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Money in black -Varghese K George and Pheroze L Vincent
-The Hindu


Corruption in India has undergone a qualitative shift from the days of licence Raj to the era of liberalisation. Opportunities for making money have come in handy for politicians, who were also dealing with a new political situation of fragmentation and instability.

In the days leading to the 2008 Assembly election in Karnataka, slum-dwellers in Bangalore were startled to see small bundles flying in through their windows at night. The rolls of currency, covered with polling slips, marked a new low in political corruption. Distributing cash to voters began around 2005, according to some accounts, starting with municipal elections in parts of the country, but by 2009, it became brazen in several Lok Sabha constituencies, particularly in Karnataka and Tamil Nadu.

T.M. Selvaganapathy, former Dravida Munnetra Kazhagam MP, who was disqualified in April after being convicted in a scam that dates back to 1995 when he was Rural Development Minister in the All India Anna Dravida Munnetra Kazhagam government, said: "In Tamil Nadu, an established model of bribing voters has been established in which whoever pays more will win ... The remedy is that that the Election Commission needs to take over the enforcement of the model code by its own staff rather than leave it to the district administration."

Corruption underwent a qualitative shift with the advent of liberalisation in the early 1990s - from "retail to wholesale," as the former Central Vigilance Commissioner N. Vittal put it. Earlier, doling out licences and awarding government contracts were the primary sources of corruption, done on a piecemeal basis; post-liberalisation, formulating policies that benefit select players and discretionary distribution of natural resources created an abundance of rent-seeking opportunities for politicians. A politician in a north Indian State is said to have changed his nameplate from "Notary and real estate agent" to "Minister and real estate agent."

New opportunities for making money came in handy for politicians, who were also dealing with a new political situation of fragmentation and instability. Money was needed in huge quantities to keep the "system" stable and functional - demonstrated by the Jharkhand Mukti Morcha bribery case in which the former Prime Minister P.V. Narasimha Rao was accused of bribing MPs for winning a parliamentary vote. In several States, the chief ministers sent suitcases to MLAs regularly to keep them happy.

Beyond generating resources to service the vested interests within the system, politicians also began to dabble in industry, resulting in the emergence of a new class of politician-entrepreneurs. Ministers and lawmakers sat on top of immense wealth created by magical enterprises they built overnight, in a blatant display of their ability to use political power for personal profiteering. The voters were watching all these, and in some ways, the splurge of freebies and subsequently, the distribution of cash to voters were attempts to keep their anger in check.

Alongside the march of corruption, several counterbalancing forces were taking shape. Judicial and civil society activism and assertive roles of institutions such as the Election Commission and the Comptroller and Auditor-General quickly flagged corruption as a matter of serious public concern. New legislation such as the Right to Information Act enabled the fight against corruption. Sometimes, articulation of presumptive loss due to corruption created such revulsion among the public that display of ill-gotten wealth suddenly appeared an unattractive idea. For instance, former CAG Vinod Rai estimated losses in 2G spectrum allocation in 2008 at Rs. 1.76 lakh crore and windfall gains to those who got coal blocks allocated from 2004 to 2009 at Rs. 1.85 lakh crore. The Anna Hazare movement turned the fight against corruption shriller.

Mr. Rai, whose biography was released recently, told The Hindu: "I sincerely believe that anyone who has something to narrate and want to contribute to ethical governance must write. Even if 10,000 copies [of the book] are sold, it shows that people are interested in knowing more about how their government functions."

The Election Commission's strict enforcement of the curbs on electoral spending and coordination with multiple enforcement agencies to check the flow of liquor and money has reduced the advantage prosperous candidates had.

The Association for Democratic Reforms (ADR) is one civil society organisation that has been at the forefront of several campaigns that checked political corruption. Last year, the Delhi High Court directed the Election Commission to collect data on the criminal records of candidates. This data, along with candidates' educational qualifications and wealth of their dependents, was made public and mandatory. Another petition by the ADR under the Right to Information Act (2005) led the Chief Information Commissioner to order political parties in 2008 to disclose the sources of their contributions of more than Rs. 20,000, which has led to a curious situation of "crowd-funding" by some parties that account for most of their income in individual contributions less than the threshold.

Last year, the Supreme Court ruled that convicted legislators sentenced to more than two years in prison would be disqualified from Assemblies and Parliament, even if their appeals in higher courts were pending. Former Railway Minister Lalu Prasad and Tamil Nadu Chief Minister Jayalalithaa thus lost membership of the respective Houses they were elected to. In Tamil Nadu, this caused widespread protests in support of the convicted leader. Electoral reforms can further improve the situation, but election funding is no longer the sole or the most important cause of corruption. More transparency in the engagement between the industry and politics is called for.

Conviction and resultant removal from public office of two prominent political figures within a short interval has signalled that corruption can have unpleasant consequences for the corrupt. But the road ahead is long and uneasy. "Politicians retain an amount of deference due to their position despite being convicted. Ms. Jayalalithaa's case took 18 years. Application of laws during the investigation is improper and despite stringent laws politicians manage to get away," ADR founder Jagdeep Chhokar told The Hindu.