The
Wire: Mumbai: Friday, 18 September 2015.
There has
been considerable debate on how corruption must be reduced in the government.
The debate even spawned a movement which shook the nation and, subsequently, a
political party. Several months have passed since then but we still seem
unwilling to bell the cat.
Consider
the following.
Most
organisations in the West do not have specific vigilance departments, whereas
most of our government departments cannot so without these. But since the
vigilance departments are ineffective, we have anti-corruption bureaus. And
despite the proliferation of these, we have a Central Bureau of Investigation
to ensure independent investigation. Of course, since experience tells us the
CBI is not up to the mark because of political interference, we have the
Central Vigilance Commission; now, there is talk of a Lokpal as the panacea for
corruption.
Instead of
trying to solve the problem after the corruption horse has bolted and failing
manifestly in this task can we think of some way to curb rent seeking at one of
its major points of origin the collusion which occurs between big business and
government functionaries?
There are
basically two kinds of corruption in government offices:
· Extortion, where bribes are demanded for a legitimate
service or as a price to avoid harassment.
· Collusion, where the giver is eager to pay a bribe so
that he can indulge in an illegal act, or enrich himself at the cost of the
public. This is usually of very large value and hurts public finances
significantly.
It is my
belief that demanding greater transparency in all corporate-government dealings
can lead to a reduction in the second kind of corruption, which results in huge
scams and a great loss to the exchequer.
I will
outline how this could be achieved but first I should note that I making an
important but I hope, reasonable assumption: A small percentage of corporates
would collapse if corruption were to be curtailed, since their profits depend
on it. Conversely, a comparable number of corporates lose a lot of business
opportunities to the former because of their unwillingness to adopt unethical
practices.
Most of the
corruption of the collusive kind is indulged in by the former. For corporates
of the second kind, there is a business need to curtail collusive corruption.
Apart from this, there may also be on their part a consideration of ethics and
a genuine desire to curb corruption. If even a few such companies decide to
take active steps to curtail corruption, and are quite clear that they will not
adopt this route of getting unfair or unjust advantage from the government,
they can make a difference to the overall national scenario. Taking a proactive
role to achieve this goal is in their business interest and could translate to
higher profits.
Collusive
corruption brings unfair advantages in the form of lower taxes or unfair relief in paying taxes.
Another benefit is getting land or other infrastructure in a manner which
amounts to an effective subsidy. One more avenue is to bid competitively for
providing services or for public private partnerships (PPPs), and subsequently
changing the conditions to affect the public interest adversely.
My proposal
is that those corporates wishing to promote honesty should pledge to publicly
display all their transactions with the Central and state governments on their
websites.
Of course,
companies can withhold certain information which may harm their legitimate
commercial interests but this is likely to cover a very small proportion of
their dealings with government. As part of their policy of disclosure, these
companies should also declare the kind of information in government
transactions they intend to withhold and state their reasons for this. Many
business leaders regret the lack of transparency in our system and bemoan the
corruption in government. Here is a chance for them to take the lead and
demonstrate their willingness to be transparent and thereby to help transform
the way business is done.
It would be
very good if a few companies got together and announced their joint commitment
to be transparent in their transactions with government. If they have taken a
conscious decision to refuse the route of corruption to get undue commercial
advantages of any kind, they would lose nothing and certainly gain respect from
citizens and peers.
Some
companies may well argue that citizens should get this information from the
relevant government departments. However, the fact is that these departments
usually do not part with information which would reveal favours being done despite
this being a violation of their obligation under the Right to Information Act.
There could
be two benefits for companies who publicly announce and practice transparency
in all transactions with government:
· They would be recognised by the public for their
commitment to transparency and corporate social responsibility.
· Over a period of time, if more companies follow suit, it
would create pressure on others to accept this level of transparency.
As the law
stands, most of this information should be accessible to citizens from
government departments using RTI, except that which is exempt. However, when
corruption is involved, the information is usually denied and a citizen finds
it difficult to battle this unjust denial.
Private
action could have the potential of curbing corruption. I am hoping a few
enlightened companies will take the lead. Corporates can make an effective
contribution to bringing transparency and accountability and reducing
corruption. Will some corporate head be willing to take the lead? The same degree
of transparency could also be achieved if regulatory agencies like the Security
and Exchange Board of India make such disclosure norms mandatory for all
companies.
(Shailesh
Gandhi is a former Central Information Commissioner)
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