360° Analysis

Corruption – An Indian’s Perspective


March 22, 2011 01:22 EDT

Corruption, as hideous a term as it may sound, is an integral part of the Indian subcontinent to such a degree that it has become culturally embedded into Indian society.  ‘Corruption’ as perceived in countries such as Germany or the US is not regarded with the same edge or intensity as in the Indian subcontinent.  To the modern Indian corruptions is simply no longer that big a deal.  Hence, there is little outrage at the blatant instances of public corruption being flashed around in the media apart from lively debates at dinner tables and bars, which are quickly forgotten, thus creating the right socio-psychological ambience for the ‘corrupt bug’ to flourish, mutate and grow into lethal proportions.

 Historically, as a country used to haggling for a good bargain, Indians have become used to cutting corners and, if permitted to do so (an opportunity that is more often than not obligingly available), Indians attempt to strike a good deal. At a micro level, a common citizen in urban India while discharging his daily morning rituals will ritualistically visit the bazaar, haggle and bargain for his daily grocery in an attempt to strike a better deal..  Then he will proceed to load his purchase on a rickshaw (illegally parked on the road) and haggle for a bargain to get back home.  On the way to his office, he will violate every traffic law in the book and if caught, he will merrily bargain a bribe with the police officer and carry on.

At work the citizen will proceed to park his car illegally: probably because he might be paying  a pre-bargained monthly charge to the local tout who in turn is likely to have bargained  with the local police administration.  At work, he might merrily strike deals ensuring his cut with every available supplier, contractor, government and administrative agency until it is coined down to the last detail in an attempt to support his ever growing personal and familial demands in this age of consumerism.

As part of his job, the Indian citizen may also visit several bureaucratic government agencies during the course of his day to address issues related to licenses, taxes, form collections, filing business and personal returns; at every stage it is customary to present the clerks with a gift, such as   an imported pack of cigarettes.  Comically, small vendors hawk such cigarettes at the doorstep of  every government building and the said  cigarette pack finds its way back to the vendor, at an agreed upon price,  from the same clerks, and curiously, the seal of the cigarette pack remains unbroken as it is sold and resold a many times a year.

 As is customary, our citizen is also obliged to pay a small token of appreciation to the clerk or other officials to ensure that his file is brought to the notice of more senior government officials responsible for dealing with it.  In the event that the citizen fails to oblige, his file may be lost in the system forever and he may end up paying a high penalty for not being in compliance with some arcane rule.  Haggling at the agencies to get his job done is yet another story.  It usually involves a percentage payout of the total benefit he receives from the transaction – and the benefit is calculated on claims both legitimate and fictitious made by the dealing officer or inspector, who in turn expects a better deal out of the transaction.

Hence, for the common citizen, paying bribes for services that in countries like Sweden or Japan would be available as matter of right is a matter of daily practice. The sums involved in such transactions can be astonishingly high but it the price to be paid for getting the job done and is part of the day’s work.

On a macro level, the parallel economy is huge.  It is common practice that many vendors and traders sell their wares in unrecorded cash transactions.  The annual trade value of these transactions is estimated to be in hundreds of billions of US Dollars. Such large untraceable end-to-end multi-level cash transaction chains involving small time traders below the radar of the government mean that a  well-accepted chain of payouts be distributed daily for the economy to function.  These payouts range from a few Rupees (1 US$ = Rs.43-approx.) to millions and sometimes billions. Of course, illiteracy and poor knowledge of English, which remains the formal language of government transactions, also lead to the formation of a predatory system, the existence of which is made possible because the citizen is not entirely aware of his rights.  Such an informal system has its efficiency gains.  In an intricate and bureaucratic governmental system, informal payments help to bypass bureaucracy and obtain the obligatory and statutory documentation necessary for carrying on any business.  Certainly, the threat of cut-throat competition along with decades long habituation to using official patronage to undercut competitors, further bolster incentives for corruption.  It is also important to understand that the common citizens feel abandoned by the government to address their day-to-day issues, from minor to major ones.  There is no sense of identification with the government and, as a result, it is considered prudent to bypass the government regulations and, in particular, the tax structure.  Taxes are seen as going into the private coffers of corrupt politicians and bureaucrats controlling the government.  Citizens therefore prefer to pay a bribe, avoid the tax and get their job done with the least possible engagement with the government.

Naturally, the innumerable bazaars all over the country engaged in such large scale transactions involving cash, create a market for ‘protection’ providers.  These players operate for a commission and, because of the money involved, often enjoy political protection.  These are fundamentally organized criminal syndicates which, in return for protection money, provide many citizens with a sense of security.  Such ‘protectors’ who enjoy political patronage also operate all sorts of criminal activities and fraudulent scams while sharing the spoils at all levels of government.  Naturally, one can imagine what examples are set once such ‘protectors’ work their way into the political structure and take  seats in Parliament or state assemblies.

Hence, for a nation plagued by corruption in every walk of life, it is not unnatural to turn a blind eye even when extreme cases emerge.  Citizens subconsciously feel it is more prudent to stay silent and bypass issues related to national interest; such as corruption, law and order, policy making, education, or health.  They often do not believe that a system without corruption can exist.  So they put up with it as long as corruption intrudes directly into their daily lives beyond the already high levels to which they are acclimated.

A key reason for such apathy and tolerance by the vast majority of citizens is that in our great country, every man is left to fend for himself.  There is no national healthcare. Even lower middle class families want to avert sending their children to public school.  Economic policies often seem too removed to the common citizen.  In fact, the majority of Indians still live in an informal economy created by themselves and for themselves, shaped by small demands with ancient barter practices still continuing at the rural level. Most rural Indians are untouched by the benefits of the much-hyped industrial growth and they are dependent on income derived from the tried and tested alternative informal cash and barter economy.

As the majority of Indian farmers produce their farm products for self consumption and barter, they are least bothered about the high-value, big-ticket, celebrity-initiated corruption that goes around in the country.  This adds fuel to the fire since politicians and bureaucrats know that the majority of  voters do not care about large scale urban and political corruption.

My understanding of the rise and prosperity of corruption in India lies primarily in four key facts:-

a)  That the Indian bureaucracy backed by political will, while implementing non-transparent and unaccountable policies has forged a redundant and an extremely slow judicial system, incompetent and politically motivated policing and grossly corrupt and inefficient administration thereby becoming a self-promoting and highly profitable Goliath. Its onerous, cumbersome and time-consuming regulatory systems leave the common citizen little alternative but to pay bribes if he wants his job done.

b)  That the illiterate rural poor are still only remotely touched by the Indian growth story.  It is outside the tax net and relies on primitive forms of trade and profession for bare survival.  It has no interest in holding governments accountable for big ticket corruption charges that seem too remote to its daily experience.

c)  That the nationalization process of Indian industry during the 60’s and the 70’s has left behind a large, defunct and poorly managed public sector where the remuneration is not matched to the individual performance.  Therefore, there is mass dissent and all kinds of incentives for the commission or cutback raj (bribes are often referred to as cutbacks and cutback raj means the rule of the cutback) which, unchecked and unharnessed, has grown to epidemic proportions.  That the resulting chaos and administrative apathy has given ample opportunity to the private sector players, post liberalization, to take full advantage of weak systems to convince, coerce and corrupt the system further in order to corner market share and amass wealth.

Corruption is in India’s national veins and is here to stay as long as there is no political will to create simple, effective and transparent administrative and judicial structures.   There has to be a real effort to check and control the money flow in the parallel economy.  There is no magic wand to wave and will corruption away, until Indian voters force their government to provide true financial and social security to the population by wielding the power of the ballot box.   Current political, administrative, legal and judicial delivery mechanisms have to be reformed, there has to be a better distribution of national wealth or there is certainly a chance that India could start demonstrating some signs of a failed state


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