x Abu Dhabi, UAETuesday 25 July 2017

India takes on corruption in a campaign not likely to be won soon

When the head of a country's anti-corruption watchdog is himself forced to resign because of corruption charges, you know that the problems are more than skin deep.

When the head of a country's anti-corruption watchdog is himself forced to resign because of alleged corruption charges, you know that the problems are more than skin deep. Yesterday PJ Thomas stepped down from his post because of pending charges dating from 1992. This is just the latest scandal to hit India's ruling Congress Party.

Week after week, revelations emerge showing business people, political elite and senior bureaucrats implicated in charges of pecuniary perfidy. The amounts are large, and the investigative officers appear to be operating with sufficient autonomy to scare political and business leaders. It is no longer business as usual.

Last year, India ranked 87th out of the 178 countries surveyed by Transparency International, an international anti-corruption watchdog. Anecdotal evidence suggests that the situation has worsened in the past five years.

Consider this: the former telecommunications minister is in jail awaiting trial over the apparently underpriced allocation of the spectrum for mobile telecoms technology. Officials of one of India's biggest business groups, that led by Anil Ambani, are being questioned over their alleged role in the telecoms scandal.

That scandal has not spared other businesses either. Leaked telephone conversations between members of India's ruling class and a powerful lobbyist have included other business leaders, politicians and media elite.

Social activists and professionals have marched against corruption. Close relatives of a former chief justice of the supreme court are being investigated for possessing property disproportionate to their known sources of income.

The chief minister of Maharashtra has resigned over the controversial allotment of expensive apartments in a high-rise tower to well-connected individuals. The head of a state-run aluminium company was shown on television being taken away by the police, detained over corruption charges.

Mauritius, a tax haven where many companies that invest in India set up their headquarters to take advantage of a dual taxation avoidance treaty, has promised to co-operate with India to help clamp down on Indian money held abroad illegally.

Corruption is hardly new to Indian public life. During the country's socialist phase, successive governments imposed, and then increased, controls on the economy, making it difficult for businesses to operate freely.

To set up businesses, raise capital, expand operations, import raw materials, export finished products or to keep rivals out, Indian businesses needed favours from the government, and they often obtained these by greasing palms. From 1966 to 1984, the period during which the late Indira Gandhi dominated India's political life, most of that time as prime minister, state controls increased and the business environment deteriorated.

When faced with complaints, Mrs Gandhi famously remarked that corruption was a global phenomenon. The late Rajiv Gandhi, her son, lost elections in 1989 over allegations of corruption over a defence deal. An expose by a newsmagazine showed that even when opposition parties came to power, corruption continued.

While this grand corruption is certainly bad, what hurts India's poor even more is the petty corruption - the municipal officer refusing to issue a permit to a hawker, a bureaucrat not registering a birth or a marriage, a public distribution official declining to authenticate the records of a family unless bribes are paid.

The amounts involved are small, but the people being asked to pay the amounts earn little.

A popular film, Lage Raho Munnabhai (Carry on, Munnabhai), popularised the idea of shaming the corrupt by adopting Gandhian tactics, and in some instances people have taken matters into their own hands. One non-governmental organisation has printed currency-like notes of no value, which users are encouraged to pay officials who demand bribes. Many Indians have anonymously written about instances when they have been forced to pay - or when they took a stand - as a kind of collective catharsis and therapy, so that they do not feel alone.

Indians have expressed outrage over corruption in the past. The assumption was that once the economy was liberalised, politicians would have fewer opportunities to demand bribes, since they would have less control over the country's economic processes. That assumption is sound in theory, but the lived experience in India is different: as the economy grows at a frenetic pace, corruption is also surging.

Economists have often estimated that India's so-called "parallel" economy may be at least as large as the official economy, and corruption may be adding huge costs to the economy, dragging down economic growth by perhaps two percentage points annually.

Corruption cannot be eliminated overnight: it requires cultural change, and that will take time.

But these investigations must succeed, prosecutions must follow, and punishment must be exemplary, if India's claim of operating under the rule of law is to have meaning.

Without a drastic overhaul, India risks its own potential for growth - and with that the aspirations of hundreds of millions of people. And it risks its own place as an emerging power in the global economy.

business@thenational.ae