Thoughts on economics and liberty

Tag: Corruption in Indian politics

What more proof of the corruption of Indian MPs and MLAs do you want?

I've had direct evidence of WADS OF CASH in suitcases carried by the team of Rajiv Gandhi to Assam in 1985 (Rajesh Pilot was a key member of that team), and of DIRECT CORRUPTION by Hiteswar Saikia CM of Assam on many occasions including one in which he directly asked me in the cabinet room to select a particular cement supplier.

And DIRECT evidence of corruption by Jayalalitha and Mumbai BJP.  And of course hundreds of other cases widely known – both within my IAS colleagues and elsewhere through public contacts.

And yet, when I claim that MMS is TOTALLY CORRUPT, that Sonia Gandhi is totally corrupt, and that the ENTIRE set of MPs in India is TOTALLY CORRUPT, some "intellectuals" take offence, demanding proof. 

I ONLY BELIEVE IN MYSELF. My standards of proof are EXTREMELY HIGH. No hearsay for me. My eyes are proof. My ears are proof. My judgement is proof. I have said the truth all along.

And of course even Arvind Kejriwal and Kiran Bedi have said the same thing. And they are right on this.

But if you are still not convinced and need HARD CASH as proof (as if there isn't enough evidence of that floating around), here's one more proof: EC cancels Jharkhand RS polls after Rs 2.15 cr seized.

seizure of Rs 2.15 crore cash by Income-Tax authorities from a vehicle reportedly owned by the brother of one of the Independent candidates barely hours before polls.

What more proof is needed? 

It is well understood and widely documented that the electoral system is  DEN OF CORRUPTION. India's electoral system is totally anti-people.

The reality is obvious except to those who have bound their eyes with THICK WADS OF WOOL.

I would like us to fight for state funding of elections so that honest people have AT LEAST SOME CHANCE of contesting elections.

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When the river drinks up its waters

Retired Vice Admiral Admiral Barry Bharathan, a prominent member of the Freedom Team of India has written this excellent write-up which I thought deserves wide dissemination.


You are incredulous at first. You then scramble for buying up bottled water like the many who can afford it. You don’t want to know as to why the river drinks up the water. You look at someone who starts digging up a bore well with awe and admiration. You think that this will solve your problems. You simply do not want to hear or read anything about the water table.

God Bless Shri Anna Hazare. The debate is not about him or the movement that is being supported by many former bureaucrats, cops, lawyers, and other reputed leaders. The real issue is our readiness to discuss, study, enquire, inquire, debate on something that is below and beneath acceptable norms of administrative and civic conduct. It is akin to describing some woman as being a little pregnant. Human venality has no real answers. At best, it can be controlled. This is the mythical and historical truth from the time Homo sapiens came into being. 

All the clamour is our Nation’s admittance of helplessness. The common man is excited and naively feels that there would be rapid reformation. The government heaves a sigh of relief that it has an escape route in the form of the “LOK PAL”. Everyone is only too familiar that the survival angst of Indians invariably calls for short term temporary placebo solutions. We need pragmatic, acceptable quality rules of business that truly addresses the aspect of effective governance.

The concept of the LOK PAL appears laudable but is actually unworkable. Our venerated constitution so wonderfully written has certain basic contradictions. An example is article 39 which directs the state to secure many essentials for the livelihood of its people. Yet article 37 prevents the state from being taken to court if it fails to do so. Article 311 seeks to provide job security to government employees. Yet it has unwittingly made the “government servant” a “People Master. Productivity and performance statistics clearly show abysmal depths of administration.  We seem to want to catch the tiger by its tail!  We have a political party agnostic government system that remains unchanged over the last six decades. Opacity, diffused accountability, compartmentalized working is the norm since independence. Rules of business, regulations, encourage below the table adjustments. People are conditioned to be supplicant when it comes to dealing with essentialities of documentation for their very existence!   

The logic of the LOK PAL to oversee the functioning of the government, review the past misdoings, without any constitutional authority seems perplexing. Assuming that even this is done, how can anyone regulate, implement a system that is not designed for transparent rules of business. The lack of a viable management information system, the absence of any corporate management and the embedded DNA of a welfare state all render Governance sub optimal. Consequently corruption has been integral to our way of life.

The LOK PAL charter simply needs to be optimized by focusing on Governance and rules of business. What affects the day to day to life of the common human? Can we make the rules and regulations people friendly. Can we create internet information highways? Can we improve supply chain management in our towns and villages. 

The Politico-Legal-Bureaucratic-Military combine must seek to get its basics right. Corruption can be stripped by transparent, accountable practices. Let us give our people a sense of belonging, believing and being Indians.       

Most refreshing is the way people came together in a peaceful manner. This is the promise of India. Let us quench the thirst of the river.


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Please be clear: Jan Lokpal won’t catch the most corrupt: Sonia and Rahul Gandhi

I'm pleased at the positive outcome re: LokPal Bill. However, it is very important to keep things in perspective and to note three VERY IMPORTANT things:

A) As Shantanu Bhagwat of FTI has noted, the battle has been won but the WAR is not over. However, I suggest that Shantanu, in his eternal politeness and consideration for the venerable Anna Hazare, has grossly exaggerated the nature of gains made by the LP Bill. In my view, the war has not even begun. This is a cosmetic and essentially irrelevant “reform” at this primitive stage of governance systems in India. The war would need to reform a host of areas:

  • electoral
  • economic and social policy
  • among many, many others.

If the package of reforms is 100, then LP bill is not even 0.5 out of 100.

B) Second, we know that the biggest "fish" in terms of corruption in India is the Congress party, and the heads of the party, the Sonia and Rahul Gandhi combine, are the MOST corrupt people of India. Most corruption in India is at least indirectly controlled by them. True, most of this money is not used by them for personal "aiyashi" but for contesting elections, but such is the nature of corruption that no good cause can justify it.  

Let this be VERY CLEAR, and written in stone. The Jan Lokpal will NEVER be able to catch the biggest fish. That is because they will always transfer funds outside India and use underhand means at every stage. There will be an even greater outflow of corrupt money outside India – beginning NOW!

True, Baba Ramdev and his maniacal followers plan to shed the blood of thousands, but even that won't stop corruption. No, my dear Baba, your intentions are good, but you simply don't understand.

C) Finally, let this be very clear as well: Neither Sonia nor Rahul nor anyone else among the politicians in India is BORN corrupt, or otherwise criminally minded. It is the system that FORCES them to do such things. That is why I'm AGAINST witch-hunts and chasing after individuals, because when 99% of the politicians and 90% of the bureaucrats (and police, media, judiciary, etc.) are corrupt, what's the point in catching one or two people? What difference can it possibly make to the life of the common man?

Yes, LP can have an effect if the system reduces corruption to the minimal, say, to 5% of the total politicians and bureaucrats. Then, LP will have an effect. At the moment, it will merely kill a lot of small fish, and the big fish will escape [and I mean KILL, given the language being used by Ramdev's supporters].

Let us become mature enough (and capable enough) of understanding the true drivers of our system. That is not a trivial task. Let us be clear that our SYSTEM makes Indians corrupt. Indians don't have corrupt DNA. 

I regret that none of the leaders of the current mass movement display ANY understanding of the causes of corruption and misgovernance in India. That task of leading India to its great future that lies ahead will have to be shouldered by FTI. Of that there is no doubt.

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Reforms of Political Representation in India

While Equality (socialism) and corruption are lifelong buddies and room-mates, Freedom (capitalism) and corruption are arch enemies. A free India can’t condone even the tiniest bit of corruption. We must become the least corrupt country in the world if we want to be called free. The following four actions will help to eliminate political corruption and also dramatically improve India’s governance:

  • Raise the wages of MPs and MLAs at least by a factor of ten while simultaneously getting rid of all of their ‘perks’. Let us pay the Prime Minister of this great nation at least what a middle level business executive of a very large multi-national firm gets, say Rs. 1 crore per year, and MPs Rs.20-30 lakhs each. As it is unpopular for politicians to raise their own salaries, we can help them by setting up an independent commission that would determine their wages. There is also atendency among politicians to add to their perks if their wages are kept low by public pressure – this is a significant problem for India. In India some MPs also allegedly sell some of their perks, such as their free air tickets. That is surely criminal. Perks are also expensive to administer. Let us therefore get rid of all perks once salaries are raised, and only reimburse actual expenses incurred on the job, for instance, eligible travel expenses. Let openness and transparency on such basic matters prevail in India; a free society can’t expect anything less than that.
  • We must fund our elections differently – through state funding. The purpose of the wages of MPs or MLAs is not to cover the expenses incurred during elections, but to pay them competitively for their responsibilities. Even if wages are hiked, we will still need to find a way to make the electoral expenses manageable. We can do so by state funding of elections. A simple and effective method that will pay Rs 25 or thereabouts, at current values, for each valid vote cast in favour of a candidate is outlined in Box 3. A system similar to this operates successfully in Australia, where about $2.10 (about Rs 66) is paid at present by the government for each valid vote polled by a candidate.[i]
Box 3 
State Funding of Elections
Let us revert to Mr Harishchandra’s original calculations. A small payment made for each vote polled by a candidate radically alters the expected financial burdens on candidates. It makes it viable for a much larger number of people to participate. The field of candidates changes from less than 1 per cent of the eligible population at present to potentially the entire adult population. Here’s how:
Let a payment of Rs X be made per vote polled, with n = 6 and θ = 0.02, as before.[ii] Mr Harishchandra expects 10 lakh voters to cast their vote at the election. His expected PVreturn now becomes:
With a government payment (X) of only Rs.8.39 per vote cast in his favour, Mr Harishchandra can expect to break even after spending Rs 20 lakhs of his own money on the election. This still leaves him with no income after repaying his loan. A payment of around Rs 25 per vote will make it practicable for Mr Harishchandra to contest the election, even with six serious candidates flanked against him. He is empowered by this method to take a calculated risk. The electoral fray now becomes a genuinecontest, not suicide.
Mr Harishchandra may, of course, still hesitate, since corrupt candidates will continue to spend huge amounts of black money without any accountability and threaten honest people should they attempt to contest. With strong auditing systems, anyone found using black money will be thrown behind bars. Further, over time, the new incentives created by state funding will allow many more honest and competent candidates to contest. There will finally come a turning point when morally challenged candidates will be shut out completely by the public which will only choose to vote for good candidates.
  • Third, we need to abolish election expense limits while simultaneously building extremely strong audit systems for monitoring the contributions received and expenditures made during elections.
  • Finally, a wider set of reforms of the electoral system will be needed, such as making public the property returns of our candidatesin the interest of greater transparency. These and other such reforms are touched upon in Chapter 6.

A One Rupee Freedom Movement 

The level of corruption in a society essentially depends on two factors: the opportunity available for corruption and incentive for corruption.
  • While I haven’t discussed the issue of opportunity in this chapter, our socialist regime – which empowers our governments to interfere virtually in each activity of ours – has clearly provided a wide range of opportunities for corruption in India to a wide range of political representatives and bureaucrats.
  • On the second of these factors, this chapter confirms that Indian politicians have a great incentive to be corrupt.
This is also an apt place to inform the world that not all Indians are moral pygmies. We do continue to have a large number of honest people that the world never gets to see or hear of, because the combination of our socialism and shoddy electoral system prevents anyone but the corrupt from rising to the top. Our system also breaks the back of the honest; completely demoralizes them. The world will, of course, ask us: ‘You’ve had 60 years of independence, so why can’t you get your own house in order?’ To which we must ask the world to be patient, for we have only recently started recognizing the causes of our problems. And we have hardly started our journey on the path to freedom. Our citizens are very sleepy headed and not yet awake either.
We, the sleeping citizens of India, must wake up and take responsibility for allowing these major flaws to develop in our democratic system of governance. We are also responsible for letting the weeds of socialist corruption overwhelm the fledgling tree of democracy and freedom in India. To scare the wits out of our corrupt representatives and to make them start paying attention, let us begin by going to our district officers today, and, for only one rupee each, get our own copy of a recent set of electoral accounts. Then, let us study these accounts and raise the issues we discover in our local press, and write to the Election Commission. That will be a very effective way to start a real freedom moment for India. We can call it the one rupee freedom movement.
This is an extract from my book, Breaking Free of Nehru.

[ii] It is assumed as before that Mr Harishchandra expects to poll one vote more than 1/6th of the votes polled, and therefore will not forfeit the security deposit.

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