One does not know whether to feel angry about the Congress party and its allies dissing the Public Accounts Committee. Mr. Murli Manohar Joshi, perhaps, gave them an opening. They seized it. This blog post in Wall Street Journal has it right.
Or, should one feel angry about Mr. Prashant Bhushan sharing a dais with Ms. Arundati Roy and calling the 1991 economic reforms the harbinger and fountainhead of corruption betraying lack of even a morsel of common sense, let alone economic wisdom?
This is from THE HINDU:
Speaking on the occasion, Mr. Bhushan said liberalisation had in its wake created opportunities for large-scale corruption that were not available earlier. “Liberalisation has given rise to a kind of business where the people in power can transfer public assets and natural resources worth several thousand crores to private hands in one shot and help create private monopolies through privatisation of water and electricity. It is exactly why we hear scams involving such huge figures today, though the Bofors scam in 1980s just involved Rs.64 crore.”
He was speaking at a at a “Public Convention Against Corruption” organised by the Coalition of Democratic Movements at Constitution Club here on Friday.
This is from Indian Express:
“Liberalisation gave rise to the industry of privatisation. In the name of privatisation, and disinvestment, the government is now in a position to transfer thousands of crores of public money in the public sector undertakings to private hands. A similar thing happens when the government gives away natural resources, like oil or gas, to private companies. This has led to the creation of a corporate mafia,” Bhushan said. He claimed that futures trading, “speculative” market mechanisms and “non-transparent financial instruments” were all contributing to corruption.
This is from the Wall Street Journal:
He said contrary to the belief that the liberalization of the economy would help reduce corruption by doing away with License Raj, it has increased by leaps and bounds since the 1991 reforms.
“What you have done is create huge demand for corruption and monstrous corporations which have assets of tens of lakhs of crores [millions of rupees] in Swiss accounts. They have managed to corrupt the whole system,” he said. “Every institution has become puppets in the hands of corporations.”
Mr. Bhushan said that this demand side of corruption needed to be tackled first for the success of the Lokpal, which can only check the supply side of the corruption: “This is an issue which needs to be simultaneously tackled.”
“The reason why corruption has been proliferating in this country is because on the one hand we have adopted policies which have created huge incentives for corruption,” said Mr. Bhushan, who did not discuss the allegations leveled against his father or himself, in his remarks. “On the other hand, we have allowed all our anti-corruption institutions to wither away and be totally ineffective.”
Corruption stems from the concentration of power. The State in India has so much power still vested in it. In areas it has vacated post-economic reforms, corruption and economic rents its agents used to extract have fallen or even disappeared.
Whether it is land-grab from farmers, land mining rights to favourite industrialists, allocation of spectrum, conduct of Commonwealth games, procurement of defence and other goods, distribution of food-grains through the Public Distribution System or the distribution of wages under the MGNREGA programme, corruption grows and flourishes where the State is involved and has the levers firmly in its hands.
Pre-1991, was there no corruption? Of course, plenty of it because discretion with the State was plenty and pervasive. The size was small because the economy was small. Numbers did not register. In a few quarters, the Indian economy would be of the size of two trillion dollars in nominal terms. The purchasing power of this GDP is perhaps worth three times more. Hence, corruption numbers are bigger.
The biggest grouse against economic reforms is that it has not trickled down. It is incorrect. There is discernible difference for the better. Absolute poverty levels have declined, literacy levels have shot up, infant mortality has declined and life expectancy has picked up. Yes, a lot more could have been done. But, think. Who is responsible for delivering on all these – education and health, etc. It is the State.
World over – developed or otherwise – the challenge is to harness and tap the gains of economic growth and spread it across a wide swathe of the population. The agent entrusted with the task is government. If the government is both inept and corrupt, then this task is not only not accomplished but is accomplished in reverse. The gains are returned to those who created it – the moneyed and the well-connected – via licenses, government procurement and blocking of competition for the favoured incumbents.
This was all pervasive pre-1991 and selective post-1991 but bigger in absolute size. It is the pre-1991 world that Mr. Bhushan wants to see restored.
They would vest the government with more discretionary powers and they would create even bigger authorities to oversee the government. You thought the government was the problem in India.
Economic reforms and economic liberalisation are not about being pro-business but about being pro-market. To be pro-market is to be pro-poor. The solution lies in whittling down the considerable discretionary powers that governments still have and hold them accountable on the exercise of the remaining powers and responsibilities that only they can exercise or discharge.
Indian politicians have conveniently interpreted liberalisation to mean pro-business and give-aways to be pro-poor. Thus India has it wrong both ways. Its ‘elites’ seem to know no better or they could not care less.
Our Prime Minister is now neither championing a responsive administration nor economic reforms. If only I could hear what his conscience is telling him…
This blogger wrote earlier in the year about saving one’s tears for India. It is just four months into the year. The tear-ducts have been overworked to exhaustion and our rulers and ‘elites’ have barely begun their show.