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T N Ninan: Draining the swamp

Amidst the verbiage spewed out on the Modi government’s first 100 days, little was said about corruption. Perhaps most commentators are waiting to see if the promised difference will indeed be visible. In the weeks before the 100th day, the gossip circuit had been full of stories of how the prime minister was keeping a close watch on his ministerial colleagues – how they dressed, what time they reached office, what company they kept at dinner, what their progeny were up to, and so on. Subsequently, the most delicious of those stories was officially denied. Perhaps the prime minister should have been keeping a closer watch on the director of the Central Bureau of Investigation, and the company he seems to prefer, namely people whom his Bureau is investigating or prosecuting. If the new government is serious about conveying the message that it expects correct conduct, shouldn’t this worthy gentleman be sent packing?

The broader point must be that you don’t tackle corruption the Arvind Kejriwal way, by chasing everyone with a broomstick. Nor can you realistically hope to prevent every kickback on a big-ticket purchase, or public-private partnership contract, or the “capture” of a sector regulator by interested parties. As Gurcharan Das advised Mr Kejriwal, the more effective way to deal with corruption is to drain the swamp. Black marketing in cement, steel and paper was not ended by catching all the black marketers, but by abolishing the rules that created a black market. We have, fortunately, got out of the culture of price controls, but our politicians continue to be attracted to the idea of selective subsidies – on foodgrain, kerosene, cooking gas and much else. But when you offer a subsidy on a product to one set of consumers and not to others, you create a dual market in which, as night follows day, there will be leakage from the subsidised segment to the open market.

This racket is worth tens of thousands of crores of rupees when it comes to kerosene being used to adulterate diesel; even more when it costs the government Rs 3.65 to deliver a rupee worth of grain to select citizens. The way to end these rackets is to do away with price distortions to the extent possible. Fortunately, the Modi government seems to be preparing the ground for replacing the supply of subsidised products with equivalent cash transfers, so one can hope this particular swamp will be drained.

A second solution is to improve record-keeping and then to allow sunlight on those records – i.e. to introduce transparency. The most important way to do this is to digitise all databanks. This makes records easily accessible, processable, and retrievable – to do an audit trail, when needed. The next step must be to give ready access to these data banks. The right to information is a great help here, but a citizen should be able to find out many facts without going through the process of filing an application under the law on the right to information.

A third step (out of at least half a dozen) must be to change the rules on resource allocations. Both telecom spectrum and coal mines will be auctioned in future, not given out to favoured parties. But that is not enough, the rules have to change on how land is dealt with. If the courts have frowned on the way DLF got land from the Haryana government, it is because proper reform is yet to touch how governments deal with change of land use definitions (the new law on land acquisitions only adds a new set of complications). These and other “draining the swamp” measures will, one hopes, leave CBI directors with less to do, and fewer people to meet at home – with, correspondingly, the need for fewer cooks to be kept busy at taxpayer’s expense.

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