Friday, November 12, 2010

Fight against Corruption

Great Expectations

You have really captured the sentiments, anguish and the outrage of the people of India who are waiting impatiently to see visible action in the coming weeks and months, as you have rightly put it. But sadly and contrary to public expectations, I understand that the current state of the government machinery, including the vigilance and criminal investigation wings, cannot and will not permit any meaningful action against the guilty. I strongly feel that the media and the people of India must together force the government to make the necessary changes to the system. I heard the Congress spokesperson Mr Manish Tiwary stating the other day that the government was ready to table the "Lok Pal / Lok Ayukt" bill in parliament in the ongoing session, as the first step.

Your HT piece is really well written and I congratulate you. I wonder if translated versions could appear in the vernacular press so that it reaches a greater number of common Indians.

You may find my e-mail to Rajdeep Sardesai (below) of interest. I feel that all right thinking Indians in all walks of life must come together and participate actively in this fight against corruption. And as you have yourself stated, the time to act is NOW
Commodore Ashok Sawhney
Dear Rajdeep,

After all the hype, interest and anguish generated by the media, the public perception is veering around to finally seeing some activity involving two of the perceived culprits in the recent momentous scams starting with the resignation of Ashok Chavan as CM and Suresh Kalmadi as secretary of the CPP. However, people are aware that this is only symbolic and are waiting impatiently to see a lot more severe action, hoping that the various inquiries in progress reveal the full wrong doing and nail all the guilty.

Sadly, contrary to the above public perception, I learnt from Mr Arvind Kejriwal on Aastha channel last evening that the current government machinery / institutions of the state in their present form will not permit any free or fair inquiry, leave alone legal action against any government functionary or member of the ruling political party/alliance. He rightly termed the ongoing CAG probe into the CWG scam akin to a financial audit being undertaken as action after a burglary. You would be aware that no FIR has been lodged in any of the cases to date. As a result, the concerned citizens of India like Mr Kejriwal and other RTI activists, Baba Ramdev who already has considerable following in the form of Bharat Swabhiman Andolan, the Bishop of Delhi and others who want action to stop the increasingly brazen acts of corruption, have given a call to the public and are all getting together at New Delhi on 14 November to lodge a FIR at the police station. This will be followed by similar gatherings and FIR action at other cities like Bangaluru (BJP government), to give out the message that it is nothing to do with politics or singling out of any one political party, but an all out fight against corruption across the board.

May I request Rajdeep that in line with the sentiments of the people of India and to follow the exposures initiated by CNN-IBN to their logical conclusion, your channel may :

(a) Invite Mr Kejriwal as one of the panelists to apprise your viewers about the actual facts pertaining to the progress of the ongoing inquiries into the various scams.

(b) Give exposure and promote the public rally being organised by the citizens of India at New Delhi on 14 November
Commodore Ashok Sawhney
Dear Rajdeep,

I must first congratulate you on running a very competitive and highly professional news channel, the CNN-IBN. If I have to pin point one major characteristic which makes your channel different and why I prefer watching it, it is the overall attitude of positivity and hope. In the vast 'ocean of negativity' all around you do manage to broadcast positive rays of hope, for example, in the form of the 'young achievers awards' recently, or the wonderful programme done a little earlier to honour the great Indian sports personalities over the years. These are really commendable and thoughtful gestures to the 'people of India'. Of course, you also have the ongoing 'citizen journalist show', my favourite, which truly personifies the power of the common people by giving them a voice and, I am sure, encourages the common Indian to feel and act as a part of the 'system', never losing hope.

You would agree Rajdeep, that with the levels and scale of 'Corruption' that we are confronted with today, thanks to some excellent investigative journalism by channels like yours, it is very easy for the common people to lose hope. Whereas the scale and volume of the money involved in the Commonwealth games is mind boggling, the 'Adarsh' scam has brought out the most shameful face of our politico-military-bureaucratic leadership. I do hope that the media will continue to follow these high profile cases till the guilty are punished.

However what I want to request you today Rajdeep, is to please also focus on 'day to day' corruption in the routine functioning of the government, as illustrated in the e-mail by an ex-IAS officer (below). That is what affects the common people when they are cheated out of the roads, electricity, water, food grains, health facilities and schools sanctioned but not provided, as the money is pocketed by the politician-bureaucrat-contractor nexus. You would be doing another yeoman service to the common people and, I am confident, thereby not allowing them to lose hope........Commodore Ashok Sawhney

'Business' of running a government is very attractive says a former IAS officer
Government, a lucrative business VIVEK KULKARNI

A government the size of Karnataka should yield Rs 3,000 crore a year, through kickbacks. The cost of purchasing legislators being about the same, the payback is swift and fabulous. No wonder, politicians are lethal businessmen.

The recent events in Karnataka showed how easy it is to take over or destabilise a government. MLAs are available for sale for Rs 25 crore each. They are ever willing to travel with you anywhere, as long it is a five-star resort. Have they visited their constituency lately?

Having seen the government as an IAS officer and worked on three State budgets quite closely, I have worked out how profitable the Government can be for any investor.

While the Tata-Corus deal was over Rs 36,000 crore, they could have acquired the Government of Karnataka for just Rs 2,825 crore by buying 113 MLAs. Another Rs 1,000 crore might have had to be doled out to mid-term dissidents and other contingency expenses. For such investment, the returns from bribes are fabulous. Even Warren Buffet cannot match it.

How do politicians make money? Most States usually spend substantial portion of their budgets on irrigation, power and roads. Table 1 summarises the budget for major departments in Karnataka. They release crores to the district and village level panchayats for schemes such as the National Rural Employment Guarantee Scheme (NREGS). Finally, the real goldmine is the slew of government positions that are almost auctioned in a transfer game.

Table 2 summarises the sitting ducks that can be targeted for transfer. How else can you explain the fact that the Chief Minister of Karnataka retains most of the transfer powers, instead of delegating them to the respective heads of department?


Consider irrigation projects. On the one hand, politicians get all the accolades for rural development. They also get to collect 15-25 per cent on all capital works. Most contractors are happy to shell out speed money. Most of these projects usually do not attract any undue press coverage, like the Commonwealth Games did.

Roads are yet another treasure-chest. The smaller village roads can sometimes yield 90 per cent margins. Some village roads are not really built at all — rather, some red soil is spread around to close a few potholes, with the hope that the rains won't wash them away till inspection. If you really lay the road properly, the material cost goes up. Politicians are lucky that NGOs and self-styled activists at the Central level prescribe almost zero material costs and a higher proportion of labour.

Power sector subsidies often equal the State's fiscal deficits. The subsidies are actually meant for poor farmers, who seldom get electricity for more than six hours a day. But power theft by politicians' favourites is often included in the farm sector's T&D losses.

Next, the purchase of substandard transformers and replacing them is a money spinner. The vendors often co-operate to show false replacement. Transformer replacement in Karnataka is remarkably high. Most power purchase files often go up all the way to the Minister, even though the Department has several talented officers.


Politicians love land. The Bangalore Development Authority has notified land acquisitions for thousands of acres over the last two decades. It could have paid the market price and taken possession. However, it did not have the money and has abandoned all those projects.

The area is now well-developed and worth crores. The land-owners cannot sell it without de-notification.
When the government found that some were selling, they came out with the Karnataka Land Transfer Restriction Act, 1991, to declare such sales a criminal offence. No wonder that, for the last many years, while all the cities in the State have been with one minister, Bangalore always stays with the Chief Minister.

Construction permits and land registration are yet another big source of money. About 12 million sq ft of new concrete is built in Bangalore alone, every year. Karnataka has over 18 cities where real estate is booming.

While the stamp duty and registration charges could be 7.5 per cent, the bribes can be at least 1 per cent. The Government collects over Rs 3,500 crore in official revenues. This implies that bribes could be close to Rs 500 crore.

Politicians often use the local language excuse and stipulate the vernacular medium of instruction for all new schools. At the same time, they allow the managements to run English medium schools, which most parents demand. The threat of disqualification after inspections means endless money every year from private school managements.

The Gandhian philosophy on prohibition comes in handy to ban new bar licences. Those who want licences can only get it from the old licencees at a huge premium. Of course, they must share a bit with the Excise Department.

This technique is not unique to Karnataka. Many European countries, such as Greece, are better at it in other sectors.


Transfer of officials is a big business. Some, like teachers, are a low-margin-high-volume game. Over a third of three lakh teachers can be transferred every year, but cannot fetch more than Rs 10,000 each. Just a few forest officials in the Bellary mining area can yield a crore. PWD engineers and commercial tax officials are all-time favourites and can also fetch sums in crores.

A lowly, yet very powerful official in the government, is the accounts superintendent, who writes government cheques and earns just Rs 15,000 a month, but whose transfer is usually worth a crore. Many of them manage recommendations from five to eight MLAs at the time of transfer.

Food for the poor is money for politicians. Even though the Planning Commission claims that just 30 per cent of the population is below the poverty line, many States show more than 100 per cent. More cards mean more ration money that can be swindled. Ration-shops are doled out to village level political functionaries. I am not sure if the UID program will make any dent in these practices.

The problem with our poverty schemes is not technology, nor the problem of identifying the poor, but the lack of political will to tackle corruption. The Right to Food programme will mean more money available for illegal distribution.

Conservative estimates show that, if all possibilities are implemented, a State government the size of Karnataka should yield Rs 3,000 crore per year. Compared to the investment, the payback is just above one year. Considering five-year cash flows, and one mid-term destabilisation costing Rs 1,000 crore, the IRR works out to 175 per cent. Politicians have become lethal businessmen.

Dear Samar,
I must commend you for hitting the nail on the head, right on, in your article "Great Expectations" published in the HT of 11 November.

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