CHINU’S BANKING AND HR NOTES: DISCIPLINE AND ITS QUALITIES Part 3 INTEGRITY IN PUBLIC LIFE & SERVICES Eradication of Corruption: Is it a Possibility? PART 1 (By N. Vittal, Central Vigilance Commissioner Talk delivered to the Institute of Chartered Accountants of India, Hyderabad, 17.6.2000) The question: Eradication of corruption, is it a possibility? can be answered in a number of ways. Many in this country may say that it is not possible to eradicate corruption because corruption has always been part of our society. Indira Gandhi said that corruption was a global phenomenon. So it is not possible to eradicate corruption. Another Prime Minister Shri Deve Gowda reportedly said that corruption was like diabetes. It can be controlled but cannot be eradicated. In my view such replies represent an easy option and a convenient excuse to not take any action at all. As Central Vigilance Commissioner, my basic function is to fight corruption. Even if all the 100 crore people of India say that eradication of corruption is not a possibility, I cannot afford to believe that statement. My `dharma is to fight corruption in my capacity as CVC. You may then ask is a mere belief that corruption can be eradicated sufficient to make eradication of corruption a possibility? The answer I would say is yes. Bernard Shaw said that the reasonable man looks at the world as it is, observes the limitations, adjusts himself accordingly and leads a peaceful life. The unreasonable man wants the world to change to his way of thinking and in the process achieves success. Suppose I were to ask, can a man fly? You will naturally say that with the gravity force being what it is, it is not possible for man to fly. But then, Wilbur and Orwill Wright invented the aeroplane and we today take flying for granted. When the young Gujarati Lawyer at the end of the 19th century was thrown out of the first class railway compartment in South Africa even though he had a valid ticket merely because he had a black skin, if a question was asked whether it was possible for the system to be changed, the answer would have been in the negative. But that Gujarati Lawyer did not believe in that. He invented satyagraha and became the Mahatma Gandhi who was able to lead successfully the fight against British colonialism in India. We should therefore start our exercise to answer this question eradication of corruption is it a possibility? with the proposition yes, it is possible. If we start with the assumption that it is not possible, then we have no alternative but to continue to live with corruption. We can begin our exercise by taking stock of where we are at this moment. India is ranked 73 out of 99 countries in the corruption perception index for 1999 by Transparency International, a German NGO. This means that 72 countries are less corrupt than India and 26 are more corrupt than India. It is obvious that there are countries in the world, which are less corrupt than India. If they could be so, there is no reason why India should be perpetually wallowing in corruption at the bottom of this list. We have seen examples of dramatic changes that have been brought about in the corruption scene of countries. Rudi Guiliani who has been recently in the news, when he became the Mayor of New York six years ago, started with the concept of zero tolerance of crime. He was able to dramatically bring down the crime levels in New York. In our own country, we have seen T N Seshan give a totally new meaning to the office of the Chief Election Commissioner and make the politicians observe a code of conduct during elections which did not even have a legal basis. The pressure of public opinion supported him. Today it will not be possible for those who are conducting elections to go back to the pre-Seshan era. In Singapore which was as corrupt probably as any other Asian country Leek Kwan Yew was able to build a culture of a clean society. We have seen in Italy some years back, the Mafia being taken on my the Mani Puliti, the Clean Hands movement led by the Magistrates. Some of them even sacrificed their lives but made a significant impact in challenging the culture of the Mafia. So it is not as if eradication of corruption is not a possibility. If something has to be achieved, then we should have the proper vision to begin with. Mere vision however is only dreaming and mere action is a waste of time. Vision combined with action can bring about results. This is beautifully summarised in the Shloka of Gita, which says Yatra yogeshwara krishna yatra partho dhanurdharaha tatra shri vijayo bhutir druvo nitir matir mama - where the yogeshwara Krishna who represents vision is present and where Arjuna who represents action is present, then there is success, justice and wealth. I think must try to create in India a situation where we can achieve those three goals of prosperity, justice and success by combining vision with action in fighting this evil of corruption. We then come to the basic question why should we fight corruption at all. What is wrong? After all countries of South East Asia called tiger economies grew very rapidly in the eighties and they also had a high degree of corruption. I remember my visit to Thailand in 1994 where in Bangkok I was told that there was corruption in Thailand as well as in India. In Thailand there was honest corruption but in India there was dishonest corruption. What they meant was that in Thailand there was a bribe to be paid for every action and when the bribe was paid, the work was done. If the work was not done, the bribe would be returned. In India when you pay the bribe, one is not sure if the work would be done and if the work is not done, the bribe is also not returned. Hence our corruption was dishonest corruption. The 1997 South East Asian financial crisis brought home the fact not only to those countries like Thailand, Malaysia, Indonesia, South Korea etc. but also the world at large the realisation that crony capitalism and corruption ultimately lead to disaster. The World Bank today says that today if a country is perceived to be corrupt, it receives 20% less foreign direct investment. The expression corporate governance has recently become very popular for the simple reason that in the era of globalisation when investments are made in emerging markets, the investors want to be sure that not only are the companies in which they are investing were managed effectively, but also functioned within an ethical framework. Corporate governance ultimately means greater transparency in operations of commercial enterprises and an ethical and value framework within which corporate decisions are taken. The Indian industry is also realising the impact of ethics in business. This is because one of the basic facts of globalisation is that there is going to be intense competition. In a competitive environment if an enterprise has to survive, it will have to attract and retain talent. Attracting and retaining talent means having a proper organisational culture of ethics. This is necessary to retain the loyalty and morale of the people in the organisation. It is only with loyalty and morale that executives of a company will give their best and come out with creative ideas. Creativity is a competitive edge that is needed in this era of globalisation. We can therefore see the direct link between the need for ethical standards in business and its relevance in the context of globalisation. Honesty is the best policy is a fact that is being re-discovered. The World Bank defines corruption as use of public office for private profit. Generally in our country when we discuss corruption, we focus on the demand side of corruption. The discussions have centered mainly on corrupt bureaucrats and politicians who are on the demand side of corruption. But after all there is also a supply side to corruption. Perhaps the permit licence raj that came up after independence gave a fillip to the growth of corruption in India. Now that for the last nine years we are having a period of economic liberalisation, it should be possible at least to make an attempt at reducing corruption in the area of economic administration. Nevertheless, we also find that there are new forms of corruption in the liberalisation era. The point I want to emphasize at this stage is that if we want to eradicate corruption, we should not leave the effort only to the CVC or bodies like the CBI or the anti corruption bureau. It is said that war is too dangerous a matter to be left to the generals. Similarly fighting or eradicating corruption is too important a task to be left only to the CVC. We must be able to mobilise all sections of the civil society. We should also tackle the supply side of corruption. 34 OECD countries had come together to sign an anti bribery convention in 1996. I wrote to the three leading chambers of commerce and industry associations in our country namely CII, FICCI and ASSOCHAM suggesting why not these three come together to form an anti bribery convention? I am very happy to report that the CII has come forward with a positive response. I received a letter from the new president of CII Shri Arun Bharat Ram which reads as follows: Dear Mr Vittal, I am writing to you in regard to your appeal to play an active role in dealing with the issue of corruption. I do so after consultations within CII at the National and Regional levels. First we propose to communicate your appeal to all 4000 member companies of CII and to all 100 affiliated associations and their member companies. Second we request you to write a special message of 900 words which we would like to publish in the CII Communique which has very wide circulation. I am pleased to bring to your notice that several companies have confirmed to CII that they do not pay irrespective of the pressures and implications. However many corporates do face ground-level problems, harassment and delays. There are enormous difficulties on account of laws and rules which are complex and which provide opportunities to create difficulties. The SSI sector is a major sufferer. This raises two issues: a. Simplification of laws and rules b. Need for accountability of the administration, and of individual officials We need to set up an institutional mechanism to deal with these issues and we wish to be proactive, to work with you jointly and to work on a sustained basis. We would like to meet you in the near future to discuss further action. With warm regards This is indeed a very welcome development. The focus on corruption so far as my job as CVC is concerned is confined to the public servants who are under the purview of the government of India departments, ministries as well as public sector undertakings and banks. Generally in the case of a public servant who is involved in a case, references are made to the CVC to get an advice whether the evidence is strong enough so that in a court of law, prosecution under the Prevention of Corruption Act can be launched. The standard of proof needed in a court of law is very high and has to be beyond reasonable doubt. If the evidence is not strong enough for a prosecution, then we go in for departmental action. Here the standard of proof is the preponderance of possibility. The punishment can be a major one like removal or dismissal or a minor one like censure. This also the CVC advises. Thereafter the inquiries are conducted by the departments. The CVC also has a dozen Commissioners of Departmental Inquiries who inquire into more serious cases. The main reason why corruption flourishes in our system is because delay and lack of transparency. The experience of the CVC in publishing the names of charged officers on the CVC website was an exercise in serendipity. Serendipity is a word coined by Horace Walpole in 1754 after The Three Princes of Serendip, a fairy-tale. Serendipity means the faculty of making happy and unexpected discoveries by accident. The Central Vigilance Commission has had an experience in serendipity recently after it launched on its web site (cvc.nic.in) the names of the charged officers who were either facing prosecution under the Prevention of Corruption Act or departmental action for a major penalty like dismissal. The action of the CVC was basically motivated by a desire to communicate the correct facts of action against public servants. The general perception of the public was that the publicity is only given about middle level or junior officials. The fact is that contrary to public perceptions, action is also taken against senior persons but somehow this aspect does not get reflected in the media. The display of the names of the senior officials of the Government of India including IAS and IPS officers in the web site of the CVC in January 2000 proved to be a classic example of serendipity. While the basic objective of the CVC was to meet the long standing demand of the media for information about senior officials facing corruption charges and inquiries, once the information was put on the web site, the reaction was an exercise in serendipity. The public at large welcomed the measure. 93% of the people in a poll conducted by the Hindustan Times welcomed measure. Some of the people who figured on the web site were also occupying sensitive positions. It is a normal Government principle that if a person is facing a vigilance inquiry, he should not be placed in sensitive posts but in practice this was not being followed. This is an important reason why corruption flourishes in our system. This aspect was highlighted immediately by the web site. Lack of transparency of the departmental operations helped people facing vigilance inquiries to occupy sensitive posts. Placing the names of the charged officers in the web site introduced an element of transparency. Questions were raised in the public at large about people who are facing inquiries occupying sensitive positions. There was another somewhat unexpected development. An impression grew that the very fact that the names were figuring on the web site meant that these persons have already been condemned to be corrupt. In fact, one paper went to the extent of saying that the CVC has started an Icondemnyou web site. All that the CVC had done was to extend to the departmental inquiries the practice, which is as old as the Indian Penal Code in criminal cases. In criminal cases when a person is accused, he is legally innocent till proved guilty but so far as court proceedings are concerned, the name of the accused is in the public domain. While even in a serious criminal offence like murder or theft, the accused does not protest that his reputation has been damaged, the moment CVC published on the web site the names of officers, who were facing prosecution cases under the Prevention of Corruption Act or departmental action for major penalty, a hue and cry was raised saying that its very action the CVC had already condemned the innocent public servants! One of the IAS Associations went to the extent of passing a resolution against the CVC stating that here after departmental authorities will not be willing to take a sympathetic view of the officers facing departmental action. It was interesting to see that while under the law no defamation has been caused by publicising the names of the charged officers, the general perception appeared to be that the CVC web site was a sort of a rogues gallery which it is not legally or technically. In spite of the fact that we have become very insensitive and cynical on the issue of corruption, the web site publication seems to have caused some stirring of the conscience in our society. The perception was that public servants would avoid getting their names published on the web site of the CVC. This was confirmed in a poll taken by the Economic Times in which 83% of the respondents said that the publication of the names of the charged officers in the CVC web site will have a deterrent effect. There was a third benefit, which flowed from the web site. Some of the persons whose names were on the web site said that even though their names were there, they had not been even served with a charge sheet. This highlighted another dimension about how corruption flourishes in our system. This is the element of delay in departmental inquiries. It is quite possible that innocent persons may also become subjects of vigilance inquiries. If the departmental inquires are delayed, the results are totally contradictory so far as the honest and the corrupt persons are concerned. In the case of an honest person, he becomes a victim of mindless departmental procedure. His career may be ruined, thanks to the delay in getting his name cleared. On the other hand, in the case of a corrupt person delay provides a cover of respectability because he can continue to maintain that he was innocent till he was proved guilty. The CVC was able to use the web site initiative as a device by which monthly reminders to all the departmental authorities could be sent so that the disposal of the cases could be expedited. The intention of the CVC is to see that within six months all departmental inquiries are completed so that honest persons can get their names cleared and the corrupt punished quickly. Yet another benefit is the apparent launching of a virtuous cycle in other areas of government where transparency can be introduced to improve the quality of governance. If the names of charged officers facing departmental inquiries can be publicised, why not the names of the willful defaulters in the banking system? The Governor of the Reserve Bank of India has announced that the Reserve Bank is examining this issue. Similarly, in the case of the non-banking financial institutions also there were reports that the Department of Company Affairs is thinking of publishing the names of defaulters. The web site is emerging as an interesting new instrument, which can help in improving the quality of governance by bringing in greater transparency. The website exercise also revealed certain social dimensions of corruption. I had thought that we had become so cynical and accustomed to corruption that there will be no sense of shame. But as the February 1 issue of the Newsweek pointed out, the attempt made by the CVC which is perhaps the first attempt to use IT to fight corruption was also resulting in e-shame. This in turn is giving me an idea about how perhaps we can mobilise some of the current trends in our country for fighting corruption. For example judicial delays are conveniently exploited by the corrupt people to escape punishment or at least postpone the day of reckoning to the maximum extent. At the same time the fact remains that there are a large number of public servants who have got disproportionate assets and are flaunting their wealth. They also have benami properties, valuable moveable properties like gems and jewellery and may also have a lot of black money. The raids conducted by the CBI from time to time reveal that corrupt officials keep a lot of black money with them and also have a lot of benami property. I inquired from the Director, CBI how these raids were conducted and I was told that this was based on source information TO BE CONTIUNED .
Posted on: Wed, 21 Jan 2015 02:47:07 +0000
Trending Topics
Recently Viewed Topics
© 2015