Has 2010 been the country’s ‘scammiest’ year ever?

It’s a new year and you are dying to say ‘Happy New Year’ and mean it, but what do you get? Emails circulating round give an incomprehensible figure of $462,000,000,000. And people greeting you with an expression which says ‘Yet another scam!’
Has 2010 been the ‘scammiest’ year ever? It would certainly seem so if you followed the news.

Yet consider this: the ruling party has the country’s oldest political dispensation at the helm, one which is synonymous not only with our Independence but also with the idealism of Gandhi and Nehru. It is controlled by Sonia and Rahul Gandhi who, successfully or not, have tried to follow the same path of idealism.

The government, itself, is led by a man respected the world over for his scholarship, and in India for his honesty. His senior colleagues are equally able men of the same unquestioned integrity so that whether people agree with the way they are doing their job or not, no one will question their track record: Pranab Mukerjee, P Chidambaram, AK Antony, Kapil Sibal and Jairam Ramesh are men whose commitment and sense of fairplay is above debate. In such a scenario, how can we be in such a mess?

It’s a question that’s difficult to answer but we can safely start with the assertion that the top leadership being corruption-free is no guarantee of a clean government.

Coalition politics has often been given as an excuse for many cases of corruption in government. But however much the Karunanidhi family is in politics for the spoils of office, would the DMK have really pulled out of the government if the prime minister had held a tight leash on his errant ministers?

To take just one example, and an all-important one at that: during the allotment of 2G spectrum should the cabinet not have decided the modalities of allocation and left it to the minister to carry out the mandate? Couldn’t the prime minister have summoned his telecom minister and ensured that the fairest method (an auction) was followed? Given the crooked inventiveness of Maran and Raja, they would have still managed some fiddles but the damage to the country’s finances would have been far less.

In any case, it’s not just coalition ministers who have been accused of bending the system. In November last year the CBI wrote to the central cabinet secretary asking the government to transfer out SI Patel, an additional secretary-level officer with the ministry of road transport and highways.

He was posted as member (projects) in the National Highways Authority of India (NHAI). This request came because the minister Kamal Nath refused the CBI permission to initiate an enquiry against Patel. Why did he do that? The project in question was large: the 120km Nagpur-Betal Highway (NH 69), with a contract value of Rs10,800 crore. The CBI said it had sufficient evidence against Patel, so why was Kamal Nath protecting him? If you remember, in a part of the Nira Radia tapes, reference is made to Kamal Nath’s ‘Ten per cent’ (or was it 15?).

That, of course, may be loose talk and Nath may be innocent, but when he tries to protect one of his senior people, what does that suggest? Kamal Nath isn’t a member of a difficult coalition partner, but a staunch Congressman. So what stopped Manmohan Singh from over-ruling his minister, and giving the CBI the permission it wanted? It is clear, that the rot that has set in is due to a failure of leadership.

But even if Manmohan Singh decides to be more assertive, it will have a salutary effect only on contracts given by the Central government. The figure of $462,000,000,000 I mentioned earlier represents the sum of Rs20,556,848,000,000 (Rs20 lakh crore); black money that has been spirited out of the country between 1948 and 2008. This figure has been given by the US-based Global Financial Integrity, a non-profit research body that has been tracking illegal capital flight in the world.

According to Dev Kar, a former IMF economist who did the study, the illicit financial outflows from India have grown at 11.5% a year, and have done so even after the economic reforms of 1992. Everyone who believed that corruption would stop once the economy was opened up, and artificially created shortages were a thing of the past, have been proved wrong. Corruption just moved to other, even more lucrative, areas.

Is there a solution? The first is to find the right leaders for key jobs like Kapil Sibal or Jairam Ramesh or Prithviraj Chavan. The other is to cut down on discretionary powers given to ministries and CMs where the interface with the private sector breeds corruption.

A third step is to wind down unnecessary government ministries and organisations. The IT sector did spectacularly well because there was no ministry of IT. Do we need a ministry of steel? Do we need a department for prohibition? In short what we need is nothing less than an overhaul of government, a system of regulatory bodies and separate judicial benches to deal with serious frauds on the economy.

It’s a massive task alright. But then, $462, 000,000,000 is a massive figure.