System and Corruption in India
By Professor Dr. Prem Lal Joshi
University of Bahrain
In 1922, the noted freedom fighter Mr. C. Rajgopalachari wrote
in his prison diary that "elections and corruption, injustice
and the power and tyranny of wealth and inefficiency of administration
will make hell of life as soon as freedom is given to us. Men will
look regretfully back to the old regime of comparative justice,
as well as efficient, and more or less honest administration. The
only thing gained from independence will be that as a race, we will
be saved from dishonor and subordination".
It seems that the fears of Mr. Rajgopalachari became true in India's
present day socio-economic and political environment. The daily
news media presents the height of corrupt practices of our politicians
and bureaucrats currently rocking the Indian Parliament (e.g. commission
issues in MPLAD (Local Area Development) scheme and cash-for-questions
scam. Consequently, for the first time, in 54 years, eleven members
of the Parliament have been expelled for demonstrating unethical
practices in high places).
Historical evidence suggests Britain ruled India to further its
own imperial interests. Upon independence, Britain left behind a
"seriously impoverished economy a feudal agrarian sector
and a fragile industrial base, which contributed to large-scale
unemployment, terribly low incomes, widespread poverty and illiteracy".
Despite this legacy, India, since independence, has made significant
achievements in several economic fronts. However, questions about
corrupt administrative and political systems persist.
N.N. Vohra (Make the system responsive) states that the "post-1947,
India was faced with an acute financial crisis and grave challenges
on varied fronts. Nonetheless, in the early years, serious problems
were tackled and fair progress was achieved in addressing the complex
tasks of nation building". Adding to the complexity of problems
associated with this period was that India faced four external aggressions
during which our Armed Forces performed valiantly (except in the
Sino-Indian conflict). In a nutshell, whilst serious gaps remained
immediately after independence, India marched towards a path of
sustained progress. This was possible due to the proven integrity,
commitment to higher values and a positive national outlook. Also,
the first generation political leaders were somewhat successful
in implementing governance practices as they had experienced large
personal sacrifices in the course of freedom struggle.
After 1980, several regional parties mushroomed whilst during 1990;
the emergence of coalition governments at the national and state
levels gave birth to political instability. These changes contributed
to a bottleneck in good governance. Furthermore, this new system
of governance gave ample opportunities for individuals and groups
to seize and hold political power resulting in a dangerous emergence
of a "nexus between corrupt politicians and public servants
and unlawful elements in society".
Some Publicized Scandals and Scams in India
During 1990s, a series of mammoth scandals (e.g., the Bofors and
submarine deals, the hawala case and the fodder scam) came to light.
Prime Ministers and Chief Ministers were accused of being associated
with these scandals. Subsequently, senior bureaucrats - even those
of the ranks of director-generals of police and chief secretaries
- were prosecuted for misuse of their power. Other examples include
the Tehelka scandal and repeat stock market scams (Pre Hari
Prasad Mundra to Harshad Mehta to Anand Rathi & Ketan Parikh)
and Urban Co-op Bank Scam (Pre - Karad Bank, UCBs at Nashik, Lucknow
& Ahmedabad, Mumbai etc). Similarly, in 2002-03, in a house
to house survey of over five thousand citizens, Transparency India
International found that Rs.26,758 crore (1 crore = 1 million) were
extracted from citizens who interacted with the top ten most corrupt
departments of Government of India. Lower strata with lower earnings
were hit harder due to corruption.
Despite these scandals, the Indian economy is booming with poverty
lines reduced. Surprisingly, curbing or combating corruption has
never been on the agenda of any political party in India. In fact,
there has not been a systematic national strategy to prevent and
eradicate this malaise. At best, only limited policies and regulations
have been forthcoming. For example, the "Benami Transaction
Prohibition Act" was passed in 1988 and provides for the benami
property to be confiscated. Nonetheless, there was no prescribed
procedure laid down for its effective implementation.
Similarly, it is known to every one in the government that computerization
could be an effective tool in preventing frauds and corruption in
the banking sector. However, implementation of computerization in
this sector to prevent fraud and corruption has been slow. For instance,
computerization in the Public Debt Office (PDO) of the Reserve Bank
of India was done only after thousands of cases of the rupees scam
were committed in this office by Harshad Mehta. On the other hand,
computerization of the booking of tickets and reservation system
has virtually reduced the corruption practices on the railways.
Successful reduction on the railways was achieved with commitment
One of the phenomena of corruption practices is that an official
can be exposed for his/her corrupt practices and such a practice
will be stopped for a while. However, after sometime the same thing
restarts. It is just like removing slums in Mumbai by Municipality
but after one month, the same slums get reconstructed in the same
place because there is a lack of post-monitoring and anti corrupt
system in the Municipality Department. Similarly, take the case
of Customs Department at the airports in India. These days, the
corrupt practices have been reduced to a considerable extent; still
the government does not allow video cameras to be fixed there. The
customs CARGO in Mumbai, Delhi, Chennai and Calicut are well known
for their illegitimate practices through commission agents. The
corrupt practices in Calicut customs CARGO was also discussed in
the Parliament in November 2005.
Some countries experiences show that public sector reform through
reducing the role of the bureaucracy can be very effective in curbing
corruption. The smaller the role of the public sector and the less
red tape and scope for administrative discretion, the less opportunity
there is for corruption to flourish. However, in Indian context,
often there has been strong opposition to public sector reforms
from employees unions and politicians who have vested interests.
Many of the elected politicians find it a safe heaven to become
chairmen or board members of hundreds of public sector enterprises
in India. Hence, it provides them a breeding ground to flourish
Players and Categories of Corruption in India
N.Vittal, who himself is a bureaucrat and the former Vigilance
argues that there are five players on the corruption scene in Indian
system that makes for a vicious circle. These are :
1. the 'neta", the corrupt politician;
2. the "babu,' the corrupt bureaucrat;
3. the "lala" the corrupting businessman;
4. the "jhola", the corrupt NGO, and
5. the "dada" the criminal of the underworld.
Alternatively, I would argue that the Indian corruption system
can be categorized into four 'Ps' in terms of quantum of money exchanged.
1. Political corruption (e.g. kickbacks, donations to political
parties from individuals and industries, use of black money in elections
2. Programme corruption ( e.g., food for work, rural development,
relief schemes, grants and subsidies to NGOs, etc);
3. Project corruption (e.g., commission to be paid for approval
of contract and grants).
4. Petty corruption (e.g., chai paani (bribe/tips for prompt access
and service) for obtaining an application form or submitting application
form, making a FIR in police stations etc).
Again, it needs to be understood that the extent of corruption
amongst politicians and officials depends, by and large, on monopoly
power and the discretionary power they exercise in discharging their
duties. Furthermore, the degree of corruption is influenced greatly
by the extent they are held accountable for their actions. I would
also include the lack of ethical traits and quality educational
background of those officials in influencing the extent of corruption.
Some Core Reasons and Signs of Corruption
Johann Grant Lambsdroff once stated that the causes of corruption
are generally rooted in country's policies, bureaucratic traditions,
political development and social history. These causes of corruption
are also applicable to India. However, some others specifically
found in the Indian system include political patronage, lack of
punishment due to confused judiciary structure which is expensive,
dilatory and inefficient, social system and environment, cumbersome
and dilatory procedures, and the low salary structure of government
and public sector employees. Other signs of corruption include:
(a) electricity theft; (b) always having to negotiate price; (c)
significant increases in toll taxes points; (d) police always wanting
you in the police station (or asking for your identification); (e)
requesting for chai pani (bribe) and so on.
It is also argued that corruption flourishes because "it is
a low-risk, high-profit activity". Other reasons that can be
found in Indian system are:
- scarcity of goods and services;
- red tape and complicated rules and procedures;
- lack of transparency in decision-making;
- legal cushions of safety for the corrupt under the healthy
principle that everyone is innocent till proved guilty; and
- tribalism among the corrupt who protect each other. The popular
phrase is thick as thieves not thick as honest
- International Reflection
It is said that there is no activity of the nation which is totally
free from corruptive malaise. Therefore, corruption in India is
all pervasive. "The World Economic Forum Survey ranked
India 45th out of 49 countries on the honesty of its officials.
The Corruption Perception Index of Transparency International
has depicted India as becoming more corrupt in recent years.
India has the dubious distinction of belonging to the category,
of the most corrupt nations in the world". Similarly, the recent
report by international consultancy major PricewaterhouseCoopers
has put India as 12th in Opacity Index among 35 countries. "Opacity
is the lack of clear, accurate, formal, easily discernible and widely
accepted practices in the world's capital markets". It estimates
the adverse effects of opacity on the cost and availability of capital
of 35 countries. Other studies, like the study of "World Phenomenon
on Corruption", have repeatedly branded India as one of the
most corrupt countries in the world. Despite this fact India is
still considered to be a very religious country and it is still
widely believed that religion is the basis of the Indian life, thoughts
and actions; consequently, the moral values in people's life should
be very high.
Strategies to Curb Corruption
The economic literature posits that corruption acts as a major
deterrent to growth and development. There is a well-developed body
of mathematical models of corruption. Some of these models and studies
state that once the critical mass is reached, corruption becomes
self-sustaining. If that is the case, can we really get rid of corruption
in India? Some authors also argue that there is plenty of corruption
in the US but it is at a higher level and generally has relatively
less impact on the common man. Will that be a good compromise or
strategy in Indian conditions too as it is a well known fact that
the political corruption can not be eradicated totally in India,
yet the US situation may be tolerated in developing countries like
ours provided the masses are affected at a minimum.
To combat corruption, it is very essential to have a strong political
will and commitment, good government and good governance, administrative
accountability, simplification of procedures, and public participation
through watchdog ship approach of public audit committees. Various
authors provide a comprehensive framework to combat corruption in
developing and third world countries. For examples:
1. Strict fines and penalties
2. Greater degree of transparency and public exposure
3. Enhancement of powers of specialist bodies e.g. anti corruption
4. Increased guidance or training for government and public sector
5. Review of legislation for domestic and international corruption
6. Continuous review of corruption related regulations to ensure
7. Review of high-risk areas
8. Enhancing and legal enforcement of codes of conduct
9. Simplifying and computerization of administrative systems
10. Whistle blowing procedures
11. Integrating ethical values into management
12. Introduction of E-governance
Role of Civil Society and Media
Corruption is so deep rooted in the present day India that it has
found an acceptance in the social system and bribery, nepotism and
favoritism are wide spread . People pay this price to babus (bureaucrats)
as a convenience to receive prompt public services. However, sometimes,
they may not be sure about the delivery of prompt services or favors.
As public-sector accountability is weak, fuzzy and tenuous, people
have no choices but to accept the system and take it as an integrated
part of their working culture.
Civil Society, being an independent actor looking for interests
of the general public. is the one to investigate and bring to light
cases of corruption. This could be achieved by creating public awareness,
formulating and promoting action plans to fight corruption as well
as by monitoring mechanism of government decisions and in public
service delivery system in an effort to reduce corruption to a large
In some situations and departments the extensive public cooperation,
such as a corruption telephone hotline where anonymous callers can
report allegations of corrupt practices may be very effective. Since
we have a poor governance system, an adequate range of incentives
and disincentives to ensure compliance are required.
Similarly, the media (both electronic and print) can help expose
corruption at various levels provided it operates in a free and
unbiased manner. Perhaps, the media is considered the most persistent
institution in the fight against corruption as the concept of investigating
journalism has been catching on fast. Furthermore, the Internet
is another media for disseminating information about the corrupt
bureaucrats and politicians, which is so far being done in rare
cases in India.
In some developed countries corruption practices are dealt very
seriously and severely. For example, in Japan and South Korea, the
former prime ministers and children of presidents were jailed for
corruption. In contrast, in India none of senior politicians, implicated
in various scandals and scams, have so far been convicted. The slow,
tardy and inefficient legal system often is responsible for this
Therefore, for the contemporary India, labeled as corrupt and economically
appears set on a rising path, to move positively forward, it is
being strongly advocated from various quarters that a shift from
a 'culture of corruption' to one of 'accountability' is absolutely
necessary to India's regeneration, stability and the future prosperity.
It is also said that "an economically developed and militarily
powerful country free from corruption can only sell its culture,
a weak nation can not." The country needs some simple strategies
to tackle this issue e.g., STP (simplification of stringent rules
and procedures, transparency and a rapid system of punishment for
the corrupt). Civil society participation and media role must be
It is suggested Special courts should be set up for an expeditious
time-bound trial, and exemplary punishment should be awarded to
the corrupt. Furthermore, the government should seek the assistance
of forensic accountants and auditors for collection of solid evidence
as many of the corruption cases involve technical accounting and
complex financial procedures.
Another suggestion is that Special Audit Courts for revealing financial
and administrative corruption should be established as a watchdog.
This court should report directly to the President of India who
in turn should refer the matter to the Parliament. In severe cases
of corruption, the Parliament should transfer them to the public
prosecutor to take the proper legal actions.
In the end, in the Indian system, the combating of or checking
corruption effectively is not an easy process. Still, vigorous and
determined will and actions will go a long way to reduce it though
a complete spring cleaning exercise of corruption is practically
impossible in this largest democracy.
1. Clay Westcott (1997) The role of civil society in combating
corruption, United Nations Development Programme.
2. N. Vital (2005) Combating corruption
3. N.N. Vohra (2005) Governance: make the system responsive.
4. S. Sondhi (2000) Combating corruption in India , XVIII World
Congress of International Political Science Association, Canada
5. Transparency International India and Org-Marg Research Pvt.
Ltd. (2003) Corruption in India: an empirical study http://www.ti-bangladesh.org/ti-india/documents/corrInd-pt1.pdf
(The author is thankful to Mrs. Hemalata J. , Dr. Amal Wakil, Bahrain
and Dr. Ashtosh Deshmukh, USA for their suggestions and comments
on this article).