Where the colour of money is black

Our democracy is being thereby alleged to be based on corruption. We are looked upon as a corrupt society. The malaise of corruption in our society operates at all levels: political, bureaucratic, business and day-to-day life. It is generally alleged, and correctly believed, that a bigger chunk of black money is involved in elections: elections to central legislatures, to state legislatures and even municipal elections. At the bureaucratic level, it operates for favours of various sorts in the administrative area. In business, the Licence Raj system is one part, and the other part is connected with securing favours from bureaucratic level and from political masters.

Involving all these levels, over the last many years there were quite a number of scams involving massive amounts of money. The Bofors scam of Rs 65 crore is now an old story. The fodder scam of huge amounts involving the Chief Minister of Bihar 8212; when he had to go behind the bars, he placed his wife on the seat of CM where she is still operating and he has now become the Railway Minister of the central government. Nobody knows how the fodder scam is now progressing. There was a scam of purchase of medicines in Uttar Pradesh, involving bogus purchases of medicines worth Rs 63 crores. A securities scam involving a high-level dealer in securities who had secured huge amounts of loans from banks against securities which were apparently fraudulent and which involved many crores of rupees. A telecom scam which involved a minister of the central government. A stamp-paper scam involving fake stamp-paper of over Rs 2200 crore. A scam of NPAs Non-Performing Assets of banks which was of momentous proportions, allegedly involving about Rs 80,000 crores, perpetrated through banks by indiscriminate sanction of loans and advances to the industry and business. The petrol pump scam involving allotment of large number of petrol pumps in various parts of the country to the relatives of political functionaries, and some other scams.

Unfortunately, over the last three-four decades, our democracy has become increasingly dependent on the practice of corruption. Black money has become the essential ingredient of political elections. Candidates have to spend money 8212; for setting up huge pandals for attracting crowds, arranging transport for attracting them to the meetings. Political parties have to collect money for meeting various requirements connected with election of candidates. Money is collected through all sorts of sources, and inevitably it is black money. No wonder that as much as 40 per cent of the Gross Domestic Product GDP is used as black money, mostly for politics and processes connected with politics.

There have been demands that political parties must maintain accounts and the account should be accessible for scrutiny and audit. This demand was secured from the Supreme Court by Common Cause through a writ petition. Orders were issued, but compliance with these orders has not been evident. There have been suggestions that elections should be based on allocation of funds by the government for parties and their individual candidates. This has been discussed and debated, but it has not, in the present circumstances of multiplicity of parties and requirements of individual candidates, been found possible or acceptable. Limits have been placed by the government on expenditure which can be incurred on election to an Assembly and election to the Parliament, but these limits have never been properly enforced.

Bureaucratic corruption is considerably linked to the present atmosphere wherein the political executive, the minister in charge of the department, is himself not above corruption and is in fact ready to jump in for securing funds from the people, directly or through the bureaucrats. There are undoubtedly exceptions where bureaucrats are not in any way involved in corruption. There are numerous functionaries for maintaining and enhancing the reputation of our country. They set the example, for their colleagues as well as for their subordinates, and they deserve all the praise and support that the functioning of the bureaucracy can give them. Among the bureaucrats, however, at various levels, including the highest as well as the subordinates, there are black sheep. They siphon off funds, through dubious means and from clients and tenderers, and amounts thus secured are sometimes huge, running into many crores of rupees.

Business is business for making money, through their products or services. Normally, their operations should remain above board. But it has to be realised that where the businessman is faced with the situation that he can make money or secure an order only by payment of bribe, he will even inevitably resort to these means. If the system of political, executive and bureaucratic operations can ensure that no businessman will be allowed to resort to foul means, there will be much less chances of bribery and corruption.

One cannot help feeling that in India, a person would have inclination to even bribe God for securing a special benefit. Whether businessman, contractor or builder involved in big constructions, all hold out promises to God with special offerings, for seeking the favour of success for their ventures.

How to curb corruption

Taking all these facts into consideration, one has to devise ways and means for curbing corruption to the maximum possible. Following are the measures which have already been talked about or initiated. It will be desirable to determine what means need to be adopted to meet the requirements of enforcement of the contemplated measures.

In the political arena, as stated above, the major cause of corruption is the requirement of black money for election purposes, beside, of course, resort to corruption by political masters when they assume power. For eliminating corruption in elections, there is no alternative to the allocation of election funds to selected candidates by their political parties. For this purpose, there is primary need for making provision of funds which can be allocated to individual political parties by the business community and those who have the capacity to afford it. That funds allocated to political parties will be exempt from income tax payable by donors. There is certainly no reason why this provision should not be enforced.

While enforcing this provision, it must also be imposed as positive responsibility on political parties that they must maintain accounts and that accounts should be subjected to annual audit and report thereof published. Direction to this effect was issued by the Supreme Court on submission of a writ petition by Common Cause, as mentioned earlier, but it is unfortunate that on subsequent enquires from political parties whether they were maintaining accounts, most of them preferred to remain silent, which means that they were not complying with this requirement. If political parties continue to collect funds through processes of black money, if they choose not to maintain accounts, there can be no curbing of corruption and our country will continue to be disgraced by the fact of our being deemed as one of the most corrupt countries of the world.

Black money is one negative aspect of Indian politics. Law-breakers becoming law-makers is the other important matter which needs to be tackled. The minimum requirement for ensuring that law-makers are able to promote a corruption-free government is that law-makers are not themselves the law-breakers. It is necessary that steps must be taken to ensure that the law-breakers and criminal elements do not become law-makers. There is need to amend the electoral law, particularly Representation of People8217;s Act, to ensure that the law-breakers do not become law-makers.

To attain these objectives, the following steps need to be taken:

8226; No political party must be permitted to contest the election unless it has got its latest annual accounts duly audited by an auditor prescribed or notified by the Election Commission, Comptroller and Auditor General or the Supreme Court.

8226; No political party must be permitted to contest elections unless it has cleared its income tax dues and has got the requisite certificate from the Income Tax authorities.

8226; Complaints regarding the scope of corrupt practices during elections should be looked into by the Election Commission even before the date of polling.

8226; Explanation 1 below Section 77 of the Representation of People8217;s Act should be deleted. This explanation states that any expenditure incurred or authorised in connection with the election of candidate by a political party or by any other association or body of persons or by any individual other than the candidate or his election agent shall not be deemed to be expenditure incurred in connection with election incurred.

8226; Another requirement is to incorporate the provision that a person who has been accused of an offence involving moral turpitude or any other criminal offence will not be permitted to contest the election. The Election Commission can identify these offences. In particular, the provision should ensure that any person against whom a chargesheet has been framed, in respect of an offence involving moral turpitude or criminal offence, should be debarred from contesting election. The Election Commission should identify the offences. The critical test for applying the ban on the candidate contesting the election should be that the concerned judicial authority, including magistrate etc., would have examined the FIRs and the date and material to the stage of framing chargesheet.

Other important requirements

8226; A very important consideration is that there should be a law which would punish the person involved in corruption. It is unfortunate that in our country, corruption today has become a low-risk and high-profile business activity. The Law Commission in its 167th Report has suggested the enactment of Corrupt Public Servants Forfeiture of Property Act. The Bill for enactment of this Act has been pending in the government from February 4, 1999. With the enactment of this Act, the corrupt public servants will no longer be able to take advantage of the present legal process to escape punishment. The main provisions of this Act include:

I It shall not be lawful for any person to hold illegally acquired property either by himself or through any other person on his benefit;

II Where any person holds illegally acquired property, such property shall be liable for forfeiture by the central government;

III Persons holding any illegally acquired property, on conviction by a criminal court, should be also liable to punishment with imprisonment which should not be less than seven years and which may extend to 14 years.

There are other provisions in this Act which strengthen the action which can be taken against a public servant involved in corruption.

8226; In addition to passing fresh legislation like Corrupt Public Servants Forfeiture of Property Act, it is necessary to ensure that the existing laws are effectively implemented which relate to checking of corruption. As an example, the Benami Transaction Prohibition Act was passed in 1988, enabling confiscation of benami property. Under Section 8 of this Act, the government has to prescribe rules under which confiscation could take place. This is reported not to have yet been done. Prompt action on implementation of such laws will greatly help in checking corruption.

8226; Another important fact is that no attempt has been made to strictly avoid politicising the bureaucracy. The simple instrument by which political executive has found that the bureaucracy can be made to dance to its tune is the instrument of transfers and postings. It is fundamentally important in this context that at least the important and sensitive posts must be insulated by making it impossible for the political executive to interfere in the matter of their transfers and postings. For instance, the CBI and the Enforcement Directorate must be insulated from influence. This objective was sought to be achieved by making the Central Vigilance Commissioner a statutory body and making the CVC supervise the activities of the CBI. There should be provision for a minimum tenure of two years for the officials, and it should be provided that they cannot be transferred with the consent of the CVC.

8226; It will in fact be worthwhile to identify all sensitive posts in government and ensure that these posts will be filled up from the panel of names recommended by an objective and independent committee or by CVC8217;s Committee of CBI and ED. These modifications will bring in certain amount of objectivity and relief from the present situation where corrupt elements literally resort to bribe for reaching the sensitive posts which they can exploit for enriching themselves through corruption.

To be continued.

The writer is director, Common Cause

PART II

PART III