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Saturday, February 5, 2011

Corruption is Good :)

On 2nd February ,2011 when A Raja,the former Union telecom minister was informed at CBI headquarters that he would be retained in judicial custody,he appeared a humbled man.The Dalit star of DMK and UPA-II had come a full circle from humble beginnings in Tamil Nadu to be humbled back at headquarters of premier investigation agency of Indian Union.The event marked an end of era in Indian telecom sector which was started with the introduction of mobile services in 1990's.The arrest was celebrated by leading political thinkers,media and me as a symbol of survival and semblance of constitutional values.The 1.76 lakh crore thief had been caught..they said..or had he?

Our nation has been brought up on a dosage of Gandhian values.While on one hand we are taught to swear by them in theory on the other we flout them in practice.Consequently corruption is a stigma for everyone of us and yet a convenience we prefer to practice.Life seems to be so easy with the 500 rupee note which prevents the cancellation of your licence or the odd 100 rupee that you slipped to the ticket checker when you didnt want to stand in a queue to buy the local ticket ...So is corruption really that bad or is it just a way free markets have adjusted to get over the impractical laws and rules that are "idealist" netas and babus frame for us

The US Commerce Secretary ,Gary Lucke quotes all difficulties in doing business in India from poor infrastructure to high tariffs except corruption.A survey by Transparency India found West Bengal and Kerala at lower spectrum of corruption while Delhi and Maharashtra were touted as one of most corrupt states in India.The Indian Black Money economy is supposed to be sized at at least one fourth of our GDP and is responsible for employing atleast a tenth of our population...So we are forced to ask is corruption a necessary evil we must stay with?

Before making an attempt to answer this question let us consider what would have happened had A Raja & Co. not stolen 1.76 lakh crores from the state Exchequer.Well it would have probably been invested back in giving subsidies to farmers or sick industries controlled by politicians.Alternatively it could have been wasted in NREGA which as a recent report suggests has leakages to the tune of 70%.It would have undoubtedly fuelled the subsidy on the petrol that run rich man's cars.Contrast this what happened because of this scam,while part of the money went to buying Omega watches and trendy cars for our babus and netas,the rest of savings were capitalized by telecom companies to provide Superior telecom infrastructure and data services to Indian people.The lengthy process of spectrum allocation was quickened leading to crores of savings in interest payments.Indian people today avail call rates which are cheapest in the world.While undoubtedly this filled coffers of some private players.At the same time it boosted employment generation and aided growth of Indian industry with superior infrastructure support,something our state run telecom companies could never have achieved.Business in India has benefited or in a better sense been subsidized in a very effective manner by this 1.76 l crores.Infact a closer analysis reveal that much of the corruption money once sent outside was quickly re routed back to India via tax havens and invested in Indian businesses.It is widely known that private spending is much more efficient than public spending in terms of efficiency,GDP growth and employment generation and sustainability.

By saying all this I certainly do noy .But to point out that the solution to corruption is not stricter anti corruption laws and their enforcement.But the solution is a deeper analysis to the situation and eliminate the problem from roots.We have to make our laws our pragmatic.For example in case of telecom industry the problem was scarcity of spectrum and the high fees would have made sustainability of industry a question mark.Efforts could have been made to implement newer technologies and free up more spectrum from Defence and other areas.Similarly we whine about corruption in subsidy bills while it could be easily avoided by eliminating subsidy and opening up markets directly for farmers.In fact what it seems is that many laws are tailor made to encourage corruption.

Its high time we re look at our laws or else the free markets will always find a way around.This time it was 1.76 l crores next time ,it might not be so peaceful...we could well choose the Egyptian way :P

Happy Blogging


  1. Hey,

    Pretty nice post...Even the anti corruption law is full of loopholes and we hardly have any alternative to the acts done by public officials..anti corruption implementation is not a solution definitely coz the implementation leader is full of corrupts and cowards..rather than to crib about all this..we could think of something better then harrasing people on the name of corruption and false hopes of actions..What raja did was just a zilch of what happens in this country..Ghoose and chara scams have never been solved..politicians died and with them the files and actions also died..The famous examples being..Rajiv Gandhi, P V Narshima Rao and hundreds of cases unreported..and if calculate the level of corruption in this reputed democracy..even the world bank would like to take loan of that calculated amount..


  2. thnks kp :) markets are the most efficient form of governance for humans are by nature meant to be take away the incentive and make laws mre pragmatic :)