Tuesday, 30 July 2013

The India Series: Look Both Ways

Tacitus was a senator and historian of Rome which spent most of his career under the Emperor Domitian. Often, Tacitus would write his histories with a distinct distaste for politics due to his exposure to corruption, and is quoted "The more corrupt the state, the more numerous the laws".

If one can associate numerous laws with a rather baffling large bureaucracy that has been ranked the worst in Asia, then according to Mark Twain India has a corruption issue. Indians seem to agree, as 75% of Indians has said that corruption has increased in the last two years in a report by Transparency International. Additionally, 47% of Indians felt corruption was a serious problem while 75% stated that the police were affected by corruption.


To turn the statistic into harsh reality, an anecdote is needed. Bihar,a state in northern India with five billion dollars to be invested in the power sector, has come under scrutiny for their mid day meal program. Basically, a program provides 1.2 million students in government run schools with a hot meal everyday. Twenty three children have died eating contaminated food from the program, which is a result of corruption according to the convenor of Right to Education forum Ambrish Rai - which is one of the NGO's working in the area. Rai stated that the southern states do a far better job at administering the program, but in the north the situation is "pathetic":

"Children are getting low quality and insufficient food; hence there is lack of nutrition. Corruption is involved in the delivery system. Fake enrolments are being done to embezzle money. These rackets are killing this very important scheme, and the main reason is lack of guidelines and institutionalisation,"

Indian scandals are not a rarity. One article lists 25 major corruption scandals from 1948 till the present in India. Seven have occurred in the last two years alone. The Lokayukta, which is an anti corruption agency in India, had 11,153 allegations of corruption from 1981 till 2006 finding only 57 offences which were of consequence. Although recently the Lokayukta caught a clerk accepting a $120 bribe, the Lokayukta has a rather dismal record of slowing corruption. In fact, there is an entire site devoted to corruption in India, called Corruption in India, which lists stories everyday showing less than upstanding conduct portrayed by Indians. 
An article in the Time of India gave some recommendations to fix bureaucracy such as linking
compensation to competence, subjectivity in appraisal process, and fixed terms for bureaucrats.
The analogy of comparing India to a one way street that is necessary to look both ways is solidified by the economic system. Although foreign investment is stalled in the one way rules and regulations of Indian bureaucracy; should one look the other way and offer a bribe, business can operate a fair bit more efficiently. An interview by NPR in 2010 of Mr. Singh stated the depravity of the situation. Mr. Singh began a telphone/internet business hiring four people, and stated he had to bribe 10 - 15 people to gain possession of the proper licenses to begin his company. The case is not held to just small business', but to large corporations such as Walmart. 

Rema Hanna an Economist at Harvard, stated that in India it takes 30 days to begin a business, as opposed to 6 in the United States, while mere minutes in Estonia. Additionally, Hanna stated that bribery may be the only recipe for growth in India, as it may be the only method to speed along business to counter the large amount of paperwork. To counter corruption, the OECD will hold a seminar in India, although succeeding in slowing the rise of corrupt bureaucrats will take commitment and be no easy task as India has already not just accepted corruption, but institutionalized it. 

There may be a street to cross in India that states traffic is only coming from one direction, but it is wise to look the other way. Most likely, there is someone going the wrong way. 




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