April 9, 2011
How to remove corruption from India – the ACTUAL solution
(Note: Read these later posts first – Are you serious about removing corruption? Then follow the POSITIVE solution – 13 August 2011 and this: Anna can’t guarantee ZERO CORRUPTION. I can, and do 24 August 2011)
As a counter-point to Anna's over-hyped work re: the LP Bill (which appears likely to get some traction, given the mass mobilisation involved), let me extract the key reforms from my book, Breaking Free of Nehru (BFN) to outline what India actually needs to implement in order to remove corruption.
Basically, we need to make India's governance incentive compatible - to ensure that interests of the elected representatives are aligned with the interests of the citizens.
Note that the reforms outlined below are only PART of the total package and won't work in isolation. And do note the richness of thought and depth involved in this way of thinking, compared with the shallow thinking that underpins the LP Bill. If things were as easy as passing a Bill, India would have resolved its many problems long ago by legislating them away!
Extract from chapter 6 of BFN
Being committed to a squeaky clean government, I cannot afford the luxury of Cabinet colleagues being paid poorly. As an interim measure, my Cabinet will significantly increase the salary of members of Parliament. State Governments will also be funded for similar increases for their assemblies and councils. The monthly wage of MPs and MLAs would go up from the current Rs 33,000 to, say, Rs 3,50,000, with proportionate increases for Ministers. There will also be an annual adjustment based on the cost of living. Simultaneously, all perquisites and indirect benefits will be abolished.A system of performance bonuses for all MPs and MLAs will be introduced:
- For every 1 per cent increase in per capita GDP growth beyond 5 per cent per annum, all our representatives will get a one-off 5 per cent bonus.
- For every 1 per cent permanent reduction – defined as a reduction sustained for two years – in the number of people below the poverty line, MPs and MLAs will get a permanent 1 per cent increase in their base salary. Once the negative income tax system is fully established, the entire reduction in poverty will be incorporated permanently into the base salary.
- For every ten ranks that India rises on a sustained basis of two years in Transparency International rankings, there will be a 5 per cent one-off bonus.
- There will be a permanent 20 per cent increase on base salary upon India’s becoming the world’s least corrupt country for two years in a row.
- The sum of these bonuses will be limited to a total of 50 per cent of the base salary in any given year.A virtuous cycle of morality will thus be established which will not only eliminate poverty but overcome the vicious cycle of corruption established by Nehruvian socialism. Legislation will also be introduced to create a genuinely independent Political Representative Incentives Commission charged with research on, and making recommendations on the following:
- a compensation mechanism for peoples’ representatives that will eliminate all reasonably foreseeable incentives for corruption, or will otherwise promote the freedom of citizens; and
- any matter related to the mechanisms of political representation, such as electoral laws.The Commission would consult widely with the community and look at international best practice. The recommendations of the Commission, made at its sole discretion and whenever it considers fit, would bind the public exchequer, i.e. there will be no voting on its recommendations. This will eliminate the dilemma faced by political representatives who find the public or media unsupportive when they vote for an increase in their own salaries. Such lack of public support creates strong incentives for subterfuge through a host of ‘perquisites’ and underhand dealings. The independent commission will bring sanity into a matter as fundamental and important as this.
High Priority Electoral ReformInterim electoral reforms based on the arguments outlined in Chapter 4 would be introduced in Parliament; things such as:
- repeal of the requirement in the Representation of the People Act for Indian political parties to swear allegiance to socialism;
- removal of limits on political fund raising and expenditures subject to stringent disclosure. These disclosure requirements will include third party audits and audit by the Election Commission. There would be penalties of up to Rs 10 crores and jail terms of up to three year for failures to accurately report on and declare all receipts and expenditures related to political purposes. Penalties for making unauthorized political expenditures on behalf of another person would be increased to Rs1 crore along with a jail term of up to one year;
- state funding of elections (being retrospectivefor the elections that would have led to the formation of my government) would be introduced. Candidates who secure more than one-twentieth of the valid votes polled will be reimbursed Rs 25 for each vote polled on a formula linked to the population and geographical extent of the constituency, normalized to an assumed 100 per cent voting rate. Surveillance will be strengthened through video cameras in polling booths and other security measures taken, as well as very significant penalties imposed, on people who engage in booth capturing; and
- the security deposit for elections would be increased to Rs 5 lakhs from the current Rs 10,000, and forfeited when less than one-twentieth of valid votes are polled by a candidate. This lower forfeiture limit will allow many more candidates to contest, while the much higher security deposit will deter non-serious candidates.There is clearly some arbitrariness in these numbers which will need to be fine-tuned over time to ensure that the gate is kept open for serious candidates but shut out for frivolous ones.
(Given the popularity of this blog post on Google search engine, I'm also providing the info that I've provided separately, here).
In addition to my book, Breaking Free of Nehru, which has extensive discussion of this matter (including solutions), the following ILLUSTRATIVE blog posts throw light on this matter:
The problem of corruption
- The Iceberg of Indian Corruption
- How can Indians possibly believe that MMS is upright?
- India sold out by CPI, Congress and our press to the USSR
- Vohra Committee Report, 1993
- Congress and BJP are equally corrupt
- Is this a joke? Rahul Gandhi honest?!
- Corruption in Indian politics
- Corruption in the Indian media
- Corruption in the Indian judiciary
- Not one reason to be honest
- Not one reason to be honest – Part 2
- Not one reason to be honest – Part 3
- Not one reason to be honest – Part 4
- Not one reason to be honest – Part 5
- How to remove corruption from India – the ACTUAL solution
- Accounting of Political Party Funds and Election Expenditure
- The dramatically over-hyped faith in the Jan Lokpal Bill
- This flimflam about Jan LokPal bill won’t clean India’s image
- Please be clear: Jan Lokpal won’t catch the most corrupt: Sonia and Rahul Gandhi
- The CVC is a sham – let’s just shut it down
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