THE BLOG

How Will India Confront its Corruption Crisis?

Adding to an already long list of scandals besieging the government in New Delhi, Italian prosecutors recently accused the former chief of India's air force, S.P. Tyagi, of corruption. Preliminary investigation papers filed in an Italian court allege that in exchange for bribes, Tyagi steered a lucrative deal for the purchase of helicopters to an Anglo-Italian defense firm. While he has denied the allegations, and Indian officials have sought to suspend the deal, the controversy is just the latest reminder of the grave corruption epidemic afflicting the country.

That corruption thrives in India is hardly a new or earth-shattering revelation. Corruption in India is as old as the Indian state itself. The decades following India's independence witnessed New Delhi adopt a socialist-inspired economy. Efforts to circumvent byzantine regulations, protectionist policies, and suffocating bureaucracies that characterized the now defunct "license Raj" rendered India particularly susceptible to widespread corruption. Since then, corruption has not only endured in India, but has flourished there unabated. Paying bribes for the most basic services is routine practice, as anyone with the even the most basic familiarity with India is well aware.

But while petty bribes have been commonplace throughout its history, corruption in India seems to have reached epic, unprecedented proportions, even by Indian standards. Mega scams involving billions of dollars have become just as ubiquitous as low-level graft. A barrage of recent corruption scandals in New Delhi--each one more brazen than the one before it--has exposed just how pervasive and pernicious India's corruption pandemic has become. For example:

  • The 2010 Commonwealth Games hosted in New Delhi were riddled with allegations of monumental corruption, fraud, and waste. Several Indian officials managing the Games were arrested for financial irregularities. India's former Olympic chief, Suresh Kalmadi, is facing a potential life sentence for his role in the scandal. In 2012, the International Olympic Committee (IOC) suspended India's Olympic Association over claims of corruption surrounding its internal election process.
  • In November 2010, Maharashtra state chief minister, Ashok Chavan, was forced to resign after reports surfaced that he had permitted politicians, friends, and even his own relatives to purchase apartment complexes in Mumbai originally built for war veterans and their widows.
  • In March 2011, controversy erupted amongst India's political class after a diplomatic cable made public by Wikileaks described a senior American official being shown "chests of cash" by a Congress party aide for the purpose of bribing members of Parliament in exchange for their support in an upcoming confidence vote surrounding the landmark US-India civilian nuclear deal.
  • In February 2012, India's Supreme Court rescinded more than 100 government-issued telecommunication licenses after finding that they had been sold at prices shockingly below their market value. Instead of being sold at public auction, the wireless phone licenses were allocated in a process that favored some companies over others. India's minister of telecommunications responsible for overseeing the deal, A. Raja, is in jail awaiting corruption charges, while a slate of other senior government officials have been implicated for their purported role in the corrupt dealings. The "2G scam" cost the government treasury a breathtaking $37 billion according to India's Comptroller and Auditor General (CAG).
  • Late last year, the Congress Party again found itself embroiled in scandal over a report issued by the CAG that cast doubt over the government's practice of awarding India's lucrative coal mines to various companies in the absence of a competitive bidding process. Estimates have put to the total cost of "Coalgate" at more than $35 billion.

The charges of graft now surrounding India's purchase of the helicopters represents the latest corruption controversy casting a shadow over New Delhi, with new allegations of official misconduct garnering headlines almost daily. Given the proliferation of colossal scandals across the country, it is perhaps no surprise that India ranked 94th in Transparency International's famed Corruption Perception Index, which ranks 183 nations from least to most corrupt.

The cost of India's corruption problem is astonishing. Recent efforts to calculate a total figure have generated some astounding estimates. According to one study by the US-based, Global Financial Integrity (GFI) group, illicit financial flows from India during the sixty-year period spanning its independence to 2008 have totaled approximately $640 billion, or about half of India's official gross domestic product. Of that staggering sum, $123 billion was lost in the last decade alone, a figure more than thirty times the amount New Delhi spent on social services like healthcare and education last year.

More troubling than its cost, however, is the profound toll corruption is taking upon the country and its more than 1.2 billion citizens. A survey published recently by the Centre for Media Studies, for example, argues that it is India's poor who are the most acutely affected by graft since they are forced to pay bribes they cannot afford in order to obtain basic services like electricity, clean water, and protection from law enforcement. Three out of four slum dwellers reported having paid a bribe to secure basic necessities such as kerosene or medical care, while 35% of respondents claimed to have been denied services because they were unable to procure the requisite kickback.

Experts have also begun to sound the alarm over the grave dangers that India's massive corruption scandals are posing to its emerging economy. The country's once soaring growth rates have stalled at around six percent, and analysts attribute the slow-down partially to the wave of multi-billion dollar corruption scams that have dominated India's political landscape. A report published by the global consultancy firm, KPMG, contends that scandals like "Coalgate" and the 2G scam deter foreign investment, undermine investor confidence, and threaten to derail India's long-term economic growth. The study effectively encapsulated the transformation India's corruption problem has undergone in recent years, observing that "it is not about petty bribes any more, but scams to the tune of billions of rupees...that highlight a political/industry nexus which, if not checked, could have a far reaching impact."

That far-reaching impact is already being felt across India. For decades, the majority of the country's population had regarded graft with a combination of indifference and resignation, accepting it as an unavoidable part of daily life. But public acquiescence has now been replaced by public outrage. The torrent of corruption scandals that have inundated the country in recent years has galvanized India's vast citizenry, particularly its booming middle class, in a way simply unseen until now. Starting in 2011, hundreds of thousands of Indians took to the streets to participate in peaceful, Gandhian-style protests demanding increased accountability, more reform, and substantive legislation to combat graft. Testing the strength of India's democratic fabric, the public demonstrations have forced New Delhi to confront difficult questions surrounding India's decaying governance and corrosive political culture.

But are these unprecedented protests-- and the anger and popular discontent they reflect--capable of effecting real and sustainable change in this ostensibly new era of corruption? With public confidence in the government steadily eroding, and the responsiveness of its democratic system suddenly under scrutiny, officials in New Delhi have pledged to take concrete steps to tackle graft. So far these have included appointing a new anti-corruption watchdog, launching an ambitious government program that will transfer cash directly to India's poor in the hopes of minimizing graft, and considering enactment of a robust, but highly contentious piece of anti-corruption legislation known as the Jan Lokpal Bill.

While encouraging, these measures just scratch the surface towards tackling the country's grave graft problem. What is needed is genuine reform that addresses the larger pathologies underlying the rampant corruption plaguing India. Overhauling India's electoral system, curtailing the immense discretionary powers of government officials, reducing bureaucracy, and strengthening the rule of law are all necessary first steps towards this end. New Delhi must not succumb to the policy inertia to which it usually submits, and should instead begin implementing these reforms as quickly as possible.

Critics remain skeptical of whether New Delhi is willing and able to take the necessary steps to confront India's crippling corruption crisis. These doubts are not unfounded considering that new scandals seem to be unearthed virtually every day. That being said, India's anti-corruption movement may have reason to be hopeful that their efforts are bearing fruit. The idea of powerful government ministers like A. Raja and Suresh Kalmadi facing imprisonment for corruption would have been inconceivable just two years ago. Other high level officials and corporate executives have also been arrested for graft. This suggests a modicum of accountability conspicuously absent in India until now, a positive development no doubt.

But India has a long way to go in its fight against corruption. The task facing the world's largest democracy is a herculean one. Its citizens have proven that they are ready to rise to the challenge. Hopefully, their government is too.

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