Celebrate India’s ‘poor’ corruption perception index

In reports that could cause Anna Hazare to make his case stronger and push the government into a corner, Transparency International’s Corruption Perception Index has been quoted in large sections of Indian media saying that India has ‘slipped’. Some such as Hindustan Times (and they’re not alone), would make Anna Hazare celebtrate.

“Corruption in India has worsened over the past year,” according to a new study released by Transparency International, a Berlin-based anti-corruption group.

Reporting on the corruption perception index, The Wall Street Journal reports, India scored 3.1 on a scale from zero to 10, where anything below five is bad news. Last year, India scored 3.3. The country’s rank is better than Pakistan (No. 134) and Nepal — which at rank No 154 is perceived to be the most corrupt country in South Asia.

“India ranked 95th in the list — lower than China, which scored 3.6 points and ranked 75th,” said the Hindustan Times.

“Corruption in India has worsened over the past year, according to a new study released by Transparency International,” said the Hindustan Times.

Hindustan Times has it wrong; corruption may or may not have worsened — and the study by TI does not say that corruption has worsened. What it says is that the perception of corruption has worsened. Before we get to the why, let’s do a check on what the Corruption Perceptions Index (CPI) is.

“The CPI ranks countries/territories based on how corrupt their public sector is perceived to be. It is a composite index, a combination of polls, drawing on corruption-related data collected by a variety of reputable institutions. The CPI reflects the views of observers from around the world, including experts living and working in the countries/territories evaluated,” says TI.

The misinterpretation committed here is much like the common misinterpretation of crime figures.

In a country like India, rape, for example, was not commonly reported a few decades ago. Now, thanks to the confidence of the woman and changes in society, more and more women are lodging complaints of rape – and the incidents of rape ‘seem’ to go up.

In the case of corruption, thanks in large part to Anna Hazare and his movement, the past year has seen a dramatic increase in the media coverage of corruption.

Corruption is in every conversation, it dominates prime time news television and the front pages of newspapers and the covers of news magazines. Ministers and other high profile government and private sector executives have been arrested. “The lack of public accountability has been recognized as a major problem,” Transparency International’s managing director Cobus de Swardt, told Reuters. Anna Hazare’s movement is founded on, and spurred by his, and the Indian citizen’s, demand for public accountability.

“The last 20 years have seen pockets of that (grassroots action), but it is arguably now in the Arab Spring and the Indian Summer where it is the most widespread and very much driven by good governance demands,” Cobus de Swardt continues in the Reuters report.

The demand for accountability and good governance in India has reached a crescendo which is reflected in the media’s focus on these areas.

Take today’s newspapers as an illustration. The Times of India has a corruption-related story (Lokpal) screaming from the front page, a front page pointer to a 2G related story under the masthead, the 2G story itself on page 13, a story on the Adarsh scam on page 8, and a story on the harassment of a businessman by a policemen on page 12.

The Hindustan Times has a story on how the BMC wasted Rs 21,000 crore over the past 5 years on road-building and a story on the Lokpal on page 1 (with detailed full page coverage on page 2), a story on the CM’s decision to cut back on his powers to allot flats on page 9, and a vox pop on page 13 where four out of five respondents speak of the negative impact of corruption on India’s growth.

Corruption dominates news — and conversations — and worsens the perception of the levels of corruption in the public sector.

Indians should celebrate the numbers that TI’s CPI throw up. It’ll be some time before the country’s current obsession with corruption and Anna Hazare’s movement and the passing of the Lokpal Bill, actually causes corruption levels to come down.

Till then, the perception should keep increasing.

Corruption: The change we need

Corruption has been on the mind of every Indian these last few months. Thanks to Anna Hazare, a scourge that has been engulfing and destroying our polity is finally centrestage. The information and opinions thrown up in the wake of the agitation have generated a debate that needs to be taken to a logical conclusion if we are to reduce this overpowering problem.

While it was generally believed that the end of the licence raj and protectionism would see a reduction of the parallel black economy and competition would break the unfair political-criminal-business nexus, the reality has been vastly different. Corruption has become worse. According to the 2010 figures of Transparency International, India has more black money than the rest of the world combined. The recent scams - 2G and Commonwealth Games - have involved unimaginably large sums of money, and have scarred the mightiest and the noblest.

The voracious appetite of our political leadership and bureaucracy for money to fund elections has fuelled these unscrupulous practices. The total spending for the 2009 Lok Sabha elections is reportedly pegged at Rs 10,000 crore. A mere Rs 1,300 crore of this was spent by the Election Commission, another Rs 700 crore by the Centre and state governments. So a whopping Rs 8,000 crore came from political parties and individual candidates. No rocket science is necessary to deduce where this money was generated from.

The tragedy and moral dilemma for India Inc is the coercion to indulge in corrupt practices. Of course, the unscrupulous have registered a meteoric rise in a short span thanks to political patronage. Even Ratan Tata said the other day at a Harvard Business School event, "If you choose not to participate in this, you leave behind a fair amount of business." Many of us have also come to be resigned to the malaise, and feel there is no way out of it. I have often heard it debated in social circles that it is perhaps more desirable to have a corrupt political leader who does his work efficiently than to have a clean politician who is inefficient.

In India, politics no longer depends solely on funds from business. There are enough avenues - whether it is real estate or projects - for the unscrupulous to make money. The openness with which money is extracted, in fact the brazen attitude of some of the officers, certain of their impunity, is a direct reflection of how low our moral standards have fallen and how tolerant and defeatist our approach has become.

Regulations are what we urgently need. Now, for the first time, there seems to be some hope that these pressures on the government may lead to the formation of some effective deterrent mechanisms. Parliament may perhaps agree to the formation of an independent ombudsman, empowered sufficiently to initiate probes and take action against the guilty. Apparently, of all the cases on corruption that are referred, the government grants sanction for prosecution to less than 2% cases, and of these, the conviction rate is only around 3%!

No doubt we need agencies with teeth, so that the fear of punitive action will make it risky to indulge in unscrupulous practices. But given these dismal figures and the loopholes in the system, one has some reservations on the efficacy of deterrent regulation. Even the recent open letter to the government by 14 prominent Indians including Deepak Parekh, Azim Premji and members of the judiciary, appealing for more action against corruption, emphasised that the Lokpal was a small but critical step in this fight and many other reforms were necessary.

More importantly and simultaneously, i feel we need to reduce the opportunities for corruption. There must be transparency across the board. Firstly, political party expenditure limits should be realistic, with payments only through the banking system. Secondly, to break the stranglehold of babus, there must be a methodical deletion of their discretionary powers at all levels. There must be fair, open methods for awarding contracts, especially in areas like roads, infrastructure, mining and land acquisition for industry. Regulatory bodies are necessary to ensure standardisation and quality, and that`s all they should do - regulate, not control, as otherwise they become breeding grounds for extracting money.

Just as the Right to Information has made a major difference to the accountability of various arms of the executive, when documentation and processes will be available online, there will be far greater transparency. E-governance will reduce malpractices as it will minimise the points of contact between public and officials.

It is clear given the magnitude of the problem that a multi-pronged approach is necessary. Continuous and sustained pressure on the government to act against graft while simultaneously resisting corruption in everyday matters may perhaps reach the necessary critical mass. The only way in which any of these ideas can come to fruition or genuine change occur is if we have the commensurate will. All this recent churning and debate will have been in vain unless, and i can`t stress this enough, we change our attitude and style of functioning. Develop the determination to press for new policies and ensure their implementation; resist graft, and adopt ethical practices.

As businessmen, we must pledge to do all of these. Merely wearing the Anna cap and attending rallies is surely not an answer.