Why Scams are Here to Stay: Understanding Political Corruption in India

by N. Ram

it failed to acknowledge the extent to which the colonial power had participated in and nurtured the corruption, and the conditions engendering corruption, that free

India inherited.

When corruption is not conceptualized soundly, in relation to socio-economic, political, and cultural factors, but is presented in overly simplified moral terms, analysis of its causes and effects tends to go all over the place;

and without accurate, theoretically sound and empirically backed analysis, prescription tends to be seriously flawed. The result is that anti-corruption institutional arrangements and actions habitually miss the mark; and mass campaigns against corruption, fuelled largely by moral outrage, make their contribution by raising the level of public awareness but are unable to sustain themselves beyond a point and fail to meet the lofty objectives they set themselves.

The prediction offered by a legion of neo-liberal economists and political theorists was that deregulation and liberalization would lead to the prevention, containment, and eventual elimination of corruption. Precisely the opposite has happened: liberalization has ushered in corruption in a much greater variety of forms and on an unimaginably greater scale than anything seen under the so-called licence raj.

The short answer to the question is that with deregulation and liberalization, the state has played a different kind of role to the one it played earlier, providing access to scarce public resources as part of a process of promoting private sector-led growth at any cost and supporting without inhibition the omnipresence and play of private interests within the public sphere; and there is plenty of evidence to show that corruption tends to be greater when pro-business strategies of governments bring on or facilitate crony capitalism and ‘when there is a state-engineered redistribution of wealth in favour of a few and at the explicit or implicit expense of the many’14.

Another fraud survey, covering Europe, West Asia, India, and Africa, done in 2017 by the market research company Ipsos MORI for Ernst & Young (EY), the global advisory, auditing, and business consultancy firm, reported that 41 per cent of Indian respondents would be prepared to act unethically to enhance their own career progression or remuneration package; 58 per cent stated that loyalty towards their companies prevented employees from reporting fraud, bribery, or corruption; and 78 per cent said bribery and corruption were widespread.

A close analysis by PRS Legislative Research of the Prevention of Corruption (Amendment) Bill 2013, which is pending in Parliament, reveals that in significant respects the original anti-corruption law is being diluted rather than strengthened5. The bill takes away the protection given by the 1988 Act to a bribe-giver for any statement he makes during a corruption trial, thus introducing a deterrent against giving evidence as a witness. It weakens the provision relating to a public

servant’s possession of disproportionate assets by introducing a requirement that in addition to possession, the intention of the public servant to acquire disproportionate assets must be established, thus ‘raising the threshold for proving the offence’. Further, the bill redefines the offence of criminal misconduct by a public servant, narrowing its scope to cover only dishonest and fraudulent misappropriation of property under his control, and intentional illicit enrichment and possession of disproportionate assets. It excises from the offence three circumstances covered by the main act: using illegal means to obtain any valuable thing or monetary reward for himself or any other person; abusing his position as a public servant to do the same; and obtaining for any person a valuable thing or monetary reward without public interest. The requirement of prior sanction from the appropriate authority for

the prosecution of public officials will now cover former as well as serving public officials. These amendments point to the non-seriousness of the government, the political establishment, and Parliament in delivering on the promise to t...

An influential theme in British imperialist historiography is the pervasiveness, inescapability, and deeply malign influence of ‘Asiatic corruption’. In the case of India, this was seen and repeatedly depicted as the culturally, socially, and historically predetermined general condition of the country, incurable without imperium.

However, the micro-economic theory is hopelessly inadequate as a conceptualization of the different types and forms of corruption. Aside from the fact that its more extreme iterations can be read as a justification for bribery, nepotism, and so forth, at least in comparison with more ‘wasteful’ forms of rent-seeking,

seeking, it fails to see corruption as a ‘configuration of corruption activities’7 that make sense only when they are placed in historical, social, institutional, and, above all, political economy, context.

For one thing, in its attempt at simplification, the definition misses out a great deal of the complexity, multifacetedness, and configurations of corruption in the real world. Secondly, by narrowing the idea of corruption so that it applies only to the public sector and to bribe-taking politicians and other public officials, it seriously underplays the supply side of corruption, that is, the active and often determinative role national and international business corporations, the private sector, and the black economy play in the exponential increase in corruption among politicians, bureaucrats, and intermediaries. Finally, the tractable

India offers an instructive case study of how legal, criminological, and, above all, political economy factors thwart every attempt to get a firm handle on corruption with a view to preventing and rooting it out.

‘corruption has always been an inherent feature of capitalism’, not ‘an aberration…a moral blight, an ethical lapse’ in a rule-abiding society; and that it is prevalent in all types of capitalist societies, whether they are under bourgeois-democratic or authoritarian regimes or military dictatorships1

Central to the Marxist understanding of political corruption is the omnipresence of private interests—above all, the class interests behind big business, including multinationals—within the public sphere.

may be worth asking and pursuing the research question whether the specific forms of corruption and especially the grand corruption arrangements encountered in a developing country like India bear telltale signs of being engendered within a ‘social formation’, or amidst the interaction of coexisting and contending social formations (including their remnants and mutations), in the Marxist sense.

The relationship between particular forms of corruption and the social formation in which they exist can be taken up as a fruitful area of research.

Those whose standard argument used to be that India’s ‘permit-licence-quota raj’ was the raison d’être of corruption and that deregulation and liberalization would lead to its prevention and elimination have a lot of explaining to do on why the dismantling of that raj has ushered in corruption in a much greater variety of forms and on an unimaginably vaster scale. The essential answer they offer is that many vestiges

Bardhan, who occupies ground somewhere between rent-seeking theory and radical approaches to corruption, has a more sophisticated explanation. The key structural reasons for the exponential growth of corruption in recent years are the shooting up, as a consequence of higher economic growth, of the market value of scarce public resources such as land, oil and gas fields, mineral resources, and the telecommunication spectrum and the enhanced opportunities for making money from their favoured allocation by a public authority; more expensive elections; major policy changes involving large-scale transfers of funds from the central and state governments to local-level bodies; and the social churning resulting from ‘the rise of hitherto subordinate social groups in political power’13.

What this chapter suggests is that even if Marxists cannot claim to have all the answers to the question of corruption and its forms and functions in political economy18, theorists and moral crusaders who come from other positions can learn from the theoretical perspectives and lived experience that Marxism brings to the subject. For those who do not approach the larger questions of political economy it raises with ideological blinkers, these insights can help make better sense of the state of corruption in India today.

Vyapam is a deadly criminal enterprise, involving blackmail, intimidation, and violence, and resulting in the ‘unnatural deaths’ of several suspects, accused persons, and victims2. Vyapam is an example of the systematic subversion of a state’s administration and, even more damagingly, its system of medical education and medical practice. Vyapam is the cynical exploitation of a situation of high unemployment and the desperate search for jobs. It has brought suffering, hardship, anxiety, and demoralization to large numbers of young men and women seeking educational opportunity and advancement, and ensnared into crooked ways by the racketeers.

When you look deeper, Vyapam turns out to be more than large-scale racketeering and grand corruption. It is, as Aman Sethi, a discerning journalist, puts it, ‘a vast societal swindle—one that reveals the hollowness at the heart of practically every Indian state institution: inadequate schools, a crushing shortage of meaningful jobs, a corrupt government, a cynical middle class happy to cheat the system to aid their own children, a compromised and inept police force and a judiciary incapable of enforcing its laws’3.

bureaucrats and police officials, and judges.

The Sarkaria Commission’s labours, far from helping to unearth and combat political corruption, served only to undermine the credibility of formal anti-corruption mechanisms, in particular, commissions of enquiry, making them seem like instruments of political vendetta.

The creation of TASMAC and vesting it with a monopoly of wholesale supply of Indian Made Foreign Liquor (IMFL) was widely perceived to be an innovative way of financing the state’s welfare schemes, especially MGR’s ambitious nutritious midday meal programme of July 1982, which quickly expanded to become India’s largest in terms of beneficiaries and a model for other states. Less known at the time was the stream of illicit revenues that began to flow from the favoured owners of distilleries and breweries manufacturing the liquor into a political fund

In the three decades following MGR’s death, the two dominant parties in the state took turns to develop, refine, upgrade, and scale up the corruption system put in place in the early 1980s. Escalating political and electoral financing needs, the desire of political leaders and their kin for personal enrichment to levels previously unheard of in the state, and the abundance of opportunity that charisma, stardom, and mass popularity offered strong leaders in a relatively developed state with decent economic growth rates combined to make Tamil Nadu’s system of grand corruption what it is today, something akin to an autonomous subformation within a social formation.

Jayalalithaa’s last five years in office saw rule-bound scientific corruption escalate. As we have seen, she had been twice convicted and then acquitted on appeal on corruption charges, and

months later, soon after the Chief Minister had been hospitalized, a senior BJP minister confided in me that when it came to corruption Tamil Nadu ranked ‘Number One’ in India and that this assessment was based not on hearsay or general impressions, but on concrete evidence available with the central government.

When a strong and charismatic leader with mass appeal and a loyal organization to support her or him makes a bold stand invoking the notion of popular sovereignty, anti-corruption campaigns rarely succeed in making a major political impact. In such cases campaigners against corruption face two difficult challenges: they need to prove corruption through robust evidence; and they need to persuade millions of voters that popular legitimacy is no defence, and the notion of popular sovereignty no argument, against proven corruption in a social environment where people believe that most politicians are corrupt.

Corruption is bad and totally unacceptable from any democratic and progressive standpoint. But it is a normal, not an abnormal, condition within the political economy of capitalism. Cronyism exacerbates the condition but corruption, understood as an integral part of the omnipresence of private interests in the public sphere, including political life, is endemic to all forms of capitalism.

The hundreds of crores of rupees the big parties are able to spend on advertisements, chartering private aircraft and helicopters, and other big-ticket items during elections do not attract the expenditure limits set for candidates. By denying the smaller parties a level playing field, this major flaw in the election law detracts seriously from the democratic character of Indian elections. The Election Commission has been criticized from the Left for its class bias: failing to check the power of big money in the electoral process, it concentrates on targeting ‘small donations in cash from…ordinary people’; and it prohibits