Why fighting corruption is important
The entire world is watching as Indians attempt to purge India of corruption using classically Indian means of protest. Hindutva and Sanatana Dharma represent the only viable cures to the cancer of corruption which is destroying the entrails of our civilisation
Corruption in India is now a major concern because of the gigantic and mind boggling amounts illegally appropriated in the Satyam, IPL, CWG, and 2G Spectrum scams. By all objective criteria, India today has by far one of the most corrupt governance. The 2G Spectrum Scam, the title of my new book released on June 11, is the most shocking rip-off of all.
As I have pointed out in the book, my curiosity was first fired by the fraud and forgery that became apparent in the sudden divestment of equity stake in Swan Capital Company by Anil Dhirubhai Ambani, the owner of ADAG who strategically controlled Swan, in favour of the Shahid Balwas-run DB Realty Company, and reportedly on then Telecom Minister A Raja's behest. DB Realty then sold the controlling shares of Swan to Etisalat.
This latter company was considered in a Home Ministry report to be a front for ISI and Dawood Ibrahim. Shahid Balwas was held by the Ministry to be an undesirable person. Yet, Etisalat was allowed by the Union Home Minister P Chidambaram to buy out the Swan Telecom at eight times the price paid by Swan for the 2G spectrum licence. National security was seriously compromised for greed of money.
I had written to the Prime Minister a letter dated November 29, 2008, for sanction under Section19 of the Prevention of Corruption Act (1988) to prosecute Telecom Minister A. Raja by filing a private complaint before the Designated Sessions Court. Thus began my venture into the 2G spectrum scam. The PM's procrastination led me to the Supreme Court.
Thereafter, a Bench of Justices Singhvi and Ganguli, by their meticulous reading of the briefs and documents filed and by their crisp orders and directions have changed the national public mood from despair and despondency to hope and expectation.
This judicial intervention came none too soon. An international watchdog committee conducted a study on the illicit flight of money from India, perhaps the first ever attempt at shedding light on a subject steeped in secrecy, and concluded that India has been drained of $462 billion (over Rs 20 lakh crore) between 1948 and 2008. The amount represents nearly 40 per cent of India's gross domestic product.
The unanimous view throughout the world today is that corruption is no more the inevitable grease or speed money to be tolerated in any system, but a cancer that could cause the death of a society by continuous debilitation — unless it is cured at an early stage.
The Indian financial system also suffers from a hangover of cronyism and corruption that have brought the government budgets on the verge of bankruptcy. This too needs fixing. India's infrastructure requires about $ 150 billion to make it world class, and the education system needs 6 per cent of GDP instead of 2.8 per cent today. But an open competitive market system can find these resources provided the quality of governance and accountability is improved. Obviously a second generation of reforms is necessary for all this.
One of the worst problems with corruption in India is the creation of "black money"— money that is used in such transactions and is obviously unreported, hence is neither taxed nor is spent openly. It travels to secret bank accounts abroad, or, worse, is used by the corrupt to indulge in gross luxurious consumption and bribery. Such black money stock also creates inflation by enabling easy finance for hoarding of supplies even as the GDP growth rate accelerates.
Corruption, therefore, impacts on economic development of a nation in five dimensions:
1. Decisions taken for corrupt motive sub-optimises the allocation of scarce national resources and hence in the long run lowers the rate of growth in GDP. It also encourages buccaneers instead of innovative entrepreneurs.
2. By the use of bribe money which escapes the tax net and is mostly stashed away in banks abroad or in trunks in safe houses, is deployed in luxury goods purchase, ostentatious life, splurging in five star hotels, real estate, and on partying. This raises demand for luxury production and services, and in turn distorts investment priorities. In India, 70 per cent of the investment goes directly or indirectly to sustain the luxury sector.
3. Unaccounted bribe money is lent to hoarders and speculators who then cause artificial shortages and thus inflation and property bubbles.
4. Since the most in corrupt activities would be in public office, they enact laws to not only to safeguard the booty by lax criminal investigations and prosecutions, but to enable earning interest or return on the bribe money. The invention of Participatory Notes (PNs) and the Mauritius Tax & Capital Gains exemption treaties is aimed at that sordid objective (see below).
5. Corruption enables beneficiaries to involve foreign governments seeking influence and criminal gangs resident abroad to launder money and provide protection.
The view of Integral Humanism as propounded by Deendayal Upadhaya or what we have for centuries have called as Sanatana Dharma is that a society is healthy only if there is a harmonisation of material pursuits and spiritual advancement in a human being. The social structure called Varna, till it degenerated into a birth-based social cartel, was designed to downgrade wealth as the indicator of status and elevate sacrifice and simplicity as a desirable value.
But now greed is driving all of us as it has become in the globalisation process. Materialistic progress alone however does not guarantee national security of a nation. What is essential is the character and integrity of its citizens. Hence, besides the objective of acquiring knowledge and getting employment that require cognitive intelligence, the youth must be motivated in other dimensions of intelligence that of emotional, moral and social.
In the United States, as Business Week has recently reported, these concepts have become highly popular in the corporate world, and have been incorporated in the best-selling books written by Daniel Goleman, Deepak Chopra, Anthony Robbins, among others.
In brief, our National Policy for integrating spiritual values and organisation leadership can be achieved by measures by which we can create a modern mindset in the youth of India, not only to motivate the youth to acquire technical competence, but to develop emotional, moral social and spiritual values that will make that person a self-reliant individual of high character, patriotic, and possessing a social conscience.
Our goal has to be thus the efficient use of resources, human and physical, hardware and software by an able and human spiritually guided and ethically organizational leadership in a framework of competitive market economies.
Hence, concisely stated, for a corruption free society to be achieved on a long term basis the Indian economy should be founded on a harmonisation of efficient organisational leadership and abiding spiritual values which we call as Sanatana Dharma. That can be nurtured only bottom up i.e., educate our growth accordingly — to synthesise material pursuits with spiritual values which lauds simplicity and eschews greed.
Ultimately it will also be decided by how we vote in elections. But we need a new ideology to combat the cancer of corruption in our system. For this we need a new breed of Indian leaders-educated, courageous, and rational risk takers. That we can get only if the ethos of our people changes from the purely individualist pursuit of material pleasures and goals, to an integral outlook. Corruption is the cancer today in our society but Hindutva (Hinduness) or Sanatana Dharma imbibed character is the cure.
The writer is president, Janata Party
IIM Professor Dr Vaidyanathan's article on Black money:-