Financial Express: National: Monday, April 13, 2015.
“The ship of
state is the only ship that leaks from the top.” These words of Sir Humphrey
Appleby in the Yes Minister series came to mind when the news broke that five
people had been arrested for espionage in New Delhi’s Shastri Bhavan, home to
many of the key ministries of the government of India. That the ship has sprung
a number of leaks is becoming apparent as the power, coal and environment join
the list of ministries from where secret information has allegedly been passed
on to private companies. In the age of Edward Snowden and high-tech mechanisms
for leaking secrets, it seems almost anachronistic that old-fashioned methods
like photocopying are being employed to steal information. Be that as it may,
the net widens daily to snare company executives and journalists, apart from
the ministry moles. The action by the Delhi Police followed a period of intense
surveillance; there are also indications that this “corporate espionage” had
been going on for over a decade. At least three aspects emerge from this entire
episode: (1) the implications for the Indian growth story; (2) the outdated,
unchanged government processes and procedures that created the environment for
what happened; and (3) the failure of the rule of law to enforce norms of
ethical behaviour.
The
government is patting itself on the back for detecting and taking action on
what it perceives as a violation of law. What it needs to worry about is the
impact on government-industry relations, never cordial at the best of times.
For the first 40 years after Independence, it was assumed that the public
sector would drive the engine of growth. After a brief honeymoon post-1991, the
government and the private sector have had what can, at best, be termed an
uneasy coexistence. If commentators on the left are fond of describing the last
20 years as the era of crony capitalism, we need to remember that the 60 years
prior to that represent the age of crony socialism. The private sector thrived
in a limited sphere, based on its proximity to the political elite. An
inefficient public sector acted as the cash cow for the political elite, which
disbursed contracts and jobs at will. The post-1991 years represent a lost
opportunity to free the economy and the country from the stranglehold of the
government. Governments, both at the central and state levels, still interfere
too much in business and neglect their basic tasks of building up physical and
human infrastructure. The last nine months have seen a lot of promises of
action, but little on the actual ground. The current “Shastrigate” episode will
only worsen investor sentiment; there is already talk that bureaucrats will not
directly meet industrialists. In any case, it will be a very bold bureaucrat
who interacts with businessmen to understand their point of view.
A second
issue relates to government procedures and processes. Things don’t seem to have
changed much since my days at the Shastri Bhavan 20 years ago. Despite all the
hype about computerisation, the Indian government system is still far from the
digital era. With every second file being marked “secret”, Shastri Bhavan would
have run out of almirahs to store these files, more so if they are to be in the
safe custody of a deputy secretary. Getting information from the government is
extremely difficult, even with the Right to Information (RTI) Act. Section 4 of
the RTI Act mandates online access to a vast body of departmental information.
Not one department at the central or state level has complied with this legal
requirement. When getting even routine information is such a laborious task, it
is hardly surprising that individuals (and companies) resort to James Bond-like
tactics to procure information. If 90% of material in government archives were
readily accessible, bureaucrats could attempt to keep the remaining 10% in safe
custody.
Finally,
there is the question of application of the rule of law. Indian legal systems
are notoriously slow: “Justice delayed is justice denied.” Anti-corruption
cases move even more slowly: the access to lawyers well-versed in exploiting
every legal loophole ensures that the corrupt are rarely punished in a
timeframe that serves as a deterrent to would-be offenders. We should count
ourselves lucky if the current case reaches closure by 2035. The Lokpal Bill
went through its own tortuous legislative process; as of today, more than a
year after the Act came into force, there is no Lokpal in place. India still
has no law in place similar to the 1977 US Foreign Corrupt Practices Act, which
penalises companies for underhand dealings in obtaining or retaining business.
Even a stronger anti-corruption law in India remains mired in interminable
discussions amongst Amartya Sen’s “argumentative Indians”.
The cocktail
of an unhealthy government-business relationship, antediluvian government processes
and a sluggish rule of law does not augur well for either democracy or for
sustained economic growth. The government needs to act fast in all these three
areas if India is to meet the challenges of an increasingly complex global
economy. Otherwise, it faces the danger of a Luddite backlash from vested
interests wishing to preserve the status quo.
The
author, a retired IAS officer and Shastri Bhavan veteran, comments on public
affairs and policy and matters of human interest ramaniv@gmail.com
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