Where the laws are many, people are poor and corrupt. - Unknown
For the last few years a consensus is evolving that corruption is the key problem facing the nation and all we need is a strong law like the Lokpal Bill to solve this problem. A new political party has taken birth entirely on this premise and there is hardly any party which officially disagrees with this thesis. A whole generation of young Indians is being set up for a life of cynicism and disappointment since the first political cause with which they have associated is the elusive corruption free India. The cause is worthy and worth applauding but reminds us of utopian Marxist ideals which appealed to young people in a similar way. It does matter how we frame our goals. Paradoxically, if the goal were to reduce corruption, we would make much more progress than we would when we seek to abolish it. Unfortunately, no one is making a case that perhaps we should repeal, and reduce the number of laws to reduce corruption.
Our civics books in school proudly proclaim that we have the longest written constitution in the world. This fact should be, at best, mentioned very sheepishly. In addition, there are the many laws passed by the state assemblies. As of now there are 116 new bills pending in the parliament to add to the already long list we have. Not even one of these bills seeks to simplify, merge or repeal any older law. Our judicial capacity itself is constrained but the myriad laws are one reason for the 3 Crore pending cases we have in India. In many of these cases, one of the parties is the government, which is the biggest litigant in India. An outcome of this state of affairs is that people will pay up anything to avoid going to the court. The term 'Court-Kachheri' in northern India is synonymous with the ordeal of Sisyphus who was condemned to roll a boulder up a hill forever. Despite this, the method of choice chosen in India right now for distributing welfare to citizens is to create a legal right, which will allow a citizen to file a case against the government for failing in its 'duty'. Keeping aside the disagreement on welfare economics (now that we are doing it), choosing a way of implementation, which has corruption and inefficiency in its DNA, seems most evil. For which citizen is eager to be number three Crore and one in any queue? Mostly a citizen will choose to grease a few palms to get things done rather than even find out where the court is. Perhaps we will soon see the Right to Justice Bill that will create an infinite loop, which would crash this 'rights based approach to welfare'.
Not only do we have too many laws, the laws themselves are very tediously drafted. The exhibit A for this is the Karnataka Labour Welfare Fund Act of 1965 which is itself modelled on the Bombay Labour Welfare Fund Act of 1953. If you have never seen an Indian Act, this is a good specimen to develop your distaste. The act mandates collecting from every establishment (the act painstakingly defines what it considers an establishment) a sum of Rs 18 per employee (6 as employee contribution and 12 as employer's) per year. It is long (around 14 pages), creates opportunities for corruption for all stakeholders, doesn't do anything useful and costs more to comply than the benefit it intends to provide, thus being of net negative contribution to the Indian economy. Due to such kind of drafting in a law, a simple change in the amount of money to be collected needs an amendment to be passed. If we notice the composition of the board constituted in this act, we will see how political patronage is distributed with multiple people. This is one reason for the logjam on labor reforms in India. If you are running an organisation (for-profit or not-for-profit) with more than 50 employees, most likely you are violating this law.
Let's take a thought experiment: keeping revenue considerations aside, will corruption in India increase or decrease if income tax were to be abolished? Although we do have global proponents of moving to an expenditure tax only regime (in simple words only GST/VAT and no income tax), this debate is not mainstream in India right now. Let's take a more real example, did deregulation of gold imports in 1991 increase or decrease corruption? Not to mention that it also killed smuggling of gold which the recent controls may revive again. The answers to these hypothetical and real questions are easy: lesser laws. Perhaps a good practice is to include a sunset clause in every law such that it expires unless explicitly extended. Corruption is one of those wicked problems with no single 'Ram Baan' solution. It is evident though that we can reduce it with lesser, simpler laws and regulations.