malays, 4% Canadians, 2% British and 5% Americans paid bribes – TI, 2011 India scores 3.3, Brazil 3.7, China 3.5, Mexico 3.1 – TI, 2011 Series of megabuck scams in last decade Very few convictions Virtually no forfeiture of ill-gotten wealth International reputation downhill
  • 4. Why Have This Show - III? An international watchdog study shows India has been drained of $462 billion between 1948 and 2008 - nearly 40% of India's annual gross domestic product India tops the list for black money in the entire world with almost US$1456 billion in Swiss banks Indian Swiss bank account assets are worth 13 times the country‘s national debt ED probes US$ 24.86 billion transactions - enough to fund national drinking water project in all 6,00,000) villages in India for the next 10 years The Economist: A rotten state (11th Mar, 2011) ARE WE A POOR NATION BECAUSE WE ARE CORRUPT?
  • 5. Why Have This Show - III?
  • 6.
  • 7. What Causes Corruption – The Layman‘s View Absolute authority vested in political and administrative bureaucracies Ineffective/antiquated and overburdened legal system leads to skewing of power structures Ineffective anti-corruption mechanisms Ineffective ombudsmen Inadequate enforcement of laws and punishment Government rules and regulations encourage rent-seeking Privatization , Liberalization and Globalization
  • 8. Defining Corruption - I Joseph Nye (1996): ―Behavior, which deviates from the formal duties of a public role because of private-regarding (family, close family, private clique) pecuniary or status gains; or violates rules against the exercise of certain types of private-regarding influence. This includes such behavior as bribery; use of a reward to pervert the judgment of a person in a position of trust; nepotism (bestowal of patronage by reason of ascriptive relationship rather than merit); and misappropriation (illegal appropriation of public resources for private-regarding uses).‖
  • 9. Defining Corruption - II Mushtaq Khan (1996): ―Behavior that deviates from the formal rules of private-regarding motives such as wealth, power, or status‖ Pranab Bardhan (1996): ―The use of public office for private gains.‖
  • 10. Defining Corruption - III Oxford Unabridged Dictionary defines corruption as ―perversion or destruction of integrity in the discharge of public duties by bribery or favor.‖ Merriam Webster‘s Collegiate Dictionary defines it as ―inducement to wrong by improper or unlawful means (as bribery).‖
  • 11. Defining Corruption - IV Can occur in either the public or private sector but typically characterized as the use of public office for private gain Economists claim that levels of corruption may depend on discretionary power, economic rents, and oversight and weak enforcement institutions May vary according to the scope of supervision and the number of hierarchical levels in an organization
  • 12. Typology of Corruption - I Grand: Senior officials, major decisions or contracts, and the exchange of large sums of money, e.g. 2G & CWG Petty: Low-level officials, the provision of routine services and goods, and small sums of money, e.g. licensing & enforcement Systemic: Permeates an entire government or ministry, e.g. DDA & MCD Individual: Isolated and sporadic, e.g. traffic constable & sanitation inspector
  • 13. Typology of Corruption - II Syndicated: Elaborate systems devised for receiving and disseminating bribes, e.g. 2G, Bofors & New Nationalized Bank Branches Non-syndicated: Individual officials may seek or compete for bribes in an ad hoc and uncoordinated fashion, e.g. pension sanction & bank loans Internal: Interfere with the ability of a government agency to recruit or manage its staff, make efficient use of its resources, or conduct impartial in-house investigations, e.g. ED & CBI External: Efforts to manipulate or extort money from clients or suppliers, or to benefit from inside information, e.g. CPWD & SEBI Administrative: Unwarranted interference in market operations, such as the use of state power to artificially restrict competition and generate monopoly rents, e.g. PSU IPOs & land sales to private sector
  • 14. Illustrations of Corrupt Behavior - I Design or selection of uneconomical projects because of opportunities for financial kickbacks and political patronage, e.g. realigning rail track to inflate cost Procurement fraud, including collusion, overcharging, or the selection of contractors, suppliers, and consultants on criteria other than the lowest evaluated substantially responsive bidder, e.g. cartelization & pre- qualification of vendors Illicit payments of "speed money" to government officials to facilitate the timely delivery of goods and services to which the public is rightfully entitled, such as permits and licenses, e.g. transfer of govt. lands
  • 15. Illustrations of Corrupt Behavior - II Illicit payments to government officials to facilitate access to goods, services, and/or information to which the public is not entitled, or to deny the public access to goods and services to which it is legally entitled, e.g. fire clearances & change of land use Illicit payments to prevent the application of rules and regulations in a fair and consistent manner, particularly in areas concerning public safety, law enforcement, or revenue collection, e.g. hafta & income tax refund advice Payments to government officials to foster or sustain monopolistic or oligopolistic access to markets in the absence of a compelling economic rationale for such restrictions, e.g. limiting construction of new airports
  • 16. Illustrations of Corrupt Behavior - III Misappropriation of confidential information for personal gain, such as using knowledge about public transportation routings to invest in real estate that is likely to appreciate, e.g. extension of DMRC, location of SEZ & national highway realignment Deliberate disclosure of false or misleading information on the financial status of corporations that would prevent potential investors from accurately valuing their worth, such as the failure to disclose large contingent liabilities or the undervaluing of assets in enterprises slated for privatization, e.g. valuation of assets prior to disinvestment of PSU shareholding by GOI Theft or embezzlement of public property and monies, e.g. Railway property & preferment of duplicate bills
  • 17. Illustrations of Corrupt Behavior - IV Sale of official posts, positions, or promotions; nepotism; or other actions that undermine the creation of a professional, meritocratic civil service, e.g. State PWD, Irrigation, NHAI & Central Secretariat Extortion and the abuse of public office, such as using the threat of a tax audit or legal sanctions to extract personal favors, e.g. income tax notice & overstated excise penalties Obstruction of justice and interference in the duties of agencies tasked with detecting, investigating, and prosecuting illicit behavior, e.g. ED & CBI
  • 18. Illustrations of Corrupt Behavior - IV •Sale of official posts, positions, or promotions; nepotism; or other actions that undermine the creation of a professional, meritocratic civil service, e.g. State PWD, Irrigation, NHAI & Central Secretariat •Extortion and the abuse of public office, such as using the threat of a tax audit or legal sanctions to extract personal favors, e.g. income tax notice & overstated excise penalties •Obstruction of justice and interference in the duties of agencies tasked with detecting, investigating, and prosecuting illicit behavior, e.g. ED & CBI
  • 19. Corruption in History - I ―Just as it is impossible not to take the honey (or the poison) that finds itself at the tip of the tongue, so it is impossible for a government servant not to eat up at least a bit of the King‘s revenue. Just as fish moving under water cannot possibly be found out either as drinking or not drinking water, so government servants employed in the government cannot be found out (while) taking money (for themselves)‖ - Kautilya
  • 20. Corruption in History - II ―This is the ―decree‖ or ―mandate‖ of heaven. If the emperor or king, having fallen into selfishness and corruption, fails to see to the welfare of the people, heaven withdraws its mandate and invests it in another. The only way to know that the mandate has passed is the overthrow of the king or emperor; if usurpation succeeds, then the mandate has passed to another, but if it fails, then the mandate still resides with the king‖ - The Chou c.1050-256 BC
  • 21. Corruption in History - III Machiavelli: Discourses on the need for virtu in republican government Rousseau: Government officials, selected by the people to manage society‘s business, must carry out their duties in a manner transcending personal interests Kautilya: Lists ―at least forty ways‖ of embezzling money from the government in India Ancient China: Failed extra allowance to government officials called Yang-lien, meaning ―nourish incorruptness.‖ Abdul Rahman Ibn Khaldun: Root of corruption was ―the passion for luxurious living within the ruling group‖
  • 22. Corruption in History - IV The servants of the nation are to render their services without any taking of presents. … To form your judgment and then abide by it is no easy task, and it‘s a man‘s surest course to give loyal obedience to the law which commands, ‗Do no service for a present‘ - Plato
  • 23. Corruption in History - V ―Corruption is worse than prostitution. The latter might endanger the morals of an individual the former invariably endangers the morals of the entire country‖ - Karl Kraus (1874-1936)
  • 24. Bishop Creighton: ―People in authority are not [to] be snubbed or sneezed at from our pinnacle of conscious rectitude‖ Lord EE Dalberg-Acton, 1887: ―If there is any presumption, it is the other way against holders of power, increasing as the power increases. Historic responsibility has to make up for the want of legal responsibility. Power tends to corrupt and absolute power corrupts absolutely‖
  • 25. Where India Stands: Ends Justify Means ―Great men are almost always bad men, even when they exercise influence and not authority: still more when you superadd the tendency or the certainty of corruption by authority. There is no worse heresy than that the office sanctifies the holder of it. That is the point at which...the end learns to justify the means‖
  • 26. Frameworks of Research & Practice of Corruption Two alternative frameworks dominate research and practice on corruption: Economic perspective: Focuses limitedly on the roles of rational self-interest, efficiency pressures, and explicit, formal regulative structures in explaining and combating corruption Organizational behavior: Focuses on the normative and cognitive aspects of corrupt behavior however, within organizations and instead of on the wider institutional orders that also influence the behavior of individuals and organizations
  • 27. Causes of Corruption - I Greater efficacy of common law in curbing corruption than civil law Democratic and open political systems foster freedom of association and of the press and engender public interest groups to expose abuses Competitors for office have an incentive to discover and publicize the incumbent‘s misuse of office whenever an election beckons – Daniel Triesman (2000)
  • 28. Causes of Corruption - II Federal structure in which each level has its own police force can reduce the vulnerability of any one law enforcement agency (Rose-Ackerman, 1994) Relatively balanced power of central and subnational officials over certain common pool resources — the tax or ‗bribe‘ base in a given region — leads to suboptimal over extraction (Shleifer and Vishny, 1993)
  • 29. Corruption: Driver or Retarder of Growth? - I YES Leff (1964) and Huntington (1968): Raises economic growth rates .―Speed money‖ would speed up procedural delays in government by encouraging civil servants to work harder for such ―incentives‖ on a piece rate (Mauro, 1995). NO Shleifer and Vishny (1993): Corruption lowers economic growth Rose-Ackerman (1978): Difficulty in limiting corruption to areas where it may be desirable.
  • 30. Corruption: Driver or Retarder of Growth? - II If Bangladesh were to increase the level of integrity of its bureaucracy to that of Uruguay, its investment rate would rise by 5% and yearly GDP growth rate by 0.5% Bureaucracy efficiency index, 1 being the lowest grade and 10 the highest: India listed along with Bangladesh in the second lowest category with a score of 4.5-5.5 with Pakistan in the lowest category of 1.5-4.5 while Sri Lanka is slotted in the next higher category of 6.5-7 A one standard deviation improvement in the bureaucracy efficiency rate was associated with a 4.75% annual rise in GDP (Mauro, 1995, 696) and a 1.03% rise in GDP per capita Paulo Mauro, IMF, 1995
  • 31. Corruption: Driver or Retarder of Growth? - III Mauro, 1998: One standard-deviation improvement in the corruption index leads education expenditure to rise by over six percentage points of total government consumption expenditure Also affects government expenditure on health services Lambsdorff (1999): If corruption affects the productivity of capital, an adverse impact on the ratio of investment to GDP will result Tanzi and Davoodi(1998): Retards growth by increasing public investment while reducing its productivity Higher corruption associated with higher total expenditure on wages and salaries Retards growth by reducing the quality of the existing infrastructure by increasing the cost of doing business for both government and private sector leading to lower output and growth Lowers growth by lowering government revenue needed to finance productive spending
  • 32. Corruption & Inflation Al-Marhubi (1999): Faced with rising tax evasion and tax collection costs in corrupt countries, governments sometimes have a motive for creating inflation to generate seigniorage (difference between face value and cost of circulation of a coin; also referred to as inflation tax in some countries) as a source of government revenue Force businesses underground thereby increasing reliance on the inflation tax Capital flight, shrinking taxable assets and income of those most able to meet government revenue requirements By reducing revenues and increasing public spending, may also contribute to larger fiscal deficits, with attendant inflation
  • 33. Corruption & Growth of Private Sector Fisman and Svensson (2007): Found a negative correlation between the rate of taxation and bribery and firm growth Concluded that ―a one-percentage point increase in the bribery rate was associated with a reduction in firm growth of three percentage points, an effect that was about three times greater than that of taxation.‖
  • 34. Corruption & Growth of Private Sector Fisman and Svensson (2007): Found a negative correlation between the rate of taxation and bribery and firm growth Concluded that ―a one-percentage point increase in the bribery rate was associated with a reduction in firm growth of three percentage points, an effect that was about three times greater than that of taxation.‖
  • 35. Corruption & Creditworthiness Increases likelihood of arbitrary government actions that reduce profits and leave firms unable to repay loans May lower the effectiveness of government services, making it even more difficult for firms to realize profits (Shleifer & Vishny, 1993). Reduce legal protection for bondholders as controlling shareholders may divert resources from the firm to their own private ends. Higher risk premium when issuing bonds. An important source of default risk Surprisingly, corruption does not distinguish between firm spreads and sovereign spreads to the same degree even though in theory corruption should matter in very different ways for these two types of borrowers (Cocchini, et al, 2003)
  • 36. Corruption & Defense Expenditure - I From 1980-2007, global arms imports have risen from $40.58 billion to $ 819.04 billion at 1990 constant prices (SIPRI, 2009) Tanzi (1998) estimated that bribes account for as much as 15% of the total spending on weapons acquisition Therefore based on purchases during 2007 may be as high as approximately $ 125 billion, i.e. about the GDP of the UAE, New Zealand and Egypt each in 2007 (World Bank, 2009).
  • 37. Corruption & Defense Expenditure - II Country TI (CPI) Purchases Country TI (CPI) Purchases Ranking ($ billion) Ranking ($ billion) 2008 in 2007 2008 in 2007 Greece 57 19.27 China 71 29.02 Mexico 72 1.74 Saudi Arabia 80 18.95 India 85 25.01 Egypt 115 16.60 Vietnam 121 2.00 Pakistan 134 9.57 Yemen 141 1.95 Venezuela 158 2.32 Myanmar 178 2.35
  • 38. Causes of Corruption in Defense Expenditure - I Gupta, DeMello and Sharan (2001) Foreign suppliers may bribe officials of countries importing arms and military equipment facilitated by the tax code of arms-exporting countries, that allow bribery as a business expense Payment of bribes to foreign officials typically not considered as a criminal act in many recipient countries Since the mid-1980s and the breakup of the former Soviet Union the defense industry in Russia and the CIS had large idle capacities and huge fixed sunk costs that prompted arms producers to scout aggressively for markets abroad Regulations typically confer power on the officials in charge of authorizing contracts
  • 39. Causes of Corruption in Defense Expenditure – II Limited competition among suppliers encourages rent seeking and provides incentives for officials to engage in malfeasant behavior The secrecy surrounding defense outlays gives rise to corruption. Defense contracts are often excluded from freedom of information legislation, where available Administrative procedures in military spending are not closely monitored by tax and customs authorities and standard budget oversight like auditing and legislative approval
  • 40. Causes of Corruption in Defense Expenditure – III Stock of defense assets—such as military-controlled land, hardware, testing grounds, transport vehicles and facilities such as housing and training centers, tends to be large and provides further opportunities for corruption Size of Global Defense Spending SIPRI: $1339 billion in 2007—a real-term increase of 6% over 2006 and 45 per cent since 1998 Corresponds to 2.5 per cent of world gross domestic product (GDP) and $202 GDP per capita
  • 41. Corruption & Inequity: Water Supply Falsified meter readings Distorted site selection of boreholes or abstraction points Collusion and favouritism in public procurement Bribes to cover up wastewater and pollution discharge Kickbacks to accept inflated bills in production Nepotism in allocation of public offices in water administration Bribes for diversion of water for irrigation Bribes for preferential treatment (spread, service level etc)
  • 42. Corruption & Iniquity: Water Limited Potable Water in Rural Areas Corruption = Monopoly + Discretion – Accountability
  • 43. Corruption & Iniquity: Urban Poor Burgeoning Slums Corruption = Monopoly + Discretion – Accountability
  • 44. Corruption & Iniquity: Rural Poor Rural & District Schools Corruption = Monopoly + Discretion – Accountability
  • 45. Corruption & Iniquity: Land Acquisition Transfer of Agricultural Land to Private Industry Corruption = Monopoly + Discretion – Accountability
  • 46. Corruption & Inequity: Social Security Social Security for Unorganized Sector Corruption = Monopoly + Discretion – Accountability
  • 47. Corruption & Inequity: Public Works - I Public-Private Partnership Corruption = Monopoly + Discretion – Accountability
  • 48. Corruption & Inequity: Public Works - II Government Executed Corruption = Monopoly + Discretion – Accountability
  • 49. National Integrity System – Institutional Layout Non-government Government Political Parties Legislature Public Procurement International Central Information Local & Regional Institutions Commission Governments Media Central Election Judiciary Commission Civil Society CAG Police & prosecutors Private Sector Public Sector Ombudsman Executive
  • 50. National Integrity System – Institutional Layout Pillar Core Rules/Practices Executive Conflict of interest; administrative law; judicial review of official decisions Legislature Fair and transparent elections Legislative Committees Power to question senior officials Auditor General Public Reporting Public Service Public service ethics; monitoring assets and integrity testing; conflict of interest, nepotism and cronyism Judiciary Media Access to information Civil Society Freedom of speech; the right to information and giving citizens a voice Anti-corruption/watchdog Enforceable and enforced laws agencies Private Sector Competition policy; public procurement; good financial management International Effective mutual legal/judicial assistance
  • 51. National Integrity System Objectives Combating corruption as part of the larger struggle against misconduct and misappropriation Creating an efficient and effective government working in the public interest. In fine, the ultimate goal of the NIS is promoting good governance, “. . . the aim is not complete rectitude or a one-time cure or remedy, but an increase in the honesty or integrity of government as a whole . . . (Pope, 1997)
  • 52. National Integrity System – Oversight Layout CAG CBI CVC _______ Parliament _______ Courts
  • 53. National Integrity System – Legal Environment CAGA SPEA PCA CVCA _______ Parliament _______ Courts
  • 54. National Integrity System – Vigilance Layout DCVO CVO ACVO CVC JS (Vig) Dir/DS VC MoPT VC
  • 55. National Integrity System – The Linkages Parliament CAG‘s (DPC) PAC CVC Act SPE Act Act COPU Constitutional Statutory Constitutional Enforceable Advisory Advisory Advisory
  • 56. National Integrity System – Some Pitfalls: I Line budget and accounting system are non-transparent, often arbitrary Key government data not available online to public Key public services not brought online including at the rural level Enforcement agencies must conform to civil service regulations – cannot hire specialists at market rates – budget dependent on uncertain government grants Conveyor belt recruitment by UPSC based merely on a third division BA minima Ministries and Depts. expanded from 18 in 1947 to over 150 now – decentralization may breed more corruption as number of employees in the approvals chain increases manifold Non-standard contract specifications for identical stores, buildings, etc . Internal audit, statutory audit and accounts face charges of corruption
  • 57. National Integrity System – Some Pitfalls: II Constitutional authority of Parliamentary Oversight Committees and CAG eroded by their advisory powers Statutory authority of CVC eroded by advisory powers – also plagued by charges of corruption CBI needs prior approval of cadre controller to investigate cases against officers of Jt. Secretary and above – also charged with internal corruption Inadequate CBI courts Multiple layers of appeal – delays of several decades No higher courts for PCA cases – delays of several decades Non-transparent appointment of senior civil servants of Jt. Secretary and above rank Senior civil service not trained to deal with demands of an opening economy
  • 58. National Integrity System – Some Pitfalls: III Discretion in senior management in post-liberalization era, e.g. omission of transfer clause in BOT PPP projects or CWG‘s OC Failure of public grievance redressing systems in Ministries/Depts Lack of transparency in government decisions – very little data and justification available in public domain No exemplary punitive action for dismissing employees caught red-handed taking a bribe or unable to explain disproportionate wealth within a stipulated time frame; Corruption associated with outsourcing Delays in audit and submission of accounts Denial of documents to audit and investigative agencies by Ministries/Depts Ministers‘ powers to appoint senior civil servants without recording reasons
  • 59. Jan Lokpal Bill: The Magic Potion? An intelligentsia-fuelled expression of mass discontent Lokpal: Too much on one table? Violates separation of powers in Constitution Merges executive and judicial authority Investigation + policy evaluation Omnibus Public Ombudsman Seeks to override existing National Integrity institutions instead of strengthening them
  • 60. Jan Lokpal Bill: Is it Enough - I? Pass Public Audit Bill of CAG Vest control of CBI in PMO? Statutory and binding status of CVC and Parliamentary Oversight Committees Create a parallel legal framework to try PCA cases headed by the Lok Pal All CBI courts to report to Lok Pal as benches HR and financial autonomy for CBI, CAG & CVC
  • 61. Jan Lokpal Bill: Is it Enough - II? Like CVC, CAG too should be multi-member Mandatory professional and educational qualifications to be prescribed for CAsG, CICs, CVC & VCs + all posts at the rank of Jt. Secretary and above in Central Secretariat Extend mandate of High Powered Committee for CVC to include CAG and all Secretaries to GOI Induct non-police specialists to man and head CBI and other investigative agencies All public projects costing over Rs. 1000 crore be preceded by public consultation
  • 62. Jan Lokpal Bill: Is it Enough - III? Switchover to accrual accounting and performance budgeting – both in public domain Reduce Ministries and Depts by two-thirds and classify them in five standalone groups, viz. infrastructure & environment, social services, security & foreign affairs, economic services and miscellaneous Foreclose all public projects that have not reached even 50% completion after five years Social Audit of government spending by expert citizen groups
  • 63. Jan Lokpal Bill: Is it Enough - IV? Prohibit re-employment of judges after retirement Prohibit appointment of retired civil servants to constitutional posts Re-look civil services recruitment system and introduce professional requirements for selection Shorten recruitment time for civil servants to not more than three months to attract the best Invite outstanding people from the private sector to head Ministries/public projects
  • 64. Jan Lokpal Bill: Is it Enough - V? Pre-audit scrutiny of estimates for all public projects and schemes of layout of Rs. 1000 crore and above by CAG Earmark 20% of all GOI expenditure for oversight, vigilance and Lok Pal Earmark 5% of GOI expenditure for training Repeal all obsolete Acts and Rules that induce corruption within three months Evaluation of officers of Jt. Secretary and above to GOI at 20, 25 and 30 years of service by multi- member committees vested with statutory binding powers
  • 65. What is Enough - I? The day a corrupt officer is jailed and his ill-gotten property forfeited within a month of his being caught – shift the onus of disproving guilt on the employee Competent officers and outsiders drafted in to government by a transparent process to provide governance – mandatory professional qualification for each senior manager 5,00,000 redundant govt. posts at a conservative median cost of Rs. 25 lakh per annum each abolished to save the nation Rs. 1,00,000 crore per annum and provide employment for 365 days with Rs. 200/day as minimum wage would employ 1.40 crore people with an annual wage of Rs. 0.73 lakh per head Assuming 3 adults/family, annual income would be Rs. 2.19 lakh per annum, several times over our present average national income for over 45 lakh families
  • 66. What is Enough - II? Strengthen vigilance and punishments for State civil servants too Remove prior sanction of Ministry for prosecuting officers of Jt. Secretary to GOI and above Grant powers of a criminal court to the CVC, CAG & Ombudsmen At least 75% of public services made online even in rural areas Promote use of plastic cards for all payments Ban cash payment of government receipts/revenues Promote expert Citizens‘ Councils to mandatorily evaluate government programs/schemes Replace obsolete Acts with contemporary ones
  • 67. What is Enough - III? List all government contracts online with linkage of benefits to each Parliamentary constituency Abolish all subsidies and introduce single-point subsidy of 50% on POL Privatize government railways, hospitals, airports, public transportation, non-NH highways on Build-Own-Operate Basis, etc. Rationalize personal and corporate tax structure by removing all exemptions and substituting with lump sum deductions for personal taxes and turnover percentage on corporate taxes Mandatory possession of PAN cards by all members of a family, akin to Social Security No. in the USA Divest Ministers of their power to select bureaucrats
  • 68. What is Enough - IV? Remove staff car concept in government – each car costs approx. Rs. One lakh per month (with driver) – 50000 cars removed and substituted with hired cars @ Rs. 40,000/month saves government Rs. 300 crore per annum from wastage, misuse and corruption Introduce annual quantitative work contracts between Minister and Secretary to reduce Ministerial discretion Abolish Ministers‘ discretion to locate public projects in their constituencies and reallocate budgetary provisions Abolish Ministers‘ powers to change end use of government land Government departments not to procure land for private projects Introduce licensing system for the real estate sector Release surplus government land to bring down real estate prices
  • 69. Our Nation has suffered enough! Corruption has:
  • 70. Views expressed in this presentation are personal