Every nation state has to deal with its own form of corruption.  Mubarak in Egypt, Berlusconi in Italy and Blagojevich in the US, all represent the same phenomenon where the public good is subordinated for private gain.  In certain states, corruption reaches endemic proportions.  In Europe, an example of such a state is Italy, where Berlusconi continues to remain in power despite having links with organized crime, interfering with the judiciary, and cavorting with underage prostitutes.  Perhaps it is fitting, then, that India which has Sonia Gandhi as the de facto head of government has gone the way of her land of origin, Italy.

Corruption in the modern Indian state has deep roots. The British bequeathed India a rapacious bureaucracy, which saw itself as a wielder of power and patronage instead of a provider of public services. This inheritance was further poisoned by the toxic legacy of Nehruvian socialism.  Not only was the bureaucracy further bloated, but also it acquired new powers to license and control all aspects of the national economy.  At the same time, the fundamental laws governing the country continued to remain the same.  India still currently retains the Indian Police Act of 1861 and district administration is still carried out on the basis of the Government of India Act of 1935; both are laws that were drafted for a colonial state.  This anomalous juxtaposition of a socialism implemented by a colonial bureaucracy led to anemic rates of economic growth, derisively termed as the Hindu rate of growth, and an increase in corruption.

Indira Gandhi, Nehru’s dictatorial daughter, damaged nearly all Indian institutions ranging from the bureaucracy to the judiciary.  Personal loyalty to the dynasty trumped professional integrity or achievement, and even the military was not spared.  The legendary Lieutenant General Premindra Singh Bhagat was not appointed as the Chief of Army Staff despite being the most senior and the most competent officer for the job, simply because he did not kiss the hem of Indira’s sari.  The damage to institutions has continued unabatedly since.  In the early 1990s, the economy was liberalized in the aftermath of the collapse of the Soviet Union.  The current Prime Minister, Manmohan Singh, was then Finance Minister and got credit for a program largely pushed through by the International Monetary Fund (IMF).  A lightening of state control led to an increase in economic growth as the private sector was unleashed in a country, which has been historically entrepreneurial and which was the world’s second largest economy before the British started expropriating its wealth.

While economic growth increased the wealth in the country and companies became more competitive, the Indian state structure continued to remain ossified and corruption actually increased.  Not only Congress leaders, but also others like Laloo Yadav of Bihar and Jayalalithaa of Tamil Nadu were involved in legendary scandals defrauding the exchequer of staggering sums.  The former was widely known to be involved in extortion and reduced Bihar to a crime-infested state where citizens did not dare to venture out of doors after dusk, while Jayalalithaa’s mansion was found stocked with 10,500 sarees, 350 pairs of shoes and 26 kilograms of gold.

The corruption that has reigned under the present Prime Minister, Manmohan Singh, is extraordinary even by Indian standards.  The scale is unprecedented and the institutional decay is staggering.  Whilst historical factors, institutional structures and flawed incentives have all added to the malaise, the fundamental reason for such an increase in corruption is that there is no leadership at the top.  Manmohan was installed as a puppet by Sonia Gandhi and is a mere de jure Prime Minister.  He has little control over his own cabinet and his ministers have total autonomy to do whatever they please as long as they swear fealty to the ruling dynasty.  Manmohan has responsibility without power and Sonia has power without responsibility.  This means that there is a vacuum at the very heart of government where no one is directly accountable.  Manmohan feigns helplessness while Sonia pretends to be above the fray.

In a rudderless government, ministers are increasingly relying on patronage and on buying off key interest groups to stay in power.  The Commonwealth Games fiasco was well chronicled in the global media.  Key figures blatantly embezzled money, newly constructed edifices collapsed, and officials were brazen and brash despite having openly purloined huge sums of money.  The 2-G Spectrum scam has been estimated at around $40 billion dollars and, even more scandalously, the estimated $45 billion dollar S-Band Spectrum scam saw the granting of frequencies reserved for space and defense.  The sums stolen are staggering but even more shocking was that in the immediate aftermath of the scandals, Manmohan chose to appoint P.J. Thomas, a corrupt and incompetent bureaucrat, as the new Central Vigilance Commissioner, essentially the anti-corruption Tsar of India.  Manmohan’s appointment of P.J. Thomas has weakened this position and can only be interpreted as a joke made in poor taste.

Under the hype of breakneck growth, the ugly underbelly of corruption has largely escaped attention so far.  Since liberalization, the facts are that India has seen an exponential growth in corruption.  It is seeing its own version of crony capitalism and, in some ways, is like Russia without the snow.  The government has been transferring resources such as land to favored private players and has so far escaped major scrutiny.  The Indian media has perpetrated the myth of Manmohan as a liberalizing leader even though his government is staffed with Sonia Gandhi’s corrupt cronies.  Politicians and bureaucrats have long been rapacious, and they have been beholden to big business houses for years.  For instance, it is widely known that the Ambanis created their empire through a mix of business savvy and political patronage, which involved buying off key people in the government. What is worrying is that this corruption has become a way of life instead of a modern aberration. 

Corruption has now extended to the military, intelligence agencies, and even to the scientific community.  The Adarsh Housing Society scandal is a symbol of all that is wrong in today’s India.  Land ostensibly appropriated to build housing for the widows of the Kargil war that India fought with Pakistan in 1999 was instead used to develop upscale apartments in violation of all civic and environmental regulations.  It involved not only the usual suspects, bureaucrats and politicians, but also members of the military, which so far has been the most professional arm of the government.  The S-Band spectrum scam involved members of ISRO, India’s space research organization, which had hitherto been the pride of the country. 

The media has perhaps emerged as the most egregious offender in the unfolding corruption saga.  For the past decade, the Indian media has been becoming increasingly sensationalist and is obsessed solely by ratings.  Journalists have been emerging as celebrities, but several of late have started acting as fixers brokering deals between top politicians and big business. Most come from a small circle of families from Delhi and Mumbai with political or bureaucratic clout.  They have the connections to broker deals and that is what they have been doing while twisting public discourse to benefit their clients in politics and business. Today, there is no institution that seems to be untouched, and the very core of the Indian government is rotten.

The reasons for the explosive rise in corruption are manifold and some have been mentioned above.  First, there has been a collapse of institutions as described earlier.  Second, the current government is relying on staying in power through patronage and by buying off key interest groups.  Third, there is more money to go around and everyone wants a share of the pie.  Fourth, bureaucrats still wield excessive power and citizens have to pay them off to carry on with their daily lives.  Fifth, there are no prospects for punishment as the investigative authorities themselves are corrupt and politicized, and the judicial process moves at a glacial pace.   Sixth, India’s media no longer does the job required of it and is sensationalist, biased, and incorrigibly corrupt.  Finally, the proverbial common man has become cynical about corruption and has accepted it as a way of life.

The implications of corruption are likely to be damaging for a deeply unequal country like India.  It means that India’s economic growth will definitely be lower than its potential simply because of the excessive transaction costs of doing business.  More importantly, in a deeply unequal society, it means that power and wealth will be increasingly concentrated in the hands of privileged elites or ruthless robber barons.  Policies are likely to be made not on the basis of efficiency or national interest but to safeguard special interest groups or dispense patronage.  India is already an over-regulated and under-governed country.  The culture of corruption threatens to make a mockery of the rule of law and if current trends continue, organized crime will strengthen its control over society.  Already, many politicians have ties to organized crime and this trend could accelerate.  This also means that the Indian state will fail those at the margins, and uprisings such as those led by Naxalites, militant communists operating in tribal and forest areas, are likely to increase.  Corruption will also affect India’s ambition to play a global role by tarnishing its reputation internationally, marring its military efficiency and damaging its diplomatic capabilities.

The way out for India is to institute long postponed structural changes and institutional reforms in the government.  There need to be fewer Indian bureaucrats and they need to have less power.  The judicial system needs a complete overhaul.  Cases actually have to be heard in time and disposed of, judges selected for lower courts have to be decently qualified, and colonial era legislation incongruous with the needs of the modern state has to change.  Investigative agencies need to be given autonomy and staffed with competent people so that they can prosecute and convict the corrupt.  The military needs to be freed from the dead hand of the Defense Ministry, which is filled with bureaucrats who know little else other than taking bribes.  The numerous Police Commission reports that have been gathering dust for decades need to be acted upon.  Most importantly, the common citizen needs to be empowered.  There should be no need to pay a bribe to get a driving license or a marriage certificate.  The culture of “if you are not in the government, you are up against it” has to change.  Automated systems and charters of rights in government offices would help.  Fundamentally, the government has to roll up its sleeves and get down to the business of putting in place structures and incentives that promote good governance.

The above are long-term changes that need a fair bit of groundwork and which are beyond the abilities of the current government.  In the short-term, Manmohan needs to go.  He has proven himself as lacking leadership and unfit for the purpose of his role.  Even if he has not personally benefited from all the scams that unfolded under his helm, his complicity means that he is morally culpable for the complete abdication of his constitutional duties.  Furthermore, there needs to be an end to the paradoxical limbo of responsibility without power and power without responsibility.  The de facto ruler of India is Sonia Gandhi, the Italian widow of Rajiv Gandhi, the grandson of India’s first Prime Minister, Jawaharlal Nehru.  So far, the dynasty has been running the show, sheltering its corrupt acolytes and shrugging off responsibility for malfeasance and poor governance.  Ruling through remote control has been good for the dynasty but not for the country.  It is time for Sonia or her son, Rahul, to take charge and rule the country instead of having an impotent proxy like Manmohan.

Finally, for the behemoth of corruption to decrease in India, three fundamental changes are needed in culture, society and public life.  First, the electorate needs to demand more from its leaders and bureaucrats.  They will have to realize that the money being stolen is their money and that they have the right to demand it spent on education, infrastructure and sanitation instead.  It follows that the culture of apathy and complacency towards life as it is needs to change.  Second, civil society needs to step up its focus on corruption.  This includes groups such as doctors, engineers, teachers, business professionals and retirees who have the education and ability to organize.  Third, opposition parties have to offer an alternative to the ruling Congress party’s government of dynastic rule and patronage.  In Bihar, the new Chief Minister has done remarkable things by transforming India’s poorest and most criminal state for the better in barely five years.  More of such politicians are needed to give the voters the alternatives they deserve.  India is a country with extraordinary human capital and despite the corruption, has a strong tradition of morality with examples like Buddha and Gandhi.  Some of it is now needed in public life to create alternatives and enable the country to be all of what it can be.