With a booming economy in the 2000s, it seemed like India was on the fast track to becoming a developed nation. However, recent slow growth has not only reigned in this optimism, but it has also revealed just how rampant government corruption is throughout the country. Major scandals in the telecommunications industry and the coal mining industry have come to light in the past year, rocking the country and bringing the current coalition government led by Prime Minister Manmohan Singh under serious criticism. Tens of billions of dollars of taxpayer revenue have been wasted as a result of such corruption, and many fear this is only the tip of the iceberg. Some reports suggest that as much as fifty percent of government money intended for welfare programs and subsidies ends up in the pockets of politicians, bureaucrats, and influential businessmen instead. With 600 million people living in poverty, 300 million living without electricity, and 65 percent of the entire population under thirty-five years of age, most without any marketable skills, India cannot afford to waste any of its resources if it wants to improve the welfare of its citizens.
India’s Black Money Problem
While corruption scandals have made the headlines in India recently, the underlying issues have been deeply entrenched in the bureaucratic and political system for decades. Former Time correspondent Anita Pratap, in an interview with the HPR, claimed, “since the 1970s, no government has seriously attacked corruption.” Politicians and bureaucrats in India certainly have amassed a great deal of private wealth, much of which is black — deposited, untaxed, in overseas accounts. This results in a significant loss of revenue for India, with some estimates reporting about $419 billion in taxable income and profits being laundered out of the country over the past decade. Pratap noted that this loss of revenue stems largely from a treaty India has with Mauritius. “Indians can deposit funds in Mauritius bank accounts tax free, allowing politicians to ‘round trip’ their money — it comes back into India as white money through fake projects or to fund their election campaigns,” she explained. As a result, this tiny island has become India’s largest financier, which Pratap believes should signal a major red flag that corruption is taking place. In fact, last year, facing mounting international pressure, the Indian government adopted a tax code that will close this loophole for untaxed overseas deposits. While this reform is encouraging, the new tax code was supposed to be implemented in 2013, but it has already been pushed back to 2014, which means India will continue to lose sizable amounts of revenue for at least another year.
States Combating Corruption
Without enough revenue, the national government has been unable to adequately fund many of its welfare programs; however, several states have managed to fight corruption and execute innovative programs that have improved people’s standard of living. K.J. Alphons, now a Bhartiya Janata Party member of Parliament, spent twenty-seven years in the Indian Administrative Service doing just that. As a district collector for Kottayam, a district in the state of Kerala, Mr. Alphons began a literacy program that was free from outside monetary funding and, thus, corruption. He said, “Without any government funding, my administration rallied 14,000 unpaid volunteers to teach people to read.” By June 1989, Kottayam was declared the first city in India with a 100 percent literacy rate, and the methodology used became the model for the national literacy program, founded soon after. He went on to apply a similar methodology to immunize every child in his district, and in 1990, Kottayam ranked higher on quality of health indices than the U.S.
Other politicians have also led successful campaigns to bolster people’s standard of living and reduce corruption. In the state of Bihar, Chief Minister Nitish Kumar, a member of the Janata Dal party, has significantly reigned in a once rampant crime rate by increasing the size of the police force and fast tracking the successful prosecution of over 79,000 criminals since he took office in 2005.
Chhattisgarh, another state in India, has also seen standards of living increased by eliminating corruption. Formerly possessing the most corrupt grain distribution system in the country, in 2003, the state introduced a program that sends a picture of a grain truck the moment it leaves the distribution center via cell phones to every person in the village, along with a message stating exactly how long it will take the truck to arrive. This technology has been so effective at reducing corruption that the World Bank recently declared Chhattisgarh’s distribution system to be one of the best in the world.
Balancing Politics and Ethics
These successes at the state level are encouraging signs that real change in India is happening thanks to the determination of various government officials who are serious about combating corruption. Pratap concurs, stating, “The system in India is good if you have the right person at the helm. We don’t need new institutions, and we have fantastic human resources, but often, politicians ensure their financial backers are given high government positions, rather than well-trained bureaucrats.” Consequently, in order for the entire nation to experience progress as a whole, strong leadership is needed at the national level, which Alphons believes is currently lacking. He describes the Indian Prime Minister, Manmohan Singh, as an “honest man,” but lacking “the strength to tackle corruption head on.” In 2007, major licenses for airwaves on the mobile spectrum were unfairly allocated to thirteen companies with close ties to government officials. The Prime Minister wrote a letter to the telecoms minister, Andimuthu Raja, informing him that this process of allocation was not transparent and needed to be changed, but Raja disregarded the warning, and Prime Minister Singh took no further action. Alphons explained that the Prime Minister’s excuse for furthering pursuing Raja is that “he is dependent on the support of ten or twelve parties — the Congress party doesn’t have a majority,” and Prime Minister Singh did not want to risk alienating members of the coalition.
Moving Beyond Scandal
States across India have proved that they can reduce and even eliminate corruption, that they can implement programs that produce tangible benefits and services for people, and that politicians and bureaucrats can work transparently to improve economic standards. Alphons, Kumar, and others have shown that strong, honest leadership is crucial to fighting corruption and improving the lives of their constituents, and this needs to be translated to the national level. Despite the current government’s less than zealous attacks on corruption, there are signs at the national level that it will not be tolerated. On February 2, 2012, the Supreme Court cancelled all of the licenses that were unfairly allocated in the Telecom scandal. With a strong legal system, prosecuting those who do not want to do business fairly is possible. Reforming the tax code is another step in the right direction, though it needs to be implemented quickly, and changing the election laws so that the monetary barriers for candidacy are lower could help citizens outside the ruling elite win more seats in Parliament and hopefully reduce corruption. From Kerala to Bihar to Chattisgarh, as well as in other states, the people of India have shown they will support leaders who fight corruption, so it is time for the national government to stand against those who want to steal from the country and instead stand with the people.
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