Corruption, Indian style

November 30, 2010

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EVEN those who continue to believe in the idea of Pakistan — and I count myself among them — cannot but accept the fact that that while India and the 'idea of India' have taken off, Pakistan continues to slip, falling rapidly behind its now prosperous neighbour.

The idea of Pakistan to which I refer has many meanings attached to it. I touched upon this subject in my article 'History must not lie' in this space earlier this month. For me the idea that a separate political entity was needed that did not have to contend with the weight of the Hindu majority made sense in the late 1940s.

Whether this idea will make sense ultimately will have to be left to the judgment of history. India pursued a different idea: for many leaders involved in the movement for gaining freedom from the long rule by the British it was sensible to craft a political system that would allow space to many diverse people. Diversity in India came in many forms — religious, linguistic, ethnic, caste, geography etc. There cannot be any doubt that a few hiccups notwithstanding, India has been able to work that idea.

It is quite remarkable that a Sikh has been the country's prime minister for six years and that an Italian-born woman is by far the most powerful political figure in the country. On the other hand, the Pakistan idea is still under test. For the last several years, the Pakistani state has been failing its people: the proportion of people living in absolute poverty has been steadily increasing and has probably touched 40 per cent. If that is the case the level of poverty has touched a new record in 50 years.

I have been to India since I wrote the article mentioned here. I went to speak at a seminar organised by the Indian Council for International Economic Research where I was invited to speak on a provocative subject of 'Has the Pakistani economy failed?'

My audience included young people from the Saarc nations. Pakistan was represented by two young women who held their ground on a variety of subjects. Since I thought my answer to the posed question would interest my readers, I covered it in an article that appeared a week ago. Today I deal with another subject which concerns the role of the institutions of the state in handling large-scale corruption, a problem that is of great concern in both countries.

During my brief time in New Delhi, newspapers were full of stories about what had come to be called the Raja affair. Until a couple of weeks back, A. Raja from the state of Tamil Nadu was a minister in the Manmohan Singh cabinet, in charge of the portfolio of telecommunications. This is an important area of government responsibility because of the enormous economic rewards available to those who are able to secure the necessary bandwidth from the government for their operations.

India has one of the most rapidly growing telecommunications systems in the world with the penetration of cellphones increasing by the day and thus bringing in hundreds of millions of people into the expanding networks. China is the only country that has done better than India in terms of the number of people reached.

Giving the telecommunications portfolio to Mr Raja was part of the deal that Manmohan Singh struck with the Dravida Munnetra Kazhagam (DMK), a powerful party in the state of Tamil Nadu, in order to form a coalition government at the centre. The DMK has 18 members in the lower house of the Indian parliament and their support is needed for Congress to remain in power. The DMK's powerful chief minister M. Karunanidhi wanted the telecommunications portfolio for his party because of the leverage he could exercise on his constituency.

Mr Raja took up his position when India was preparing to auction licences for the 2G spectrum, the second-generation bandwidth system, which allows hand-held devices such as cellphones to do much more than was possible under the older system. The minister apparently ignored the rules in awarding the contracts to what appeared to be favoured companies. According to a report prepared by the comptroller auditor general (CAG) and tabled in parliament a day after the minister quit his job, 85 out of 122 licences granted were illegal.

According to the report “Raja issued a press release at 2:47pm on Jan 10, 2008 giving just 45 minutes notice to the companies to assemble at the department of telecommunications to collect response letters and furnish various guarantees. It was clear that some companies had been given prior warning”. Several companies turned up with financial guarantees that pre-dated the government announcement by several days. It seemed that they had been informed of the action the minister was to take. The loss to the exchequer was calculated at a staggering Rs1.76 lakh crore.

What this incident points to is not the staggering size of corruption that was involved but that there are systems and accountability institutions in place to deal with those who go off the track. Not only was Mr Raja forced out of his lucrative position by a report prepared by a government agency, the opposition is now pushing for the establishment of a parliamentary committee that would further investigate the affair. The Times of India

A. Raja was not the first high-level political person to fall. Earlier the Congress had forced Maharashtra chief minister Ashok Chavan to quit in the face of the Adarsh Cooperative Society scandal and removed Suresh Kalmadi from the party post in the light of controversies surrounding the Commonwealth Games. As wrote in an editorial, “the compulsions of coalition politics were hardly an excuse when the minister couldn't convincingly explain his decisions, which according to the CAG had resulted in the loss of government revenues to the tune of a staggering Rs1.76 lakh crore”.

What this particular case demonstrates is not that the Indian democracy is in danger when such a crime has been committed by a high political appointee. There are other cases being reported daily in the press including the collapse of an unauthorised building in Delhi which killed 50 people. What it shows is that there is plenty of big and small corruption in India but there are also institutions that kick into action when they come to light. This is where Pakistan needs to go.

The writer is chairman of the Lahore-based Institute of Public Policy, a former finance minister of Pakistan and former vice president of the World Bank.