Saturday, 28 May 2011

Corruption in India

Political and bureaucratic corruption in India are major concerns. A 2005 study conducted by Transparency International in India found that more than 15% of Indians had first-hand experience of paying bribes or influence peddling to successfully complete jobs in public office.
Taxes and bribes are a fact of daily life and common between state borders; Transparency International estimates that truckers pay US$5 billion in bribes annually. In 2010 India was ranked 87th out of 178 countries in Transparency International's Corruption Perceptions Index.

Contents

 Overview

Former Prime Minister Indira Gandhi is quoted as saying that corruption is a misuse of power. "India needs to deal with the malice of corruption and improve governance in Asia's third-largest economy." Prime Minister Manmohan Singh said on March 18, 2011.
Criminalization of Indian politics is a serious problem.In July 2008 The Washington Post reported that nearly a fourth of the 540 Indian Parliament members faced criminal charges, "including human trafficking, immigration rackets, embezzlement, rape and even murder".
India tops the list for black money in the entire world with almost US$1456 billion in Swiss banks (USD 1.4 trillion approximately) in the form of black money. According to the data provided by the Swiss Banking Association Report (2006), India has more black money than the rest of the world combined. Indian Swiss bank account assets are worth 13 times the country’s national debt.
Independent reports have recently calculated India's traditionally ruling family's (Gandhi's) financial net worth to be anywhere between $9.41 billion (Rs 42,345 crore) to $18.66 billion (Rs 83,900 crore), most of it in the form of illegal monies.Harvard scholar Yevgenia Albats cited KGB correspondence about payments to Rajiv Gandhi and his family, which had been arranged by Viktor Chebrikov, which shows that KGB chief Viktor Chebrikov sought in writing an "authorization to make payments in US dollars to the family members of Rajiv Gandhi, namely Sonia Gandhi, Rahul Gandhi and Paola Maino, mother of Sonia Gandhi" from the CPSU in December 1985.
“The recent scams involving unimaginably big amounts of money, such as the 2G spectrum scam, are well known. It is estimated that more than trillion dollars are stashed away in foreign havens, while 80% of Indians earn less than 2$ per day and every second child is malnourished. It seems as if only the honest people are poor in India and want to get rid of their poverty by education, emigration to cities, and immigration, whereas all the corrupt ones, like Hasan Ali Khan are getting rich through scams and crime. It seems as if India is a rich country filled with poor people", the organisers of Dandi March II in the United States said.
The Comptroller and Auditor General of India said, “As on March 31, 2010, unutilised committed external assistance was of the order of Rs.1,05,339 crore.
In a most recent example of corruption, even as the Enforcement Directorate (ED) probes US$8 billion worth transactions allegedly involving suspected money launderer Hasan Ali Khan, evidence available with a news source in India shows that he had transactions of over Indian Rupee symbol.svg112,000 crore (US$24.86 billion) between years 2005 and 2006. This amount is enough to fund the national drinking water project in all the six lakh (600,000) villages in India for the next 10 years.[

 History

The economy of India was under socialist-inspired policies for an entire generation from the 1950s until the late 1980s. The economy was subject to extensive regulation, protectionism, and public ownership, leading to pervasive corruption and slow growth.[21][22][23][24] License Raj was often at the core of corruption.
The Vohra Report was submitted by the former Indian Union Home Secretary, N.N. Vohra, in October 1993. It studied the problem of the criminalisation of politics and of the nexus among criminals, politicians and bureaucrats in India.
The report contained several observations made by official agencies on the criminal network which was virtually running a parallel government. It also discussed criminal gangs who enjoyed the patronage of politicians — of all political parties — and the protection of government functionaries. It revealed that political leaders had become the leaders of gangs. They were connected to the military. Over the years criminals had been elected to local bodies, State Assemblies, and even the Parliament. The unpublished annexures to the Vohra Report are believed to contain highly explosive material.
According to Jitendra Singh, "in the bad old days, particularly pre-1991, when the License Raj held sway, and by design, all kinds of free market mechanisms were hobbled or stymied, and corruption emerged almost as an illegitimate price mechanism, a shadowy quasi-market, such that scarce resources could still be allocated within the economy, and decisions could get made. ... These were largely distortions created by the politico-economic regime. While a sea change has occurred in the years following 1991, some of the distorted cultural norms that took hold during the earlier period are slowly being repaired by the sheer forces of competition. The process will be long and slow, however. It will not change overnight. One of the major problems and obstacles to development that many developing countries face is corruption by greedy, power-hungry politicians, which is endemic in certain parts of the world.

 Politics

As of December 2008, 120 of India's 522 parliament members were facing criminal charges. Many of the biggest scandals since 2010 have involved very high levels of government, including Cabinet Ministers and Chief Ministers, such as in the 2G spectrum scam and the Adarsh Housing Society Scam.
Bureaucracy
A 2005 study done by Transparency International (TI) in India found that more than 50% of the people had firsthand experience of paying bribe or peddling influence to get a job done in a public office.Taxes and bribes are common between state borders; Transparency International estimates that truckers pay annually US$5 billion in bribes. A 2009 survey of the leading economies of Asia, revealed Indian bureaucracy to be not just least efficient out of Singapore, Hong Kong, Thailand, South Korea, Japan, Malaysia, Taiwan, Vietnam, China, Philippines and Indonesia; further it was also found that working with India's civil servants was a "slow and painful" process.

 Land and property

Officials often steal state property. In cities and villages throughout India, Mafia Raj consisting of municipal and other government officials, elected politicians, judicial officers, real estate developers and law enforcement officials, acquire, develop and sell land in illegal ways.

 Tendering processes and awarding contracts

Government officials having discretionary powers in awarding contracts engage in preferential treatment for selected bidders and display negligence in quality control processes[citation needed]. Many state-funded construction activities in India, such as road building, are dominated by construction mafias, which are groupings of corrupt public works officials, materials suppliers, politicians and construction contractors.Shoddy construction and material substitution (e.g. mixing sand in cement while submitting expenses for cement) result in roads and highways being dangerous, and sometimes simply washed away when India's heavy monsoon season arrives.

 Medicine

In Government Hospitals, corruption is associated with non availability of medicines (or duplicate/fake medicines), getting admission, consultations with doctors and availing diagnostic services.There have been cases of diversion of medical supplies from government hospitals and clinics[citation needed] as well as supply and distribution of medicines of inferior quality[citation needed] Some hospitals are charging extra amounts from rich people. In India there is an unfair co-operation for medi-insurance companies and hospitals.

 Income tax

There have been several cases of collusion of officials of the income tax department of India for a favorable tax treatment in return for bribes

Preferential award of public resources

As detailed earlier, land in areas with short supply is relatively common with government entities awarding public land to private concerns at negligible rates. Other examples include the award of mining leases to private companies without a levy of taxes that is proportionate to the market value of the ore[citation needed].

 Judiciary

According to Transparency International, judicial corruption in India is attributable to factors such as "delays in the disposal of cases, shortage of judges and complex procedures, all of which are exacerbated by a preponderance of new laws".

Armed forces

The Indian Armed Forces have frequently witnessed corruption involving senior armed forces officers from the Indian Army, Indian Navy and Indian Air Force. Many officers have been caught for allegedly selling defence stores in the black market in the border districts of Indian states and territories. Recent sukhna land scandal involving four Indian Lieutenant Generals has shaken public faith in the country's growing military at a time when large sums are being spent on modernising the armed forces. A string of eye-popping fraud cases has damaged the institution in recent years. The latest Adarsh land scam is another example of the nexus between the armed forces , bureaucracy and the politicians in the embezzlement of government property.

 Media

The role of media in systemic corruption can not be undermined at it shows it involvement through paid news and sometimes unethical support to corrupt.

Religious institutions

In India, the corruption has also crept into religious institutions. Some of the Church of North India are making money by selling Baptism certificates.A group of church leaders and activists has launched a campaign to combat the corruption within churches. The chief economic consequences of corruption are the loss to the economy an unhealthy climate for investment and an increase in the cost of government-subsidised services. The TI India study estimates the monetary value of petty corruption in 11 basic services provided by the government, like education, healthcare, judiciary, police, etc., to be around Indian Rupee symbol.svg21,068 crore (US$4.7 billion). India still ranks in the bottom quartile of developing nations in terms of the ease of doing business, and compared to China and other lower developed Asian nations, the average time taken to secure the clearances for a startup or to invoke bankruptcy is much greater.

 Right to information act

The Right to Information Act (2005) and equivalent acts in the states, that require government officials to furnish information requested by citizens or face punitive action, computerization of services and various central and state government acts that established vigilance commissions have considerably reduced corruption or at least have opened up avenues to redress grievances. The 2006 report by Transparency International puts India at the 70th place and states that significant improvements were made by India in reducing corruption.
Ombudsmen
The LokAyukta is an anti-government corruption organization in the Indian states.These institutions are based on the Ombudsman in Scandinavian countries. An amendment to the Constitution has been proposed to implement the Lokayukta uniformly across Indian States as a three-member body, headed by a retired Supreme Court judge or high court chief justice, and comprise of the state vigilance commissioner and a jurist or an eminent administrator as other members.
Social welfare worker Anna Hazare has led a movement to compel the Indian Government to notify the Committee for the implementation of the Lokayukta against corruption as an independent body and also giving enough powers to the Lokayukta to also receive corruption complaints against politicians, bureaucrats and even sitting judges. Anna Hazare has achieved this big success through his non-violence measures like fasting till death at the Jantar Mantar place in Delhi Capital City of India . The public also gave nation-wide support to Anna Hazare in his demand for strong and tough anti-corruption law.

Whistleblowers

Whistleblowers play a major role in the fight against corruption. India currently does not have a law to protect whistleblowers, which was highlighted by the assassination of Satyendra Dubey. Indian courts are regularly ordering probe in cases of murders or so-called suicide of several whistle blowers. One of the latest case of such murder is of V Sasindran Company Secretary of Palakkad based Malabar Cement Limited, a Government company in Kerala and his two minor children, Kerala High Court ordered CBI probe on 18 February 2011. Initially, CBI showed its unwillingness for probing into such cases citing over-burden as a reason.

Anti-corruption police and courts

The Enforcement Directorate, Central Vigilance Commission and Central Bureau of Investigation all deal with anti-corruption initiatives.
There have been calls for the Indian government to create an anti-theft law enforcement agency that investigates and prosecutes corruption in government at national, state and local levels.[citation needed] Special courts that are more efficient than the traditional Indian courts with traveling judges and law enforcement agents are being proposed.[citation needed] The proposal has not yet been acted upon by the Indian government.[citation needed] Certain states such as Andhra Pradesh (Andhra Pradesh Anti-corruption Bureau) and Karnataka (Lokayukta) have similar agencies and courts.

 Civil sector initiatives

Several new initiatives have come up in the civil sector to raise awareness about Corruption related issues and to build anti-corruption platforms. 5th Pillar is one such organization that is promoting the use of Zero Rupee Notes to fight corruption by shaming the officials who ask for bribe. Another popular initiative Jaago Re! One Billion Votes from Tata Tea has now changed its focus from voter registration to fighting corruption.nobribe.org is another platform for corruption free India and advocates the use of direct and regular measurement of corruption to force the hands of the leadership into dealing with corruption related issues.
In Karnataka, ASTRA(Association for Social Transparency, Rights and Actions) is leading movement against the corruption at grass root level by proper and extensive use of RTIA(2005) and by enforcing implementation of Citizen Charter in all public authorities.
Another platform is http://www.indiaagainstcorruption.com India Against Corruption is a movement created by concerned citizens from all spheres, and professions, who have come together to fight corruption in India. http://www.ipaidabribe.com is one such site.
People For Lok Satta has taken the initiative to lead the National Campaign Against Corruption and Dandi March II.
Another site is www.ekakizunj.com, which intends to create a database of all the corruption in India. It includes names and details of many scams and scamsters since independence. It is inspired by G. R. Khairnar, the erstwhile Mumbai Municipal Deputy Commissioner who is known for his one man fight against corruption.

 Privatization and Commercialization of Corruption Overhaul System

The Privatization and Commercialization of Corruption Overhaul System (2011) is a proposed solution to remove organized corruption by privatizing corruption overhaul system, and providing financial motivation to the private companies working in sector of Corruption finding and probing business. The solution is offered by a group of Indians named themselves as "Indian Patriots" and they are promoting this solution at their website page http://bharatswabhimanbachao.com/Our_Solution_of_Corruption. Facebook group- Journey Against Corruption to bring all those people together who are PASSIONATE ABOUT INDIA

The solution if drafted by the "Indian Patriots" founder and president Bharat Chovatiya and it was made publicly available on March, 15 2011.

 Effects of corruption

According to a report by KPMG, "high-level corruption and scams are now threatening to derail the country's credibility and [its] economic boom".
  See also

Over 150 corruption cases pending

GUWAHATI, May 11 – More than 150 anti-corruption cases of the Central Bureau of Investigation (CBI) are pending before the Court of the Special (CBI) Judge, Assam for years and ten of these cases are pending for more than 20 years.
Highly placed official sources told The Assam Tribune that the conviction rate of the cases by the Guwahati branch of the CBI was 80 per cent in 2009, which was one of the highest in the country. But last year, the conviction rate came down to only around 34 percent, while, two old pending cases were also withdrawn after receiving due permission from the competent authorities to do so.
Giving reasons for the drop in conviction rate last year, sources said that there was no Judge in the Court of Special (CBI) Court of the State for eight months, as a result of which the cases were pending for long time. Sources said that though one Judge has been appointed in the Court now, the same Judge is also given additional charge of the Court of Special Judge, Assam and Court of Special Judge (NIA) as a result of which the trials got delayed.
Sources revealed that the Supreme Court has also expressed its concern over the large number of pending cases all over the country and it was decided by the Government of India that 71 new Special (CBI) courts would be set up all over the country to expedite the process of trial of the cases. Two new such courts have been sanctioned for Assam and it is up to the State Government to provide buildings and other infrastructure for it.
Meanwhile, sources revealed that Guwahati branch of the CBI is now investigating into 18 anti-corruption cases and two of those are against one garrison engineer of the Indian Air Force. Sources said that according to information gathered by the CBI so far, the engineer manipulated papers to siphon off around Rs 20 lakh and investigation into the case is now on.
Sources said that another major case under investigation by the Guwahati branch of the CBI is of irregularities in sanctioning of loans by the State Bank of India in Arunachal Pradesh. As per the allegations, loans amounting to more than Rs one crore were given to "non-existent beneficiaries".
A major case involving a cement factory in Meghalaya is also under investigation by the CBI. Sources said that the cement company located in the Jayantiya Hills, signed fuel supply agreement with the Coal India Limited for supply of 38,000 MT a year of A grade coal from the coal fields of Margherita coalfields for the years 2008.2009 and 2010 and the cement company procured 70,000 MT of coal during the period. The coal was provided to the company at subsidized rate and as per the agreement, the company cannot use the coal in any other purpose than the cement factory.
But during investigation, it was found that the coal laden trucks did not enter Meghalaya and there was no record of the trucks in the check gates of the State. This proved that the coal lifted from the Margherita coal fields at subsidized rate either must have been used somewhere else in violation of the agreement or the same was sold in the open market at much higher rate. The incident resulted in loss of revenue amounting to Rs 15 crore to the Coal India Limited as the company could earned more by selling the coal in the open market. A thorough investigation into the case is now on by the CBI.
The CBI is also investigating into a case of disproportionate assets against an engineer of the Postal Department after Rs 6.50 lakh was seized from his possession.

Corruption can entail India's global image

The temptations of corruption are universal. My own country, Canada, experienced a serious political corruption scandal some years ago that contributed to a change of government in Ottawa in 2006.
Corruption in business, while deplored everywhere, has long been seen as a fact of life in large swathes of the world. Indeed, economists sometimes argue over whether some forms of the phenomenon are “enabling” in contrast to others deemed purely negative.
At times, to foreign observers, India seems neither better nor worse at fighting corruption than some other dynamic developing economies. But today, India's business and public sector climate is seen abroad as at serious risk from corrupt practices.
Strong institutions of the state promoting accountability — particularly robust audit capacities and transparency in government, parliamentary oversight of government spending and an alert judiciary — are key to combating corruption. A concerned citizenry, informed by a free and investigative media, is also vital. India possesses all of these assets in varying degrees.
India's foreign policy today, while seeking to protect the country's security, is driven uppermost by the promotion of the country's economic interests. The prevalence of corruption may seem far removed from a country's international relations. But in this globalised era, in which countries compete for investment capital, this is not true.
Thus, recent allegations of gross corruption, as in the 2G auction case, and of mismanagement possibly aggravated by corruption, such as that besetting the recent Commonwealth Games are relevant to India's standing on the global stage.
India's success in generating strong growth in recent decades has transformed the country's image, now that of an emerging power. The excitement over India has developed in spite of poor performance in reducing the absolute numbers of its poor (unlike China, which, with much higher national income and growth levels, has been able to make sharp inroads into poverty).
Wide contrasts
Indeed, first-time visitors to India are easily confused by the contrast between booming growth of some economic sectors and the continuing reality of widespread and grinding poverty — in spite of many government programmes touted to alleviate the latter. Often it seems as if India's private sector is succeeding in spite of the government sector, while the poor suffer the indifference and, in some cases, the rapacity of the latter.
When, internationally, I speak with enthusiasm about India, I am nowadays often confronted with sceptical questions about its recent corruption scandals.
While Indians take pride in the overseas investments of its large private sector firms, they sometimes forget to ask why Indian firms find it so much easier to invest abroad than at home. The reasons are many, from fractious domestic politics, to conflicts over land — but the opaque relationships between Delhi and some of India's private sector clearly count among them.
By and large, India's foreign policy has been prudent and responsible. Its bilateral diplomacy is energetic and the country has accessed the top tables of global diplomacy on security as on financial matters. In recent years, it has mostly resisted the temptations of force and the regional bullying that its size would make possible.
Media coverage
But India is not yet so well established globally that it can afford coverage of its affairs in the international media to be dominated by corruption scandals, big and small. (Figures cited in relation to the 2G affair if confirmed, would place it in the ranks of potentially the largest corruption scandals ever, anywhere).
Mrs Sonia Gandhi, who has proved herself a much more deft politician than her patronising critics assessed her only a few years ago, is thought to have retained from the Bofors affair, which tarnished the reputation of her late husband, a horror of corruption. Core Union government ministers in key portfolios are admired, among other qualities, for their personal integrity. But it is widely known in Delhi and beyond that more peripheral political personalities, often hailing from regional parties, sometimes tend to their party's coffers through the patronage and leverage that their portfolios offer. Political finance reform, attempted in a number of other countries, might provide a path forward.
It takes two (at least) to effect a corrupt transaction. Recent months have reflected poorly not just on some of India's politicians but also on business practices, both overt and covert, in several firms.
India's investigatory and judicial processes can be slow. But in matters of gross corruption and malfeasance (Satyam being one example), swift action leading to fair trial is vital, and not just for those indicted and for the victims of fraud. It is vital also for India's image when, as now, the balance of international reporting (reflecting debate in the Union parliament and discussion in India's national media) is generating negative reviews for the country.
India's investigatory machinery and its courts are often up to the challenge. But judicial reform might help place the judiciary itself above suspicion and could improve efficiency (and hence judicial effectiveness). In politics and public service some countries have informally linked higher pay scales to higher penalties for corruption, hardly fool-proof but perhaps worth considering where affordable.
India harbours huge potential for itself and for the world. Indians deserve all possible rewards from the country's global engagement. Friends of India abroad, myself very much included, have been heartened at the degree of local fight-back against corruption in India. Let's hope that civil society, politicians of integrity, business leaders of moral character and the media do not simply allow the current crop of scandals to exhaust themselves, then reverting to “business as usual”.
If these matters fade without clear-cut resolution, they will simply add to the weight of international questions about India as a business opportunity, and as a global leader. Such an outcome would be a great shame.

Corruption has become a way of life

Between birth and death and at every stage of life corruption stares you in the eye. And experience shows that while corrupt politicians who make millions invariably go scot-free, a petty bus conductor or a lowly constable caught taking bribes is dragged to court.
FROM womb to tomb, corruption has become a part of everyday life.
It’s so widespread that only few Indians – rich or poor, illiterate or highly-educated – have not experienced it first-hand.
All politicians promise to stem it but when in power, they invariably end up being stained by it.
An expectant mother has to grease the palm of officials in a government hospital for admission while it is routine for her to pay “speed money” to lowly municipal officials to secure a birth certificate for her new-born.
As for the tomb, well ... unless you bribe the guy in charge of the crematorium, you are not certain of getting dry wood or the right quantity that you have paid for to cremate the dead.
Between birth and death, at every stage of life, corruption stares you in the eye.
If you can afford expensive private hospitals, which have mushroomed in urban India in recent years, your child will get the best medical attention. (Even in these five-star hospitals, doctors will prescribe unnecessary tests and make you stay longer in expensive rooms because they get cuts on the side.)
But the majority of Indians go to government-run dispensaries where, unless you know someone influential, you have to pay small bribes to jump the long queue of patients to get proper treatment.
And when your child is old enough to be admitted to a kindergarten, either you have the right “connections” or you pay a hefty sum to have him admitted.
In fact, getting your child in the right school is an ordeal for parents who are expected to undergo a “personality test” of their own before their young one can be considered for admission.
As for college admission, unless your ward is brilliant, you ought to be prepared to pay a large sum in illegal “capitation fee”.
Finally, when your child is ready to join the workforce, either he competes in the all-India public service examination, always tough to crack given the huge numbers seeking to fill very few openings, or he seeks employment in the private sector.
Relatively, both merit and “connections” work in the initial entry into private sector firms.
However, being self-employed is fraught with so many obstacles that to cross each one, you have to pay bribes.
To hawk vegetables on a cart, you have to give a hafta (weekly bribe) to the neighbourhood police constable.
Shopkeepers have to keep various inspectors from the local and central authorities in good humour.
Those who ply yellow-top taxis and auto-rickshaws have to keep on the right side of the traffic police, lest they penalise them for violation of any of the numerous provisions under the motor vehicle act.
Try getting a driving licence or a passport without hiring a tout, you will be given such a “run around” till you regret for not having parted with a couple of hundred rupees in the first place.
Now, a senior functionary of the government has proposed that bribe-giving, as distinct from bribe-taking, be made legal in certain cases.
Kaushik Basu, a former professor of economics at the prestigious Cornell University and now chief economic adviser to the Finance Ministry, in a recent paper has sought to make a distinction between what he calls “harassment bribes” and “non-harassment bribes”.
In his paper titled “Why for a class of bribes, the act of giving a bribe should be treated as legal”, Basu argues that the “harassment bribes” should be made legal.
It is notable as the law stands today that both the bribe-giver and the bribe-taker are liable to be punished.
Basu contends that the payment of “harassment bribe” should enjoy “full immunity from any punitive action by the State, even if the act of bribery is still considered illegal ... entire punishment should be heaped on the bribe taker”.
Indeed, he suggests that the bribe-giver in harassment cases should be encouraged to report against the bribe-taker so action can be taken against the latter under the anti-bribery law.
At one level, Basu’s suggestion for immunity for the bribe-giver might appear amoral, nay, defeatist and insofar as it seeks to accept petty corruption in the system.
However, on purely pragmatic grounds, it is better to concentrate on cases of huge sums being given and taken in bribes rather than frittering away the energies of government on pursuing petty corruption.
Even without changing the anti-corruption law, the State can ignore petty corruption of its army of inspectors, while it can make an example of those selling official favours, be it precious radio waves (spectrum) or the right to exploit mines and minerals for a song in return for huge sums in bribes.
Unfortunately, experience shows that while corrupt politicians invariably go scot-free, a petty bus conductor or a lowly constable caught taking bribes is dragged to the court for a long drawn-out trial.
In sharp contrast, senior politicians rarely, if at all, pay for lining their pockets with illicit moolah. Indeed, politics is the only vocation where one can make millions without having any educational or professional qualifications.

How corruption has been eating into our land

At the root of India’s corruption epidemic is the business of land allocation. India does not have a rigorous framework of property titles. For historical reasons, much of the land in this country is government owned by default. Further, archaic, 19th century laws allow state governments to expropriate farm property and redistribute it to private entities, citing a decidedly bogus “public interest”.
This leads to a scarcity of land available in the free market. As such, it becomes very valuable. Real estate prices in India’s cities, for example, are astronomical. With the commodity of land being so prized, cash deals and a black-market property economy are inevitable. Unless this system is broken, corruption in India will never be seriously challenged. A strong Lokpal law may focus on big-ticket swindles at the very top — by Union ministers and Commonwealth Games organisers, for instance — but the fount of crony capitalism will not run dry.
The situation can be best explained with a case study. The office of the Comptroller and Auditor General (CAG) recently released its report on Maharashtra government public sector undertakings for the year ending March 31, 2009. It makes an interesting reference to the Maharashtra Airport Development Company (MADC), set up in 2002 to develop a “multi-model international passenger and cargo hub airport” in Nagpur.
It was an ambitious venture and while it has not quite materialised yet, the Nagpur airport project is sitting on some 3,500 hectares. In 2005, it designed a land pricing policy, aiming to sell land to users of the airport-SEZ complex. On December 5 that year, the company board allotted 100 acres to Satyam Computers at the rate of Rs18 lakh an acre. Satyam agreed to set up an IT facility for the aviation sub-city.
As per MADC’s land pricing policy, Satyam should have paid a minimum of Rs24.28 lakh per acre. However, it was argued Satyam was benefiting from a discount due to an “early bird” offer. There had been no previous mention of an “early bird” incentive, and presumably the MADC authorities took this decision at the spur of the moment.
The story doesn’t end there. On December 5, 2005, itself, the MADC board also allotted 100 acres in Nagpur to Shapoorji Pallonji and Company, again for developing an IT facility. Shapoorji Pallonji was charged Rs26.3 lakh an acre and there was no mention of “any ‘early bird’ incentive”. All of this is there in the CAG’s report.
What is ‘not’ there is the detailing of the sordid nexus and the conflicts of interest that linked Satyam Computers (still owned and run by the Raju family) and the MADC top brass. The man who was vice-chairman and managing director of MADC till January 2011 was also non-executive director and chairman of Maytas Infra till January 2009.
Maytas was a sister company of Satyam. It bid for numerous high-profile infrastructure projects and the Raju family attempted to funnel Satyam’s money into Maytas. This triggered a chain of protests and inquiries that eventually led to the Satyam scandal and collapse in 2009.
Coming back to MADC and Nagpur, there are several issues that must concern us. The same person — a pushy, well-connected former IAS officer — serves on the board of two companies, one of them a state government undertaking. Wearing one hat, he approves a sweetheart deal that benefits a company that gives him his other hat. Astonishingly, his boss as ex-officio chairman of MADC is the (then) Maharashtra chief minister.
This scandal is only an illustration. Compared to the millions being discussed in the context of the spectrum and other swindles, the MADC favour to Satyam appears chickenfeed. That is not the issue. The point is, every day, far from public gaze, literally tens of dozens of such deals are done by a variety of government agencies and Union and provincial authorities.
They are too small to be noticed. No Anna Hazare fasts in protest. No prime time news shows discuss them. They slip under the radar. Those who execute them are immune to everything, and they will surely figure out a way to survive the Lokpal as well.

The Cost of Corruption in India

Anna Hazare is one of India's well-acclaimed social activists. The 73-year old fasting Gandhian was a former soldier in the Indian army.  Anna is well known and respected for salvaging a hopeless village ridden by drought, alcoholism and poverty. He inspired the state government to implement the ‘Model Village’ scheme as part of its official strategy.
However while Anna Hazare’s supporters celebrate the victory of the people, we wonder; how did he prompt thousands of people to join his fight-through-fast and change the minds of local Indian government authorities against corruption?


Fighting for India’s brighter future – for the country and its people – Anna Hazare’s anti-corruption campaign is at the forefront of his movement for what he believes hinders India’s economic progress. Especially for its people in rural areas.
Dev Kar, a former International Monetary Fund economist said that the illegal money that consists of India’s underground economy drains out in foreign lands. According to him, India’s underground economy is believed to be 50 percent of the country’s GDP - US$640bn at the end of 2008.
Following Hazare’s campaign, demand for a strict Lokpal Bill in Haryana is gaining momentum as social activists call for action against corrupt officials and public representitives.
Renowned management guru Professor Jagdish Sheth along with co-author Rajendra Sisodia in his book Firms of Endearment coined the term ‘Conscious Capitalism’ – to show how companies who take care of multiple stakeholders outperform the S&P 500 index four times.
Looking at corruption scandals rocking India Inc., Sheth observes “If you do a cost analysis, let's say you want to corrupt a politician to do you a favour — then the cost of corruption is less profitable to companies. There are any number of examples from history that the corrupting way of business is very short-term. It is not long-lasting,”
However, Sheth sees a positive future for Indian companies. He predicts by 2025 India Inc. will transform into a global enterprises, not through exports but through large, global acquisitions of world-class companies with strong technical, manufacturing or branding assets.
He also predicts that India will become the second largest consumer market, if not the largest, in many products and services – and expects India will partner with other countries in search of industrial, agricultural, energy and talent resources around the world.
But with India rocked by Radia tapes and corruption scandals, what will be the cost of corruption to these companies?
As an example, Sheth looked at how disgruntled employees and workplace violence costs companies $200 billion a year.
In a $14-trillion economy, $200 billion does not look that big. Till you do the numbers.
“Now we are trying to see how you can handle workers who are agitated, very angry, so that they do not become militant. We are going back to the Gandhian principles to do that. Interventions for drug assistance, alcohol.”
The real cost of corruption has yet to be calculated, but Sheth believes it’s only a matter of time before companies realize corruption is not a good means to achieve their ends.
Says Hazare, ``we have decided to develop centers to create awareness amongst people about government schemes and train activists to know the modus operandi of corruption in each sector. As the state government has decided to set up committees at almost every nodal point like state, district, tehsil, and village level with one member on such committee represented by our organisation. We have trained more than 400 volunteers to work on such committees.’’
According to Hazare “eradication of corruption are two sides of the same coin. If both are adopted, only then there will be an established welfare state.”

Baba Ramdev’s remedies to corruption

Yoga guru Baba Ramdev  suggested that the government should ban Rs500 and Rs1,000 currency notes. “Doing so would root out corruption,” he said.
Speaking at the Press Club of Bangalore, he said that majority of the funds used in elections was black money being stashed abroad by corrupt politicians and officials. The first thing the government must do is to declare all that money as the nation’s property.
Welcoming the Jan Lok pal Bill, he said that it must be implemented as soon as possible. “The power of the bill must not be ignored. It should be made like the Lokayukta, which is an independent body. Only then will all the black money be retrieved,” he said.
He said that the country should be called Bharat and not India. “I don’t want to call ‘Bharat’ as India, as it is the name given by the British.”
He also added that ‘Bharat’ is a spiritual country and not a secular one and that it has no place for an evil such as corruption.
“Besides yoga, we are also giving education pertaining to anti-corruption. Though we have to work on it on an international level, we also have to work within ourselves to completely root out corruption,” he said.
When asked if spirituality can be used to eradicate corruption, he said, “Yes, it can. About 99% of the country’s population is honest and hard working. It is only the remaining 1% that is corrupt. The government should implement stricter laws to check this problem.”
About the current education system, he pointed out that, even after 62 years of independence, the standard of education was not up to the mark.
When asked if he was a political, spiritual, or a yoga guru, he replied, “Jaise drishti, vaise shrishti. I just want to bring a positive change in the country.”
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