DECEMBER 30, 2014

By B N Gururaj, Advocate

Dr. Awdhesh Singh's article titled "Why Should Indians Be Proud of Their Track-record of Corruption?", published by TIOL on December 27, 2014 calls for diligent reading and carefully weighed response. It is indeed a very bold title for an article on this topic, in a society which is weighed down by the feeling it is the most corrupt and debauched. Initially, I was typically tempted to post a comment on the Message Board. Thereafter, I felt that the contents of his article require more detailed attention. Hence, this article.

The statistics and indices relied on by him in his article certainly gives us confidence that the day India rubs shoulder with Denmark may not be in the realm of fantasy. The factors relevant for ranking of a country for transparency have been considered so well in his article that I do not think, I can add anything more.

But, inspite of all the reasons given by Dr.Awdhesh Singh, one does not feel comfortable to live with the conclusion that we can be proud of our record hitherto, on the corruption front. The ground reality, which pricks us day in and day out tells a different story. Dr. Awdhesh Singh's article, which is mainly based on statistics can lull us into complacency of believing that we are ‘almost there'.

Does poverty really drive people to be corrupt? What could have motivated a deceased corrupt Chief Minister and his son from Andhra Pradesh to acquire thousands of crores in money and thousands of acres in land? To start with, as a medical doctor, the father certainly wasn't poor. Having made a couple of dozen crores, he could have stopped. But, he continued to amass hundreds of crores. Surely, poverty could not have had any role in his sordid saga.

There were two cases unearthed by Karnataka Lokayukta couple of years back. A police inspector who owned no less than 45 residential and commercial plots and a Commercial Tax Officer who owned no less than 102 cars, all plying as taxis. After acquiring a couple of plots, or a dozen cars and alleviating their poverty, they could have stopped, but did not.

I think, after some stage, making money becomes a passion in itself, going beyond the question of need for money. Making money becomes an end in itself. I do not wish to make any airy comments about the honesty, or decadence of either the rich, or the poor. It is quite certain that salary becomes incidental income for such people who flourish by raking in bribe money. Even the best salary and perks cannot stop them. Only swift and strong deterrent punishment can.

I think, from a citizen's view point, the criteria for determining transparency should be “Does corruption touch me in my day to day life, or is it a distant phenomenon for me?”On this issue, I know for a fact that a couple of our tiny neighbouring countries score better than India. To the man on the street, it matters little whether the corruption he has to live with comes from the Local Authorities, or the State Government or the Central Government. Corruption may take place at high places for political reasons, or in awarding government contracts, or in taking decisions which might favour some, or do disfavour to others. These do not frustrate the citizen or petty businessman, as much as the corruption that he has to put up with on day to day basis.

Typically, officials who visit a factory or petty business places are the Boilers Inspector, the Factory Inspector, ESI/PF Inspectors, Commercial Taxes Intelligence officials, Central Excise / Service Tax Preventive officers, City Corporation Tax Collector, jurisdictional Police officer, weights and measures inspector. Few if any, walk out of the premises without collecting their dues. A displeased officer needs no more than a few minutes to find some fault or the other. After all, everyone who does anywork is equally bound to commit some mistake too.

As an individual, one has to deal with Authorities responsible for water supply, sewage problems, electricity supply, tax payment on the property, approval of plan by the Local Body for constructing or altering a house, traffic police inspector, motor vehicle inspector, sub-registrar for registration of property transactions, to name some. I can confidently state here that in any part of India, none can get any work done from these departments or utilities without facing the demand for bribe. The demand is rarely articulated directly. When things do not happen as desired, the sensitive citizen is expected to realise that he has to lubricate the arthritic joints of the government machinery to get his work done. In lighter vein, I would call upon Dr.Awdhesh Singh to obtain a Khata Certificate for his property, without pulling his rank!

Closer to corporate matters, I am certain that professionals and company officials who deal with departments like Corporate Law Affairs, their RoCs, or Ministry of Commerce, or Directorate General of Foreign Trade can narrate many horror stories. In some of these departments, one has to go through “consultants” who have donned that role after retirement from the respective departments. Dealing through them, the officials inside feel more confident of not becoming victim of another sting operation.

Just as we have official Settlement Commission, we also have unauthorised Settlements for Commission in every Central Excise and Service Tax jurisdictions. The auditors who visit the assessees unearth some problems from the audited records and confront the assessees. Most of these problems are quite safe ones, in the sense that there may already be judicial decisions, or clarificatory circulars to protect what the assessee may have done. But, few if any, assessees would be so up-to-date in their knowledge of law and procedure. Most people in assessee entities are equipped to accomplish their day to day statutory compliances.

Typically, the persuasion of the auditors goes on to state the duty liability, and interest liability @ 18%. It can be more scary in service tax with 30% interest rate; penalties under several provisions, which might exceed the duty liability. If the demand exceeds Rs.50 lakhs, there is the threat of offence becoming a cognizable one, leading to arrest; that if one takes litigation route, it might take many years, with the interest meter ticking away relentlessly, not to speak the high cost of litigation, and how expensive the lawyers and consultants are. The alternative is placed before the worried assessee, that he could buy peace for certain specified sum of money being paid. Usually, a thinking person is dangerous for the vested interests. Therefore, these settlements are concluded in brisk and business-like manner, without giving sufficient time to the assessee to seek second opinion. Typically, small and medium industries prefer settlement to litigation. I do not know how successful National Litigation Policy has been in reducing the number of tax cases. But, this Settlement with Commission has brought down the prospective cases to near zero.

I take Dr.Awdhesh Singh's statement at face value that there are very large number of honest officers who have served in government departments and are forced to live modestly after retirement. The issue unfortunately does not concern how many honest officials are working in the Government. It concerns the vermin in the government Departments, in the public life and their cohorts amongst the public, who find it mutually beneficial to continue the prevalent practice. Even in private sector, I have seen: the slush money has a way of sticking to every hand it passes through.

Therefore, I am of the humble but firm opinion that it is rather premature to pat ourselves on back about our record on eradicating corruption.