The document discusses strategies for combating corruption in India's established democracy. It aims to analyze corruption in seven key public sectors and suggest reforms. Unlike newer nations, India has well-established governance institutions but corruption has hindered development. The research will examine corruption levels and their impact on economic growth. It argues comprehensive reforms are needed across government, politics, and society to substantially reduce corruption.

1. PURPOSE OF RESEARCH: Strategies for combating
corruption in an established and developing democracy
The objective of this paper is to highlight the extent of
corruption in India by identifying the main causes for
corruption in major sectors such as the bureaucracy, judiciary
and polity and suggest remedial measures. Unlike other middle-
income newly independent nations that are yet to build up their
political, judicial and executive governance infrastructure, India
has a well—established governance system with all the requisite
institutions in place for over half a century now. This research
therefore, takes into account the natural and human resources,
industrial and technological skills available within India and
contrasts it with the underlying corruption as a way of life
retarding progress and development and depriving citizens of
their legitimate right to ensure a better quality of life for
themselves. The weak rule of law and a drastic overhaul of the
legal system and other accountability systems therefore feature
prominently in this paper. Deregulation and outsourcing too
occupy a significant position being major elements in devolving
power to citizens and assuring indirect popular participation in
governance. While there may be more than an alternate opinion
on many of the suggestions made as being Draconian, the fact
would, nonetheless, remain that perhaps only such Draconian
changes and enforcement alone can lift India from the morass it
has sunk into in the last six decades since independence.
Unless corruption as a national way of life is jettisoned to the
extent of at least 70-80 per cent of its present level, annual GDP
growth rate of over 8 per cent would remain only an impressive
statistic and not translate to a better quality of life for India‘s
citizens who belong to the world‘s two largest ‗tiger‘ economies.
It is this issue that my research would seek to investigate. In
doing so such research would also touch upon several other
SHANTANU BASU

2. SHANTANU BASU 2
facets that would be of interest not only to other relatively
smaller and less complex developing countries but also many
international organisations and multinational corporations and
other bodies corporate who are investing substantial capital and
resources in these countries. Such research may also be of help
not only to academic researchers but also foreign educational
institutions and other corporate bodies as they cross the seven
seas to establish their satellite campuses or seek to invest in
educational systems, health services, transportation and a host
of other infrastructure areas.
Therefore the purpose of this research is to briefly analyse
corruption in seven key sectors in public administration in
India:
Bureaucracy
Elections and political party funding
Judicial administration
Police administration
Municipal administration
Health administration
Education administration
So far anti-corruption measures have mainly confined
themselves to addressing administrative corruption by
reforming public administration and public financial
management. However, with increasing recognition that the
roots of corruption extend much beyond lacunae in government,
suggestions for redressal are focusing on broader structural
relationships such as those relating to the organisation of the
political system, states and firms and states and civil society. No
single strategy would succeed, instead a healthy mix of coercion
and incentives in varying measures may provide answers to the

3. SHANTANU BASU 3
complexities of the Indian situation. Such strategies would also
have to take into account the presence of powerful vested
interest, political compulsions, considerations of caste,
community, geographical and linguistic chauvinism, etc. The
following diagram would show the symbiotic interplay of various
forces that would recall the need for a multi-pronged strategy to
combat corruption:
Competitive Private Sector Political Accountability
Economic policy reform Political competition, credible political
Competitive restructuring of monopolies parties
Regulatory simplification for entry Transparency in party financing
Transparency in corporate governance Disclosure of parliamentary votes
Collective business associations Asset declaration, conflict of interest rules
ANTI-CORRUPTION
Institutional Restraints Civil Society Participation
Independent and effective judiciary Freedom of Information
Legislative oversight Public hearings of draft laws
Independent prosecution, enforcement Role for media/NGOs
Public Management
Meritocratic civil service with monetized,
adequate pay
Budget management (coverage, treasury,
procurement, audit)
Tax and customs
Sectoral service delivery (health, education,
energy)
Decentralisation with accountability
Source: The World Bank, 2000: Anticorruption in Transition – A Contribution to the
Policy debate
Although corrective models may vary by practice and
experience, yet the goals remain identical, viz. enhancing state
capacity and public sector management, strengthening political
accountability, enabling civil society and increasing economic
competition. Though a formidable task, a healthy interplay
between the executive, polity and judiciary and a country‘s

4. SHANTANU BASU 4
citizens can bring such reform to life. The following chart would
illustrate the symbiotic interplay of these forces in assuring
accountability:
Civil Society - Media
Judiciary
Legislature
Subnational governments and
autonomous oversight
agencies
Executive
Source: Global Monitoring Report, 2006: pp. 159, The World Bank, Washington DC

5. SHANTANU BASU 5
Strategies to Combat Corruption
in Public Management in India
1.1 India: The Geographical Background
India, the second largest country in the world population wise
and seventh territory wise, lies north of the Equator, between
8'4''to 37'6" North latitude and 68'7"to 97'25" East longitude.
The country's landmass is flanked by the Bay of Bengal and the
Arabian Sea, along the southeast and along the southwest
respectively. On the western border is situated Pakistan and in
the east, Bangladesh and Myanmar. Along her northern
boundary are Bhutan, Nepal, and Tibet and Sinkiang region of
China. The Gulf of Mannar and the Palk Strait separate India
from Sri Lanka. From North to South, India measures about
3214 km and from east to west, about 2933 km. The total land
area is 3,268,090 sq. km. Its land frontier is 15,200km and
coastline, 6,103km. The Andaman and Nicobar Islands in the
Bay of Bengal and Lakshadweep in the Arabian Sea are parts of
Indian territory.
1.2 India’s natural resources
India has a large number of economically useful minerals and
they constitute one-quarter of the world's known mineral
resources. India also has the world's largest deposits of coal.
Next to Russia, India has the largest supply of manganese. India
also produces three quarters of the world's mica. The country
has substantial resources in chromite, bauxite, gypsum, nickel,
copper, ileminite, silimanite, gold, uranium and rare earths.
Petroleum deposits are found mainly in Assam and Gujarat and
off the Western coast. India ranks 3rd in production of coal,
lignite and barytes, fourth in iron ore, sixth in bauxite and

6. SHANTANU BASU 6
manganese ore, tenth in aluminum and eleventh in crude steel
in the World.
1.3 India’s demographic profile
The population of India has grown from around 300 million in
1947 to 1.02 billion as per the Census 20011 marking a 23 per
cent rise over the previous decennial census of 1991. Of this
532 million is the male population while the female population
is 496 million. India accounted for 17 per cent of the world‘s
population with just 2.40 per cent of the world‘s landmass. This
population is forecast to rise to 1.26 billion by 2016 by the
Registrar General of India- a five-fold rise over 1871 (211.7
million). Given the relatively young demographic profile of the
present population 500 million would be added to the

7. SHANTANU BASU 7
population in the next few decades taking the total population
by World Bank estimates to 1.57 billion by 2051.Translated into
population density terms the 2001 census has added 57
persons per sq. km. to the existing 267 persons per sq. km. per
the census report of 1991. This is in stark contrast to a density
of 77 per sq. km in 1901. The following population density
graph would amplify the growth race of India‘s population:
350
300
250
200
150
100
50
0
01
11
21
31
41
51
61
71
81
91
01
19
19
19
19
19
19
19
19
19
19
20
Source: Adapted from Registrar General of India Census 2001
The crude literacy rate for males is 64 while that for females is
only 46 per cent. Despite this phenomenal growth of population
the net per capita national product has risen by a factor of eight
in the last fifty years while life expectancy has risen to 61.6
years for males and 63.3 for females. Satellites in space, nuclear
reactors in operation, a world I-T leader; yet India remains at
127th position in the UNDP‘s Human Development Index 2 for
2005 having dropped a further nine notches from 2004. India
ranks 58th in terms of human poverty with 31 per cent of its
population living below the poverty line with 72 per cent of its

8. SHANTANU BASU 8
population in the villages, 33 per cent under the age of 15 years
and 21 per cent being malnourished. About 260 million people
live on less than a dollar a day. India‘s Constitution recognizes
22 official languages, in addition to English, although the
country has about 800 languages and 2,000 dialects. However,
India does not have any state religion and all religions have
equal rights of preaching and practicing.
1.4 India’s economic indicators
Despite the single largest handicap of a burgeoning population,
India sustained a growth rate of 7.5 per cent in 2004-05 which
is projected to rise to 8.1 per cent in 2005-063. Inflation has
mainly stabilized around the 4 per cent per annum mark and
the total GDP (PPP basis) in 2005 is estimated to be US$3.699
trillion with per capita GDP being US$3400. Agriculture has
remained largely stagnant and contributed 20.6 per cent to GDP
while services provided 51.4 per cent and industry 28.1 per cent.
The balance of trade remained unfavourable and foreign debt
totaled 22 per cent of GNP. Regrettably, the per capita income
remained at an abominable US$285 in 2004-05.
1.5 India’s infrastructure
Despite several centuries of neglect and colonial administration,
India today boasts of 50,000 km of national highways and
3,000,000 km of secondary and other roads, 11 major and 163
minor ports along its 6,000 km long coastline. India's 21.59
million-line land telephone and 41 million cellular networks are
one of the largest in the world and the 3rd largest among
emerging economies (after China and Republic of Korea). Given
the low telephone penetration rate - 2.2 per 100 people of
population, which is much below the global average, India offers
vast scope for growth. It is therefore not surprising that India

9. SHANTANU BASU 9
has one of the fastest growing telecommunication systems in
the world with system size (total connections) growing at an
average of more than 20 per cent over the last 4 years. This is
despite only 31 per cent of India‘s population living in urban
agglomerations. Indian Railways extend over 60,000 route km
and carry 25 million passengers annually. India‘s information
technology industry has become a global phenomenon.
1.6 Paradox of development and future growth
Vision 20204, a document published by the Planning
Commission of the Government of India envisages the creation
of 150-200 million jobs by 2020 distributed over commercial
agriculture, tourism, construction, housing, I-T and I-T enabled
services, transport and communication, education and health.
This, in turn, would require doubling of allocation of resources
for education to about 6-7 per cent of GDP per annum and a
four-fold rise in health. Expenditure on R&D would raise
manifold from its present level of 1/60th of South Korea‘s. Public
mass transportation and telecommunications too would witness
a manifold rise. For India to rise to the world‘s fourth largest
economy by 2020, the country would have to produce 10 per
cent annual GDP growth rate during 2007-11 and 13 per cent
during 2012-20, both within the realm of the possible. A
colossal sum of US $ 72 billion is estimated to be required for a
cent per cent literate India by 2010.
At the same time India produces 441,000 technical graduates,
nearly 2.3 million other graduates and more than 300,000 post-
graduates every year. Bharat Forge, a private Indian company is
the world‘s second largest maker of forgings for car-engine and
chassis components, behind Thyssen-Krupp of Germany5. The
production efficiencies of Indian private industry too are
improving rapidly. While in the early 1990s, Bajaj Auto, a

10. SHANTANU BASU 10
leading Indian manufacturer of two-wheelers, was producing a
million vehicles with 24,000 workers; in 2005 it produced 2.4
million vehicles with only 10,500 workers. While Indian garment
exports climbed to US$ 7.5 billion of total textile exports of US$
17 billion, nevertheless they remained a poor second to China
with figures of US$ 40 billion of a total of US$ 107 billion, after
accounting for trade safeguards. Peak electricity supply falls 11
per cent short and 56 per cent of households live without
connections. Although India‘s has a road network of 65,000 km,
of national highways only 9 per cent have four-lane traffic.
Although domestic air travel have increased by over 25 per cent
per annum and Bombay-Delhi air fares down to an all-time low
of US$40 (one-way), aircraft often have to circle overhead for
over 30 minutes for want of runways at airports. India‘s annual
expenditure on infrastructure has fallen to 3.5 per cent of GDP
at US$ 21 billion compared to China where the corresponding
figures were 10.5 per cent and US$ 150 billion. While
investment of US$ 55 billion is required for airports and
railways, power would require US$ 75 billion and
telecommunications US$ 25 billion. Poor and slow inland
transport causes 35-40 per cent of fresh farm produce to rot
before distribution while it takes a transport lorry 32 hours to
transit between Delhi and Bombay, a distance of about 1,400
kms.
Yet Indian industry has not given up. Reliance Industries
Limited, India‘s largest private conglomerate plans to establish
over the next four years a mega chain of 1,000 hypermarkets
and 2,000 supermarkets that would be an ―integrated farm-to-
fork supply chain‖. Similarly, Indian industry estimates that the
number of mobile telephone users would cross the half-billion
mark by the next decade. The market capitalization of major
Indian companies too has undergone a sea change with

11. SHANTANU BASU 11
traditional leaders falling behind and even some public sector
enterprises forging ahead as the following graph shows:
Market capitalisation of select Indian companies
45
40
US $ in billion
35
30
25
20
15
10
5
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Name of company
Source: Adapted from The Economist, London,
Indian public and private sector companies too have lately
acquired coal mines in Australia, tea gardens in Kenya, a $
32.50 billion 49.4 per cent shareholding in Arcelor Steel (now
called Arcelor-Mittal with an annual output of 100 million tones)
and Tata Coffee‘s $220 million takeover of the century-old Eight
O‘Clock Coffee Company (EOC) based in Montvale, NJ, from its
US owners, Gryphon Investors6. A similar bid by United
Breweries to take over a large German brewery is on the cards.
Indian pharmaceutical companies hold patents for several life-
saving generic drugs and a conglomerate of Indian pharma
companies is presently scouting for a large dispensing
pharmacy chain in the US on outright purchase basis on a cash
budget of US$ 800 million. A company of the Indian railways

12. SHANTANU BASU 12
provided the software, its operation and maintenance for the
London Tube while a combine of two public sector companies
has bagged orders for the turnkey construction of thermal
power plants in Australia, Belgium and a number of other
countries in Europe in global competitive bidding.
But would the Indian bureaucracy be able to fulfill such
expectations despite the inherent strength and resilience of the
Indian people, entrepreneurship and knowledge and the natural
resources of the land? The answer would seem to lie in the
ability of the country to combat corruption which has engulfed
almost every aspect of national life and is retarding it progress
and development.
2. Defining corruption
Corruption involves behavior on the part of officials in the
public and private sectors, in which they improperly and
unlawfully enrich themselves and/or those close to them, or
induce others to do so, by misusing the position in which they
are placed. Transparency International (TI)7, the leading NGO in
the global anticorruption effort defines corruption as:
“Corruption involves behavior on the part of officials in the
public sector, whether politicians or civil servants, in which
they improperly and unlawfully enrich themselves, or those
close to them, by the misuse of the public power entrusted
to them.”
An illustrative List of Corrupt Behaviours8 published by the
Asian Development Bank includes the following:
The design or selection of uneconomical projects because
of opportunities for financial kickbacks and political
patronage.

13. SHANTANU BASU 13
Procurement fraud, including collusion, overcharging, or
the selection of contractors, suppliers, and consultants on
criteria other than the lowest evaluated substantially
responsive bidder.
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.
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.
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.
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.
The 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.
The 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.
The theft or embezzlement of public property and monies.

14. SHANTANU BASU 14
The sale of official posts, positions, or promotions;
nepotism; or other actions that undermine the creation of
a professional, meritocratic civil service.
Extortion and the abuse of public office, such as using the
threat of a tax audit or legal sanctions to extract personal
favors.
Obstruction of justice and interference in the duties of
agencies tasked with detecting, investigating, and
prosecuting illicit behavior.
The Oxford Unabridged Dictionary defines corruption as
“perversion or destruction of integrity in the discharge of public
duties by bribery or favor.” The Merriam Webster‘s Collegiate
Dictionary defines it as “inducement to wrong by improper or
unlawful means (as bribery).” It is often useful to differentiate
between grand corruption, which typically involves senior
officials, major decisions or contracts, and the exchange of large
sums of money; and petty corruption, which involves low-level
officials, the provision of routine services and goods, and small
sums of money9. It is also useful to differentiate between
systemic corruption, which permeates an entire government or
ministry; and individual corruption, which is more isolated and
sporadic. Finally, it is useful to distinguish between syndicated
corruption in which elaborate systems are devised for receiving
and disseminating bribes, and non-syndicated corruption, in
which individual officials may seek or compete for bribes in an
ad hoc and uncoordinated fashion. Some types of corruption are
internal, in that they 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. Others
are external, in that they involve efforts to manipulate or extort
money from clients or suppliers, or to benefit from inside
information. Still others involve unwarranted interference in

15. SHANTANU BASU 15
market operations, such as the use of state power to artificially
restrict competition and generate monopoly rents. The World
Bank labels this as administrative corruption and refers to it as
the “intentional imposition of distortions in the prescribed
implementation of existing laws, rules and regulations to provide
advantages to either state or non-state actors as a result of the
illicit and non-transparent provision of private gains to public
officials”5. Joseph S. Nye10 posits a fairly comprehensive
definition of corruption:
“Corruption is 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).
In continuation of Nye‘s definition, Mushtaq Khan11 defines
corruption as “behaviour that deviates from the formal rules of
private-regarding motives such as wealth, power, or status”. In a
statistical study of 106 countries during the late 1970s and
early 1980s, IMF economist Paolo Mauro12 found that
corruption ―is strongly negatively associated with the investment
rate, regardless of the amount of red tape.‖ Mauro‘s model
indicates that a one standard deviation improvement in the
―corruption index‖ will translate into an increase of 4 per cent in
the investment rate and more than a 0.5 per cent increase in the
annual per capita rate of GDP growth. Thus ―if Bangladesh (with
a score of 4.7) were to improve the integrity and efficiency of its
bureaucracy to the level of that of Uruguay (score 6.8), its
investment rate would rise by almost five percentage points and

16. SHANTANU BASU 16
its yearly GDP growth rate would rise by over half a percentage
point‖.
2.1 The extent and forms of corruption
That corruption in various forms is endemic to all nations is a
universally acknowledged fact. It only differs in content and
direction. The following instances would show the extent of
corruption worldwide13:
Some estimates calculate that as much as $30 billion in
aid for Africa has ended up in foreign bank accounts. This
amount is twice the annual gross domestic product (GDP)
of Ghana, Kenya, and Uganda combined;
Over the last 20 years, one East Asian country is
estimated to have lost $48 billion due to corruption,
surpassing its entire foreign debt of $40.6 billion;
An internal report of another Asian government found
that over the past decade, state assets have fallen by more
than $50 billion, primarily because corrupt officials have
deliberately undervalued them in trading off big property
stakes to private interests or to international investors in
return for payoffs;
In one South Asian country, recent government reports
indicate that $50 million daily is misappropriated due to
mismanagement and corruption. The Prime Minister
stated publicly recently that the majority of bureaucrats
and the administrative machinery from top to bottom are
corrupt;
In one North American city, businesses were able to cut
$330 million from an annual waste disposal bill of $1.5
billion by ridding the garbage industry of Mafia
domination. A particular problem was the permeation of
regulatory bodies by organized crime;

17. SHANTANU BASU 17
Studies of the impact of corruption upon government
procurement policies in several Asian countries reveal
that these governments have paid from 20% to 100%
more for goods and services than they would have
otherwise;
Corruption can cost many governments as much as 50%
of their tax revenues. When customs officials in a Latin
American country were allowed to receive a percentage of
what they collected, there was a 60% increase in customs
revenues within one year;
Some estimates of the role of corruption in a European
country concluded that it has inflated this country's total
outstanding government debt by as much as 15 per cent
or $200 billion. In one city, anticorruption initiatives have
reduced the cost of infrastructure outlays by 35-40 per
cent, allowing the city to significantly increase its outlays
for the maintenance of schools, roads, street lamps, and
social services.
Academicians over the decades have provided various
classifications of corruption. Amundsen14 provides a useful
classification. The basic level of corruption is grand and petty
corruption that plagues the political leadership and the
bureaucracy. This can be further sub-classified into private and
collective (institutionalised) corruption and redistributive (from
below) and extractive (from above) corruption. While private
corruption is normally limited to an individual or a small set of
individuals, collective corruption is a societal phenomenon with
more pronounced negative economic effect by
extortion/extraction in collusion between groups/classes of
individuals for their respective group/class benefit. Similarly,
while extractive corruption is limited to extraction by select
ruling elite (such as the Duvaliers of Haiti 1957-86 or Mobutu of
Zaire 1965-97), redistributive corruption stems from powerful

18. SHANTANU BASU 18
interest groups based on caste, community, tribes, etc. that
corner certain strategic benefits for themselves. In the final
analysis, the State and its regulating capacity remains the
ultimate sufferer. Rose-Ackerman15 has correctly related the
bargaining power of the state vis-à-vis those of non-
governmental or private actors. She has argued that the nature
of corruption depends on the organisation of government as well
as that of non-governmental actors and the final advantage is
derived from monopoly power of the respective parties in their
dealings.
Another classification of corruption made by the World Bank16,
particularly in emerging nations, is between state capture and
administrative corruption. “State capture refers to the acts of
individuals, groups or firms both in the public and private sectors
to influence the formation of laws, regulations, decrees, and other
government policies to their own advantage as a result of the
illicit and non-transparent provision of private benefits to public
officials”. In this group would fall “the legislature, executive,
judiciary and regulatory agencies. This form of corruption is
generally prevalent in an economy where economic power is
highly concentrated, countervailing social interests are weak, and
the formal channels of political influence and interest
intermediation are underdeveloped”. On the other hand
administrative corruption refers to “the intentional imposition of
distortions in the prescribed implementation of existing laws,
rules and regulations to provide advantages to either state or
non-state actors as a result of the illicit and non-transparent
provision of private gains to public officials”. However, the World
Bank‘s classification is in tune with various other similar
classifications attempted.

19. SHANTANU BASU 19
2.2 The impact of corruption
Corruption delays, disturbs, distorts and diverts growth and
development. It lowers foreign and domestic investment,
reduces incentives for entrepreneurs and heightens risks of
investment. High levels of corruption threaten economic
stability, slow down growth, weaken institutional capacities and
reduce resources available for social development. It violates
basic human rights and introduces preferential treatment in
exchange for consideration. Corruption also has a devastating
impact on the environment. For private industry, it distorts the
growth of sectors, engenders unfair competition and
discourages capital investment. The economic costs of
corruption not only create inefficiencies in the operation of
markets but also distort patterns of public expenditure. Finally,
corruption is divisive and makes a significant contribution to
social inequality and conflict.
Corruption disrupts and even prevents orderly competition and
weakens institutions. Klitgaard17 has explained this with the
following schematic equation:
Corruption = Monopoly + Discretion – Accountability
In his view, corruption thrives where officials have exclusive
control over valuable goods and can use their discretion in
farming these out without having to answer to anyone.
Monopoly plus discretion undermines competitive participation
while discretion minus accountability weakens official
institutions and creates illicit ones. Citizens seeking redress
through established channels against such entrenched
corruption may be reasonably expected to adopt what Alam18
calls evasive ways. Such ways may include dropping out of
politics or the mainstream economy, foregoing economic

20. SHANTANU BASU 20
benefits or even use corrupt links of their own. In fact they can
swell the ranks of corrupt interests.
For some time viewed as an agent for promoting economic
growth by creating informal markets and price systems and
integrating political systems (Leff)19 corruption is today viewed
as a major source of economic and political retardation of
nations keeping in view its long-term effects (Rose-Ackerman)20.
In the process of replacing fair competition by illegal payments,
corruption severely undermines entrepreneurial activity from
productive action into rent seeking. Ironically, corruption also is
seen as an aid to augmenting efficiency (Kaufmann and
Kaliberda)21 - efficiency of extortion. Decline in investments for
human development also leads to a corresponding decline in the
quality of public services (Mauro and Rauch)22. The value and
positive inclination of prospective investors too takes a hit as
corruption becomes a tax on such investment (Wei)23.
Corruption also fosters crime. Corrupt businesses are sheltered
from competition with legitimate businesses by their illegality.
In corrupt systems they also operate without fear of prosecution
by paying off the police and politicians or by incorporating them,
directly or indirectly, into their businesses. The danger for
economic development arises when organized criminal groups
begin to dominate otherwise legal business, e.g. control over
petrol bunks or coal transport contracts in India. Profits from
such illegal business are diverted to legitimate businesses often
undermining them in the process of obtaining public contracts
(Gambetta and Varese)24. Such criminality can generate
financial resources at usurious rates by threatening violence in
a scarce capital scenario in certain industries (Webster; Webster
and Charap; Yabrak and Webster)25, e.g. the Bombay film
industry which is, to a large extent, financed by the underworld.

21. SHANTANU BASU 21
Corruption distorts political development. The essence of a
welfare state is defeated when patronage networks come into
being for the sole purpose of controlling citizens and resources
rather than for improving the quality of human life. Politicised
use of divisible incentives (Johnston)26 degenerates into a
disorganized scramble for spoils (Easterly and Levine)27
culminating in corrupt elites consuming as much as possible
within a limited time (Scott)28. Such aberrations
notwithstanding, democracies are however, unlikely to lose their
basic character given the presence of independent regulators,
law enforcement agencies and popular will.
Corruption ultimately affects the poor and causes the gap
between the rich and poor to increase. The poor will invariably
receive a lower level of social services. Use of illegal price
systems to distribute pensions, public housing, education and
health will disadvantage those unable to pay. Secondly,
investment in infrastructure will be biased against anti-poverty
projects. Small and simple community projects and indigenous
small-scale enterprises that would not contribute substantially
to bribery would be placed on the back burner. Thirdly, the poor
not being able to face the taxation system without bribes may
proceed to the underground economy. Consequently, the state
would not be able to provide them the requisite social services
once faced with a fiscal crunch from falling tax revenues.
2.3 Corruption as a national issue in India
With a pessimistic 78 per cent of an interviewed population29
believing that corruption would increase in India and US$ 523
(PPP value) being the estimated average annual outgo per capita
and accounting for 10-20 per cent of GDP paid as bribes per
household, , any study must necessarily focus on the causes of
such rampant corruption. For this purpose it is proposed to

22. SHANTANU BASU 22
classify the sources in three categories, viz. historical, societal
and environmental in this study.
Transparency International‘s Report for 2005 ranks India at 88th
place out of 158 in its Corruption Perceptions Index. The
following table would amplify the position
further:
3.5
3
2.5
2
1.5
1
0.5
0
Sri Lanka Bangladesh Pakistan Myanmar China India
Source: Adapted from TI International: Corruption Perceptions Index, 2005
The major sources identified by Transparency International
globally are also the same in India as would be seen from the
following table:
4
3.5
3
2.5
2
1.5
1
0.5
0
Political Police Business Customs Medical Education Registry & Religious
parties services permit bodies
services
Source: Adapted from TI International: Corruption Perceptions Index, 2005

23. SHANTANU BASU 23
This is all-important when one considers the public perception
of basic public services as being excessively corrupt as would be
seen from the following table from Transparency International
India‘s (CMS) study in 200528:
Using
Department Direct Poor influence/ Corruption Commitment Perception Composite
experience quality middlemen perception to reduce increased Index
of bribing of of dept. corruption value
service
NEED BASED
RFI 19 23 14 25 31 29 22
Income Tax 20 30 23 62 38 38 35
(individual
assesses)
Municipalities 23 60 32 75 60 57 47
Judiciary 47 62 31 81 58 63 59
Land 48 58 37 79 63 62 59
administration
Police 8-0 74 12 88 64 77 77
BASIC
Schools (up to 18 20 9 45 27 31 26
Grade 12)
Water supply 9 33 13 56 37 38 29
Public 16 43 27 62 48 46 37
Distribution
system
Electricity 20 41 12 67 50 49 39
(consumers)
Govt. hospitals 27 44 18 67 48 50 42
Average 18 36.2 15.8 59.4 42 42.8 34.6

24. SHANTANU BASU 24
The World Bank‘s governance performance statistics30 too show
a similar picture from 1998-2004 as follows. In fact the graph
and appended show several critical parameters having
significantly worsened in 2004 over 1998, in particular
regulatory quality, rule of law and control of corruption:
Percentile Rank
Governance Indicator Year
(0-100)
2004 53.9
Voice and Accountability
1998 58.6
2004 24.3
Political Stability
1998 27.3
2004 55.8
Government Effectiveness
1998 50.8
2004 26.6
Regulatory Quality
1998 41.8
2004 50.7
Rule of Law
1998 67.0
2004 47.3
Control of Corruption
1998 59.6
Source: Kaufmann D., A. Kraay, and M. Mastruzzi 2005: Governance Matters IV:
Governance Indicators for 1996-2004.

25. SHANTANU BASU 25
2.4 The Weberian model and Indian bureaucracy
Bureaucracy plays a pivotal role in ensuring the rule of law and
preventing corruption. It is therefore necessary to trace its
evolution Max Weber‘s31 theory of bureaucracy describes a new
organizational form called a bureaucracy. To him, in a
bureaucracy leadership and authority were derived from a more
‗rational‘ framework than was the case before. Unlike in earlier
periods the bureaucracy derived its authority from logic,
efficiency and reason rather than charisma or tradition. This
new organisation functioned on the basis of rules, laws and
regulations and their legitimacy from the consistent, disciplined,
rationalised and methodical calculation of optimum means to
given ends. Weber viewed bureaucratic action as being typically
oriented towards solving problems and that bureaucratic
decision-making was guided by the objectives of efficiency,
calculability and predictability. Thus decision-making was
‗rational‘, made as these decisions were not with reference to
any person(s). Weber also believed that bureaucracies being
technically efficient instrumentalities of administration since
their institutionalised rules and regulations helped their
employees to perform their duties optimally. Notwithstanding
the value Weber attached to bureaucracies, Weber was also
critical of the bureaucracy for its tendency to impose excessive
controls on employees often imprisoning them in an ‗iron cage‘.
In sum, the key features of Weberian organisations are that they
are hierarchical, maintain division of labour and are governed
by rules. While hierarchy results in vertical differentiation,
division of labour entails horizontal differentiation within the
structure of an organisation.
In the century after Weber‘s assertion of the virtues of a
bureaucracy, most scholars have become increasingly critical of
its ways thereby giving the term ‗bureaucracy‘ a most negative

26. SHANTANU BASU 26
connotation in more modern times. Burns and Stalker32
observed that highly bureaucratic organisations were change-
resistant. The traditional hierarchical structure itself promoted
self-perpetuation and retarded innovation. Another negative
quality was the sub-optimisation‘ (Selznick)33 in bureaucracies
by which units possessing delegated powers worked at cross-
purposes with the stated objectives of the mother organisation.
Yet another criticism of the traditional theory has come from
Gouldner34 who found that the ‗govern according to rules‘
culture in bureaucratic organisations led to members following
the minimum possible rules required. This, in turn, had a
cascading effect in obtaining more than minimally acceptable
behaviour from members. Merton35 has stated that a major
failing of bureaucracy was its tendency to foster ‗goal
displacement‘. In the process of following rules and regulations
rigorously resulted in rules becoming an end in them thereby
subverting the real goals of an organisation. Further,
application of rules and regulations often in inappropriate
circumstances and the tendency to routines unique events
resulted in dysfunctional outcomes. The role of individuals in a
bureaucratic organisation has been commented upon adversely
by Blau36 who proposed that in bureaucratic organisations,
certain people who knew how to ‗play by the rules‘ shifted power
from the nominal leaders, who did not know how to play by the
rules, to with people who did. In a similar vein, Ostrom37 has
argued that the bureaucratic structures ―are necessary but not
sufficient structures for a productive and responsive public
service economy.‖ Claus Offe38 has, in his counter Weberian
analysis spoken of a bureaucratic structure as running against
the rationality of developed welfare-state capitalism unlike the
Weberian bureaucracy that was relevant to a ―specific historical
phase and contingent from the standpoint of functional
rationality‖. Mainly, scholastic studies have dwelt upon specific

27. SHANTANU BASU 27
aspects of the bureaucracy such as inefficiency, corruption,
concentration of power, managerial frustration, dissatisfaction,
low creativity, organizational conflict, poor decision-making,
misuse of power, political interference, etc.
Yet studies have found that bureaucracies work well in certain
contexts such as the evolution of society in erstwhile communist
USSR, decline of the ancient Roman army and the development
of the British pottery industry during the Industrial Revolution.
However, these appear to be more by way of exceptions than as
rules. An attempt has been made to fuse some of the above
theories and opinions in the Indian context in the succeeding
paragraphs.
2.5 Causes of corruption in India
Before delving into the causes of administrative corruption, it is
important to understand the hierarchical organisation of the
bureaucracy in India. The following diagram shows the layout of
a typical federal Ministry/Department:

28. SHANTANU BASU 28
Prime
Minister
Cabinet
Minister
Minister of Secretary
State
Secretary Same as for the other Secretary
Additional Secretary/Jt.
Secretary
Director/Dy.
Secretary
Under
Secretary
Section
Officer
Clerical staff
Chairperson, Advisory Councils
Directors-General Central Police Forces [Home only]
Autonomous body CEOs
Public sector CEOs
Average: Secretaries (2-3); Addl. Secretaries: 1-2; Jt. Secretaries: 5-7; Directors/Dy.
Secretaries: 10-15; Under Secretaries: 15-20; Section Officers: 15-20

29. SHANTANU BASU 29
2.5.1 Historical causes of administrative corruption in India
For 4850 of its 5000 year history, India remained a bevy of
feuding princely states whose sole sources of revenue came
either from land and trade or pillage. Colonial administration
relied mainly on strength of Draconian laws, police and military
might, fostering dissension amongst the Indian princes and a
fear of the State apparatus on the citizenry to govern the
country. Nor was Indian enterprise and capital encouraged to
flourish. Needless to say, democratic institutions did not have
any opportunity of formation. At the dawn of Independence in
1947, India had a band of visionary and dedicated leaders with
a colonial bureaucracy to overcome centuries of
maladministration and human suffering.
Bureaucracy in India – its structure, role, behaviour and
interrelationships – has evolved over 150 years. The Macaulay
Committee Report (1854)39 recommended a civil service based
on the merit system establishing the principle that ―henceforth,
an appointment to the civil service of the (East India) Company
will not be a matter of favour but a matter of right. He who
obtains such an appointment will owe it solely to his own
abilities and industry.‖ This was significant since a study has
shown that 23 per cent of nominations to the Indian Civil
Service between 1809 and 1850 were made to relatives of
Directors of the East India Company while 55 per cent were on
the basis of friendship (Cohn)40. This bureaucracy also had a
Weberian side to it inasmuch as it was recruited from the
affluent sections of society owing allegiance to the English
Crown- exclusivity that Weber felt was essential to a true
bureaucracy. Recognising this bureaucracy‘s imperial
significance Prime Minister Lloyd George declared in the House
of Commons in 192241 that ―they are the steel frame of the
whole structure. I do not care what you build upon it - if you

30. SHANTANU BASU 30
take the steel frame out, the fabric will collapse‖. This
perception did not change even with post-independence leaders
of the stature of Jawaharlal Nehru (India‘s first Prime Minister
1947-64) and Vallabh Bhai Patel (India‘s first Home [Interior]
Minister 1947-50). This was perhaps on account of the
bureaucracy and the political leadership sharing a common
social and cultural background42. Wedded to the Weberian
characteristics of hierarchy, status and rigidity of rules and
regulations and concerned mainly with the enforcement of law
and order and collection of revenues, the Indian bureaucracy in
its colonial form did not fit into the priorities of a developing
state.
Up to the 1930s the Indian bureaucracy was well-paid even by
contemporary international standards as Potter43 has shown in
the following table:
Top Indian Civil service Monthly pay Comparative Posts Monthly pay
Posts
(In Rupees) (In Rupees)
Governor of United Provinces 10,000 - -
Governor of Bihar 8,333 Governor, New York State 5,687
Member Viceroy‘s Council 6,666 Cabinet Minister, UK 5,555
Governor of Assam 5,500 Chief Justice, US Supreme 4,550
Court
Secretary, Govt. of India 4,000 Treasury Secretary, UK 3,333
Chief Secretary, Madras 3,750 Cabinet Member, USA 3,412
Commissioner, Bombay 3,500 President, Poland 1,560
Chief Secretary, Bihar 3,000 Governor, South Dakota 682
Secretary, Madras 2,750 Prime Minister, Japan 622

31. SHANTANU BASU 31
The idealism of the pre-Independence leaders soon gave way to
a sea of political leaders claiming to represent caste and
communal interests and whose sole interest lay in vote politics
based on caste, regional and linguistic basis while the
bureaucracy gained in strength as the ultimate arbiters of
India‘s destiny. In doing so, the bureaucracy fully ‗lived up‘ to
the words of Sir John Simon in his Indian Statutory
Commission Report (1930)44:
“In a country of small cultivators, no accumulated resources and
little experience in organisation, except along the limited and
traditional lines of the village community, private enterprise
cannot undertake new and costly experiments. The task of
bringing within reach of such a society the benefits of the
administrative experience and the applied science of the West
was possible for one agency only-Government; no other had the
necessary knowledge or machinery. Thus the civil service of
India, which in origin was little more than a revenue collecting
agency, gradually took upon itself a very wide range of duties. As
the work became specialized, new services had to be created to
carry it on, and in this way there grew up departments dealing
with public health, education, forestry, agriculture, irrigation,
archaeology, and many more. India looks to government to do
many things which in the west are done by private
entrepreneurs.”
Idealism and euphoria arising from newly found freedom
coupled with the multifarious problems from the greatest divide
in human history (Partition) and a sudden vacuum created by
the departure of colonial administrators ensured that the
colonial bureaucracy assumed control. The press and media,
stifled by years of colonial repression, neither had the networks

32. SHANTANU BASU 32
nor the capital to enhance their coverage. Neither had the
telecommunication and education sectors developed nor the
capabilities of the accountability enforcing agencies. Grinding
poverty, hunger and disease disallowed the population from
devoting its energies to enforcing accountability. The middle
class and intelligentsia also constituted a miniscule proportion
of the population and even so, were more favourably disposed to
the erstwhile colonial rulers that had created this class. The
legal system too, suffering from the ravages of Partition, was in
no position to play the role of an effective enforcer. Therefore it
was but natural that India had little choice but to fall back upon
the bureaucracy to administer the nation during this crisis and
execute the first mega development projects. A millennium of
civil strife, foreign invasion, colonial rule and societal divisions
centering on religion, community and caste, absence of political
cohesion amongst rulers, ensured that the impoverished and
hungry population, at the dawn of Independence, possessed
neither the bare minimum educational attainments nor the
capital and resolves to claim their lawful rights and participate
in government.
Conditioned by the demands of a highly stratified feudal society
and lured by an utter mismatch between a burgeoning
population and available infrastructure and services, open to
not infrequent political intervention, India‘s civil service is yet to
come to grips with the fast changing economic scenario and
desperately clings to its colonial vestiges with an adopted veneer
of modernity and a put-on concern for welfare of the community
of governed citizens. Shrouded in a veil of secrecy with an open
disdain for professionals, mainly confined to mass-scale
graduate and post-graduate degrees and deeply rooted in
colonial times, India‘s bureaucracy is partly responsible for the
country‘s abysmal rating by Transparency International. The

33. SHANTANU BASU 33
Indian bureaucracy‘s inability to deal effectively with the
complexities and ravages of a post-Partition (1947) India
stemmed from the facts that they were ill-equipped both by
training and mindset to cater to the wave of rising expectations
of a newly independent population in a democratic polity. Nor
did they possess what Bhatt45 quantifies as the sole objective to
―emphasize results, rather than procedures, team-work rather
than hierarchy and status, [and] flexibility and decentralisation
rather than control and authority‖.
It was quite unlike what Woodrow Wilson in his seminal essay
on ‗The Science of Administration‘ (1887)46 had envisioned the
role of government:
“There is scarcely a duty of government which was once simple
which is not now complex; government once had but a few
masters; it now has scores of masters. Majorities formerly
underwent government; they now conduct government. Where
government once might follow the whims of a court, it must now
follow the views of a nation.”
This essay was written when there was a public outcry against
corruption, improvement of efficiency and streamlining of
service delivery in the pursuit of public interest – a scenario that
is being presently repeated in India. Therefore it is imperative
that the Indian bureaucracy, as Esman47 says, accepts its
limitations and works in tandem with community and private
agencies. In a similar vein, Chambers48 describes the need for
‗bureaucratic reversals‘ in most situations where officials know
less than their clients; professionals should move from being
experts transferring information to become consultants and
collaborators of the poor. Disillusionment with the bureaucracy
and its inability to deliver on promises has fuelled demands
from a section of academia that sees non-governmental

34. SHANTANU BASU 34
organisations (NGOs) as agents of development (Korten)49.
Notwithstanding such opinions, one cannot wish away the
continued importance of governance and it three main organs,
viz. the executive, judiciary and legislature. Governance in the
contemporary context is as Rhodes50 states “……. the new
method by which society is governed”. “Thus the governance
concept points to the creation of a structure or an order which
cannot be externally imposed but is the result of the interasction
of a multiplicity of governing and each other influencing actors”
(Kooiman and Van Vliet)51. Thus the role of governance retains
centre stage in all lending operations of the World Bank52 as
would be seen from the following table:
Category Proportion of lending
operations with governance
content (per cent)
Legal framework 6
Participation 30
State-owned enterprises reform 33
Economic management 49
Capacity building 68
Democratisation 68
Source: World Bank, 1992. Governance and Development, Washington DC
Expansion of market concepts in the public sector is taking
place coinciding with the thrust to build administrative systems
that address the problems of a growing urban-industrial nation.
That is why the public sector appears to be large, cumbersome,
wasteful and beyond citizen control (King and Stivers)53. The

35. SHANTANU BASU 35
historical distinction between private and public sectors is
‗essentially obsolete‘ and management therefore should be
generic across sectors. (Peters and Pierre)54. However, treating
citizens as happy customers may also be equally
counterproductive. Therefore governance in India needs to be
dynamic, responsive and participative and deliver public
services economically and efficiently with adequate levels of
accountability.
2.5.2 Societal causes of administrative corruption in India
Any bureaucracy arises from society and there can be no
different yardstick for the Indian bureaucracy. Recruitment to
the ‗Covenanted Services‘ such as the Indian Civil Service,
Imperial Police and Indian Audit and Accounts Service,
although based on competitive examinations conducted in
England, were restrictive in nature and other considerations
such as those relating to family connections, caste, religion, etc.
played significant roles in determining selection. There was also
selection by nomination without any benchmarking
examination. It was therefore natural that only the miniscule
and land-owning rich middle class (the biggest single supporters
and beneficiaries of colonial administration) were represented in
the upper echelons of India‘s bureaucracy. Having benefited
from English education and largesse in various forms
(including, but not limited to, knighthoods, land grants, etc.)
this class, since its inception by the then Governor General of
India Lord Cornwallis in 1793, served as a surrogate
bureaucracy to the colonial administrators. There was not much
difference when it came to recruitment for subordinate
government positions either. Bulk of the jobs were low paying
but welcome to an otherwise impoverished population with
virtually no other sources of income. Having originated from
various castes and communities, the colonial civil service

36. SHANTANU BASU 36
favoured regional and caste based loyalties and was looked
upon as the saviours by fellow citizens. It was this very class of
indigenous colonial administrators that decided the distribution
of projects, their executors, funding, and deployment of
personnel and shaping of a nascent nation‘s laws. Centuries of
deprivation and impoverishment coupled with the laxity of the
post-independence polity enabled the Indian bureaucracy to
make inroads into every sphere of life in India, irrespective of
their capabilities.
2.5.3 Environmental causes of administrative corruption in
India
The causes under this category are mainly economic and partly
related to service conditions of the bureaucracy.
2.5.3.1 Economic causes of administrative corruption in
India
An important economic cause of corruption is the relatively low
salaries of the 20 million government work force, particularly
the senior civil services. A secretary (in his mid to late-fifties) to
the Government of India (the topmost rung of the civil service)
today earns around INR 60,000 per mensem that translates to
US$ 1350. However, added to this are non-taxable fringe
benefits such as chauffeured staff cars, orderly
messengers/attenders, other personal staff, virtually unlimited
telecom facilities, leave travel concession by air for himself and
his dependants, spacious premium government residential
family accommodation, inflation-indexed lifetime pension and
family pension thereafter, provident fund, comprehensive
lifetime health care (at US$ 3 per month) for himself and his
dependants and, in case of railway officers , the lifetime privilege
of free air-conditioned first class railway travel for himself and
his spouse. An approximate additional cost to all these items at

37. SHANTANU BASU 37
current cost would translate to INR 400,000 or US$ 9,000,
making for a gross salary liability per head for the federal
government of approx. US$ 10,350 per month. This pales into
insignificance when one considers starting salaries for a fresh
Indian Institute of Management graduate (in his early twenties)
ranging from INR 300,000 to 400,000 per month (US $ 7,000-
9,000) plus incentives that could add twice as much to the base
salary apart from self-designed rapid intra/inter-sectoral
mobility at a time of his/her choosing. However, the lower
echelons of the bureaucracy, particularly junior officers and an
army of clerks, accounting for about 95 per cent of the
bureaucracy are paid salaries ranging from INR 8,000 – 30,000
(US$ 175 – 700) although they too have scaled down non-
taxable perquisites such as pensions and health care.
In 1991, the then Government of India introduced far-reaching
reforms in the first phase of liberalization of the economy.
Subsequent interventions by successive governments have
added pace to this movement. However, by redefining the role of
government vis-à-vis the economy, liberalization has given way
to the bureaucracy to use its state power for selling/disinvesting
public enterprises in oft-criticised and low-transparent manners
as also arrogating to itself the authority to permit or deny
licenses to foreign/indigenous companies/entrepreneurs for
setting up manufacturing, service or much-needed
infrastructure facilities. However, this may be only a transitory
phenomenon as private industry comes to occupy centre stage
and a relatively limited ‗price‘ to pay for a brighter future.
Another factor that impinges on corruption is the recent trend of
coalition politics in India. Underhand political funding and
uncertain tenures of governments and ministers have
engendered an unholy nexus between the bureaucracy and the
politicians insofar as corruption is concerned. Such a strong

38. SHANTANU BASU 38
nexus also becomes apparent when one considers the utter
helplessness of accountability agencies that are either given
advisory status or have to wait endlessly for government
permission to institute prosecution proceedings against
delinquent officers/politicians. Even proceedings where
launched are stymied by poor legal follow-up and presentation,
absence/destruction of original evidence, layers of legal appeals
and ultimately, nominal exemplary punishments.
The all-pervasive lure of ill-gotten money that India‘s Central
Vigilance Commission characterizes as a ―low-risk and high-
return‖ enterprise has encouraged the average citizen to view
the Indian bureaucracy as predatory and oppressive rather than
enabling thereby reinforcing their sense of helplessness and
exclusion. By distorting development priorities such as the
execution of often-controversial single mega projects instead of
localized smaller and functional ones (without attendant
problems of rehabilitation, employment, etc.) in the search of a
bigger ‗share‘ of the ‗booty‘, the bureaucracy, in tandem with the
political leadership has skewed development to the detriment of
the population.
2.5.3.2 Service conditions as cause of administrative
corruption in India
An interesting feature about India‘s bureaucracy is that it
constitutes only around 1.2 per cent of the population against
the OECD average of 7.7 per cent (with pronounced reliance on
private sector delivery mechanisms)55 and yet exercises a
stranglehold on the country. While there is, prima facie, a strong
case for increasing the government workforce, yet there are
major angularities in the staffing patterns thereby giving an
impression that salary and pension spending at around 25 per
cent of total government expenditures is too high relative to non-

39. SHANTANU BASU 39
salary spending. Thus the State Government of Delhi has only
37 food inspectors to inspect 450,000 food outlets – a ratio of
1:12,000. Against this the Karnataka State Administrative
Reforms Commission (2001) found that 45 per cent of filled
positions in the Irrigation department, 73 per cent in the Public
Works Department and 53 per cent in the Mines and Geology
Department were in excess of requirement. The productivity of
the government workforce does not generate any cause for
optimism either. Steady salary increases in the public sector
have ensured that the salary of a graduate teacher in the Indian
state of Uttar Pradesh increased in real terms by 36 times from
1960-61 to 1995-96 (Kingdon and Muzammil)56. Mehrotra and
Buckland57 have estimated that the ratio of trained graduate
teacher salary to state domestic product per capita increased
from 8.4 in 1985-86 to 13.5 in 1995-96. This compares
unfavourably with Carnoy and Welmond‘s58 findings that show
the ratio of an average teacher‘s salary to GDP per capita for
West and Central Africa at 7.3, almost half of Uttar Pradesh‘s
average in 1995-96. The declaration of all private elementary
schools in the state of Madhya Pradesh as government schools
by the state government in the early 1980s overnight brought
650,000 teachers into government service. Thus political
compulsions in creating posts and recruitment to these posts,
except the senior federal and state civil services, has severely
skewed the structure of the Indian bureaucracy for it to be able
to act as a major agent of change and development.
Fragmentation of the civil services both at federal and state level
and the absence of any horizontal, vertical or lateral movement
between services have also added to the absence of
specialisation and recognition of good performance as a way to
obtain career advancement. Faced with slow promotions, many
of these services have sought to make good official

40. SHANTANU BASU 40
compensation with less honourable means fuelling corruption
further.
An important aspect that merits discussion is the training of
personnel. Although the Government of India has laid down that
every Ministry/Department shall earmark one per cent of its
gross annual expenditure on staff training and training
institutions have mushroomed, yet the quality and commitment
to such training remains well below par. An unwillingness to
serve in any training institution and perception of such
institutions as being anti-professional climbers has
characterized these institutions. Although the senior federal
services are trained in private institutions such as Indian
Institutes of Management and foreign universities, the training
effort for the bulk of the file-processing ranks has been
lackadaisical at best. The end result is a vast bureaucracy that
frequently oversteps its rights and obligations, is ill-equipped to
comprehend the subtleties of current-day economics and
finance, yet standing in the way of professionalisation of these
services. A standing example of bureaucratic ennui is the
almost daily multiple interventions by courts of law, including
the federal Supreme Court, on issues relating to subjects as
diverse as admissions to educational institutions, environment,
unauthorised constructions, etc.
A major factor that affects the civil services in India is that of
chronic and rampant political interference leading to frequent
suspensions from service and transfers and diluting or even
removing any accountability of these officers. This engenders
corruption by way of informal auction of posts to the highest
bidder by politicians. About two decades back, Robert Wade
noted the buying and selling of posts in his study of the
irrigation department of a major south Indian state government.
Wade59 noted that irrigation engineers were able to extract large

41. SHANTANU BASU 41
amounts from the sale of posts as well as award of contracts
and water to lobby groups. After a share for the engineers, the
bulk of this money found its way into the coffers of politicians
for elections and other purposes. The buyers of these posts, in
turn, had to work hard to recoup their investment by extracting
as much revenue as they could before either being transferred
or winning an extension with this wealth. Evidently, the more
downstream problem of chaos in administration caused by high
turnover rates is linked to the upstream imperative effacing
politicians to extract revenue from routine government functions
to finance their quest for office.
Another important factor that adds to the limited capabilities of
the bureaucracy and engenders corruption is the continued
employment uncertainties of the bureaucracy, particularly in
the wake of recent government pronouncements and action in
strategic disinvestment, winding up of unprofitable ventures,
ban on recruitment, economy instructions, scaling down of
some redundant organisations, etc. All these have been mainly
done by governments unable to make their balance sheets tally.
Lowering of revenue barriers, post-WTO, also has meant a
general decline, in real terms, of government revenues and
consequently the affordability of several government structures
in a scenario where a dynamic private sector has emerged as a
powerhouse of industry and services. With the services sector of
the economy expanding at almost breakneck speed, many
government departments would have to be eventually closed
down. Possessed of very limited educational and professional
attainments and skills vis-à-vis fast advancing technology and
skills from the private sector and the perceived absence of
alternative employment opportunities have led the bureaucracy
into believing that as a facilitator alone, their sources of
‗supplemental‘ income would eventually dry up. This perhaps

42. SHANTANU BASU 42
has also led the bureaucracy at all levels to attempt a free run
on all the resources that India has.
A bureaucracy mirrors the societal environment of any country
which also becomes its biggest negativity. Complacency arising
from excessive insulation by a maze of antiquated rules,
regulations and laws, high levels of illiteracy in the population, a
non-participatory monolithic administrative organisation vested
with unwritten discretion, regional and caste loyalties – all these
and more serve to make the Indian bureaucracy expensive and
expansive, inefficient and corrupt apart from engendering
mediocrity.
3. Elections and political party funding as a source of
corruption in India
The evolution of a democracy usually takes several centuries
and several generations of citizens to mature. While the UK
became a constitutional monarchy in 1689, established the
Tories, Whigs and Liberals as the precursors of today‘s parties,
introduced universal suffrage in 1918, it was not until 1945
that a well-defined and distinct two-party political system was
evolved. Similarly, although France became a constitutional
monarchy in 1790 and a democratic republic in 1871, yet a
stable democracy came into being only in 1958. The US too,
starting with independence in 1783, introduction of the party
system in 1824, established the present party system in 1856.
Thus while the UK took between 27 and 256 years to build its
democracy, France took 78-168 years, Germany 30-80 years,
the US 30-70 years and Japan around 50 years. However, none
of these nations had ever to carry a colonial burden or were
faced with a fragmented and fractured society, political disunity
and major social divides. Compared to these nations India‘s
democracy has found firm roots although it would yet take

43. SHANTANU BASU 43
perhaps another five decades to reach a similar level of
maturity. Nevertheless, the basic concepts of a democratic polity
such as universal franchise, popular sovereignty, and
institutionalised control of power and pluralism of political
forces are quite well established in India.
Since Independence (1947), India has witnessed series of
elections to the lower House of Parliament (Lok Sabha or the
House of the People). The official estimated figures of
expenditure on such elections are shown in the following graph:
14000
Expenditure incurred (In INR
12000
10000
million)
8000
6000
4000
2000
0
52
62
71
80
89
96
99
19
19
19
19
19
19
19
Year
Source: Adapted from data available at www.eci.gov.in
The size of the electorate too is perhaps the largest in the world,
proof of India‘s living democracy as shown in the following
graph:

44. SHANTANU BASU 44
800000000
700000000
600000000
500000000
Number of electors
400000000
300000000
200000000
100000000
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Year
Source: Adapted from data available at www.eci.gov.in
In 1991, the conduct of general elections required some 600,000
polling stations (775,000 for 1999 and 687,000 for 2004
elections) for the country's 3,941 state legislative assembly and
543 parliamentary constituencies. To attempt to ensure fair
elections, the Election Commission in India deployed more than
3.5 million officials, most of who were temporarily seconded
from the government bureaucracy, and 2 million police,
paramilitary, and military forces. Loksatta60, an Indian NGO,
estimates expenditure incurred by parties and candidates for
Parliament and State Assembly elections to be about Rs.7000
crore. Strangely, this figure in absolute terms is comparable to
the exorbitant election expenditure in the US. In the 2000
elections in the US for the presidency, both Houses of Congress,
gubernatorial offices and state legislatures, the total
expenditure was estimated to be about US$ 3 billion. About half
of it was incurred for issue-advertising by political action
committees (PACs) and pressure groups. The actual campaign
expenditure was probably about $ 1.5 billion, which is almost
exactly the amount spent in Indian elections! When one

45. SHANTANU BASU 45
considers the high purchasing power of the INR as opposed to
its low exchange value, India‘s real expenditures are about five
to six times that in the US. Yet, India‘s income per capita is
nearly one-eightieth of that in the US. Adjusting for India‘s
higher population, and relative to per capita income, the
country‘s per capita election expenditure is several times (about
20 times in purchasing power terms and 100 times in absolute
terms) than in the US!
However, that the desired maturity level of Indian democracy is
yet to be reached is evident from the fact that there are no
meaningful laws and conventions on regulation of political party
funding. Thus a legal provision that allows only public sector
companies to contribute to political parties (an impossible task)
while the Income-Tax law provides for limited exemptions on
contributions made by corporate entities to political parties. In a
highly politically fractured polity combined with the
uncertainties of multi-party coalition politics, to expect any
corporate entity in the private sector to identify itself with any
political party is most inappropriate for reasons of vendetta at a
later date. No clear cut guidelines or laws either exist to govern
political party funding.
It is therefore a natural phenomenon that parties and their
politicians often extort finances from private companies and
businessmen either by way of denial of a license, not allowing
change of land end-use, environmental clearances, media
advertisements from government agencies, transfers and
postings of bureaucrats, budgetary support, and grants to
NGOs, etc. The administrative system similarly promotes
political corruption. Virtual auction of civil engineering officers‘
posts in public works departments, Project General Managers in
the telecommunications sector, national highway projects,
irrigation projects, out-of-turn promotions, convenient

46. SHANTANU BASU 46
placement of favourable bureaucrats, allocation of budget
outlays, – the list is endless. Raking up issues relating to
reservation of university seats on religious and caste basis is
another ploy. Forcibly imposing quotas on admissions and
reserving a part of few available seats for government nominees,
directly or indirectly, government quotas on state-run railways,
bus services, airlines, issue of food ration cards, driving and
gun licenses, issue of all-India motor transport permits,
transportation of POL products by public sector companies (the
contracts) are the usual sources of corruption arising from an
unholy nexus between the bureaucracy and politicians.
Deregulation then, more than new and often unenforceable
laws, would appear to be the sole answer to these ills.
4. Municipal administration and corruption in India
The urban population has been projected to rise by India‘s
Planning Commission61 to 40 per cent of a total estimated
population of 1.33 billion by 2020 , i.e. over half a million from
the current level of 27.80 per cent, i.e. 284 million. Such
demographic growth is expected to be confined to around 60-70
large cities in the country.
The following graph illustrates the growth of towns/urban areas
in India during the last century:

47. SHANTANU BASU 47
5000
Number of towns/cities
4000
3000
2000
1000
0
1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001
Towns/UAs 1827 1815 1949 2072 2250 2843 2365 2590 3378 3768 4368
Source: Census of India, 2001
Concurrently, the percentage of urban population too has
shown a rise as the following graph shows:
30
25
20
15
10
5
0
1901 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001
Source: Census of India, 2001
With liberalization of the economy, increasing reliance would
have to be placed on institutional financing and capital markets
for resource mobilization and on the private sector for service
delivery. Given the generally poor performance track record and
financial performance of most municipalities, apart from an all-
pervasive public perception of being amongst the most corrupt
in India, is likely to make it extremely difficult for them to raise

48. SHANTANU BASU 48
resources from the market. Issues such as those relating to
reduction of urban poverty, employment, environment
management, housing, water supply, energy, transportation,
road decongestion, town planning, zoning, sanitation, etc. would
increasingly come into focus.
Financing urban services is perhaps the single major challenge
that faces India‘s planners. In 2001-02 municipal revenues
constituted barely 3 per cent of total government revenues
although the served population was nearly 300 million. This
was after a more than 10 per cent annual revenue expenditure
growth rate over the last decade. Consequently, municipalities
have had to depend on devolution of resources from the State
governments which too did no have adequate resources. This
has translated into abysmally low levels of civic services.
Rampant corruption has further reduced the efficacy even of
these limited resources for citizens‘ welfare. Fifty to eighty per
cent of all municipal resources are consumed by salaries while
operations and maintenance expenditure account for 20-40 per
cent of the total expenditure of a municipality. Some metro area
municipalities such as those in Bombay, Calcutta and Delhi are
unmanageably large and have fallen victim to priorities of the
elected representatives that head them. Here too the unholy
nexus between municipal officers and employees and their
political masters has contributed in some measure to the
quality and distortion of urban development plans.
Some municipalities have become unmanageably large and have
indisciplined and huge departmental work forces that are
recruited in much less than transparent manner poorly
educated and virtually untrained. Efforts to break-up these
monolithic entities have not succeeded for a variety of reasons.

49. SHANTANU BASU 49
5. Education administration and corruption
India is home to 17 per cent of the world‘s total population
accommodated in an area which is 2.4 per cent of the world‘s
total area. Of 2820 languages in the world, as many as 325
languages are effectively used in India alone. The country has
witnessed phenomenal educational development – both in
quantitative and qualitative terms, since independence. The
country has also made significant strides in higher and
technical education. India spent a nominal 4.02 per cent of its
GDP on education during 2001-2002 but about 44 per cent of
its adult population still remains to be made literate62. The
following statement compares the population, area, density,
literacy rates and level of public expenditure on education in
India and some of its neighbouring countries:
Particulars Population Area Density Percentage Percentage Public expr.
(millions) (Sq. Kms) to world of adult on
(2000) illiterate education
Population as %age of
2000 GNP (1996)
World 6055.0 * 135604354 45 100 100 20.6 NA
Afghanistan 21.2 # 652090 33 0.48 0.35 63.7 N.A.
Bangladesh 129.2 143998 897 0.11 2.13 59.2 2.2
China 1277.6 9596961 133 7.08 21.10 15.0 2.3
India 1027 $ 3287590 312 2.42 16.96 44.2 3.2
Indonesia 212.1 1904569 111 1.40 3.50 13.0 1.4
Japan 126.9 377801 336 0.28 2.10 NA 3.6
Myanmar 46.4 676578 69 0.50 0.77 15.3 1.2 &
Nepal 22.5 # 140797 160 0.10 0.37 58.6 3.2 @
Pakistan 156.5 796095 197 0.59 2.58 56.7 2.7 @
Sri Lanka 18.8 # 65610 286 0.05 0.31 8.4 3.4
Thailand 62.0 # 513115 121 0.38 1.02 4.4 4.8
SOURCE: Statistical Yearbook, 1999 UNESCO
* Estimated population for 2000, # Reference year 1999, $ Reference year 2001
& Reference year 1994, @ Reference year 1997
Note: The area figures of India exclude area under illegal occupation of Pakistan and China.
The following chart shows the slow trend of public expenditure
on education as part of GDP in India during the period 1951-52
to 2001-2002:

50. SHANTANU BASU 50
4.02
4.5 3.8
4
2.92
3.5
3 2.25
2.5
1.52
2
1.5 0.64
1
0.5
0
1951-52 1961-62 971-72 1981-82 1991-92 2001-02
Source: Adapted from data available at www.education.nic.in
Another chart would show the growth of educational facilities in
India during the same period:
2000-01
1990-91
1980-81
1970-71
1960-61
1950-51
0% 20% 40% 60% 80% 100%
Primary Upper Primary + High Colleges Universities
Source: Adapted from data available at www.education.nic.in
Colonial rule introduced concepts of a modern state, economy
and an education system. By linking entrance and advancement
in government service to academic education, colonial rule
contributed to the legacy of an education system geared to
preserving the position and prerogatives of the more privileged
(Lall)63. In order to correct this and provide for more broad-

51. SHANTANU BASU 51
based universal education, the Government of India established
the Kothari Commission (1964-66) to formulate a more
contemporary education policy for India. These principles were
further developed in the National Policy on Education (1986)
that came out with more concrete programmes such as:
Operation Blackboard (1987-88) with the objective of
improving human and physical resources in primary schools;
Restructuring and Reorganization of Teacher Education
(1987) for providing facilities for continuous upgradation of
teachers‘ knowledge and competence;
District Primary Education Programme (1993) for
decentralised planning and management, improved teaching
and learning materials and school effectiveness;
Despite the above and many other programmes, progress of
enrolment in elementary school was negated by relatively high
drop-out rates at Standard-10 level. Although government
statistics claimed credit for establishing thousands of schools,
yet government evaluation agencies such as the Comptroller
and Auditor General of India64 found that most schools did not
have teachers at all, that teachers were not qualified, teacher
absenteeism, basic infrastructure including buildings, potable
water, sanitation and furniture, teaching aids, etc. were grossly
inadequate or absent in toto. Inadequate and that too erratic
State funding compounded the existing misery.
Another major issue that faces school education is that there is
no common school system in India. Instead the school
education system is controlled by different Boards, viz. Central
Board of Secondary Education (CBSE under the federal
government), Council for the Indian School certificate
Examinations (CISCE) Board, State Boards, National Open

52. SHANTANU BASU 52
School (federal) and international schools that mimic schools in
Europe and America and affiliation to one of these Boards is
mandatory for recognition. Thus affordability of quality
education largely remains related to means and backgrounds of
parents. Even the existing curricula in these Boards have not
been free of politicisation with governing committee members
being placed by successive governments on religious, caste and
political affiliations. Revisions of text books that allegedly sullied
India‘s multi-religious heritage were re-written and supervisory
institutions/Boards reconstituted frequently. Needless to add,
school children were the hardest hit although they had no say
in the repeated revisions of their curricula. The existing school
system also suffers from a severe shortage of seats which, in
turn, has led to malpractices such as demands for donations
and stiff entrance/admission fees, interviews for 2-3 year old
children, political and bureaucratic interference, unannounced
modifications in state aid to minority-run institutions,
mushrooming of unaffiliated schools without any quality
benchmarks, siphoning of school financial resources to
subserve the interest of promoters and sponsoring mother
organisations. Salaries of teachers in many Board affiliated
schools are often decided arbitrarily and are low in most non-
government schools. School curricula too emphasizes learning
by rote that often poses serious health hazards to children who
have to carry bags weighing 5-7 kg to school every day.
Although curricula have been modified over the years, they
nevertheless remain confined to the narrow cloisters of tradition
and do not incorporate large contemporary elements such as
computer-aided design, graphic designing, commercial art, etc.
The present school system with its emphasis on learning by rote
finds reflection in school leaving examination results. Children
scoring aggregates of 97-99 per cent marks in their terminal

53. SHANTANU BASU 53
school examinations is invariably reflected in undergraduate
colleges raising their minimum cut-off marks for admission.
Recent media reports indicate that around 55 per cent of high
school graduates would not be able to obtain admission in any
Delhi University undergraduate college during the 2006-07
academic year. These children would therefore look to
neighbouring or other states for admission. Disparities being
large in marking of examination paper norms between states
and federal or autonomous boards and state domicile (akin to
in-state/out-of-state in the US), it is not unlikely that students
from Delhi would be able to obtain very few admission berths.
This brings us to the issue of vocational training for children
who are unable to secure admission to universities or who, for
reasons of inclination, ability or finances are unable to pursue
higher education. Although both the federal and state
governments have established several hundred Industrial
Training Institutes over the last few decades, the available seats
do not cater to more than a microscopic minority of students
leading to malpractices and corruption in the admission
process. State funding is also insufficient and upgrading a
training laboratory could take years or even decades to
accomplish. The social acceptance of a non-graduate apprentice
and stigma attached to undertaking jobs relating to carpentry,
plumbing and repairs of electronic gadgets compounds matters.
However, in tune with the changing times, at least Indian call-
centres or BPO offices of transnational companies accept
Standard-12 graduates. The Standard-10 graduates yet do not
figure in employability statistics. An all-encompassing
recruitment benchmark both in the private and public sectors
for graduate employees and the consequent availability of a job
does not factor in the limited availability of academic seats
either.

54. SHANTANU BASU 54
Higher education in universities is regulated by the University
Grants Commission (UGC), an autonomous body under the
federal Ministry of Human Resources Development. The UGC
too has not been above politicization with successive
Chairpersons being appointed on the basis of their political
affiliations. With a decline in real terms of state aid for institutes
of higher learning, the UGC is unable to provide adequate
grants to universities. Education is funded by both the federal
and State governments. Given the poor financial condition of
State government finances, the ability of each state to fund the
higher education system varies widely. University campuses
have also become a happy hunting ground for all political
parties in both teacher and student communities with elections
to student and teacher bodies being contested with substantial
budgets, campaigning and violence. Political affiliations of
university Vice-Chancellors and teachers vis-à-vis the federal
and state governments are known to effect positive or negative
modifications in the extent of budgetary support to such
institutions.
Even in specialized institutions of international repute such as
the Indian Institutes of Technology, Indian Institute of
Management or All-India Institute of Medical Sciences attempts
to curb their autonomy have been recently made by the present
UPA government. For how long such institutions would be able
to retain their autonomy solely on the basis of public outcry and
protest given successive governments‘ political compulsions in
forcibly imposing caste and community based quotas in such
institutes remains a debatable point. Political interference in the
constitution of Governing Bodies of these institutions,
withholding of grants and absence of any political will to raise
costs of education from paltry levels, delays in government
clearances to invite foreign guest faculty or permitting

55. SHANTANU BASU 55
academicians to visit similar institutions abroad have
characterised these institutions of international repute.
6. Health care administration and corruption
Health care in India has been traditionally vested in the State
and Federal government hospital/dispensary network. This
network spans 500,000 doctors, 700,000 health care workers,
25,000 primary and community health centres and 1,600,000
sub-centres complemented by 22,000 dispensaries and 2,800
hospitals. However, this infrastructure remains under-equipped,
under-manned and under-financed to cope with the challenge of
eradicating major threats to human life. Even this over-
stretched system suffers from irregularities in recruitment and
promotion of doctors and para-medical staff, unwillingness of
medical personnel to serve in rural/semi-rural areas, political
interference in appointment and transfers of doctors and
support staff, political affiliations of staff and doctors unions,
major financial irregularities in procurement of medicines and
equipment, wastage of scarce financial resources by way of
uninstalled equipment and shelf-life specific medicines,
spurious drugs, etc.
With no major initiative in establishing hospitals by
governments in last few decades and reduction in government
assistance both in physical and real terms, the existing facilities
are on the brink of collapse. While private enterprise has come
forward in a limited way these are largely beyond the reach of
common citizens. While authorised private clinics have
mushroomed to fill in the gap the state governments are lacking
in the legal enforcement and monitoring machinery. Private
unauthorised clinics offering a range of illegal services ranging
from foetal sex determination and abortion to treatment of
medico-legal cases at usurious rates and operate without the

56. SHANTANU BASU 56
mandatory licenses. Nor does India have any social security
system for its unorganized labour force and other citizens. Even
insurance companies do not bear the costs of outpatient
treatment upon payment of the requisite premium. However, the
only exceptions to the absence of comprehensive health care
scheme are federal government employees who are covered by
the Central Government Health Scheme (CGHS).
The CGHS was established in 1954 with the objective to provide
comprehensive healthcare to the central government employees.
Later the scheme was extended to pensioners and various
government personnel. At present this scheme is operating in 24
cities through 246 dispensaries, 19 polyclinics, 18 laboratories
and 86 ISM units. More than 7000 employees are employed with
the CGHS with several million beneficiaries employed by the
federal government and their dependants as also pensioners
and their dependants. Plagued by inefficient operations, poor
quality of medicines, frequent strikes, indiscipline and abuses of
the system by both beneficiaries and employees alike, the
CGHS, while adding substantially to the costs of governance,
the CGHS appears to have lost its relevance. In fact, the costs
involved in the CGHS annually would take care of several
million deprived people without causing any inconvenience to its
current beneficiaries.
7. Judicial administration in India
Corruption is so all-pervasive that even the judiciary is not
immune from it. However, before proceeding to analyse the state
of the judiciary it is important to understand the physical
structure of the India judiciary and its various levels. The
following diagram shows the organisational structure of the
Indian judiciary:

57. SHANTANU BASU 57
Supreme Court
High Courts
Sessions Courts
Sessions Judges
Chief Metropolitan Magistrate
Metropolitan Magistrate
Assistant Sessions Judges
Chief Judicial Magistrate
Sub-Divisional magistrates
Judicial Magistrates of I Class
Judicial Magistrates of II Class
Special Judicial Magistrates of II Class
Source: South Asia Human Rights Documentation Centre, 2006: Handbook of Human
Rights and criminal Justice. Ch 1- Criminal Procedure and Human Rights in India, p.13.
Oxford University Press, New Delhi=, India
7.1 Judicial corruption in India
The judicial system derives from legislation mainly passed by a
colonial administration. Most of the laws are either dated or do
not mirror contemporary realities. Till recently epilepsy patients
were covered by the Indian Lunacy Act. The physical size of the
judiciary has not expanded in direct proportion to the increase
in population. Even within the existing judiciary there are large
numbers of unfilled vacancies of judges. As on December 31,
2005, a mind-boggling 29,210,015 cases were pending before

58. SHANTANU BASU 58
the Supreme Court, 21 High Courts and the subordinate courts
in India against total unfilled vacancies of nearly 3,000. In Delhi
alone, the High Court has six positions and subordinate courts
have 123 positions waiting to be filled where 78,379 and
786,464 cases respectively were pending. Similarly, the Patna
High Court tops the list for vacancies with 22 out of the total 43
vacant positions. The court has 91,580 pending cases. The
District and Subordinate Courts in Uttar Pradesh (UP) have by
far the largest number of vacancies with 756 out of an approved
strength of 2,172 vacant seats. It is no surprise then that UP‘s
subordinate courts also have the highest pending numbers of
civil and criminal cases, with 4,458,861 cases still left to be
dealt with. For such large number of pending cases, India has
barely 10 judges for every million of population compared to 107
in the US, 75.2 in Canada and 50.9 in the UK. Added to this is
the absence of a clear distinction between the administrative
and judicial functions of legal officers. Ill-defined original
jurisdictions of High Courts often mean that small value cases
are heard by them while high value cases are heard by lower
courts.
In 1924, the colonial government set up the Justice Rankin
Commission to speed up the judicial process. Justice Rankin
had remarked:
“Unless a court can start with a reasonably clean slate,
improvement of methods is likely to tantalize only. The existence
of a mass of arrears takes the heart out of a presiding judge. He
can hardly be expected to take a strong interest in the
preliminaries, when he knows that the hearing of the evidence
and the decision will not be by him but by his successor after his
transfer. So long as such arrears exist, there is temptation to
which many presiding officers succumb, to hold back the heavier
contested suits and devote attention to the lighter ones. The

59. SHANTANU BASU 59
turnout of decisions in contested suits is thus maintained near
the figure of institution, while the real difficult work is pushed
into the background.”
Eighty years later there is no change in this situation. Although
several new path breaking legal enactments have been passed
by Parliament since Independence such as the Arbitration and
Conciliation Act, 1996, Foreign Exchange Management Act,
Money Laundering Act, etc., yet basic law such as the Criminal
Procedure Code and the Civil Procedure Code remain rooted in
colonial times. Regulatory laws such as the Essential
Commodities Act, 1955 have long outlived their utility and need
to be repealed. Another category of laws that need to be urgently
amended relate to patents, food adulteration, companies and
corporations, demonopolisation of the banking and insurance
sectors, telecommunications, industrial disputes, etc.
7.2 Causes of judicial corruption in India
Judicial corruption has been an oft discussed subject in India.
In the last five years several members of the higher judiciary
have been accused of corruption, some even convicted and some
had their properties confiscated and sold. With large numbers of
pending cases, the premium for a favourable judgment or even a
timely hearing is understandably high and may vary from a few
dollars to several thousand. Dated colonial laws often require a
contemporary verdict which too commands a hefty premium.
Often government agencies find themselves at the receiving end
as large payouts are passed by courts and arbitrators in cases
relating to land, inheritance, compensation, etc. Even in quasi-
judicial proceedings such as those relating to land acquisition
for projects of public importance that are conducted by
administrative officers vested with judicial powers are fertile
breeding grounds for corruption. The act of a court assistant in

60. SHANTANU BASU 60
‗pushing‘ a case file ‗up‘ for hearing is rewarding. So is a private
audience with a judge. In cases relating to evasion of taxes,
notably customs, excise and corporation, payouts by appellants
may be substantial. In another category fall such cases that are
referred to appeal tribunals with adjudicating powers. It is
common knowledge what reward an out-of-court settlement at a
figure many times lower than the officially assessed figure
fetches. Despite such widespread judicial corruption and denial
of justice, several High Courts and the Supreme Court of India
have pronounced landmark judgments in cases relating to
environment protection, reservations in university seats,
disqualification of members of Parliament, rights of minorities,
unauthorised constructions, etc. Despite successive National
Law Commission reports, initiatives by the federal Cabinet
Secretariat and the Prime Minister‘s Office, Committee on
Administrative Law reform, etc., none of their recommendations
have found favour with the judiciary, executive, politicians and
lawyers, solicitor firms.
The multiple layers of appeal in the Indian legal system coupled
with antiquated and often contradictory laws foster greater
corruption in the entire body politic. In civil cases there is
normally the right to make as first appeal on a fact or point of
law to district courts (Section 96, Civil procedure Code) and a
second appeal to high courts on a point of law (Section 100,
Civil Procedure Code). If the second appeal is heard by a single
judge, the appellant can pray for an additional appeal, known as
letters patent appeal, to a division bench of the high court.
There is no single Article for appeals against judgments, decrees
or orders of high courts. Most appeals therefore finally end up in
the Supreme Court. Nor has the provision of a second appeal to
the High Court been scrapped. Tortuous litigation, often

61. SHANTANU BASU 61
frivolous, thus provides ample scope for corruption. AP
Herbert65 remarks aptly sum up the Indian situation:
“The people may be taught to believe in one court of appeal but
where there are two, they cannot be blamed if they believe in
neither. When a man keeps two clocks which tell the time
differently, his fellows will receive with suspicion his weightiest
pronouncements upon the hour of the day even if one of them
happens to be right”.
Open-ended laws also promote corruption in the judiciary and
the legal system. The Civil procedure Code provides
innumerable opportunities to lawyers to delay proceedings.
Lawyers may file applications for interrogatories, appointment of
a commissioner for local inspection, a temporary injunction
(interlocutory order) and arrest or attachment of movable assets
before judgment. Each application, and two can be made, is
required to be heard and disposed accounting for at least one
year in each appeal. While the first appeal may take up to three
years, the second may takes at least 7-8 years if admitted in a
High Court. Added to this are long-winded arguments of lawyers
with no time limits specified in law for such arguments and
repeated adjournments sought by lawyers on behalf of their
clients without any cap specified for such requests. Rampant
delays in pronouncing judgments following closure of
arguments and the obtaining of a decree that may take several
months or years more provide all the more reason for corruption
in the legal system.
The manner of appointment and transfer of judges and cases
from courts by governments also fosters uncertainty and
corruption in the judiciary. A high turnover of Chief Justices at
the Supreme Court – 12 between 1987 and 1999 and 4 in 2002
alone - has only compounded delays. Delayed anticipation of

62. SHANTANU BASU 62
judicial vacancies, inordinately long time taken in verification of
antecedents of prospective judges and recommendations of the
state governments are some factors that ensure the shortage of
judges in the judiciary and a consequential build up of backlog
of cases. Nor has a single judge been impeached in the last fifty
years giving judges the right to remain unaccountable for their
deeds. In recent times high court judges have also been arrested
for immoral human trafficking and corruption in real estate,
illegal remittance of foreign currency abroad and benefits
obtained from state governments by way of housing land, etc.
Needless to add, the cases in these issues would last for several
years and there is no assurance that the final verdict would
even exonerate the judge for some procedural deficiency in the
cases registered by enforcement agencies against him.
Corruption then is inevitable as millions of aggrieved citizens
are often willing to pay bribes in their quest for relatively
speedier justice.
Contemporary laws too have often proved to be a source of
corruption. While the Narcotics and Psychotropic Substances
act, 1985, prescribes a minimum penalty of ten years‘
imprisonment and/or a fine of US$ 4,500 this is regardless of
whether the drug is poppy straw, prepared opium, cannabis or a
psychotropic substance. This reduces the probability of
prosecution and the probability of conviction when prosecuted.
Thus enforcement agencies who file case have a large element of
discretion while courts have the last say in determining the
applicability of any particular section of this Act to a defendant.
Doubts have often been raised about the qualifications and
experience of judges in dealing with cases. Although the lower
judiciary is recruited through a competitive examination system,
this does not always assure that the best students join the
judiciary. Plagued by poor pay structures, uncertainties of

63. SHANTANU BASU 63
promotions and tenures, a constant face-off with their
appointing executive and low levels of in-service training are
other major factors affecting India‘s judiciary. Lateral
recruitment into the higher judiciary on the basis of
nominations by governments have often been accused of being
less than transparent and aimed at the creation of a ‗committed
judiciary‘ – committed to the interests of the ruling dispensation
that appoints them. Such commitment is often rewarded by
ruling elites that provide luxury official cars to high court judges
and other non-taxable perks such as a handsome transport
allowance of INR 15,000 per month to judges of the Calcutta
High Court.
India has also been quite liberal in granting large number of
holidays to its employees. Courts are no exception either.
(Debroy66). The working hours in Indian courts range from 5.5
hours per day in subordinate courts to 5 hours in different High
Courts and the Supreme Court. This is in contrast to Malaysian
courts that operate for an average of 6.5 hours per day. The
Indian Supreme Court operates for only 180 years per annum.
For high courts, working days are around 200-210 per annum
while in subordinate courts it varies from 240-270 days. This is
again in contrast to the Malaysian Federal Court that operates
for 220 days while the other courts are open for 220-260 days
per annum.
Last, but not the least, most courts in India, particularly at the
lower echelons, are not automated. Court registries are
therefore not always able to list all items in chronological order
and take up listed matters sequentially without any
arbitrariness. The absence of automation therefore invariably
leaves ample room for discretion and corruption in the hands of
lower court employees to accord preference for listing to one
case over another.

64. SHANTANU BASU 64
Zuckerman‘s67 remark „A sense of crisis in the administration of
civil justice is by no means universal, but it is widespread‟ is
certainly applicable to the Indian judiciary. Notwithstanding
such a gloomy situation, the Supreme and High Courts have,
over the years, evolved their own institutional mechanisms and
pronounced judgments in a variety of cases ranging from
environment to frivolous litigation, perjury to marital divorce,
child adoption to illegal construction activity and women‘s rights
to electoral malpractices apart from clearly defining the powers
of the State vis-à-vis the Constitution. Public Interest Litigation
(PIL) pioneered by a former Supreme Court Chief Justice PN
Bhagwati has also enabled citizens to approach this Court on
the basis of a postcard complaint. The Court has gone further
and also entertained media reports in cases relating to
maladministration and many other social issues. Such yeoman
service has restored citizens‘ faith in the higher judiciary
although much more needs to be done since judicial activism
alone cannot substitute for bureaucratic failure, antiquated
laws and procedures and financial unaffordability.
8. Police administration and corruption in India
The India Act XIII of 1856 reformed the municipal police
administration in the three Presidency capitals (Calcutta,
Madras, and Bombay). They were each placed under a
Commissioner who was responsible directly to the Governor of
the Province. India Act V of 1861 (commonly known as the
Indian Police Act, 1861) established a uniform system of police
administration throughout British India with an Inspector
General at the head of the police in each province. The Superior
Police Services, later known as the Indian (Imperial) Police,
consisted of an Inspector General, Deputy Inspectors General,
District Superintendents and Assistant District
Superintendents. The Subordinate Police Service in each

65. SHANTANU BASU 65
province consisted of Inspectors, Sub-Inspectors, Head
Constables and Constables. The rank of Sergeant (equivalent to
Head Constable) also existed but was mainly confined to
Europeans or Eurasians who served in the City forces or in
cantonments. The Indian Police (Superior) Service in its earlier
days included many European officers of the Indian Army.
Before 1893 appointments to all senior grades (i.e. Assistant
District Superintendent and above) were made locally in India.
From 1893 most new entrants to the top echelon were
appointed by examination or selection in the UK. In the lower
branch, the Subordinate Services were mainly constituted of
Indians with some Europeans and Eurasians in the higher
ranks. The Indian Police structure was again changed in 1905
when the rank of Deputy Superintendent with four grades was
created within the subordinate services. The term 'Provincial
Service' was used to refer to these four grades. The design of the
colonial police force was therefore „not independent of the
economic, political and administrative realities that existed‟
(Arnold)68.
The parent law governing police functioning in India continues
to be the 145-year old Indian Police Act of 1861, which is
completely outdated. It was framed immediately after the Indian
Mutiny in 1857, and reflects the contemporary angst of the
British to maintain internal order with an iron hand and
perpetuate their rule over India. In consequence, this Act was
designed to establish a force to protect the rulers, and not one
for the community to claim ownership. The brutality,
unresponsiveness, and other vices associated with the police in
India derive from this limited charter of their duties, which
distinguishes the rulers from the ruled. Incidentally, the major
enactments concerned with the administration of criminal
justice like the Indian Penal Code, the Code of Criminal

66. SHANTANU BASU 66
Procedure and the Indian Evidence Act were framed in the latter
half of the nineteenth century. Except for a few amendments
these enactments, along with the Indian Police Act, provide the
basic framework for administering criminal justice in India.
The image of the Indian police is not that of a citizen-friendly
force. Public criticism varies from its alleged overzealousness
and brutalization at one end of the spectrum, to ineffectiveness
in controlling crime and criminals at the other - not surprising
in the face of mounting evidence of violence and crime. The poor
image of the police, in some states like Bihar, has darkened
even further. Instead of being an instrument to enforce the rule
of law, it is increasingly seen as a pliable tool in the hands of
unscrupulous politicians. This is not a new development. The
Indian police have a long tradition of being a partisan
instrument in the hands of the rulers since colonial times. At
the heart of the problem is the fact that a section of police
officers instead of fighting crime and criminals decided to join
them, because doing so was more profitable and less risky.
The increasing politicisation of the police in India has seriously
affected its morale and discipline. The resulting polarization in
some of the states has been along religious, caste and ethnic
lines, eroding its credibility. The emergence of armed caste-
centric senas (private armed militias) in Bihar and Uttar
Pradesh was a consequence of this loss of faith in the state
police to protect people's life and property. An unholy nexus has
developed between corrupt police officers and unscrupulous
politicians. The criminalisation of politics has affected police
performance more than the performance of any other state
institution.
The wholesale transfer of police officers with each change of
government has become a routine matter. Officers have to

67. SHANTANU BASU 67
undergo the humiliation and harassment of being transferred
again and again, sometimes within 24 hours. To expect a police
force led by such demoralised officers perform in a fair and
effective manner may therefore be misplaced.
The police have not escaped the evil effects of communalism and
casteism in Indian society either. A partisan and politicised
police has often been used to intimidate adversaries and reward
supporters. When the police uses its discretionary powers and
enforces the law in a selective manner, as happens quite
blatantly in states like Bihar and Uttar Pradesh, it is no longer
trusted by the people. The registration of cases, their
investigation and prosecution has increasingly become a matter
of political expediency. Even arrests and searches by the police
are often made to serve partisan ends.
Nowhere in the world can a police force effectively perform its
role without the cooperation of the people. It is not a
coincidence that senas have mushroomed in those parts of the
country where the police has ceased to be a professional force to
provide a sense of security to the weak and deprived. It is not
that criticism against the police is a new phenomenon. Much of
what is being alleged today has been said earlier too. The
allegations of incompetence, corruption, brutalization, and
being a violator rather than an enforcer of the rule of law, have
all been voiced before. But the deteriorating law and order
situation and an increasing sense of insecurity in the country
have lent a new edge to these allegations.
The present system of administrative and political supervision
over the police suffers from many distortions. After the
separation of the executive from the judiciary with the
amendment of the Criminal Procedure Code in 1973, the so-
called magisterial control has lost its original motivation.

68. SHANTANU BASU 68
Complete control has now passed on to political rulers. Not
surprisingly, the police tend to be the handmaiden of the
political rulers of the day. There is no alternative to creating
institutional mechanisms to insulate the police from arbitrary
administrative and political control, and to subject it to the
control of an agency which functions in a non-partisan manner
and holds the rule of law and public interest as the sole criteria
for judging police performance.
A major negative feature in police administration is the system
of dual control -- one exercised by the IPS and the other
operated through the office of District Magistrate and the Home
Ministry staffed by the non-police civil services. Even though in
the Police Act of 1861, control by the then Indian Civil Service
was limited to the administration at the district level, the control
mechanism grew geometrically. First it led to the establishment
of the Home Ministry that began controlling the police
organization, formulating its policies and controlling its budget.
Furthermore, at every level of administration the police were
subordinated to the corresponding civilian officer. Thus, the
police ranges were made smaller units than revenue divisions
and the Divisional Commissioner (a state government official)
became the superior officer of the DIG. Indeed, in many states,
even the Zonal Inspectors General have been subordinated to
the Divisional Commissioner. A much junior ranking IAS officer
has been elevated to the rank of Home Secretary where he
begins to dictate to the Chief of Police - the DGP, an officer who
may be at least 10 years senior in rank. The present system has
therefore ensured through various mechanisms to subordinate
the police service to that of administrative service. This has
prevented growth of professionalism in police and created a
situation where people with little stake in the police organization
make its policy and control its functions. Nonetheless, the

69. SHANTANU BASU 69
importance of the District Magistrate as the principal
coordinating authority in districts cannot be denied.
The over 100 year old system of maintaining police records of
crime and criminals has become non-functional because of a
huge increase in crime and the number of criminals. Frustrated
at their failure to control crime and angry at the unjust criticism
against the force, police officers give vent to their feelings by
resorting to extra-legal measures. Illegal arrests, fake
encounters and torture in police custody may bring about some
visible signs of improvement and positive media attention for a
brief period, but in the long run they cannot control crime.
Traditionally, third-degree methods of interrogation have been
applied during investigation with some tacit social sanction. The
problem, however, is that it does not take long for some officers
to resort to strong-arm methods for extortion and political ends.
The growing nexus between the police, politician and criminal is
a logical outcome of this process.
Eighty per cent of the police force comprises of constabulary.
Constables have varying educational qualifications for
recruitment stooping as low as a school grade-Iv passed in the
state of Bihar. They enjoy little legal powers and are made to
perform demeaning duties for officers and walking the beat-
loosely dressed, overworked, uncouth but still able to exercise
extraordinary powers. In fact a recent survey found that
constables were exercising considerable discretionary powers,
settling disputes and resolving social conflicts without any
recognition or departmental guidelines (Griffith, Murphy and
Verma)69. While the Indian Police Service is well-trained and
enjoys all the benefits admissible to other senior civil servants,
the lower ranks, including investigating officers, have a low
social status and work for 10-12 hours every day. Housing is
available to barely 2-3 per cent of the force and there are no

70. SHANTANU BASU 70
provisions for over-time, transport and promotions. During
elections and festivals policemen are on duty for 12-15 hours a
day. Yet their emoluments, perks and other organisational
support are weak. There are few vehicles for the police stations
and communication equipments like wireless sets and telephone
instruments are in short supply. Most stations are and other
buildings are in poor shape and urgently need repairs. Poor
training and neglect of working conditions have therefore
undermined the professionalism of the police forces. It is
therefore not unusual to find a distinct police sub-culture in
which hostility towards the citizens, group solidarity and
secrecy were paramount has come into being (Westley)70. The
discretion vested in a police officer vis-à-vis the limited legal
knowledge of a citizen lends itself to misuse when cases are
often deliberately not registered under the appropriate
provisions of the law, leading to excessive or low level of penal
action. At the higher levels discretion is exercised by Indian
Police Service officers in deciding the quantum of force to be
deployed, in identifying the sensitivity of election voting booths
for protection and pre-election preventive arrests. The superior
police service is also guilty of demoralizing the subordinate
forces by extorting moneys form subordinates for promotions
and postings to ‗attractive‘ posts and stations. In time all these
lead to the politicisation of the police forces.
9. Remedial measures to contain corruption in India
While there is certainly a crisis of governance in India, this does
not necessarily mirror a corresponding crisis of governability.
While governance relates to the quality of government – its
capacity to deliver services, regulate levels of public corruption,
etc., governability has more to do with the resilience of
democratic stability. ―The multiplicity of India‘s institutional
pluralism is both cause and consequence of its crisis of

71. SHANTANU BASU 71
governance. India‘s multiple institutions assist, thwart,
manipulate and subvert each other, but at the same time
appear to have provided a system that undergirds apparent
fragmentation and chaos. The very features that make
governance more problematic also reduce covariance risk and
thereby systemic threats to instability.‖ (Kapur and Mehta)71.
Therefore no single remedy can be a prescription for multi-
faceted corruption that India is faced with. Only a blend of
coercion, restructuring, outsourcing and incentives can ensure
enforcement and compliance without excessive opposition. The
primary areas to start with appropriately would therefore be the
political, executive, judicial systems. Some measures to contain
corruption are given in the succeeding paragraphs.
9.1 Civil service reform
9.1.1 Global trends in civil service reform
In the UK efforts at civil service reforms started in 1979 with the
creation of an efficiency unit in the Prime Minister‘s office. The
Financial Management Initiative sought to remedy several flaws
in the civil service. The Next Steps study resulted in the creation
of executive agencies. While New Zealand and UK concentrated
on agencification and managerilaising their core public services,
Germany‘s New Steering Model left the style of public service
intact and focused on readjustment of administrative functions
and financial responsibilities between the federal and Lander
governments. Australia, Canada and Ireland have also made
efforts towards reforming the civil service, including opening up
the senior structure and contractual management. Australia
also went in for a Financial Management Improvement
Programme. In Malaysia systemic changes have been introduced
in budgeting and accounting to permit managers to achieve

72. SHANTANU BASU 72
optimal utilisation of resources. The new remuneration system
attempts to create a new work culture by emphasizing
performance quality and productivity. The Total Quality
management programme has been adopted to provide for
citizen-friendly organisation.
9.2 Pre-Independence
In India attempts at civil service reform began as early as 1886
when the first Public Service Commission under the
chairmanship of Sir Charles Aitchison was constituted72. The
Commission recommended that the general administrative staff
in India should be divided into three branches: the Indian Civil
service, Provincial Civil service and Subordinate Civil Service.
The second Public Service Commission (Islington Commission)
was constituted in 1912. This Commission expanded the scope
of recruitment to the ICS and allowed Indianisation of this
covenanted service by a higher proportion. It also recommended
promotions to the ICS from the PCS. Salaries and allowances
too were proposed to be increased by 15 per cent. A third Public
Service Commission (Lee Commission) was set up in 1923
following large vacancies in the ICS and unwillingness to join for
want of better pay and promotion prospects. This Commission
specified quotas for Europeans, Indians and PCS. While
recommending a substantial increase in emoluments (also
called the ‗Lee Loot‘ worth about INR 125 million), this
Commission also made an important recommendation about the
pension system. These reforms ensured that the numbers of the
ICS were strictly controlled while it became a representative
bureaucracy by lateral upward movement from the subordinate
civil services. At the same time it did not dilute the basic
colonial character of the ICS.

73. SHANTANU BASU 73
9.3 Post-Independence
Since Independence, there have been more than 600 committees
and commissions at the federal and state levels to examine what
can be broadly characterised as administrative reforms73. The
reports of Gorwala (1951), Gopalaswami (1952), Mudaliar
(1956), Krishnamachari (1962), Kothari (1977) and Satish
Chandra (1977) are some instances. These reports suggested
retaining the open-entry and meritocratic nature of the civil
service and incremental improvements to the recruitment
system. With a rapid increase in the size of the bureaucracy, the
Government of India invited Paul H. Appleby to carry out one of
the first systematic studies of public administration in India.
Appleby emphasized the need for the establishment of a central
office charged with the responsibility of reviewing structures,
management and procedures in government. This resulted in
the creation of the Organisation and Methods Division in the
cabinet secretary‘s office and publication of the first Manual of
Office procedure common to all ministries and departments of
the federal government. A report by TT Krishnamachari dwelt
on the importance of training for the civil service and
improvements in district administration. K. Santhanam (1964)
addressed the issue of corruption as early as 1964. The
inadequacies of the bureaucracy in dealing with development
invited the establishment of the Administrative Reforms
Commission (1966). In the four years of its existence this
Commission submitted 20 reports containing 581
recommendations in all areas of administration. Although it
took government nearly a decade to implement many of these
Commission‘s recommendations, nevertheless the following
major reforms were put in place:

74. SHANTANU BASU 74
a. The Department of Personnel and Administrative Reforms
was created;
b. A new system of secretariat functioning based on the desk
officer system was introduced to replace the existing large
sectional officers charges;
c. A new principle in delegation of financial powers was
enunciated whereby it was decided that wherever powers
were to be delegated these should be the maximum
possible and not the minimum necessary.
d. The entry of generalists into top positions in the public
sector was curbed and proper procedures for recruiting
top level professionals from outside were introduced.
The Department of Personnel & Administrative Reforms
addressed specific areas of reform and undertook several useful
management studies. These finally led to improvements in
financial administration – the integration of internal and
associate finance in federal Ministries into a single integrated
financial adviser, departmentalization of accounts, payment of
government dues across departmental counters, etc. States too
established corresponding Departments of Personnel. Increasing
emphasis was laid on training.
In 1985, India‘s Prime Minister, Rajiv Gandhi, unveiled a
package of measures aimed at making administration an
instrument of social and economic transformation. The package
included decentralisation of the decision-making process,
enforcing accountability, simplifying rules and procedures,
prompt service to citizens and creation of a separate Ministry
called the Ministry of Programme Implementation. As follow-up
action on this announcement, the government introduced the
concept of Annual Action Plans (AAPs) for all ministries and

75. SHANTANU BASU 75
public enterprises. Authority was delegated for online
monitoring of development projects. Management by Objectives
(MBO) too was introduced during these years. For the public
sector, a system of signing memorandums of Understanding
was introduced and these were effectively their AAPs.
Other major measures included time-bound inter-ministerial
consultation and broad guidelines were laid down by specialists
for project implementation. In such cases the onus of
implementation lay on the secretary of a Ministry and
introduced higher levels of accountability for failure to meet
targets. Improvement in work environment and introduction of
modern equipment followed. The machinery for public
grievances was revamped and a Director of Public Grievance
within the Department of Personnel was established. Each
Ministry too was required to appoint a nodal Public Grievance
officer. For the first time, institutional linkages between
government and NGOs were established. Extensive and
compulsory training of civil servants was also taken up at
institutions such as the Administrative Staff College of India
and the Lal Bahadur Shastri National Academy of
Administration and State Institutes of Public Administration.
The government also issued orders earmarking a minimum one
per cent of the gross expenditure of a Ministry/Department to
be utilised for training. Unfortunately, with a change in
government and the subsequent assassination of Rajiv Gandhi,
civil service reform once again took the back seat. With the
liberalization of the economy starting in 1991, the Indian
bureaucracy and the spectacular performance of the private
sector, the ways of the bureaucracy militate against progress in
citizens‘ perceptions. Recognizing this fact, the federal
government has set up the Second Administrative Reforms

76. SHANTANU BASU 76
Commission (2006) to address the contentious issue of civil
service reform in more contemporary environmental conditions.
No discussion on civil service reform in India can be complete
without a reference to the successive Pay commissions, five of
which have submitted their reports to date while the sixth is
expected to be announced in July 2006. Over the years, the Pay
Commissions proposed rationalising bureaucratic structures
but at the behest of the bureaucracy itself that chose to guide
the recommendations for its own benefit. Such state capture not
only enabled them to extract better benefits every five and later
ten years while the exponential and often misplaced population
boom went unchecked. Positive recommendations of such
Commissions that would have had a salutary effect on
containing India‘s burgeoning budget deficit on revenue account
were not accepted or modified in such a manner as to suit the
demands of the bureaucracy. In fact successive governments
went overboard in vastly extending the scope of the
recommendations of the Pay Commission in specific instances.
At no stage was there any attempt to unify the civil service from
its present fragmented complexion nor was there the political
will to implement any worthwhile recommendation of any of
these 600 committees and commissions although these
consumed vast public funds over the last six decades.
Maheswari‘s74 comment that India‘s effort at reform have
amounted to “correction slips to the inherited administrative
system” is therefore not misplaced. In fact, Das‘75 comment that
“Indian civil service reform efforts were not even correction slips –
they were more in the nature of endorsement slips” mirrors
reality even more closely.
The near absence of any political will to carry out civil service
and public management reforms and the stranglehold exercised

77. SHANTANU BASU 77
by the senior levels of the bureaucracy has stymied all attempts
at reform. The situation is akin to French bureaucrats who, as
Crozier76 has shown, have resisted all attempts at change. An
unholy nexus between the bureaucracy and political leadership
in a mutually beneficial marriage has ensured that only lip-
service to such reform is paid. Civil service reform, so far
relegated to the background by successive governments,
therefore needs to be pursued as a major national issue with a
blend of divestment, outsourcing, decentralisation and
devolution to lower formations of the bureaucracy.
10. Measures to contain corruption in India
10.1 Measures to contain bureaucratic corruption in India
The budget deficit on revenue account has been steadily
expanding over the last few decades and has sharply risen since
the implementation of the Vth Central Pay Commission Report
in 1998. While the cost of salaries has risen, overall inflation too
has caused an overall rise in the cost of governance. While the
inevitable pressures in a democracy governed at the centre by a
coalition and in the states by diverse local parties cannot be
ignored, nevertheless governments would have to exercise
greater fiscal discipline and cut their overheads drastically if
development is not to suffer. Some suggestions that may reduce
the cost of governance are as follows:
a. The fragmented federal and state civil services needs to be
unified to provide for lateral, vertical and horizontal mobility,
equality of opportunity for all and revised job gradings by
evaluation for each post and its equivalents. Scales of pay
should also be rationalised to around 20-25 as has been
suggested by the First Administrative Reforms Commission,
instead of the several hundreds, or even thousands, available
today. This model has been adopted by Pakistan in the

78. SHANTANU BASU 78
1970s by its army rulers upon a perhaps reasoned belief that
a unified civil service would ably support the army‘s
perpetuation of its political power. Though a similar analogy
does not exist in India, yet the basic reform toward a unified
civil service may unleash hidden talent in other services that
may not have come to the fore at the point and age of
recruitment. This measure would also encourage and reward
individual performance and industry and keep alive an
apprehended threat of change of charge upon poor
performance.
b. Outsourcing of all non-essential security, sanitation, staff
departmental vehicle and office equipment provision,
operation and maintenance, clerical staff, etc. Since
employee resistance would be stiff and have political backing,
it may be advisable to form a special purpose vehicle in the
form of a 50 per cent employee held umbrella company (the
remaining 50 per cent held by the federal government) that
would have all presently government vehicles, office
equipment, etc. transferred on an as-is-where-is basis to it
and use the services of surplus staff as service providers on
commercial terms with government ministries/departments.
This would obviate large salary, pension, medical and other
perquisite payments and could be substituted with a
generous medical insurance and contributory social security
scheme, partly funded by profits from such commercial
operations and partly by government for the next decade;
c. Disposal of all government owned residences all over India,
development of these properties for private commercial and
residential purposes with private builders and developers on
profit-sharing basis. Occupiers of such residences could be
compensated by allowing 60-70 per cent of basic salary level
as house rent allowance this expenditure being funded in a

79. SHANTANU BASU 79
phased manner from realizations from sale of government
properties. This would also allow large savings by way of
operation and maintenance costs of these complexes by
government agencies and more than offset additional burden
by way of house rent allowance to a lesser number of
government employees consequent upon implementation of
(a) above;
d. Withdrawal of all government owned health care facilities for
employees and replacement with health insurance through
private insurers, funded by government. However, outpatient
treatment would have to be provided for by service providers
as insurance companies presently do not provide
reimbursement of outpatient health care costs. This would
lower medical coverage costs substantially and also
substantially improve access to modern hospitals for
treatment;
e. Presently government budget allocations totaling several
billion dollars made at the beginning of the year lie with the
reserve Bank of India without any gain on interest. Even if a
conservative 1.5 per cent per quarter interest is earned by
investing these funds in a financial institution till such time
as actual requirement arises, this measure would certainly
help in containing profligacy and the deficit in tandem with
the other measures suggested earlier;
f. Government rules for conduct of government business in
India hark back to the colonial times and often do not
promote accountability of its employees. The budget of a
Ministry/department is quantified twice per annum in
monetary terms and distributed budget head wise, based on
projections that are invariably inflated and presented on ad
hoc basis. Although monthly review of expenditure is carried

80. SHANTANU BASU 80
out, this is more an exercise in sheer monetary terms rather
than as an instrumentality of constructive monitoring of
physical targets. The impregnable job security of government
employees combined with constant political interference in
the bureaucracy has invariable fallout by way of skewing
expenditure and leading to mass-scale corruption at all
levels. The following suggestions may ameliorate the
situation:
(i) All Ministries/departments should be divested of all
administrative control over all public sector
companies (approx. 2,500 in the federal and state
sectors);
(ii) Administrative budgets of Ministries/Departments
should be on net expenditure basis, i.e. the budget
grants to them should be reduced by the amount of
internal generation of resources by them;
(iii) Staff should be frozen at least at 2000 AD level and
all future employment should only be on lateral
lump sum fixed-term and assignment on contract
basis with targets specified annually and
continuation of contract subject to satisfactory
performance. Adjudging performance should be left
to an independent body nominated by the
Government of India/State;
(iv) Administrative budgets should be based on the
zero-based model and the preceding year‘s budget
should not be treated as a precedent. Further,
Secretaries of all Ministries/departments may be
assigned a lump sum administrative budget which
they would apportion between various budget heads
from time to time. For this purpose they shall have

81. SHANTANU BASU 81
full delegation of financial and administrative
powers. While the existing rules of staffing in
government would partly remain unchanged,
Secretaries would have powers of redeploying staff
across the entire spectrum of technical and non-
technical staff and have powers to contract part-
time employees/institutions on lump sum salary
packages. Any legislation required for this purpose
may be on the lines of The Financial Management
and Accountability Act, 1997 promulgated in
Australia;
(v) While the present cash accounting system
mandated for governments in India is useful for
managing cash flows, it does not help in asset
management. Thus the cash system does not
provide any incentive to government departments to
extract the best value from their capital. Nor does it
generate information on the basis of which
governments can decide whether to use an existing
infrastructure or take up new capital investments.
Thus governments are unable to balance capital
and revenue expenditure giving rise to very high
capital-output ratios in government departments.
Although cash accounting is useful in tracking
annual expenditure and identifying short-term
effects of current policy, it is not suited to providing
information on long-term impacts of current policies
and calculate future revenues to pay for past debts
as well as for future services. Cash accounting also
enables governments to suppress liabilities, does
not reflect the value of subsidies or estimated losses
and cost of administration of loans and subsidies.

82. SHANTANU BASU 82
Nor does this system reflect the long-term costs
involved when government gives guarantees for
repayment of loans. It also lends itself to
malpractices like manipulation of deficits or
surpluses by varying the time of receipts or
payments. Lastly, it does not promote fiscal
discipline since up to 50 per cent of annual
government expenditure is incurred during the last
quarter of a financial year (April-March).Therefore it
is imperative that governments progress within a
specified, time frame, say five years, to accrual
accounting and budgeting irrespective of possible
high costs and political and bureaucratic resistance
that may be involved in such transition;
(vi) Each Ministry/Department should have an
Ombudsman vested with the powers of a federal
High Court and supported by judicial members who
would constitute benches to hear complaints by
citizens and allow compensation, grant permission
to prosecute delinquent public officials and
adjudicate on cases filed by federal and state
investigating agencies against such employees. All
cases of corruption against public officials would
automatically stand transferred from
county/district courts to the new institution. At the
federal level there should be an Appellate Tribunal
that would have original and appellate jurisdiction
in all such cases. No appeal would lie to the Federal
Supreme Court.
(vii) For all development funds flowing to federal and
state level agencies there would be a Appraisal
Board (as distinct from the Planning Boards

83. SHANTANU BASU 83
presently) comprising of 5-7 members each drawn
from the fields of economics, law, sociology,
accountants and auditors and distinguished
citizens appointed by a high level selection
committee nominated by Parliament. This Board
would also have the right to hear state level
complaints from citizens and original judicial
jurisdiction for all cases of corruption against public
servants, private executive agencies, etc. The Court
of the Ombudsman would act as the Appellate
Court in such cases;
(viii) In order to tide over the huge arrears of anti-
corruption cases filed by investigating agencies,
federal and state governments may establish fast-
track courts with the original jurisdiction of a state
high Court to ensure that speedier and exemplary
justice is meted out to delinquent officers and staff;
(ix) The institution of the Comptroller and Auditor
General of India, presently staffed (with around
60,000 personnel) needs to be professionalized with
qualified contract employees, chartered
accountants, cost accountants, company
secretaries, forensic auditors and accountants, I-T
experts, etc. being brought in on a mass scale. This
institution should also be given judicial powers and
have original jurisdiction over all anti-corruption
cases found during audit. However, India‘s Supreme
Audit Institution should be made a three-man
judicial commission and qualifications for
appointment to this post should be prescribed for
this end to be adequately met. Extensive
professional training at institutions of excellence in

84. SHANTANU BASU 84
India and abroad and creation of specialist audit
units either sectorally or theme wise may be
considered. The SAI while reporting to the
Legislature annually would also be free to enforce
its findings independently without constituting a
breach of privilege of the Legislature;
(x) Similarly, the recommendations of the Central and
State Vigilance Commissions to their respective
Governments may be dispensed with and these
Commissions may be given full powers of trying all
anti-corruption cases either referred to them by the
Ministries/Departments or from citizens;
(xi) Enforcement agencies such as State Anti-corruption
Bureaus and the federal Enforcement Directorate
should not be necessarily manned by police and
customs officers but also have professionals such
as forensic scientists within the organisation. The
heads and other officers of these agencies may be
granted constitutional protection for a fixed tenure
other than for case of corruption against them;
(xii) The Indian bureaucracy, particularly at levels of
Joint Secretary (the third senior most rung in the
federal civil service) and above have, for decades,
dodged all attempts by politicians and citizens alike
to be prosecuted without the sanction of the
President of India that involves 7-8
Ministries/agencies. Cases where investigating
agencies have sought permission of their respective
state and federal government run into thousands
stretching over several decades. With the creation of
fast-track courts, ombudsmen, audit commission,

85. SHANTANU BASU 85
etc. suggested above, this provision in the rules
would become redundant and must therefore, be
abrogated or as suggested by the current Federal
Administrative Reforms Commission in June 2006,
be amalgamated with a similar Act of Parliament to
provide limited immunity from prosecution;
(xiii) Promotions from one rung in the hierarchy to the
next higher rung should be made only after the
passing of a compliance examination and interviews
to be conducted by the Union Public Service
Commission for all federal services and by the State
Public Service Commissions for the state services;
(xiv) An appropriate system of built-in rewards and
punishments also needs to be incorporated into
service rules, development schemes, projects, etc.
Thus for example, an executive engineer entrusted
with the construction of a traffic flyover should have
the targets quantified, say, on a quarterly basis. If
three spans of a bridge of a total of 8 spans that
were to be completed between April-June 2005 and
only two are complete a punitive fine amounting to
0.25 per cent of the pro rated cost of the single span
should be recovered from his salary. Conversely, if 4
spans are ready against the target of three, he
should be awarded 0.25 per cent of the pro rated
estimated cost of the fourth span. Although India‘s
Ministry of Personnel and notified a system of
targets for all officers over a decade ago, most of
these targets are referred to while writing the
Annual Confidential Report (ACR) of an officer
without even verifying the truth contained in the
self-appraisal of the ACR form;

86. SHANTANU BASU 86
(xv) The long-delayed Companies Act needs to be passed
by Parliament urgently as this would have the
maximum impact on corporate governance
(including the public sector enterprises). Key
features such as accounting and auditing standards
also need to be incorporated into this Act to provide
for the twin purposes of higher levels of
accountability and self-regulatory enforcement vis-
à-vis malfeasance, insider trading on stock
exchanges, etc.;
The establishment of an independent but representative
standing Civil Services Commission as a judicial body to deal
with all appointments to the federal civil services, their
conditions of service, periodical postings and transfers needs to
be implemented without any further delay;
10.2. Measures to contain electoral and political party
malpractices
Some suggestions that could perhaps ameliorate the situation
are contained in the following paragraphs.
(i) The existing Election Fund of India administered by
the Election Commission of India may be extended in
the following manner:
a. All contributions to political parties in any manner
may be credited to this Fund;
b. All purchases of goods over a threshold limit of US$
25,000 may be subjected to the payment of a 0.25 -
0.5 per cent cess on the basic price of the good(s)
and buyers may be allowed to claim this
expenditure as expense for income tax purposes.

87. SHANTANU BASU 87
The onus of depositing these amount into the above
Fund would lie on the seller;
c. 2 per cent of all service tax proceeds may be
credited to the Fund. This tax is presently being
collected as a part of central excise;
d. Government may declare a one-time amnesty
limited to say three months during which all
contributions in cash to this Fund would be
converted into 10-year interest bearing bonds (2%
below the prevailing market rate) and no future
investigations would be made by the Income tax
officers for such amounts. All political parties too
would be eligible to buy these bonds;
e. Government may amend the existing disclosure
laws to provide for exemption from
income/corporate tax as part of business
expenditure to the extent of 50 per cent of such
contributions made to the Fund. Identical
provisions would govern individual or other
institutional investors;
f. All corporate entities would, by law, have to
contribute 0.50-1 per cent of their annual sales
turnover to this Fund that would be fully tax-
exempt;
g. All budget allocations held by the Reserve Bank of
India on behalf of various government spending
units would henceforth be held in interest-bearing
securities on quarterly withdrawal basis and 1-2
peer cent of such interest income would be credited
to this Fund;

88. SHANTANU BASU 88
h. Disbursement from this Fund to political parties
would be based on the following yardsticks:
(ii) The Companies Act, 1956 may be amended to legalise
all contributions made by corporate bodies and exhibit
them in their annual accounts as a lump sum.
However, the details would have to be mandatorily be
submitted to the regional registrar of Companies
confidentially. Severe penalties may be built into the
company law including prolonged imprisonment of up
to 10 years and pecuniary penalties starting from US$
250,000 for every US$ 10 million under disclosed.
Corresponding changes would also have to carried out
in other corresponding statutes;
(iii) Disclosure norms under the Companies act, 1956
would also include making accounting standards
legally enforceable and the introduction of separate
accounting standards for political party funding.
Similarly, auditing standards should form part of the
company law and auditors held liable for reporting on
company donations;
(iv) Although a Money Laundering Act is in place, the
enforcement machinery for the same is yet to be
established on a firm footing. The Serious Frauds office
under the federal Finance Ministry is similarly placed.
These bodies need to be professionally staffed by non-
bureaucratic personnel with much higher salaries and
perquisites on the lines of India‘s biggest private
companies. This machinery also should be vested with
powers of search and seizure, arrest, trial and
punishment. The legal support service too should be
drawn from the country‘s best solicitor firms each with

89. SHANTANU BASU 89
an annual turnover of not less than US$ 1 million.
These bodies may also be given unfettered rights to
monitor telephone, fax and e-mails of all suspects;
(v) A regulatory commission to oversee all real estate deals
above a threshold limit of US$ 250,000 may be
constituted headed by a sitting judge of the State High
Court in each state and by a judge of the Supreme
Court at the federal level in an appellate capacity. The
Members of these agencies may be elected for a period
of three years by popular franchise. Minimum
professional attainments may be prescribed and
thorough screening of their character antecedents may
be made before permitting them to offer themselves as
candidates. Such agencies will determine real estate
prices by surveys, allow deviations up to a ceiling of
10-15 per cent, devise building by-laws, direct
compulsory enforcement by municipal agencies,
regulate the registration of builders after causing
verification of their antecedents, regulate all academic
institutions in this field and have the original powers of
a state High Court in trials and imposing punishment
and also all anti-corruption cases against public
officials insofar as they relate to real estate
management and regulation. Such agencies may
constitute separate benches to assist them in what
would become an increasingly heavy responsibility. In
sum, real estate in India, like elsewhere in the world, is
the single largest consumer of illegally obtained funds
and rapidly ballooning real estate prices even in remote
geographical locations with little or no support
infrastructure therefore merits a closer mention;

90. SHANTANU BASU 90
(vi) Another major area of interest and consumer of ill-
gotten funds of bureaucrats and politicians is the
capital market. Registering a company in India is not
difficult and therefore the multiplicity of companies
floated in the names of frontsmen by politicians is
large. These companies not only show ill-gotten
moneys as share capital but also enter the stock
market often driving the share market violently up and
don, before collapsing with several million dollars
worth of citizens‘ investments. Given the long-drawn
out legal proceedings and an equally corrupt police
force, the promoters of such companies go scot free in
most cases even as cases against them linger on in
courts for decades together. Therefore the process of
registering a company needs to be suitably tightened
as also stock exchange rules of disclosure. Although
the Securities and Exchanges Board of India (SEBI) is
rendering yeoman service to regulating the capital
market, yet its success would hinge on enforcement of
allied laws and rules by related agencies. Although
insider trading earlier resulted in a ruinous crash of
the capital market about a decade back, the recent run
of bulls and bears remains a cause of deep concern;
(vii) The Election Commission of India at the federal level
and State Election Commissions need to be vested with
full judicial powers for taking action against violators
of the election laws up to and including local body
elections. However, they would not be competent to
pronounce judgments on constitutional matters. They
would also have powers to debar candidates from
contesting future elections up to a maximum of 7-10
years and also attaching ill-gotten properties and

91. SHANTANU BASU 91
finances of candidates without the right of appeal to
another court;
(viii) All candidates with criminal cases pending against
them in courts and civil cases relating to fraud,
embezzlement, corruption, defamation, dowry,
extortion, etc. may not be permitted, by amendment of
the election laws, to offer themselves as candidates for
any election till such time as the final verdict on their
guilt or otherwise is published. All efforts in this
direction made by a pioneering Election Commission of
India have so far been stymied by repeated references
to constitutional law to the Supreme Court;
(ix) The formation of political parties is also a sad
commentary on the state of the Indian polity. Mere
minor differences of opinion and numbers are the sole
criteria for registering a new party with the Election
Commission of India. This has led to a situation in
which no party is able to garner even a simple majority
and is therefore dependant on such disparate parties
for support with or without participation in
government. It is therefore not surprising that prior to
the formation of a new party, the constituents are
moved covertly to neighbouring states and ‗locked‘
away in luxury hotels and resorts. Such is the allure of
office that large sums exchange hands for switching
party loyalties. Therefore commitment to party ideals
and agenda invariably plays second fiddle to the lure of
office. In order to rectify the situation the definition of
what constitutes a political party needs to be recast.
Registering a party should include a registration fee of
least US$ 250,000 and be subject to verification of
character antecedents of each. The President,

92. SHANTANU BASU 92
Treasurer and Secretary of the new party would also be
required to submit personal surety bonds of at least
US$ 100,000 each that would be invoked if they
defect/split from this party in the coming five years. In
the event they defect/split after the five-year
moratorium, all the above bonds would stand forfeited
and fresh application would have to be filed. While this
measure may sound Draconian and even repugnant to
the basic freedom of choice and political conviction in a
democracy, the current situation demands no less a
solution;
Further, the following yardsticks could also be used to
determine the definition of political parties for federal and
state elections:
National: Parties that are in power in at least three state
level governments and/or in the federal government, are the
largest or second largest party in a state or federal legislature
and have an audited and independently certified primary
membership of at least 250,000. For these parties for federal
elections an individual candidate would be eligible for an
outright grant of US$ 25,000 while for state elections this
amount would be limited to US$15,000 after fulfillment of
the conditions laid down in sub-para (ix) supra;
Regional: All other parties that do not fulfill the requirement
of national parties. There would be no distinction with
national level parties or with the provisions contained in sub-
para (ix) supra. However, for the proposed provision
contained in sub-para (viii) supra, the limits for these parties
would be limited to three-quarters.
(x) Similarly the minimum educational qualification that a
prospective candidate is required to fulfill before

93. SHANTANU BASU 93
offering himself for election should be revised to at
least a graduation degree. In addition, a non-
refundable application fee of at least US$15,000 would
have to be made by each candidate. This would be
credited to the Election Fund of India. In addition, a
non-interest bearing refundable security deposit of at
least US$ 20,000 would be held by the District
(county) Returning Officer for a period of three months
after declaration of the final election results. This
amount would be utilized for cleaning of defaced public
and private properties during election campaigns,
unpaid dues of contractors engaged by candidates for
printing, erecting temporary structures for meetings
and other damages to life and property. A part of this
security deposit would also be deductible towards a
compoundable system of fines for violating election
laws. No appeal would lie against any deductions in
the refunded amount of the security deposit;
(xi) The suggestions made for electoral reform by the Chief
Election Commissioner of India to India‘s Prime
Minister in July 2004 need to be implemented without
any further delay.
10.3 Measures to contain judicial corruption in India
Some measures to contain judicial corruption in India are
contained in the following paragraphs:
(i) Empower the existing National Law Commission
with judicial powers to make appointments to the
higher judiciary and their transfers without advice
from the federal government. All complaints against
members of the higher judiciary shall lie to this
Commission both in original jurisdiction and

94. SHANTANU BASU 94
appellate jurisdiction (different benches). No appeal
shall lie to the Supreme Court. This Commission
would also have judicial authority to promulgate
rules and regulations relating to all echelons of the
judiciary all over India, their recruitment, conduct
of compliance examinations, try all anti-judicial
corruption cases in the manner specified above, fix
terms and conditions of service, salaries and
allowances for all members of the judiciary, licenses
for lawyers, solicitor firms and other agencies like
notaries, etc. All other bodies at national and state
level shall be disbanded. Instead some of these may
be converted into State benches of the National
Commission;
(ii) Complete the ongoing exercise to review all
antiquated laws and repeal them by 2010 AD;
(iii) Enact all contemporary legislation presently
pending at various stages by 2010 AD;
(iv) Enact contemporary legislation such as those
relating to credit cards, ATMs, hire purchase and
leasing, electronic data interchanges, biodiversity,
intellectual property rights, competition policy,
electronic commerce, etc;
(v) Harmonise all laws on a single subject such as
those relating to labour or the poor and orders and
rules and subordinate legislation by governments;
(vi) Reduce transaction costs associated with obeying
the law so that the incentive to operate illegally is
partly removed. This would bring down the number
of cases filed in courts of law the arrears of which

95. SHANTANU BASU 95
would otherwise take nearly 250 years to settle. For
a weak procedural law combined with a strong
substantive law weakness the base on which a case
is contested;
(vii) All existing administrative dispute resolution bodies
may be armed with executive and quasi-judicial
powers of settlement, evidence, appearance, etc.;
(viii) Provide for separate fast track courts for litigation
between government departments that threaten to
crowd-out public litigation. The existing Central
Administrative Tribunals may be empowered to
cover all government cases and not restrict
themselves to government employees‘ terms and
conditions of service;
(ix) Provide severe penalties on litigants for frivolous
litigation;
(x) Presently, a typical civil suit goes through the
following ten stages:
a. Institution of the suit by filing of a complaint by
the plaintiff;
b. Issue of summons;
c. Appearance of defendant and filing of written
statements;
d. Production of documents for evidence;
e. Framing of issues;
f. Fixing the date of trial. This may range from 12
years in Delhi High Court and 16 in the Bombay
High Court;
g. Trial, including examination of witnesses and
oral arguments;
h. Arguments, judgment and decree;

96. SHANTANU BASU 96
i. Execution of the decree
j. Appeals
Unless these multiple stages are amended and procedural law
simplified neither would costs nor would often century-long wait
for justice periods come down;
10.4 Measures to contain corruption in police services in
India
It is known that over ninety per cent of all policemen are in the
ranks of constables and head constables. The constabulary is ill
educated, poorly trained; it lacks initiative and looks up to
superior ranks. The disparity in human quality between the
bottom and top ranks of the police hierarchy in India is striking
and it reflects the disparity in the larger society. Initiative and
responsibility are concentrated at the top of the police
hierarchy; the bottom layer is not allowed to display such
qualities. Thus, the Indian police are said to 'systematically put
its worst foot forward‘. The Police Commission of 1902 had said
that 'the duties of a constable should be of a mechanical
character'. It added that 'duties requiring the exercise of
discretion and judgment' should not be entrusted to constables,
'from whom such qualifications cannot be reasonably expected'.
Since police recruits learned their duties and an elementary
knowledge of colonial law from the 'Constable's Catechism', they
were not expected to have an intelligent understanding of their
responsibilities. The end of colonial rule in 1947 did not change
the role of constables as agents of colonial rule nor reduce their
predatory disposition towards the people. Though a 'despised
minority', because of its predatory activities and its human
rights violations, the constabulary remains an exploited section
in the police hierarchy.

97. SHANTANU BASU 97
Any significant attempt to reform the Indian police must
therefore begin with the men at the bottom, not at the top. The
quality of police performance can improve only if the bottom
rung changes. The quality is hindered by human deficiencies,
not legal impediments. The problems of police practice can be
resolved only by reshaping the constabulary. Further, judicial
suspicion of the police can only be removed by better
performance from the bottom up; nepotism and political
influence play a large role in police activities.
The ranks of assistant sub-inspectors, sub-inspectors and
inspectors must replace the constabulary. These ranks should
be capable of taking independent initiative and discharging the
essential duties of a police officer. The new police officer should
begin to break the suspicion that tarnishes police relations with
the public, the judiciary, the politicians, and even superior
police officers. The armed police must be reduced in numbers
making available more unarmed policemen for patrolling and for
police station duties. A greater measure of egalitarianism should
be introduced in police ranks by raising the responsibility, pay
and respect of the lowest ranks.
Traffic management, crowd control, and organised crimes are
examples of areas which require high levels of expertise.
Specialisation in different aspects of policing, such as
intelligence and investigation, should be introduced. Police
officers should be encouraged to opt for specialisation in various
streams of police administration. After a few years of exposure
to different police jobs, police officers should be earmarked for
different branches depending on their aptitude and
performance. Policing is too complicated a job to be handled
efficiently only through commonsense as was the case in the
past. Rapid urbanisation and the revolution in information
technology and communications have changed all that. Police

98. SHANTANU BASU 98
officers must become true professionals if they are to succeed in
controlling crime and criminals. Basic reforms in recruitment
methods, training and system of promotions and posting are
necessary to make the force more professional and less brutal.
Officers should be encouraged to opt for one stream of police
administration or the other, depending on their aptitude and
inclination. Only a professional body of well-trained and
motivated officers can deal with difficult and complicated
problems of today. Even a beat constable needs access to
modern technology for communication and information about
crime and criminals. To function effectively in the age of
information revolution, the police require technological
upgradation and an element of specialisation and
professionalism. To ensure that senior police officers are more
sensitive to the needs of the constabulary, officers of the Indian
Police Service should serve for some time as constables before
promotion to higher ranks. The Commissioner of the
Metropolitan Police in London, the senior-most police officer in
Britain, starts his career in the rank of a constable. The time
has come for the removal of the artificial distinction between
'officers and men'. A system of accelerated promotions for the
more qualified and better performers can be devised to
substitute the present 'caste' system.
The path-breaking recommendations of the National Police
Commission (NPC) since 1977 also need to be acted upon by the
government. The main categories of the recommendations of the
NPC relate to:
a. Police recruitment and training;
b. Organisational restructuring to include more investigating
officers than constabulary;
c. Other service conditions such as housing, education,
compensation;

99. SHANTANU BASU 99
d. Appointment of a Criminal Justice Commission and State
Security Commissions to provide for suitable amendments
to the law and for non-political superintendence of the
police forces;
10.5 Measures to contain corruption in municipal services
in India
Although the recent establishment of a special purpose vehicle,
India Infrastructure Finance Company (IIFC) is a welcome first
step in this direction, unless the following courses of action are
minimally implemented, 40 per cent of India‘s population would
continue to remain deprived of the basic civic amenities of life:
a. Municipalities are give extended rights of taxation within
their jurisdictions instead of linking them wholly to
devolution of taxes from State governments;
b. Greater institutional flexibility to recover cost of services
rendered by them by way of fixing of tariffs, etc.;
c. Outsourcing several municipal services such as mass and
departmental transportation, civil and electrical
maintenance, sanitation and security services, I-T services,
tax collection, etc;
d. Municipal schools and dispensaries could be grouped for sets
of municipalities, say within a 100 km radius of the biggest
municipality, and self-governing institutions be established
with about 25 per cent of their share capital being
contributed in equal measure by the State and federal
governments;
e. Municipalities should also be free to obtain credit ratings and
float bonds in the capital market;

100. SHANTANU BASU 100
f. Floating of joint ventures with private developers for
developing currently vacant municipal lands;
g. Establish a financing/refinancing company with 50 per cent
shareholding by government and the rest by public issue, for
financing urban development projects in India on the lines of
the IIFC, preferably on a regional basis that would involve
the community too;
h. Establish regional or State wise Ombudsmen with judicial
powers of a district court to try cases of corruption amongst
municipal employees;
10.6 Measures to contain corruption in health care in India
For a start, the following courses could be considered for
adoption:
a. All government-run hospitals in states could be brought
under one publicly held umbrella company run entirely
on commercial lines, maybe as a joint venture with
governments being minority share holders and the private
partner the managing agency;
b. Publicly list such companies to provide for public
participation and go in for IPOs;
c. Similarly, the next lower tier, the dispensaries and sub-
centres could be treated like the hospitals;
d. A Central Health Care Regulatory Authority would
however, have to be established. This Authority would
also oversee related subjects such as admissions to
medical schools, ethics, licensing of physicians, conduct
compliance examinations, import of medical equipment,
disaster relief operations, pharmaceutical tariffs, etc. The

101. SHANTANU BASU 101
Authority would also be vested with judicial powers
normally vested in a State High Court. However,
appointment to this body would be made either through
popular election or by some other transparent method;
Government may establish a publicly-held Hospital Finance
Corporation that would finance/refinance new infrastructure
underwrite investment risks, give interest subsidies for bank
loans, etc.;
10.7 Measures to contain corruption in education services
in India
While governments in India have traditionally been the principal
source of sustenance for the education sector in India, with
large infrastructural deficiencies in the economy, government
finances are unlikely to ensure a cent per cent literate India even
by 2020 AD. Although India‘s private sector has come up in the
education services sector, it has still got a long way to go in
terms of creating affordable infrastructure. Added to this is a
parallel cash trade economy the size of which is variously
estimated to be around 40-50 per cent of India‘s annual GDP.
Although governments have in the past, attempted to draw out
these hidden funds, success has been limited for various
reasons. A major reason for such failure has been the taxation
system. Even if 20 per cent of these funds are brought into the
resources-starved education sector the vision of a literate India
may be achieved within the next decade. Some measures to
contain corruption in the education services sector in India re
as follows:
a. A general amnesty from tax investigation for unaccounted
moneys channeled directly by private
entrepreneurs/companies into educational institutions

102. SHANTANU BASU 102
limited to a maximum of 10 per cent of an entity‘s annual
turnover;
b. Tax rebates for private investment in public libraries,
university libraries and equipment, buildings, etc. and
interest subsidy on commercial bank loans by the federal
government for the purpose of establishing schools,
polytechnics, universities, R&D laboratories. These
measures would assure the availability of much larger
numbers of seats in educational institutions and clear the
imbalance between prospective students and the number
of seats, particularly in higher education;
c. Establish an Education Finance Corporation at the
federal level with State subsidiaries as a publicly-held
company to provide loans to the private sector for
educational infrastructure. This company may issue tax-
free bonds against cash up to INR equivalent of US$
500,000 like those being issued by other infrastructure
development agencies like the National Highways
Authority of India and National Housing Bank.
Governments may partly underwrite the expenditure on
interest by providing direct interest subsidy to financing
banks to minimise fraud and diversion;
d. Groups of financially viable government schools may be
placed on management contract basis with private
education foundations/companies with governments‘ role
being that of a stakeholder only without managing rights.
The present teachers and employees of such schools may
be given stock options and the authority to subscribe to
the share capital of such companies. However,
governments may divert their full share of the profits from
such joint undertakings to subsidizing tuition and other

103. SHANTANU BASU 103
fees and text books for children from deprived
families/homes;
e. Set up an independent School Services Authority for each
state charged with the duty of administering the school
system and reporting to the central regulator;
f. Establish properly trained and staffed inspection units for
each State under the federal regulator and establish
informal parents‘ education monitoring for a to visit
schools and carry out independent surveys on quality of
school education;
g. Set up a Central Education Services Regulatory Authority
with branches in all State capitals to regulate both
government and private educational establishments,
administer all scholarship schemes, R&D in teaching
methods, curricula and act as the enforcement arm of the
state;
h. The system of multiple school boards may be abolished
and instead substituted by the Central Board of
Secondary Education (CBSE) to enable uniform text
books, marking, evaluation, teaching standards and
norms and migration from one geographical extremity of
the country to another at any time of the academic year.
All states would have to abide by the new Board‘s rules
and regulations;
i. The grade point average system needs to be introduced
without any further delay;
j. Recruitment of teachers to government, joint
undertakings and private schools would be conducted on
an all India basis by the CBSE who would also train such

104. SHANTANU BASU 104
recruits from time to time. Scales of pay and incentives for
teachers at all levels would be regulated uniformly by the
CBSE, affiliation with which would become mandatory for
all schools;
k. For higher education a separate service called the Indian
Education Service should be constituted as a federal
service for government owned and joint sector educational
institutions. This service would comprise of all higher
education teachers and would have an all-India transfer
liability that would retard in-campus union politics. Being
part of a hierarchical setup, promotion prospects too
would not be a disincentive. However, promotions should
be publication and compliance examination based and
not solely on the basis of seniority/efflux of time;
l. Universities may be encouraged to introduce teachers‘
training courses at all levels. Alternatively, universities
catering solely teachers‘ training in diverse disciplines
could also be contemplated. Such universities would also
provide a forum for undertaking basic research in other
disciplines in tandem with existing laboratories in the
government and private sectors;
m. While establishing any new academic institutions, care
needs to be taken to outsource all non-teaching services
and also obtain services of part-time or contractual
teachers. Such teachers could be people engaged in
fundamental research and for whom the absence of a
teaching qualification would not be a disqualification.
This would also help to relate research to the community‘s
needs and vice-versa;
n. India‘s information technology prowess could also be
harnessed for training of teachers;

105. SHANTANU BASU 105
10.8 Information technology as a tool to contain
corruption in India
10.8.1 Information technology at the federal level
In recent years India has established its own Ministry of
Information Technology, promulgated the path-breaking
Information Technology Act, 2004, set up cyber crime police
teams, the National Informatics Centre (NIC), MediaLab Asia,
Centre for Development of Telematics (C-DAC), Centre for
Railway Information Systems (CRIS), etc., yet the use of
information technology (I-T) for the benefit of citizens and
enforcing accountability in governance remains limited.
In the bulk of Ministries/Departments, computers are used as
word processors. Most departments, although having a Local
Area Network, have not developed suitable application packages
to derive the fullest benefits. For instance, there is no
customizable ERP for any government office. Instead payroll,
bills payable/recoverable, personnel information systems,
inventory management have been developed on diverse
platforms and that too on ad hoc basis within the same
department. There is very limited sharing of data across
databases of different Ministries. Each Ministry is loath to part
with information on the grounds of secrecy. Even
computerization projects are mired in large-scale corruption,
particularly when one considers the gigantic proportions of
government I-T requirements – perhaps the largest requirement
ever in the world. Perhaps the few honourable exceptions are
banks and insurance companies.
In fact, perhaps the bureaucracy apprehensive of being called to
account has only to fall back upon an apprehended violation of
the antiquated Official Secrets Act – again a colonial legacy – to
negate any semblance of accountability. Endless inter-

106. SHANTANU BASU 106
departmental meetings instead remain the norm. A nationwide
OFC backbone has recently been created by a major private
company on a large budget. However, the Indian Railways
despite having a route line network of around 60,000 km and
ownership of lands along these lines was unable to establish a
nationwide OFC backbone at a fraction of the cost. The end
result was that although the network has come up now to the
extent of 60 per cent of the original project, there is very little
demand and it has become a heavily losing proposition. Even
after establishment of such capital-intensive digital backbones
and submarine cables to the gateway in Singapore and London
in recent times, the federal government has not established a
nationwide Wide Area Network (WAN). Instead some enterprising
Ministries/Departments/public sectors have established their
own WANs to the exclusion of other Ministries/Departments.
Thus federal and state police networks are not integrated, nor
are those of the federal taxation agencies, accounts offices and
their clients have virtually no integration, mountains of reports
from diverse regions of the country with a goldmine of data
remain virtually utilized oblivious of the large costs of collection
of such data.
Despite rank bureaucratic apathy and often lip-service and
hostility, the I-T industry has made giant strides. That CRIS has
been awarded the ticketing contract operation and maintenance
for the London Metro System and the National Thermal Power
Corporation-Bharat Heavy Electricals (public sector) combine is
constructing nearly fully-automated thermal plants in Australia
and Belgium in global bidding is no mean tribute to the
resilience and onward march of the Indian I-T industry. That
India also boasts one of the largest I-T consultancy services
private companies in the world – Tata Consultancy Services –
that engages over 75,000 highly-skilled employees in over 75

107. SHANTANU BASU 107
different countries of the world is a greater tribute. Similarly,
the twin initiatives of the Indian Central Board of Direct Taxes
to establish a WAN to plug loopholes in income tax
administration and that of the Central Board of Excise and
Customs, particularly for customs operations, are indeed
laudable.
However, I-T to the aid of common citizens remains a pipe
dream in India remaining confined to web sites (not updated for
months together) and select applications such as few citizen
services (municipal and passport forms, pension release status,
etc.).
10.8.2 Information Technology in states
While some state governments, notably Andhra Pradesh,
Karnataka, Tamil Nadu, Kerala, Gujarat and lately West Bengal,
have made major strides in promoting an e-culture in their
respective states most other states are ways behind. In these
states a number of citizens‘ services have been brought under
the e-umbrella. Thus payment of annual property taxes cannot
be done online in Delhi, a tax deduction certificate for an aged
pensioner has to be obtained from a bank in person and
income-tax returns have to be manually filed (although this is
expected to change in another 1-2 years), refunds of tax too are
time-consuming and manually done leaving ample room for
corrupt practices. Video conferencing networks, although in
existence in a few states between districts (counties) have found
little favour with erratic electrical supply and ignorance at the
lowest levels of the bureaucracy. The charm of a trip at
government expense to the state capital or national capital
remains a favoured alternative, notwithstanding large costs
involved.

108. SHANTANU BASU 108
10.8.3 Information technology in combating corruption
The use of information technology would fulfill citizens‘
aspirations for participation in government by reducing
discretion in the hands of public servants and making them
accountable in greater measure. Some suggestions that may be
implemented are contained in the following paragraphs:
(i) A third of the savings from reduction in government
spending should be channeled into a National I-T Fund
that would also enjoy charitable status qualifying for
income tax exemptions;
(ii) A quarter of this Fund would be utilised to train at
least 20 per cent of teachers at primary school level in
the vernacular as trainers and provide at least one
computer (with peripherals) to at least 10 children;
(iii) Another quarter of this Fund would be utilized to fund
NGOs to take up mass e-awareness and training
programmes with careful monitoring;
(iv) The last quarter from this Fund should go to
establishing institutions devoted exclusively to higher
e-learning. However, such institutions should not be
government owned and operated but in private hands.
Government assistance would be limited to granting of
bank loan (for construction, library, equipment, etc.)
interest subsidy. Nor would government have any say
in their administration;
(v) The last quarter of this Fund should be applied to
renewal and extension of I-T assets created by
government, grant of scholarships, establishment of

109. SHANTANU BASU 109
sponsored chairs at e-universities and digitization of
documents in academic institutions, etc.;
(vi) I-T education should be made a compulsory subject
from primary school level and continue till graduation
level with at least fifty per cent of all courses going in
for online examinations (at notified centres alone). Use
of computers and multimedia in classroom teaching,
particularly at high school level and onward may be
made compulsory as is the case in universities in the
developed world;
(vii) Tax incentives for NGOs and private companies
wishing to set up computer training institutes may be
considered favourably by governments;
(viii) A time frame may be notified by law within which to
implement at least 3/4th of all citizen services over the
Internet, at federal, state and municipal levels. The
medical records of a citizen ought to be available online
at a government hospital with the attending physician,
chemist, and stores issue clerk and procurement
officer. Similarly, income tax returns should be capable
of being filed anywhere in the country;
(ix) All citizens over the age of 18 years should be
assigned a digital I-D that would enable all agencies to
track criminal records, educational qualifications,
professional, all tax, family, medical, fingerprinting,
travel and other records on a centralised database or
series of interlinked databases (with appropriate levels
of security and access);
(x) Similar provisions would enable citizens to track the
status of their applications/representations to various

110. SHANTANU BASU 110
government agencies and seek legal redress in case of
any unwarranted delays from any of the proposed
grievance redressal agencies specified elsewhere in this
paper;
(xi) Government should make it mandatory on all
Ministries/Departments of the federal and state
governments to lay OFC backbones connecting all
government departments for sharing databases and
information between them. Such information could be
related to the budget, real time accounts figures,
videoconferencing, updates on daily purchase prices of
commodities for farmers, dynamic POL pricing, seats
available for admission in universities or even
municipal schools, etc.. Insofar as funding of such
major projects are concerned, a minimum of 5-10 per
cent of all federal grants to state and municipal
governments under each project/scheme may be
earmarked and a similar amount by way of earmarking
taxes devolving to governments with no provision in
the rules for diversion of funds intended for I-T;
Governments should mandatorily automate all their routine
procedural functions within a time frame of not more than 2010
AD;
10.9 Strategic exit of government from non-essential
activities as a measure to contain corruption
That government is ‗unaffordable‘ and therefore government
participation in economy and society should be reduced only to
inescapable levels is the common refrain of all citizens. The
acceptance of the Fifth Central Pay Commission
recommendations raised the central government's wage bill

111. SHANTANU BASU 111
(including pension dues of Rs 50.94 billion) from Rs 218.85
billion – equivalent to US$ 5 billion (in 1996-1997 by nearly 99
per cent to Rs 435.68 billion – equivalent to US$ 9.70 billion - in
1999-2000. The state governments‘ wage bill went up by 74 per
cent to Rs 898.13 billion- equivalent to US$ 20 billion - in 1999
from Rs 515.48 billion – equivalent to US$ 11.50 billion in 1997.
The impact of the Fifth Pay Commission was so brutal that
some 13 states did not have money to pay salaries in 2000.
Some of the Fifth Pay Commission's other recommendations
included slashing the government workforce by 30 per cent,
abolishing 350,000 vacant posts and reducing the number of
pay scales from 51 to 34, were never implemented. Since
traditionally Pay Commissions are appointed on a decennial
basis, the Central Government is now arguing in favour of a
Sixth Commission on the grounds that the states have surplus
revenues of Rs. 408 billion - equivalent of US$ 9 billion - to fuel
this step and that too for around 20 million employees whose
annual wage bill is over US$ 15 billion! This is aside from
central and state pensionary liabilities that the World Bank
estimates could account for 25 per cent of India‘s GDP, provided
no further hikes are announced and only price-indexation
continues to be sole causative factor for a relatively retarded
pace of growth. Needless to add, such raises raised hackles from
one and all alike.
Therefore outsourcing of a large percentage of government
activity may be an answer to curb the sheer numbers of the
bureaucracy. The following example would illustrate one such
possible area.
10.9.1 Public Works in india
Given the paucity of capital and knowledge available in India
during the colonial years and the requirements of a colony,

112. SHANTANU BASU 112
infrastructure development passed entirely into the hands of
government. While in the States, Public Works departments
(PWD) were established, at the federal level, the Central Public
Works Department (CPWD) was established. In addition public
works were also undertaken by the Irrigation and Public Health
departments. The forest, posts & telecommunications, railways,
etc. too had their own independent works departments. In
addition, local governments too established their public works
departments. The village communities took care of their
requirements under their own arrangements. Little has changed
since then. In fact the CPWD has grown to a mammoth
organisation with nearly 50,000 personnel. While there can be
no denying the critical role played by these organisations in
establishing the initial infrastructure in India, their role is
increasingly coming into question with major Indian civil and
structural engineering private companies bidding for such
projects (and winning them) in international competitive
bidding. The overhead costs, particularly post-Fifth Pay
Commission are, more often than not, crippling. Added to this is
the ‗padded‘ cost in estimates drawn by these agencies that
often inflate estimates by as much as 20-40 per cent apart from
major procedural delays in completion of projects leading to
major time and cost overruns. For a start, the following courses
of action could be adopted:
a. Exit from all new public works and maintenance of public
buildings entrusting them instead to private contractors;
b. Transfer the execution and maintenance works to
Ministries and departments and attach existing personnel
as an in-house consulting works unit;

113. SHANTANU BASU 113
c. Convert the CPWD/PWD/Irrigation to a centralized and
purely consulting organisation taking advantage of its
established combined expertise;
d. Convert this new entity into a separate business unit run,
in its entirety, on commercial lines and with public
participation in shareholding. This would also enable the
organisation to cash in on the current boom in real estate
in India;
e. Constitute a Regulatory Commission with well-defined
powers, including punitive ones akin to those of a federal
court, to regulate government building/maintenance
activity and appoint regional Ombudsmen to safeguard
the interest of shareholders and contractors and others
engaged in such works;
f. Constitute a Central Government Land and Buildings
Authority as the nodal administrator charged with the
task of disposing of all surplus land and buildings,
conversion of office and residential buildings into new
complexes with revenue sharing arrangements in
collaboration with the private sector. However, the
Authority would have to be appointed by a transparent
selection process with due public participation. Vested
with judicial powers and functioning through benches
staffed by professionals in their respective fields. These
measures would generate several billion dollars for
development and assure the population of housing by
2020;
g. This Authority would also be the supreme public works
coordination agency for all Ministries and departments of
the federal government and synergize the existing
resources and expertise of all units after due hearing by

114. SHANTANU BASU 114
the benches. Thus huge tracts of Railway land could be
used for creating medical colleges, hospitals, industries,
etc. while defence land could be converted similarly to
stadia, museums, etc.;
10.10. Citizens’ participation in government to combat
corruption in government
India‘s Parliament passed the Information Technology Act, 2004
and the Right to Information Act, 2005 which can justifiably
mark the beginning of greater accountability in all walks of life,
particularly in government. Understandably, the Indian
bureaucracy has not taken too kindly to the passage of both
these Acts. Nor have these prevented citizens from making
outrageous demands for information from government agencies.
Thus if a citizen requested for land records for parcels of land
for the last 30 years, the bureaucracy refused to hand over the
300,000 photocopied sheets unless the bill (provided for in the
Act) amounting to US$ 7000 was first paid! Perhaps this is only
the transition stage and things would normalize in a year or
two. Nonetheless, post-Independence (1947), these remain two
outstanding pieces of original legislation. However, legislation
alone is unlikely to be the panacea of all evils in a country
famed for its excess of laws and very little justice. Citizens‘
participation in government would be a major step in
supplementing the efforts of law-makers and law-enforcers. For
instance, Bangalore City Corporation has recently introduced

115. SHANTANU BASU 115
the Fund Based Accounting System (FBAS) as a strategic
management tool. Apart from radically altering the basic
financial architecture by generating accurate and timely data,
FBAS also loops back the information to the public domain.
This highly enabling framework of integrating backend reforms
with front-end outreach has virtually galvanized civic
participation by applying this credible and open information
base to monitor the activities of the local government.
This initiative (called PROOF -Public Record of Operations and
Finance) is an advocacy campaign that uses the quarterly
statement of the corporation as a tool to take information about
the financial performance of the corporation to citizens. It seeks
to bring multiple stakeholders together in an exercise to track
financial statements of the government, develop performance
indicators for different expenditures, and create a space for
management discussion. It seeks to ask the basic question,
where is the money of the government going and what value are
we getting out of the money being spent.
The work of PROOF has enabled questions to be raised about
the assets owned by the city corporation, the way in which these
assets are being used, and also the examination of whether
development expenditure, like in education, is giving value for
money.

116. SHANTANU BASU 116
Another highly enabling application has been in the field of
procurement. Bids and tenders for public works are widely
perceived to be the fountain-head of corruption in local
governments. Saukaryam in Vishakapatnam has addressed this
issue by an e-enabled disclosure process of publishing all
financial transactions - bidding and auctions, decisions,
tenders, procurement etc. through the net into the public
domain.
Online Citizen Charters on key services is another example of
using the power of ICT to usher in more transparency and
accountability.The following suggestions may constitute such
supplemental efforts:
(i) Delhi has strong Residents‘ Welfare Associations (RWA)
whose office bearers are often professionally qualified
and eminent persons with sufficient local following in a
locality. RWAs have been at constant loggerheads with
municipal agencies over local issues such as
sanitation, public health, water supply, horticulture,
etc. The controversies center mainly on quality of
municipal services and a resistance of municipal
agencies to RWAs raising their own financial resources.
Given the abysmal state of municipal services, it may
be worthwhile for the federal government to consider a
one-time lump sum grant to each registered RWA to be
held as an interest-bearing deposit with a government
financial institution/bank and interest from it used to
defray expenses on sanitation, private security,
advertising, maintenance of area markets, horticulture,
etc. It would be mandatory for each family residing in

117. SHANTANU BASU 117
any locality to be part of the RWA and pay a monthly
maintenance fee to the RWA that, along with the
interest on the deposit, would be applied to common
services. This step would reduce on the number of
sanitation, inspection, security, and horticulture staff
and create a sense of belonging and cooperation
between all RWA members. It would also be much
cheaper and perhaps more efficient to provide these
services without government paid employees. Similarly,
RWAs may be considered for powers of collecting and
accounting for property taxes on private property on
behalf of municipalities. RWAs may also be empowered
to provide for inspection of construction sites to check
on unauthorised buildings/extensions and take local
police and municipal help in stopping/demolishing
such constructions through the municipalities. They
may also be empowered to raise additional resources
by licensing private and commercial properties to use
common areas such as parks, road signage, etc. for
advertising, concerts and the like. However, in order to
ensure accountability, a regulatory mechanism would
necessarily have to be devised, format of accounts and
audit prescribed, reporting standards enunciated and
a system of punishments built into the new system;
(ii) While petty municipal courts do exist, it is imperative
that fast track courts with the original jurisdiction of
state High Courts are established to dispense justice in
cases relating to property dues, municipal taxation,
land demarcation within municipal limits, change of
land-use patterns, and corruption by municipal
servants, etc. This would reduce the burden on district

118. SHANTANU BASU 118
and High Courts that have millions of cases pending
over several decades;
(iii) Peer groups of citizens may be appointed by
governments to evaluate projects of national
importance on a quarterly basis. Such groups could
comprise senior members of industry, NGOs, eminent
citizens possessing the technical qualifications, etc.
There are quite a few NGOs such as Common Cause
that have taken up cudgels on behalf of citizens in the
Supreme Court with substantial degrees of success.
Social audits on subjects of local administration such
as the Municipal Corporation of Delhi‘s efforts to desilt
choked storm water drains, billing by joint sector
power utilities, leakage of water from public utility
pipelines are likely to yield positive results to awaken
an usually somnolent local administration;
(iv) Institute a system of calling for public referendum
conducted by the Election Commission of India on
issues of national importance and making the outcome
binding on the Legislature;

119. SHANTANU BASU 119
11. Implications of this research for policy makers
Long attuned to a system where maintenance of the status
quo was the byword for success and personal gain, India‘s
policy makers would have to take cognizance of the rapidly
changing economic scenario. With participative democracy
and citizens‘ rights becoming the norm, policy makers would
have to fall upon private entrepreneurial abilities and
resources to make good the deficiencies in the State operated
machinery. This would naturally entail many major systemic
changes in legislation and an overweening desire to
implement by successive governments. While opposition to
reform would mainly come from an entrenched bureaucracy
and a corrupt polity, the desire of the large majority of the
country‘s citizens for better public and community services
cannot be ignored any longer. Colonial traditions and a
taxation system that rewards dishonesty and penalizes
honest tax payers combined with a new outlook enforced as
much by education and awareness as much by the will to
assure a better quality of life would be the main factor in
determining the course of action for successive governments
in India, oblivious of their political predilections and
compulsions.

120. SHANTANU BASU 120
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