Corruption in India: Here are the 5 most prevalent forms of corruption you should know about

New Delhi | Published: August 14, 2017 5:04:20 AM

Conflict over corruption underlies the recent change of government in Bihar, and for the last decade we have been horrified, entertained and enraged by high-profile corruption scandals.

2G spectrum allocation, allotment of coal mines, the Vyapam scam, economy, india economy, corruption cases in india, corruption rate in india, corruption subsystem indiaIn India, corruption is so widespread that it comprises an informal ‘subsystem’ of governance.

Conflict over corruption underlies the recent change of government in Bihar, and for the last decade we have been horrified, entertained and enraged by high-profile corruption scandals—2G spectrum allocation, allotment of coal mines, the Vyapam scam, and various land grabs, of which the controversy over the building of a resort on forestland in Chhattisgarh is the latest. In the fightback, we have seen the Anna Hazare movement build up and peter out. A major development is the entry of corruption as an issue and a weapon in competitive politics. Dents have appeared in the compact among elites to fight out their differences without raking up this one issue. Political actors are at last willing to accuse each other of corruption and bait their opponents, though admittedly very selectively. Hopefully, this will lead to cleaner government over time, even if it is tragic that some innocent people have become victims in this game.

Important as they are, these high-profile scandals give us only a minuscule and partial peek into corruption. In India, corruption is so widespread that it comprises an informal ‘subsystem’ of governance. Just as there are formal, stated processes of governance, such as enacting laws, formulating policies, applying rules, implementing government programmes, etc, there are distinct, but unstated, practices of corruption. These deserve study and analysis, as much as the formal governance processes, for they are as widespread, and as influential, in the outcomes of government actions.

Here, an attempt is made to classify five most ubiquitous types of corruption in government. These types vary in terms of their mechanisms, level of secrecy, range and class of people affected, and overall socio-economic impact. This classification is by no means comprehensive, but it is a start.

Rule Charge

One corruption type, which may be called ‘Rule Charge’, rests on the government servants’ exploitation of their authority to give licences, permissions, etc. This authority is misused while applying rules. Examples include business firms paying to get environment clearances, and ordinary citizens to get their house plans approved. Rule Charge is not a secret, as it involves a large number of people. Usually, to deal with these numbers, new ‘rules’ of corruption, applicable uniformly to all citizens, are developed, such as a fixed ‘rate’ for getting a particular licence, document, etc. In villages, Patwaris, responsible for maintaining land records, commonly have a fixed fee for each type of service, and this is well-known to all the villagers. Rule Charge affects all classes of people, though ‘exemptions’ may be given to powerful people and ‘contacts’ of various types. These exemptions go to upper and middle classes, as the poor are unlikely to have the influence to get them. Rule Charge is experienced as harassment by ordinary people, and can be a major obstacle in industrial growth.

In government, officials who actually give licences or permissions are fairly junior functionaries, and in Rule Charge the amount involved is usually modest. It is, therefore, often categorised as ‘petty corruption’—petty referring to the amounts involved and the seniority of officials practising it, not the number of people experiencing it. But sometimes, such as for giving clearances to big business, Rule Charge can move out of the ‘petty’ category. It can involve very high level government functionaries, and the amounts exchanged can be fairly large. Even in the ‘petty’ category, the official practising Rule Charge usually has the support of someone at a higher level of government, who may be responsible for giving final approvals or for protecting the official from getting into trouble. A percentage of the proceeds of Rule Charge go to such higher functionaries.

Shopping Bonanza

The second corruption type, ‘Shopping Bonanza’, concerns purchases made by the government. These can range from large contracts for armaments and aeroplanes, to minor purchases of office stationery, and even lunch provided at meetings and conferences. A ‘cut’ is usually accepted by the government functionary from the seller. In Shopping Bonanza, people at large are not harassed, as the deal takes place between government officials and sellers who are willing to play the game. The taxpayers’ money is pocketed by government officials, and also by sellers, as such sellers, having favoured the official, can easily supply substandard goods. In some cases, such as in the supply of lunch in meetings, the impact is relatively small and restricted to minor misuse of government money. But in other instances, the consequences can be much graver. For example, if equipment bought for the armed forces and the police is of poor quality, security may be threatened.

In Shopping Bonanza, papers are usually in order—tenders are floated, bids are invited, appropriate approvals are obtained. This process operates within fairly stringent financial rules, and has to be practised with some skill. Bidders usually build in the ‘cut’ to be given to officials into the prices they quote. In big cases, higher officials giving approvals are usually involved, but in more minor ones, may be duped. Secrecy is maintained, and only the participants are aware of the full details.

Resource Rent

A third type, ‘Resource Rent’, revolves around the allocation of resources owned by the government, such as land, mines and spectrum. This is a game usually played among powerful actors within and outside the government. The level of secrecy is high, because only a small clique is involved. Resource Rent promotes inequity in society, as powerful people corner public resources. In its worst form, public resources used by poor people are transferred to the powerful. The more dramatic cases of corruption in recent times have been of this type. This is because there has been a paucity of rules for allocation of public resources, and even a perception (within the government) that the government can use the resources it ‘owns’ as it ‘likes’. Some of these cases have come to light because the perpetrators have been casual with the paperwork.

Development Fees

A fourth type, ‘Development Fees’, involves pilfering funds available in government developmental and social welfare programmes. For example, a government official may simply pocket the money available for repairs of some village school. Or only part of the money sanctioned for digging a well may be provided to the end-user. In Development Fees, supervisors and at least some higher-ups have to be involved to carry out convenient ‘inspections’, and to protect officials in case of discovery of substandard outcomes. Development Fees hurts the poor the most, as money voted for them by Parliament is pilfered. When poor quality midday meals for schools and nutrition in the Anganwadis are supplied, some of the most vulnerable children are affected. Development Charge operates in a semi-secret terrain. The victims are aware of an injustice, but may not know exactly what is wrong.

Crime Dividend

A fifth type of corruption, ‘Crime Dividend’, centres around protection, and actual practice, of various types of illegal and criminal activities by government servants. Here, government officials may overlook encroachment on public land, or the police may ignore, encourage and even participate in criminal activity. In some parts of India, officials connive in transferring one farmer’s land to another. Officials may themselves engage in outright extortion, such as with hawkers, who may have to pay a regular ‘hafta’ (a weekly sum of money) to a government official to ply their trade. Trucks may be stopped and forced to ‘pay up’ to continue their journey. Crime Dividend encourages the exploitation of the least powerful people in society, and eats away at public security and infrastructure.

As stated above, this attempt to classify five most widely prevalent forms of corruption is only a beginning. To truly understand governance and its outcomes in India, we need a more comprehensive and detailed understanding. But for those who might want to undertake this task, a word of caution is necessary. It is a difficult area to research, as there are almost no written records available, and those who practise these processes are rarely willing to talk about them. Only partial observation is possible. And, it can even be dangerous.

The author, Rashmi Sharma is a retired IAS officer

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