The government blinked. Anna Hazare broke his fast. Representatives from civil society are sitting with some central ministers to draft a new Lokpal Bill. The Bill will still have to be passed by Parliament before it becomes law. But, given the tremendous groundswell of support amongst middle India, it is a safe bet that major political parties will pass the Bill in some form.
What exactly have we won? In the best of scenarios, a Lokpal Bill will curb the incidence of highly visible scams such as the ones associated with the Commonwealth Games and 2G licences. But these instances of corruption, however repulsive they are, represent only a tiny fraction of illegal economic activities which have resulted in a gigantic parallel economy. Estimates about the size of the black economy vary from 50 to 70% of the "white" economy. Since the Lokpal Bill will have a tiny effect on the size of the black economy, we will only have won a match in the plate division of the Ranji Trophy! And even this victory may come at a cost.
Many columnists have pointed out that if civil society activists are allowed to dictate terms, then the new institution will give unbridled powers to the Lokpal. What are the safeguards which will ensure that the Lokpal will not be corrupt? In other words, who will monitor the monitor? In environments where even former chief justices of the Supreme Court have been accused of corruption, it is extremely dangerous to create anything resembling a Leviathan.
Most other established democracies are significantly less corrupt than ours. So, there is no reason why we cannot reduce the level of corruption without sacrificing basic democratic principles. Common sense suggests that the government either reduces the scope for citizens to indulge in illegal activities or it slashes the incentive for generating incomes through such activities.
The government has made some fledgling progress in the first respect by, for instance, making the use of PAN cards mandatory for a large number of financial transactions. Increased computerisation in the income tax department has also resulted in lower levels of income tax evasion.
Of course, huge holes still need to be plugged. Consider, for instance, how difficult it is to buy any property in Delhi without paying large sums in black, or the film industry where incomes are grossly underreported (although many film stars tweeted their support to Anna Hazare!).
While we are all incensed when politicians and senior bureaucrats indulge in corrupt practices, we seem to meekly accept the necessity to bribe government officials for services which are due to us, be they ration cards, income tax refunds or clearances to the corporate sector to start new plants. The amounts involved in most instances may be small. But, since bribes have become more or less standard practice in virtually all interactions with government babus, the total sum involved is inordinately large.
In most cases, bribes originate as a result of mindless bureaucracy. Consider, for instance, a recent order of the Delhi government banning the registration of all transactions of houses unless they had a certificate of "structural safety issued by competent authority". Although the order, subsequently revoked, was ostensibly designed to curb the construction of unsafe buildings, it did not stipulate that it was restricted to new buildings. However, the MCD did not have enough engineers to issue structural safety certificates for even a minuscule fraction of existing buildings in the city.
One is forced to conclude that orders of such monumental stupidity - of which there are far too many - are designed precisely to extract bribes from helpless citizens. It does not need any Lokpal to simplify bureaucratic procedures so as to reduce the scope for extraction of bribes.
It also makes sense for the government to turn the direction of incentives completely. That is, instead of citizens running from pillar to post, it should be in the interest of the government babus to make sure that their performance is par for the course.
The government can use the internet to announce the maximum time within which specific services will be delivered. It can also pass orders or legislation imposing steep penalties on the government if these deadlines are not honoured, and reward officials if they adhere to these deadlines. NGOs can help in implementing such schemes by ensuring that the government actually pays the penalties whenever services are not delivered within the promised period.
Lastly, it is imperative for the government to ensure that crime does not pay. In other words, the government has to make it increasingly difficult for individuals to spend what they stash away illegally. Consider a world where all goods and services need to be bought by issuing cheques or with credit cards. Then, it would be practically useless to hold stocks of "black money". What would you spend them on?
Of course, such a world is a utopian ideal. But a reasonably close approximation would be an economy where cash cannot be used in any high-value transactions such as purchase of jewellery, airline tickets or bills in five-star hotels.
What exactly have we won? In the best of scenarios, a Lokpal Bill will curb the incidence of highly visible scams such as the ones associated with the Commonwealth Games and 2G licences. But these instances of corruption, however repulsive they are, represent only a tiny fraction of illegal economic activities which have resulted in a gigantic parallel economy. Estimates about the size of the black economy vary from 50 to 70% of the "white" economy. Since the Lokpal Bill will have a tiny effect on the size of the black economy, we will only have won a match in the plate division of the Ranji Trophy! And even this victory may come at a cost.
Many columnists have pointed out that if civil society activists are allowed to dictate terms, then the new institution will give unbridled powers to the Lokpal. What are the safeguards which will ensure that the Lokpal will not be corrupt? In other words, who will monitor the monitor? In environments where even former chief justices of the Supreme Court have been accused of corruption, it is extremely dangerous to create anything resembling a Leviathan.
Most other established democracies are significantly less corrupt than ours. So, there is no reason why we cannot reduce the level of corruption without sacrificing basic democratic principles. Common sense suggests that the government either reduces the scope for citizens to indulge in illegal activities or it slashes the incentive for generating incomes through such activities.
The government has made some fledgling progress in the first respect by, for instance, making the use of PAN cards mandatory for a large number of financial transactions. Increased computerisation in the income tax department has also resulted in lower levels of income tax evasion.
Of course, huge holes still need to be plugged. Consider, for instance, how difficult it is to buy any property in Delhi without paying large sums in black, or the film industry where incomes are grossly underreported (although many film stars tweeted their support to Anna Hazare!).
While we are all incensed when politicians and senior bureaucrats indulge in corrupt practices, we seem to meekly accept the necessity to bribe government officials for services which are due to us, be they ration cards, income tax refunds or clearances to the corporate sector to start new plants. The amounts involved in most instances may be small. But, since bribes have become more or less standard practice in virtually all interactions with government babus, the total sum involved is inordinately large.
In most cases, bribes originate as a result of mindless bureaucracy. Consider, for instance, a recent order of the Delhi government banning the registration of all transactions of houses unless they had a certificate of "structural safety issued by competent authority". Although the order, subsequently revoked, was ostensibly designed to curb the construction of unsafe buildings, it did not stipulate that it was restricted to new buildings. However, the MCD did not have enough engineers to issue structural safety certificates for even a minuscule fraction of existing buildings in the city.
One is forced to conclude that orders of such monumental stupidity - of which there are far too many - are designed precisely to extract bribes from helpless citizens. It does not need any Lokpal to simplify bureaucratic procedures so as to reduce the scope for extraction of bribes.
It also makes sense for the government to turn the direction of incentives completely. That is, instead of citizens running from pillar to post, it should be in the interest of the government babus to make sure that their performance is par for the course.
The government can use the internet to announce the maximum time within which specific services will be delivered. It can also pass orders or legislation imposing steep penalties on the government if these deadlines are not honoured, and reward officials if they adhere to these deadlines. NGOs can help in implementing such schemes by ensuring that the government actually pays the penalties whenever services are not delivered within the promised period.
Lastly, it is imperative for the government to ensure that crime does not pay. In other words, the government has to make it increasingly difficult for individuals to spend what they stash away illegally. Consider a world where all goods and services need to be bought by issuing cheques or with credit cards. Then, it would be practically useless to hold stocks of "black money". What would you spend them on?
Of course, such a world is a utopian ideal. But a reasonably close approximation would be an economy where cash cannot be used in any high-value transactions such as purchase of jewellery, airline tickets or bills in five-star hotels.
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