Corruption

[sidchhikara]

Take 15 mins out of your 'busy' schedule and read this article by Atanu dey.

Any member who has personal stories of corruption, please feel free to contribute.

http://www.deeshaa.org/2009/09/26/of-trucks-and-roads-and-corruption/

Of Trucks and Roads and Corruption

26 September 2009 3 Comments
Let me tell you a story. It’s a vignette of what I consider to be important although it may appear to be rather trivial. Perhaps its apparent triviality is what should astonish us. But allow me to first recount a conversation I had the last week.

A close friend of mine was visiting me one evening. Let me preserve his identity by just identifying him as RL. I have known RL since the first grade. Born to a Marwari business family, RL has done reasonably well in business. I asked how things were with his business of arranging trucking services all over India. “Same old, same old,” says RL.
“Tell me more,” says I. “You were talking to someone on the phone just now and you said ‘890′. What was that about?” I asked.
“That’s the price that I was negotiating for transporting one metric tonne of goods between Mumbai and Raipur,” replied RL.
I had no idea of how this truck transportation business works. For no particular reason I inquired further.
“So how many metric tons does a truck normally carry?” I asked.
“About 35 tons,” RL said. “But that’s above the allowed limit. The limit for the average two-axle truck is only 16 tons. But if you stick to that, the numbers don’t work out.”
“So you mean to say that the trucks are overloaded?” I said.
“Of course. At the allowed 16 tons max, it would cost 1200 rupees per ton to move material. So we just pile on whatever to break even. It’s a competitive market,” said RL.
“But then aren’t there checkpoints along the route? Don’t they figure out that the trucks are overloaded? Are there weighing stations where the trucks are weighed to see that they are within the limits?” I asked.
“Yes of course. There are many RTO checkpoints. The deal is simple. Every month, for each truck, there’s a schedule of payments. Say between Mumbai and Raipur, the rate is Rs 20,000. Once you pay that for a truck, you are free to load the truck to whatever the truck will bear, never mind the legal limit,” RL said.
“And how many trips does that cover?”
“About 5 round trips a month. On an average it takes three days each way. Works out to about Rs 2,000 per transit. But it allows you to keep the costs down and therefore it works out for all concerned,” says RL. “It’s routine stuff. Once you pay the 20,000 rupees, there are not more hassles. You only pay at one central location and the money is divvied up among the various stakeholder along the way,” replied RL.
“And who are the stakeholders?” I ask.
“You know, everyone. All the way up to the concerned state and central government ministers. There is a regular schedule.”
“Wow! That’s really neatly done. So even the top politician must be getting his cut,” I said.
“Naturally. It would not happen otherwise. Everyone has to have his share, otherwise this could not happen,” said RL.
“What’s the deal?”
“Let me give you the short version,” RL said. “The truckers have to carry more than the legally mandated load. Otherwise it would be too costly per ton. To get around the legal limit, you have to bribe the RTO — the road transportation officials. There are many check points along the route. It helps that the bribe is collected at one point and that too for the entire month. Otherwise it would take too long. Anyway, the collections are passed on to various people, all the way to the top. Government ministers and other bureaucrats, you know. But this scheme works only because there are other interests tied to it.”
“Like what?”

[sidchhikara]

“Consider the truck manufacturing companies. They make more money because they sell more trucks which are rated at a lower carrying capacity. So they are not interested in raising the legal load limit. But the overloading of trucks is good for the RTO. They make money in bribes. That’s not all. The government builds roads. Right? OK, so they get contractors to build roads that are rated to carry say 16 tons per truck. Naturally with trucks carrying 32 or even 45 tons, the roads get f**ked. The contractors make money from repaving the roads frequently. The kickbacks from the contractors for road repairs ends up in may pockets, mainly the politicians. It’s huge. Road repair is huge business,” RL said.
“Is that all?” I asked.
“No, there’s more. It’s a dirty business but then what do I know. I have been in this business for a couple of decades and that is why I know the ins and outs of this one. What do I know about what goes on in say the tire business. Or the container shipping business. You don’t know about the trucking business but I do. But then we are equally ignorant about all the rest. It looks as if this sort of corruption cuts across every aspect of business in India. I have to play the same game because otherwise I could not survive in business.”
“Surely you could refuse to pay the bribes and refuse to ply overloaded trucks,” I said.
“No I cannot. I cannot refuse to play this game because no one can survive in business if one refuses the deal. Never mind me, you cannot survive in politics if you refuse to play along. A fellow got elected as the MP for a constituency close to where I live. He’s not a career politician. It just so happened that family was owed some favor and he got a ticket from this party and he won. Quite a decent fellow, actually. But totally naive about how things work.
“He didn’t know what he was expected to do and how much he was supposed to charge for the deals that he was supposed to help with as a member of parliament. Anyhow, the people who needed to get their interests taken care of had to help the MP learn the ropes. They put people in his office who would tell him which document to sign and how much he was to be paid for each of his signatures. Like I told you, the guy is a decent fellow. He does not know now but in a year he will know the game. And he has to participate in it. Or else,” said RL.
“Or else what?” I asked.
“Else he won’t get elected. If he refuses to take bribes, the work will not get done. More importantly, the political party that he is part of will not make the money that they need to fight the next elections. If he is clean, he would be throwing a spanner in the works. He will be replaced by someone who doesn’t have scruples. He either plays the game or he is out. In a year he will be as corrupt as the rest of the bunch. OK, so he may have got the job of an MP when he was naive and stupid but by the middle of his term, he would have learned what he needs to learn to survive. Why on earth do you expect otherwise? If the guy giving you orders, your boss, is corrupt, just to keep your job you have to be corrupt. Else you don’t play. You don’t get a ticket. You are a spoiler. You wreck the whole deal. You are not a part of the team. They will find a more complaint person.”
I had heard enough. We moved on to less trivial matters. But I continued to worry about the issues raised in that conversation.
It is collectively rational for people to not be corrupt but it is individually rational to be corrupt in a corrupt system. Corruption does not work bottom-up. It works top-down. If the guy at the top is corrupt, you are forced to be corrupt. Why forced? Because you don’t get to make the rules. You only get to decide whether you want to play the game based on the rules that have been dictated by the guys on the top.
The guys on the top make the rules. And if they are corrupt, that’s just the way it is.
I spent this summer talking about matters that lead to economic development. I was teaching a course on economic development at Berkeley. Corruption and its corrosive effects on economic development was a major theme. I tried to get the idea across that poor countries are poor because the system they have in place makes it impossible for non-corrupt actors to play a role. More depressing is the realization that corruption itself causes the poverty that makes the corrupt make the rules. I put it this way in the course — “The corrupt gain power and the absolutely corrupt gain absolute power.”
It is perhaps naivety that makes the so-called leaders like say APL Abdul “Dr” Kalam lecture school students about the moral incorrectness of bribery. Or perhaps it is just plain obtuseness. But I think it is more likely that it is plain pragmatism that motivates people in high places to emphasize corruption at the mundane level while turning a blind eye to corruption at the top — at the level of central government ministers and bureaucrats — because the guys at the top owe their exalted position because they are corrupt. Absent moral turpitude, they would not have reached the top.
Corruption at the lower levels is a survival mechanism. The small-time businessman like my friend RL is just a pawn in the game. He does not have any more influence on how the system is defined any more than he can dictate the laws of physics. The guys at the top, the guys who make the laws, they are the guys who define how the great economic game is to be played. And eventually this great economic game determines how much stuff is produced. Because of the rules of the game, the amount of stuff produced is lower than what is potentially achievable. Dividing up the production is the next innings. There too they have a good racket. Instead of figuring out ways to increase the amount produced, they are busy figuring out who should get how much of the limited stuff. And the division is made strictly upon the calculus of who is going to vote which way.
India is famously touted as the largest democracy in the world. What that means is that the people decide who is going to make the laws. That the system throws up the most corrupt as the framers of the rules that define the economic game is not surprisingly a dire consequence of the choices that the people make. It is not a comforting thought that over the decades of India’s existence as a politically free nation, the people have consistently voted into positions of power those who are arguably the most venal of the lot. But then, is it reasonable to expect something else? Can a people who are almost absolutely ignorant of what the system really is be expected to know what is in their interest? A majority of us are not even literate — and even those of us who are literate, are woefully ignorant of how the system works. I readily confess that I don’t know what the great big machinery of the government of this huge nation is up to. How can I expect that the person who cannot even read the railroad timetable be able to decide which public policy is good and which is not?
So if this is not to be a counsel of despair, I should at least hint at what I consider to be the solution. I think that we — the ones who are have the ability and means to engage in this conversation — have to get out priorities straight. I get asked to support this or that organization which is trying to feed poor school children a mid-day meal. I get impatient at those kind of meaningless and ultimately futile gestures. They perhaps believe that by feeding a bunch of kids meals is going to fix the problem. I don’t deny that it is not important to feed kids. After all, the kids have not committed any crime that they should starve. What I don’t understand is why people don’t take a step back and see that the problem is that there is not enough stuff to go around, and the reason for that is that too much effort goes into extracting rents and too little in figuring out how to make more stuff.
There isn’t sufficient stuff to go around because there are no roads. That’s just an example of what’s missing. No roads is just an example. But the lack of roads is only an instance of what happens when corruption is the name of the game and the rules are made by the abjectly corrupt. I think that it should be the headlines on the newspapers. Instead what occupies the national attention has to do with how made how many runs in some cricket match. Or why someone should not have twittered the words “cattle class” — that matters and not the unspeakable fact that half of India’s children below five a chronically malnourished.
Deva, deva!

[anilsinghd]

A good one and what I like most was that it was concerning a big picture.


Yes this is the irony that we still VOTE the people who have been there for ages and saying that they will do this and that and blah blah .... 60 years is not not a small time and if someone cannot do it , then let them give a break and opt for something new.

I am not in favor or against any political party but talking in general.

I was watching the India-Pak game the other day and when nothing seemed to work , I hear the commentators saying that Harbhajan needs to come round the wicket and try something different , the point I wish to make is that it is so trivial COMMON SENSE to try something different when things are not working for you long enough. May be the common sense is not that common.

How much more we will see of this CASTE , FAMILY , RELIGION , MINORITY/MAJORITY politics , where are the topics of how much the country progr essed as compared to its peers and accounting for the resources we have?

Also on the reciever side , I strongly believe that the voting eligible population should be the one who can make informed and rational choices. Agreed with the author on that point.

[sidchhikara]

A good one and what I like most was that it was concerning a big picture.


Yes this is the irony that we still VOTE the people who have been there for ages and saying that they will do this and that and blah blah .... 60 years is not not a small time and if someone cannot do it , then let them give a break and opt for something new.

I am not in favor or against any political party but talking in general.

I was watching the India-Pak game the other day and when nothing seemed to work , I hear the commentators saying that Harbhajan needs to come round the wicket and try something different , the point I wish to make is that it is so trivial COMMON SENSE to try something different when things are not working for you long enough. May be the common sense is not that common.

How much more we will see of this CASTE , FAMILY , RELIGION , MINORITY/MAJORITY politics , where are the topics of how much the country progr essed as compared to its peers and accounting for the resources we have?

Also on the reciever side , I strongly believe that the voting eligible population should be the one who can make informed and rational choices. Agreed with the author on that point.


Bass ab Rahul baba ki gaddi garam kar raha hai Manmohan.
There are just too many illiterate, ill-informed people in our country ... it is almost impossible to bring about change.

[poonam]

Good one Sid..

too many ill iformed..yeah but actually..too many to start with..Population is the root cause!

[rajivsp]

There is big difference in all these and thats' the main cause of all problems
we always talk about. No Talkers but Doers required.......And there will not be
any problem. Population could be used as Resource not the root of all
problems.

The world is like Tail of A Dog - So we can not expect it to be RAM-RAJ. Its
not at all possible. So what changes we could expect?????? I think India is
doing well and for me This is the best place to live in the world.

[sidchhikara]

There is big difference in all these and thats' the main cause of all problems
we always talk about. No Talkers but Doers required.......And there will not be
any problem. Population could be used as Resource not the root of all
problems.

The world is like Tail of A Dog - So we can not expect it to be RAM-RAJ. Its
not at all possible. So what changes we could expect?????? I think India is
doing well and for me This is the best place to live in the world.

If its the best place in the world, then we don't need to do anything .. do we?

[sidchhikara]

Population could be used as Resource not the root of all
problems.



India is running out of natural resources like water ... food (you need water to grow food) to support such a huge population ... especially considering the fact that these resources are not distributed properly and there is no long term planning for irrigation.

Also, what good is an illiterate population? They are nothing but problem .... don't you see it around you ... even if you walk around with rose colored glasses ... you can still see the $hit on the streets. Bhikharyon ki sena khadi karni se?

[rajivsp]

India is running out of natural resources like water ... food (you need water to grow food) to support such a huge population ... especially considering the fact that these resources are not distributed properly and there is no long term planning for irrigation.


I lived 5 years in Holland what is there nothing but still Holland is the best
place to live. In America you can see poverty but not in Holland. Half of
the land is under the sea level. Farmers had done wonders there that
Eastern Europe calling them for training.

Problems are problems if you see it as problems but it could be seen as
Challenges/opportunities. There is no life without challenges. Are you
happy in America???????? I was not in Europe because I didn't want to live
retirement life at 30. In India there was struggle from childhood, we
wanted to become doctor/engineer to get a better life and we were
working hard for that. But in Holland hey whats' Mathematics leave it that
was the attitude in many students. Because job security is there they
could become plumber, cleaner, stewards, cashiers in super market and
could live a decent life. I didn't want my children got the same attitude.
and I came back to India.

We have enough resources as you said but its not well distributed or there
is wastage of resource. Don't you agree how much water/electricity we are
wasting everyday. After coming Meerut I came to know in one muslim
colony only 30% people are paying electricity bills. In Faridabad many steel
indusries were running on theft electricity. { for me these are
oppotunities to prove ourselves. Sabhi Mahatma
Gandhi ban jayenge tho mahatma banne ka scope hi khatm ho
jayega, Inhi Bikhriao ki fauz ne Mother Teresa to Nobel dilaya and
saint banaya. America ya Holland mein ye scope
nahin milta unhen}

If you see you will be unhappy. If you see in more depth you will be more
unhappy. But if you are able to see everything then you will be happy. So
if you do not see at all you will be happy or you see everything then you
will be happy. in between always unhappiness, complaints.........

[poonam]

. I didn't want my children got the same attitude.
and I came back to India.....

And when they wil become what you wanted (doc/engineer...), they may want to come back to this part of the globe, simply because more potential to grow here..anyway, to each his own..

[satyeshwar]

India is running out of natural resources like water ... food (you need water to grow food) to support such a huge population ... especially considering the fact that these resources are not distributed properly and there is no long term planning for irrigation.

Also, what good is an illiterate population? They are nothing but problem .... don't you see it around you ... even if you walk around with rose colored glasses ... you can still see the $hit on the streets. Bhikharyon ki sena khadi karni se?

Sid, I agree with what you are saying. Let's say we do run out of the natural resources for the humongous population, then what happens? Do you see a mass famine that reduces the population by half? Perhaps, the problem will inevitably find a solution. Nature finds an equilibrium and sometimes is very cruel about it.
-Satyeshwar

[sidchhikara]

Sid, I agree with what you are saying. Let's say we do run out of the natural resources for the humongous population, then what happens? Do you see a mass famine that reduces the population by half? Perhaps, the problem will inevitably find a solution. Nature finds an equilibrium and sometimes is very cruel about it.
-Satyeshwar

Yes, 200 million are on the brink. There is a very high probability that they can perish.
http://www.ifpri.org/pressrelease/india-faces-urgent-hunger-situation

[rajivsp]

And when they wil become what you wanted (doc/engineer...), they may want to come back to this part of the globe, simply because more potential to grow here..anyway, to each his own..
I don't want them to become doc/eng but competent. Thats all. After 12th where ever they want to go, I wont mind.

[Mishti]

Of Trucks and Roads and Corruption

What an eye-opener !!!
Thank you Sir.

[anilsinghd]

If its the best place in the world, then we don't need to do anything .. do we?


Precisely! On the money mate! :)



Sid, I agree with what you are saying. Let's say we do run out of the natural resources for the humongous population, then what happens? Do you see a mass famine that reduces the population by half? Perhaps, the problem will inevitably find a solution. Nature finds an equilibrium and sometimes is very cruel about it.
-Satyeshwar

I think I have read the same post of yours somewhere else as well!
2things ; one you repeat yourself , which is good ; two even you believe in the law of averages which is heartening! :D

[rajivsp]

World don't need our help.
WE HELP OURSELVES, NOT THE WORLD - Swami Vivekanada


http://www.ijourney.org/index.php?tid=609
http://www.swadharma.org/2008/12/23/the-world-is-like-a-dogs-curly-tail/

[karan]

Rajeev
Glad you gave an example of Holland. What a wonderful country? Indeed so, legalized drugs, farmers have done wonders in agriculture etc. Just one question how come there are so many car thefts and robbery. There is no place on the face of this planet where there is no poverty. Poverty is not just defined by annual income, disposable income but people who receive welfare and sucking the system dry. Just because some nation has perfected the art of hiding their flaws behind curtains does not mean they don't have flaws. One thing great about US and Canada is they are not pretentious like europeans, they acknowledge their flaws.
Rest is debatable.
As far as India is concerned, corruption is the reason why there was a population explosion, corruption is the reason why there were mumbai attacks of 1993, when custom Officer allowed the entrance of RDX in India as he called "kala Sabun". Corruption is the reason why mumbai 26/11 happened.
Corruption is the reason why we win or lose?

[rajivsp]

Car thefts and robbery in Holland! Strange I never heard, ya I heard about cycle thefts ( 1 million cycles every year theft whereas the population of the country was just 16 million). May be I was lost in the beauty of the land and in the enjoyment of my 5 year long Honeymoon which was possible in Holland only - unlimited free petrol, every 3 year a brand new car, more than 6 months holidays in a year, less than 2 hours job a day that too most of the time from home.

God made the land Dutch made the Netherlands the only country I liked after India, really a wonderful country- wonderful dutch people. Its like a dream my stay in Holland.

I agreed corruption is the only reason everybody knows that. isn't it. But whats the use of just talking......... if we can't remove it.

[sidchhikara]

I agreed corruption is the only reason everybody knows that. isn't it. But whats the use of just talking......... if we can't remove it.

OK ... what do you have in mind??
All you are doing is talking about NOT talking .. God!

[rajivsp]

???????????????

[kapdal]

Yes, 200 million are on the brink. There is a very high probability that they can perish.
http://www.ifpri.org/pressrelease/india-faces-urgent-hunger-situation

Does anyone have a good analysis on this? I am not sure if this "hunger" is same as the hunger that we normally think of (people dying as they are not getting food).

The wiki page for this index is here: http://en.wikipedia.org/wiki/India_State_Hunger_Index

It says that the index is based on Global Hunger Index (GWI).
http://en.wikipedia.org/wiki/Global_Hunger_Index

Calculation of the GHI
GHI: (PUN + CUW + CM) / 3
PUN = proportion of the population that is undernourished (in %)
CUW = prevalence of underweight children under five (in %)
CM = proportion of children dying before the age of five (in %)
The index ranks countries on a 100 point scale, with 0 being the best score ("no hunger") and 100 being the worst, though neither of these extremes is achieved in practice. Values less than 4.9 reflect "low hunger", values between 5 and 9.9 reflect "moderate hunger", values between 10 and 19.9 indicate a "serious", values between 20 and 29.9 are "alarming", and values exceeding 30 are "extremely alarming" hunger problem.

Now, question is what determines whether a child is undernourised/underweight? If Indian children are benchmarked against global averages, many would anyways come out as undernourished and underweight, just because of different diets. Just like even healthy Indians would come out as under-height if benchmarked against global benchmarks. Coming to child mortality, isn't it a big assumption that a child dying before 5 would be dying of hunger? What about lack of proper medical attention when a child falls sick? I can think of anecdotal examples of children dying after getting fever/cholera/jaundice/etc. as he was not taken to a doc on time or because the doc/quack was incompetent. This is from my surroundings where no one was "hungry" as we generally imagine poor people to be.

Now read this in first link:
ISHI 2008 scores for Indian states range from 13,6 (“serious”) for Punjab to 30,9 (“extremely alarming”) for Madhya Pradesh, indicating substantial variability among states in India. Punjab is ranked 34th when compared to the GHI 2008 worldwide country ranking, while Madhya Pradesh is ranked 82nd. In this state more people suffer from hunger than in Ethiopia or Sudan. 60 percent of the children are undernourished.

So do we really think that even a result of 30.9 is alarming, if Indian children are being benchmarked against global averages? Even a state like Punjab, where availability/access to food is not a big issue, falls in serious category. I don't think 13.6% of children are dying of hunger in Punjab.

Also note the 60% of undernourished children in MP, that has been compared with Ethiopia to generate shock value. Is it not too high a number to be plausible as real hunger? And it also gives an indication of what is driving these numbers. MP's score is 30% overall; of which 20% is contributed by undernourishment (60%/3). Between undernourishment and underweight, I'd consider underweight to be a better indicator (not good enough, but relatively better). As an underweight child is much more likely to be "hungry" than an undernourished child. I can easily imagine how a supposedly well-fed and over-weight Indian child (eating bread, butter, samosas and what not) would still be under-nourished when you look at global averages of proteins and vitamins.

Another thought- hopefully the people calculating didn't double count the undernourished and underweight. It is an elementary thing to take care of, but working in a bank, I am no more surprised by elementary errors.

Finally, just to be clear- I am not rubbishing this Index. Indeed, it may quite usefully point that Indian children (rich and poor alike) are undernourished and the remedy would be a balanced diet. But what happens usually is that these reports are used for sensational headlines (Indians hungrier than sub-Saharan Africa) and then forgotten. Or worse, they lead to wrong policy actions. One can easily imagine a controversy based on such a report followed by banning of exports on wheat/rice, etc; which may already be rotting in FCI's godowns.

And also, just to be clear, I am not saying there is no one dying of hunger in India. There may probably be quite a few needing urgent attention, just don't think this report identifies them correctly.

Would love to see a good analysis of this methodology and report somewhere.

[sidchhikara]

Good analysis Kapil.
I will have to look at the parameters more closely to see whats going on with that index.
I do remember studying diseases like Kwashiorkar, marasmus, anemia taught in science class in middle school. At that time, I found no sense to lagao ratta of these diseases - I think they were trying gto scare the kids - that was such a cruel joke. I believed that Kwashiorkar was named after a Marathi man.

[jAY4U]

Of Trucks and Roads and Corruption

What an eye-opener !!!
Thank you Sir.
what,s mean eyes opener:confused:

[sidchhikara]

Here is a very good read on corruption on Atanu Dey's blog:

http://www.deeshaa.org/2009/10/12/a-digression-on-corruption-in-six-acts/

I will reproduce it here:

A Digression on Corruption in Six Acts

12 October 2009 No Comment
ACT 1: A Course on Development
This summer for teaching an undergraduate course on economic development (Econ171 (http://econ171.wordpress.com/)) at Berkeley, I naturally considered the major factors that affect — and effect — economic growth and development of an economy. The major headings included growth models, energy, infrastructure, urbanization, education, agriculture, and one other topic which I will come to presently. It should come as no surprise that the government of India — being one that professes a sincere commitment to economic growth and development — actively intervenes in all of those areas. There are government departments and ministries at the central and state levels.
Digression: Ministries
Actually, it is an understatement to say that the government intervenes in the economy. One would be hard-pressed to find even a minor matter related to the economy that the government does not interfere in and control. There are ministries. Here are a few, from the Govt of India directory (http://goidirectory.nic.in/exe.htm#ioff):

Ministry of Agriculture
Ministry of Chemicals and Fertilizers
Ministry of Civil Aviation
Ministry of Coal
Ministry of Commerce and Industry
Ministry of Communications and Information Technology
Ministry of Consumer Affairs, Food and Public Distribution
Ministry of Corporate Affairs
Ministry of Culture
Ministry of Defence
Ministry of Development of North Eastern Region
Ministry of Earth Sciences
Ministry of Environment and Forests
Ministry of External Affairs
Ministry of Finance
Ministry of Food Processing Industries
Ministry of Health and Family Welfare
Ministry of Heavy Industries and Public Enterprises
Ministry of Home Affairs
Ministry of Housing and Urban Poverty Alleviation
Ministry of Human Resource Development
Ministry of Information and Broadcasting
Ministry of Labour and Employment
Ministry of Law and Justice
Ministry of Micro, Small and Medium Enterprises
Ministry of Mines
Ministry of Minority Affairs
Ministry of New and Renewable Energy
Ministry of Overseas Indian Affairs
Ministry of Panchayati Raj
Ministry of Parliamentary Affairs
Ministry of Personnel, Public Grievances and Pensions
Ministry of Petroleum and Natural Gas
Ministry of Power
Ministry of Railways
Ministry of Road Transport and Highways
Ministry of Rural Development
Ministry of Science and Technology
Ministry of Shipping
Ministry of Social Justice and Empowerment
Ministry of Statistics and Programme Implementation
Ministry of Steel
Ministry of Textiles
Ministry of Tourism
Ministry of Tribal Affairs
Ministry of Urban Development
Ministry of Water Resources
Ministry of Women and Child Development
Ministry of Youth Affairs and Sports
There are commissions and independent offices:

Central Bureau of Investigation (CBI)
Central Information Commission
Central Vigilance Commission (CVC)
Comptroller and Auditor General of India (CAG)
Election Commission of India
National Commission for Backward Classes (NCBC)
National Commission for Minorities (NCM)
National Commission for Scheduled Castes (NCSC)
National Commission for Scheduled Tribes (NCST)
National Commission for Women (NCW)
National Commission on Population
National Human Rights Commission (NHRC)
National Manufacturing Competitiveness Council (NMCC)
Office of the Principal Scientific Adviser
Planning Commission
Telecom Regulatory Authority of India (TRAI)
Thirteenth Finance Commission
Union Public Service Commission (UPSC)
And more:

Directorate of Public Grievances (DPG)
Department of Atomic Energy
Department of Space

[sidchhikara]

Act 2: Cars with Flashing Red Lights
Lots of union and state ministers there. Lots of commissioners. And department heads. All going around in cars with red flashing lights on the top. Traffic is controlled when these people travel on city streets, doing whatever they are supposed to be doing. And bureaucrats to support them. That means a lot more cars with red flashing lights on top. Lots of pushing of files and granting of permissions. Lots of god alone knows what in various offices scattered across Delhi and state capitals.
There is no economic activity, however trivial, that is not under some ministry, commission, or department of the government of India. In most cases, the control that government agencies exert over them is comprehensive and exhaustive. That economic growth and development has largely eluded India for decades is a well established fact. Is it possible that it is precisely because of the government control that development and growth has not happened? It could be. Lack of economic freedom is correlated with poorly functioning economies. But why? I believe that the answer is one word: corruption.
That’s one topic that I find to be at the heart of all economic development and growth. It is striking that the topic does not receive much attention. I was recommended a textbook by an Indian author on development economics. The book did not have a chapter on corruption. It’s like having a textbook on thermodynamics and neglecting to refer to entropy.
I decided against using the book. Besides, it was not particularly suited for a well-rounded understanding of the subject.

[sidchhikara]

ACT 3: The Missing Ministry
But fortunately, there is a large and growing literature on corruption, much of it easily accessible on the internet. I used that for the course and spent considerable class time in discussing the role of corruption in development.
Now here’s a point I am trying to make over here: It appears that corruption is one factor that matters significantly in economic development and yet there is no ministry dedicated to controlling corruption. There are ministries by the truckloads, ranging from the important to the trivial: from infrastructure to micro enterprise to energy to earth sciences (I did not know that) to civil aviation (a vanishingly small portion of Indians can afford aviation) to culture (really!), ad infinitum.
One could cynically observe that no special ministry of corruption is necessary as corruption is a horizontal issue that runs across all the verticals, and indeed that they are all implicitly ministries for corruption.

[sidchhikara]

Digression: The CVC Mystery
Actually, there is something called the “Central Vigilance Commission (CVC)” but it is not easily clear what it actually does. The website says,
Powers and Functions of CVC (http://cvc.nic.in/CVC_power.htm)
* to exercise superintendence over the functioning of the Delhi Special Police Establishment (DSPE) with respect to investigation under the Prevention of Corruption Act, 1988; or offence under CRPC for certain categories of public servants and to give directions to the DSPE for purpose of discharging this responsibility;
* to review the progress of investigations conducted by the DSPE into offences alleged to have been committed under the PC Act;
* to undertake an inquiry or cause an inquiry or investigation to be made into any transaction in which a public servant working in any organisation, to which the executive control of the Government of India extends, is suspected or alleged to have acted for an improper purpose or in a corrupt manner;
* to tender independent and impartial advice to the disciplinary and other authorities in disciplinary cases, involving vigilance angle at different stages i.e. investigation, inquiry, appeal, review etc.;
* to exercise a general check and supervision over vigilance and anti-corruption work in Ministries or Departments of the Govt. of India and other organisations to which the executive power of the Union extends; and
* to chair the Committee for selection of Director (CBI), Director (Enforcement Directorate) and officers of the level of SP and above in DSPE.
* to undertake or cause an inquiry into complaints received under the Public Interest Disclosure and Protection of Informer and recommend appropriate action.
That sounds good. But going from what is reported in the popular press about anyone convicted of high-level gross corruption (not one actually reported in the last 60 years), one would have to conclude that corruption at high levels does not exist in India at all. At most one hears of the conviction of people involved in petty corruption — such as throwing a poor man who sold diluted milk in jail, or some common burglar being apprehended and successfully prosecuted.
Small fry, yes; big fish, caught and let go; great whites, you must be joking.
What’s the CVC actually done? I poked around the website for a good while and it appears they do nothing worth reporting on their site. It’s a mystery.

[sidchhikara]

Act 4: Wealth Accumulation
It may be true that not all politicians in India are corrupt. Of the tens of thousands of politicians, there must be at least a handful that are not corrupt and have not accumulated immense wealth. But to use an expression favored by economists, to a first approximation all politicians are corrupt. The exceptions are not known but the exceptionally corrupt are widely recognized. Corruption is so endemic to the class of politicians that it does not evoke even mild surprise, leave alone any outrage.
Here’s an example. The late YSR Reddy was chief minister of Andhra Pradesh for the second term. He died in a helicopter accident last month. Unverified reports say that he was wealthy. How wealthy is hard to estimate. But here’s a partial list that is going around. I stress again that this is only alleged and I am not representing this as a fact.
Assets gained by YS in his 5 years as Chief Minister
• Raheja Corporation land allocation for Infrastructure ( 200 acres in first phase and 300 acres in second phase)- CM’s son gets 50 percent share
• 500 acres in the 1000 acres allocation to Gangavaram port
• Brahmani Steels investment – Rs.40,000 crore - CM’s son gets 50 percent stake
• Indu and Brahmani Infotech companies get 250 acres with 50 percent stake to CM’s son.
• Rs.3500 crore investment for a six million tones Cement factory at Kamalapuram in Kadapa district.
• Rs.6000 crore Hydro electric project -1200 MW in Sikkim - CM son gets 50 per cent stake
• 1000 acres bought in and around Bangalore - land cost Rs.Three crore per acre.
• Rs.250 crore commercial complex on Bannerghatta Road in Bangalore
• 25 acres land in Hyderabad, Kukkapally Housing Board location.
• 90 acres in benami bought in IT corridor area of Gacchibowli .
• 151 acres of granite mining lands in Prakasam district, Cheemakurthi ( world famous for its black and gold granite stone ) in benami company ( Gimpex ).
• Mauritius shell companies 2 I Capital , Flury Emerging Capital purchase 125 crore worth shares in Sandur Power Ltd –
• Benami subsidiaries : Bhagavat Sannidhi, Carmel Asia Holdings, Harish Infra, Classic Realty, Janani Infra,Marvel Infra ,Silicon Builders, Capstain Infra, Shalome Infra, Inspire Hotels
• Purchase of Assigned lands -1000 acres in Kandur village and 500 acres in Chitwel village of Kadapa district.
I quoted only a bit of a fairly long list that is available at the Shadow Warrior (http://rajeev2004.blogspot.com/2009/09/partial-list-samuel-reddys-financial.html) blog. I am sure that YSR Reddy is not exceptional; similar lists must be available for other ministers, past and present. No one particularly cares that corruption is part of the DNA of this society.

[sidchhikara]

Digression: Public versus Private Corruption
Allow me to introduce you to “Atanu’s First Lemma of Private Corruption“: Public corruption establishes the upper bound to private corruption.
It is my natural modesty that prevents me from calling it a law. And besides, a lemma is a stepping stone to a larger theorem or thesis that I wish to establish one of these days.
But seriously, we have to examine the problem of corruption in India. After considerable thought I have concluded that the basic problem of India’s underdevelopment rests on corruption. By focusing on corruption we can understand the entire system. Once we understand the system, we can propose what is to be done about improving it. First, however, we have to give corruption the undivided attention that it deserves.
A ready response whenever the topic of corruption is raised is, “Corruption happens everywhere. It is not only in India. Heard of Enron? And a thousand other instances of corruption in developed and underdeveloped countries?”
Yes, corruption is not unique to India. Indians are not unique. They are humans and share all human characteristics with the rest of humanity. The point to note is that the impulse to be corrupt occurs in all people. The difference lies in the opportunity that the environment presents for the expression of that basic instinct. In India, for reasons that we could go into later on, the environment provides the most fertile ground for corruption to flourish. The genes are the same; the environment allows differences in their expression.
The upper limit to private corruption, as I said before, is established by public corruption. Which implies that the lower bound to public corruption can be estimated by the revealed private corruption. Let’s take a recent example. Satyam, a large private sector technology firm head quartered in the above mentioned state of Andhra Pradesh, was recently in the news. Its boss, one Mr Ramalinga Raju, fiddled with the books to the tune of a few billion dollars for a number of years. I conjecture that he did it because he was fairly confident that he would get away with it. Could it have been possible that this assurance came from knowing that the political powers were even more corrupt? Does public sector corruption provide the cover that private sector operators depend on for protection? Whatever be the details of the Satyam case, it can be reasonably asserted that without the involvement of the government of the state, Mr Raju could not have been all he was.
Andhra is not the only state where there is public corruption. It is a fraternity, a sacred brotherhood even. Regardless of which political party or ideological persuasion, they are all in it. Which is why you don’t see party A (in power) prosecute party B (not in power) for corruption that the latter indulged in when in power. Party A now has the opportunity to rake in the spoils of their reign. After all, the party fought tooth and nail mostly so that it could have the opportunity to make a killing. They would be insane to forego the primary benefit of being in power — make money. This means no political party has an incentive to do anything that limits their opportunity to gain from corruption. This means religiously avoiding throwing stones since they are living in very fragile glass houses.
If the level of public corruption cannot (in the ordinary course of events) come down, then the ceiling for private corruption keeps rising. I conjecture that in the past, the amount of public corruption was lower (and so was private corruption) and that it has been monotonically increasing with time.

[sidchhikara]

Act 5: The Big Picture
Now it is time for the First Law of Corruption: Corruption at any specific level provides the upper bound for the degree and extent of corruption at the next lower level.
Here’s what that implies:
1. If the boss is honest, he will not tolerate dishonest business under him.
2. If the boss is dishonest, the people under him have his permission to be dishonest.
3. If the boss is dishonest, the people under him are safe being dishonest — he couldn’t fire them because they could rat on him.
4. If the boss is dishonest, he will not tolerate honest people working for him — he cannot have a hold on them and they could rat on him.
5. If the boss is dishonest, he will eventually convert those work for him to be dishonest.
Basically, in any hierarchical organization, the degree of corruption increases with the level in the organization. If the lowly clerk at the government office is corrupt, it means that the whole structure is corrupt and the most corrupt are at the top of the organization. Public sector organizations — such as the list of ministries listed above — draw their inspiration from the top. The government is a collection of such organizations. The people who form the top level of the government can therefore be expected to be the most corrupt.
The corruption of the captains of the private sector is bounded by the corruption of the top level operators of the government. If you hear of the corruption of a mega super corporate head honcho, be assured that he (and to a first approximation they are all males) has the support of the top level of the government.

[sidchhikara]

Final Act: Why?
Corruption is seriously like a cancer for an economy. It eventually kills it. Like a cancer, corruption has something to do with the DNA at the cellular level of the organism. Damage to the DNA leads to cancer. Somehow at some time, corruption enters the economic system. It then keeps growing. Like a cancer, it can start off in one localized spot and then it metastasizes. The best response to cancer is to catch it early and excise completely the tissue that is cancerous. It is too late when the cancer has spread to other vital organs.
I have concluded that monopoly power allows corruption to take hold. Healthy competition is not consistent with corruption. The market mechanism largely kills institutions and firms that are corrupt. The government, however, has monopoly power in many sectors, and therein lies the possibility of corruption. It is not guaranteed that all governments will be corrupt. Only some, and only those which are based on flawed constitutions. But that is a different story for another day.
Government monopoly power gives the leaders of the government the power to be corrupt. Then if these leaders do become corrupt, the corruption trickles down the organizational structure. And then it spreads side ways: the private sector is becomes part of the game. Sometimes they are forced to join the game. The rules say that the government has the right to allow or prohibit the establishing of certain businesses. Those who are willing and able to pay the government for the licences, are allowed in.
Given enough time, basic human nature will ensure that corruption will monotonically increase with time in a license-permit-quota control raj. The socialist government of India, created by the Congress, for the Congress and of the Congress was bound to degenerate to this state of affairs.
India is poor because it is corrupt. No other factor can adequately and fully explain its horrifying poverty.

Please See Page 2 of this thread for the whole series starting at post #24 ... it is very interesting ... I guarantee it.

[karan]

SID
India is poor not because of corruption but due to kleptocracy. Corruption is a tool used by people who are not part of kleptocracy.

[sidchhikara]

SID
India is poor not because of corruption but due to kleptocracy. Corruption is a tool used by people who are not part of kleptocracy.

Yes, Corruption and flawed democracy (because of illiterate population and flawed constitution) is what promotes kleptocracy.

[jangsher]

Act 4: Wealth Accumulation
It may be true that not all politicians in India are corrupt. Of the tens of thousands of politicians, there must be at least a handful that are not corrupt and have not accumulated immense wealth. But to use an expression favored by economists, to a first approximation all politicians are corrupt. The exceptions are not known but the exceptionally corrupt are widely recognized. Corruption is so endemic to the class of politicians that it does not evoke even mild surprise, leave alone any outrage.
Here’s an example. The late YSR Reddy was chief minister of Andhra Pradesh for the second term. He died in a helicopter accident last month. Unverified reports say that he was wealthy. How wealthy is hard to estimate. But here’s a partial list that is going around. I stress again that this is only alleged and I am not representing this as a fact.

Assets gained by YS in his 5 years as Chief Minister
• Raheja Corporation land allocation for Infrastructure ( 200 acres in first phase and 300 acres in second phase)- CM’s son gets 50 percent share
• 500 acres in the 1000 acres allocation to Gangavaram port
• Brahmani Steels investment – Rs.40,000 crore - CM’s son gets 50 percent stake
• Indu and Brahmani Infotech companies get 250 acres with 50 percent stake to CM’s son.
• Rs.3500 crore investment for a six million tones Cement factory at Kamalapuram in Kadapa district.
• Rs.6000 crore Hydro electric project -1200 MW in Sikkim - CM son gets 50 per cent stake
• 1000 acres bought in and around Bangalore - land cost Rs.Three crore per acre.
• Rs.250 crore commercial complex on Bannerghatta Road in Bangalore
• 25 acres land in Hyderabad, Kukkapally Housing Board location.
• 90 acres in benami bought in IT corridor area of Gacchibowli .
• 151 acres of granite mining lands in Prakasam district, Cheemakurthi ( world famous for its black and gold granite stone ) in benami company ( Gimpex ).
• Mauritius shell companies 2 I Capital , Flury Emerging Capital purchase 125 crore worth shares in Sandur Power Ltd –
• Benami subsidiaries : Bhagavat Sannidhi, Carmel Asia Holdings, Harish Infra, Classic Realty, Janani Infra,Marvel Infra ,Silicon Builders, Capstain Infra, Shalome Infra, Inspire Hotels
• Purchase of Assigned lands -1000 acres in Kandur village and 500 acres in Chitwel village of Kadapa district.
I quoted only a bit of a fairly long list that is available at the Shadow Warrior (http://rajeev2004.blogspot.com/2009/09/partial-list-samuel-reddys-financial.html) blog. I am sure that YSR Reddy is not exceptional; similar lists must be available for other ministers, past and present. No one particularly cares that corruption is part of the DNA of this society.
Politician Rupeeye nahi kamayega to Baar Baar Election Kaise contest karega

[jangsher]

Yes, Corruption and flawed democracy (because of illiterate population and flawed constitution) is what promotes kleptocracy.
Jo log corruption mein involved hote hain wo normal aadmi se jayada mehanti or risk taking hote hain. We normal people do not have guts, sirf baat karte hain, kahin jaroorat pare to ladte nahi, darte hain

[rajivsp]

SID
India is poor not because of corruption but due to kleptocracy. Corruption is a tool used by people who are not part of kleptocracy.
Got the point Sir, you are genius why don't you join me at http://infobizz.in
lets write a book on Entrepreneurship and spread awareness of entrepreneurship among Jats. For me this is the only way to socio-economic development of our community. Small and medium enterprises are the backbone of the economy of any developed country, even in USA if I am not wrong 3 out of 4 jobs generated by SMEs only.

All progress-major milestones (Success/failure) is being write down here only at
http://www.jatland.com/forums/showthread.php?p=228840#post228840

http://www.jatland.com/forums/converse.php?u=8986&u2=17766

[karan]

Got the point Sir, you are genius why don't you join me at http://infobizz.in
lets write a book on Entrepreneurship and spread awareness of entrepreneurship among Jats. For me this is the only way to socio-economic development of our community. Small and medium enterprises are the backbone of the economy of any developed country, even in USA if I am not wrong 3 out of 4 jobs generated by SMEs only.

Rajiv Sir
The idea behind Entrepreneurship is individuality. Every person must go through growing pains individually. Opening a business and making it successfull is akin to nurturing a child, you have general idea, you have seen others do it but just like every child is an individual such is the business. Every business has something different to offer, their model is different, their phillosophy is different, their goal is different. Most of new businesses fail within first five years. (Some JL'ers please save your comment, some people here can't even write a coherent sentence yet they are at the forefront of confrontation) This satistic comes from advanced economies not emerging economies.
I don't have anything to offer to anyone, haven't reached the level of wisdom that I anticipated I would, writing a book is like imposing your thoughts, opinions and your mistakes on others. I can't live with the fact that due to my advice some poor soul made bad decision or failed at their business endeavour. Thanks for the offer but I do wish all the success and luck to you with your enterprise.

[rajivsp]

There's nothing you can do that can't be done.
Nothing you can sing that can't be sung.
Nothing you can say but you can learn how to play the game.
It's easy.

Nothing you can make that can't be made.
No one you can save that can't be saved.
Nothing you can do but you can learn how to be you in time.
It's easy.

1)
Data from the U.S. Census Bureau’s Business Tracking Series show that about 65 percent of new businesses are still operating after four years. That means new ventures actually succeed more often than not.
2)
A leader is known by his leadership qualities, A scientist is known by his innovation, A language teacher is known by his Language. Eienstein tried to learn English, never learnt, in his notes written in german there are many grammatical mistakes.
3)
Most of the jats are from farming background which no less than any enterprise. So basically we are entrepreneurs.
4)
writing a book is not imposing your thoughts on others rather sharing it with others.
5)
the progress in India might be much faster than any other advanced economy, one should know the ways.