Implementation of policies more important than drafting laws

Economic Times, October 31, 2011

By Pradeep S Mehta

The debate on corruption triggered by the Anna Hazare movement, the apex court and the country’s auditor and vacuous political noises, along with silent demonstrations by citizens, has set in motion a process of addressing the morass in our country. The debate and unravelling of scams itself has downsides of policy paralysis, investor scepticism and general insouciance, which we can ill-afford. Therefore, catharsis must begin from confession.

An eminent group of citizens, comprising of Deepak Parekh among several other notables, has sent a second open letter early this month to the Prime Minister to end the policy uncertainties, tackle galloping corruption, introduce online auction of natural resources, etc, which should hopefully add momentum to the process of confession and catharsis.

Rent-seekers turned to natural resources after the reforms in the 1990s brought to an end the licence-permit-quota raj to a large extent. The natural resources include land, forests, minerals, oil, spectrum, etc, as the picking ground for their greed and need. I say need, because they have to fight elections that cost humongous amounts nowadays. But state funding for elections will never be a panacea, because that will not satisfy their greed. Just take a look at the voluntary disclosures by ministers, which clearly show how rich they have become ever since they came into politics. And that is just the declared income and not their wealth, which is much more than their declared wealth, salted away in salubrious climes abroad. Why have exports to the Bahamas suddenly shot up 100 times in two years, from $2.2 million in 2008-09 to $2.2 billion in 2010-11? The answer: round tripping of black money stored abroad.

Another method of illegal wealth creation is our systems. Wherever discretion to the powers continue to operate, they have reached alarming proportions. Many high court judges take bribes in double-digit lakhs to write a favourable order. No court babu will move a file without a standard bakshish. The list is endless, but the gratification levels are steadily going north, with the excuse that if politicians can make thousands of crores, what is a few lakhs.

The loss to the nation on account of the 2G spectrum scam has been estimated at 1,76,000 lakh crore, an incredible figure. But the fact is that bribes in thousands of crores were paid through various means to get the licences without going through the competitive bidding process. Now the government is talking about transparency in spectrum allocation under a new telecom policy.

Few other things have started happening to address the morass, but they too are moving slowly due to the inertia, while rent-seekers and wheeler-dealers dominate the show. The spectrum conspirators are behind bars, though yet to be convicted. Even if they are convicted, our laws do not allow the disgorgement of their ill-gotten wealth. Very recently, Bihar has seized a corrupt bureaucrat’s house and turned that into a school for the weaker sections. But that is perhaps a rare thing.

In between all this, an RTI application unearthed an inter-ministerial advice by the finance ministry to proceed with caution in the 2G scam. That created quite a furore. Suddenly, there were calls made to amend the RTI Act. Once again, the RTI Act was blamed for thepolicy paralysis. But wise counsel prevailed that one cannot unwind or dilute the RTI law. After all, why should honest officers be afraid. Fortunately, the RTI law has helped improve both transparency and, in turn, probity, which is what it aimed at.

Babus dealing with public procurement functions are reported to be causing a loss estimated at 27,500 lakh crore per annum, or about 20% of our GDP. Our procurement systems are not only opaque but out of sync. Just because the scams are not a one-time affair, they do not catch the public’s attention unless they are funny ones like the CWG buying toilet rolls for 4,000 each. This is somewhat like the huge number of road accident deaths in our country, 1.18 lakh in 2008, which cost the GDP about 3%, but they don’t hit the headlines. The death figures translate to a number of people dying if two Boeing 737s (with about 160 passengers on-board) crash everyday, and even one air crash hits the headline news. As another step forward, the government has set in motion reforms in procurement policy and also drafting a procurement law.

To ensure sound allocation of natural resources, the government has prepared an excellent draft report. Alas, the same is not in the public domain. The report seeks transparency and fairness in allocation of business licences through competitive bidding, etc. The reason that this is not yet public is because of many dissensions within the government for obvious reasons. The committee headed by Ashok Chawla, inter alia, comprised of the secretaries of the government dealing with these natural resources so that there can be a consensus report.

Unfortunately, that did not happen. Sixty-eight of the 81 recommendations have been accepted but a few relating to coal, petroleum and land are still to be agreed upon. Evidently, political economy factors are holding up the proposal to discipline these sectors. In the ultimate analysis, it will be the implementation of all these measures that would matter more than drafting policies, laws and regulations. Only then can we achieve catharsis.

Pradeep S Mehta Secretary General, CUTS International

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