Smoke and mirrors

Pinning down corporations for bribery is good. But government must also be open,consistent

Written by The Indian Express | Published: October 12, 2012 3:04:06 am

At a time when public discourse is dominated by issues of corruption,the abuse of public authority and the ways to curb it,Prime Minister Manmohan Singh struck a reasonable note. His speech at the 19th conference of CBI and state anti-corruption bureaus acknowledged the gravity of the phenomenon,and laid out a few ways to address it. The Prevention of Corruption Act will be amended,and will now consider “corporate failure to prevent bribery” as an offence on the “supply side”. This is a welcome move,and in line with the guidelines of the UN Convention Against Corruption,which India had signed only last year. Our anti-corruption legislation has always focused on the state as the primary pressure point,and shied away from taking on the private sector. As the nature of the economy changes,it becomes that much more crucial to address the other side of institutional corruption. The prime minister pointed out that corruption has shifted shape in the last two decades,from the kind of pathologies associated with the licence-permit raj to more sophisticated and specialised manipulation,and advised anti-corruption agencies to keep up with the change.

The PM’s advice is unexceptionable,but it does not confront the reason that corruption thrives in the interstices between business and government — there is often little clarity or consistency in the way policy is framed and decisions are taken. In a developing economy,setting predictable and transparent rules for the people to engage with the state is a vital reform that the government is only beginning to put in place. The public disgust with corruption and cronyism may yet serve its purpose if it forces more transparent systems. There have been welcome changes in the processes for the allocation of coal blocks and telecom. However,it does not help when cabinet ministers resist the demands for more openness by claiming they impinge on the government’s policy-making prerogative. Too many sectors still remain discretion-laden — land,for instance. Given that state governments have the power to dramatically alter value by changing its use or invoking some regulation,decisions about land allocation inevitably serve powerful insiders.

Having clear rules for each sector and being bound by them,and minimising arbitrariness,is within the government’s control. It is the only lasting way to check corruption,not simply turning the mirror around and making corporations culpable too.

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