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January 2015

Cancerous Corruption

By Narayan Varma Chartered Accountant
Reading Time 6 mins
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Anti-corruption Bureau:
Right to Information is an effective tool to contain corruption. When bureaucrats realise that they will be exposed to scrutiny because of RTI applications, they are afraid to do the wrong thing and do not take a bribe. But many believe that such fear is now less than it was in earlier times.

Hence RTI plays a preventive role. However, it cannot result in catching an individual who demands and takes bribe. That role is played by CBI and ACB. Presently ACB is headed by DGP Praveen Dixit. He has made ACB very vigilant and dynamic. In this month (December) Trustees of Public Concern for Governance Trust (PCGT) of which I am Jt. Managing Trustee, had a dialogue with him. PCGT and ACB finalised the arrangement to launch a device in Whatsapp format to facilitate anyone to make a complaint on bribe-seekers to ACB from anywhere in Maharashtra. (Please see BCAJ issue of August 2014 for more on this device). On my request, Mr. Dixit has agreed to write for this feature in a month or two.

Crime Records:
The number of crimes reported in different government departments in 2014 has already seen a 104% rise than last year. Breaking its 10-year record, the ACB has registered 1,199 corruption cases from 1st January to 30th November, while the figure was 583 last year.

According to the Anti-Corruption Bureau data, the revenue department is the most corrupt department, where 297 cases were registered and 392 of its officials caught so far, followed by the state police department where 383 cops were arrested for taking bribes in 273 offences. The gram panchayat department had 171 of its officials booked for graft in 89 cases, while 118 and 53 corruption cases were registered against urban development department and the BMC officials respectively. A total of 71 officials for the education department have been caught.

“Unscrupulous officials do not spare the challenged or senior citizens. Corrupt babus don’t care if their victim is disabled, for whom life is a struggle every day. They just want their needs to be satisfied.” Said DGP (ACB) Praveen Dixit. “Due to the awareness, more people are reporting such offences and so, the number of registered cases has also risen.”

Reasons for seeking bribes:
The reasons for seeking bribes vary from renewal of licenses, deleting the names of deceased persons from property cards, leniency in criminal cases to even getting sanction for maternity leave. Cases documented in the ACB report show the bribe amount has varied from as little as Rs. 50 to over Rs. 2 lakh.

Citizen’s role to contain bribeseeking:
Uday Aphale, deputy SP (ACB), Kolhapur said mere arrest of corrupt employees would not stop corruption. “People should be aware of their rights and fight for them. If people decide to not pay a bribe, the government employee will not dare to ask them for money. This is a key way to keep a check on corruption,” he said. He said awareness drives among visitors to government offices have helped increase the number of complaints registered.

Business & Graft:
Gone are the days when multinationals could book bribes paid in far-flung countries as tax-deductible expenses. These days would-be palm-greasers have to contend with ever-tougher enforcement of old laws, such as America’s Foreign Corrupt Practices Act of 1977, and a raft of new ones on countries from Britain to Brazil.

As policing is stepped up, however, much about the practice of bribery remains murky. The OECD’s first report of the subject, published on 2nd December 2nd, sheds some light by analysing more than 400 international bribery cases that have been brought since the antibribery convention of this group of mostly rich countries came into force in 1999.

Some findings confirm what was known or suspected. The most bribe-riddled sectors are oil, gas, mining, construction and transport. At the other end of the spectrum, financial services and retailing are fairly clean. Most bribes go to managers of state-owned companies, followed by customs officials. And America leads the enforcement pack, with 128 cases that resulted in sanctions.

But the report also undermines some common beliefs. Bribery is not a sin of rogue employees or poor countries. In 53% of cases, payments were made or authorised by corporate managers. More than 40% of the time, the bribe taking official was in a developed country (though this figure is probably inflated by rich countries’ greater willingness to criminalise bribery and co-operate with cross border investigations). Authorities are often alerted by firms themselves: those that co-operate quickly are often treated leniently.

The cost of bribery varies by industry. Builders pay a modest average of 4% of transaction’s value, extractive companies a hefty 21%. Add to that the rising costs of paying penalties and conducting internal probes – these cost Siemens, for example, $2.4 billion when it was mired in a graft scandal a few years ago – and bribery starts to look bad not just for reputations, but also for bottom lines.

—The Economist

Transparency International Corruption Perception Index 2014:
The Corruption Perception Index ranks countries and territories based on how corrupt their public sector is perceived to be. A Country or territory’s score indicates the perceived level of public sector corruption on a scale of 0 (highly corrupt) to 100 (very clean). A country or territory’s rank indicates its position relative to the other countries and territories in the index. This year’s index includes 175 countries and territories. First 10 least corrupt countries:

India ranks at 85 along with 8 other countries with thesame score 38. They are:

Asian Countries: India and its neighbors

The above chart shows that only Bhutan is much ahead in containing corruption. All other 7 countries are behind. India has improved its rank, while for China it is other way round. For the first time in 18 years, India ranks as less corrupt than China. India ranks an otherwise depressing 85th, but has improved by jumping 10 places. China, on the other hand, has fallen 20 places to rank No. 100 despite Chinese President Xi Jinping unleashing a massive campaign against corruption and arresting a number of high profile politicians and military leaders.

-Jose Ugaz, Chair, Transparency International writes: “Countries at the bottom need to adopt radical anticorruption measures in favour of their people. Countries at the top of the index should make sure they don’t export corrupt practices to undeveloped countries.”

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