Corruption is not the problem – but rather, Corruption, Nepotism and Special interests are the symptoms of a deep-rooted malaise in India’s government system that is threatening to dismantle and derail the concept of public life and democratic government that our founding fathers envisioned.
The need to usher in better Governance is not an academic issue nor is it only about morality and probity in public life as discussions on corruption invariably boil down to. Good governance has very tangible benefits in terms of money! It improves fiscal position of and allows Governments to more directly impact the lives of more people in our country that need government support AND also creates a more sustainable and prolonged growth cycle by making more and more investments for the future. A good example of benefits of governance - is the impact this year of the decision to auction 3G/BWA spectrum despite pressure and lobbying from many quarters, including the leaders of business – which garnered the Government approx. Rs.1,40,000 crores – representing about 14% of the total Budget outlay, which has helped in the faster fiscal consolidation despite increased spending.
For India to develop faster and do better as an economy, it is, therefore, important to foster the culture of honesty and trustworthiness. Hence, to cut down on corruption and pilferage, we have to design policies in such a way that there is no incentive for ordinary citizens and the enforcers of the law to cheat.
The problems of Governance arise from the issue of “unfettered discretion” - Unfettered Administrative discretion in dealing with Public assets and unfettered administrative discretion in doling out Government contracts and spending with very little oversight and failure/compromise of institutions like Independent Regulators – leading to repeated instances of public policy and regulatory capture by vested interests. The current telecom scam is such an example of compromised regulators, public policy capture by vested interests and administrative discretion being used to the fullest to benefit some private interests.
The solutions for this are obvious – a value for money culture – a culture that reinforces the truth that Government is only a trustee of public money and assets. The spending of this money and the handling of public assets must always pass the test of national good, and not in the misused public interest argument that’s often used to give scarce national assets to private interests.
Four Point Strategy to address Corruption
A four point strategy for this can be outlined as follows:
Firstly, Statutory disclosures by all Government departments on commercial decisions. Disclosures are the best way to keep Government departments honest. Knowing that their financial decisions are available for media and people to scrutinize without relying on RTI - is a great way to encourage honesty.
Secondly, More effective ministry oversight on all decisions relating to Spending, contracts and public assets.
Thirdly, increased use of technology for ensuring better disclosure and expenditure management.
Fourthly, A relook at the Independent Regulatory institutions.
These four, if pursued, will be catalysts for introducing a culture of fiscal responsibility and value for public money within the Government.
There will be the usual arguments made that these would slow down administrative decision making – But those should be brushed aside. To quote John F. Kennedy – “The problems of this world cannot possibly be solved by skeptics or cynics whose horizons are limited by the obvious realities. We need men who can dream of things that never were.”
Elaborating on the last issue of the Regulators in recent years, it pains to see independent regulators become parking spots for bureaucrats. They cannot and should not become another layer of bureaucracy. We must create motivated, public service oriented and specialist people who want to serve as Independent Regulators.
Telecom is a classic case where very poorly equipped or people with questionable motivation were put as regulators and they have presided over the public policy capture by vested interests. The Supreme Court also has said recently that the CVC need not be chosen from retired bureaucrats. Creating a set of credible regulatory institutions is one of the most important requirements of delivering governance and improving the state of Governance.
We all know that India has both the resource base and the human capital that is necessary to transform itself into an economic superpower. However, corruption is proving to be the biggest hurdle on that journey. It is time that the govt. formulates an effective strategy to uproot it, once and for all.
Until next time.
Cheers!!!
Signing off
Shauvik.
The need to usher in better Governance is not an academic issue nor is it only about morality and probity in public life as discussions on corruption invariably boil down to. Good governance has very tangible benefits in terms of money! It improves fiscal position of and allows Governments to more directly impact the lives of more people in our country that need government support AND also creates a more sustainable and prolonged growth cycle by making more and more investments for the future. A good example of benefits of governance - is the impact this year of the decision to auction 3G/BWA spectrum despite pressure and lobbying from many quarters, including the leaders of business – which garnered the Government approx. Rs.1,40,000 crores – representing about 14% of the total Budget outlay, which has helped in the faster fiscal consolidation despite increased spending.
For India to develop faster and do better as an economy, it is, therefore, important to foster the culture of honesty and trustworthiness. Hence, to cut down on corruption and pilferage, we have to design policies in such a way that there is no incentive for ordinary citizens and the enforcers of the law to cheat.
The problems of Governance arise from the issue of “unfettered discretion” - Unfettered Administrative discretion in dealing with Public assets and unfettered administrative discretion in doling out Government contracts and spending with very little oversight and failure/compromise of institutions like Independent Regulators – leading to repeated instances of public policy and regulatory capture by vested interests. The current telecom scam is such an example of compromised regulators, public policy capture by vested interests and administrative discretion being used to the fullest to benefit some private interests.
The solutions for this are obvious – a value for money culture – a culture that reinforces the truth that Government is only a trustee of public money and assets. The spending of this money and the handling of public assets must always pass the test of national good, and not in the misused public interest argument that’s often used to give scarce national assets to private interests.
Four Point Strategy to address Corruption
A four point strategy for this can be outlined as follows:
Firstly, Statutory disclosures by all Government departments on commercial decisions. Disclosures are the best way to keep Government departments honest. Knowing that their financial decisions are available for media and people to scrutinize without relying on RTI - is a great way to encourage honesty.
Secondly, More effective ministry oversight on all decisions relating to Spending, contracts and public assets.
Thirdly, increased use of technology for ensuring better disclosure and expenditure management.
Fourthly, A relook at the Independent Regulatory institutions.
These four, if pursued, will be catalysts for introducing a culture of fiscal responsibility and value for public money within the Government.
There will be the usual arguments made that these would slow down administrative decision making – But those should be brushed aside. To quote John F. Kennedy – “The problems of this world cannot possibly be solved by skeptics or cynics whose horizons are limited by the obvious realities. We need men who can dream of things that never were.”
Elaborating on the last issue of the Regulators in recent years, it pains to see independent regulators become parking spots for bureaucrats. They cannot and should not become another layer of bureaucracy. We must create motivated, public service oriented and specialist people who want to serve as Independent Regulators.
Telecom is a classic case where very poorly equipped or people with questionable motivation were put as regulators and they have presided over the public policy capture by vested interests. The Supreme Court also has said recently that the CVC need not be chosen from retired bureaucrats. Creating a set of credible regulatory institutions is one of the most important requirements of delivering governance and improving the state of Governance.
We all know that India has both the resource base and the human capital that is necessary to transform itself into an economic superpower. However, corruption is proving to be the biggest hurdle on that journey. It is time that the govt. formulates an effective strategy to uproot it, once and for all.
Until next time.
Cheers!!!
Signing off
Shauvik.
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