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In India, corruption scandals come in all shapes and sizes. From telecom licenses to bank loans, housing societies to organizing of mega sporting events, there has recently been a tussle to outreach the other in terms of the scale and audacity of corruption scandals. Those purported to be involved range from ministers and bureaucrats to judges, corporate honchos and even journalists. With institutionalized corruption at all levels being acknowledged as the order of the day, the malaise is taking the sheen out of India’s much-vaunted march towards progress and a rising stature at the global stage.
Graft in India is not a new phenomenon nor is it likely to be a thing of the past anytime soon. But its notoriety is beginning to negate the advances made by the country. Since perception is as important as reality, the image of deep-rooted corruption scares not just investors but also those Indians abroad who wish to return with their business and investment plans. Those inside the country have no choice but to coalesce and become part of the system. They have either been already corrupted or have resigned to the fact that there is no other way to get around than by participating in it. Such a mentality not only dilutes the value system but also proves to be a disincentive for those with entrepreneur skills looking for a level-playing field.
There is another widespread perception that is not helping the country’s fight against corruption. While there is no doubt that politicians are mostly at the helm of scandals and make the most of it, blaming them alone is proving to be counter-productive. In fact a herd mentality appears to be developing in the country wherein almost everyone else blames politicians for cases of corruption. Yet the fact remains that almost no segment of the society remains untouched from it. Ironically, recent cases of corruption suggest that the top leadership in the country is not only untouched by it but is also battling hard to restore order, albeit with limited success.
But that goes mainly for the office of the Prime Minister. Even the Central government’s recent communication to India’s Supreme Court on prosecution in corruption cases is an indication of the deep malaise. The government recently informed the court that prosecution is awaited in 126 cases registered from 2000-2010 under the Prevention of Corruption Act against various public servants. Sanctions were sought against 319 officials including two in services, 166 in government, 83 in public sector undertakings, 60 in banks and financial institutions and eight others. Customs and Central Excise accounted for the maximum number of 69 persons against whom prosecution is awaited, followed by the communications ministry with 32.
There was no mention in this list of Central Vigilance Commissioner (CVC), P.J. Thomas, against whom a charges-sheet is pending in the Kerala palmolein import case. Ironically, the Central Vigilance Commission was set up on the recommendations of the Committee on Prevention of Corruption, to advise and guide Central Government agencies in the field of vigilance. Now, finger has been pointed at the head of this apex vigilance institution itself.
The telecom licensing scandal, also known as the 2G scam, is the latest to have brought political parties at loggerheads, triggered probes and stalled the country’s parliament. According to one estimate, due to this scandal India lost up to $39 billion in revenue – almost equivalent to its defense budget. It was all under wraps till a state auditor report revealed that the telecoms ministry gave out lucrative licenses and radio spectrum in 2007-08 at below-market prices. The Comptroller and Auditor General (CAG) report last November also said several rules were flouted when the licenses were given out which led to many ineligible firms getting licenses.
As the report came out in the open, Telecoms Minister A. Raja was forced to resign after days of initial resistance. Opposition parties, led by the Bhartitya Janata Party, raised demands for a Joint Parliamentary Committee (JPC) probe which was refused by the government. This infuriated the opposition and it chose to block the normal functioning of the Parliament for three continuous weeks. Subsequent investigations have focused on the telecoms ministry, firms and lobbyists. Nobody has yet been charged though.
The minister denies any wrongdoing and maintains that he was only following existing rules and norms. Supreme Court, on the other hand, has questioned the credentials of CVC P.J. Thomas as he was the senior bureaucrat in the telecoms ministry before his elevation and has a separate corruption charge against him. The government finally told the court that Thomas would not oversee the investigations into the charges.
The country’s top investigating agency, the Central Bureau of Investigations (CBI), is probing allegations of corruption in the ministry and the government is willing to have the Supreme Court monitor the investigation. However, the investigations are likely to be meaningless unless they look into the dealings of some of the top industrialists in the country who have been direct or indirect beneficiaries. Then there are a string of power brokers, lobbyists and even journalists who have been overheard participating in the process.
Even as the dust was settling down on this huge scam, news surfaced that leading officials of Indian banks, lenders and financial firms have been accused of taking bribes to grant corporate loans. The size of the scandal is not yet known, yet media reports believe it runs into millions of dollars. Responding swiftly to these reports, the CBI arrested eight people, including the chief executive of LIC Housing Finance and senior officials at state-run Central Bank of India, Punjab National Bank and Bank of India. Bribes were reportedly paid by a private finance firm which acted as a “mediator and facilitator” for the loan beneficiaries.
Several leading Indian firms have been named in court documents filed by the CBI, including wind turbine maker Suzlon Energy, infrastructure firm HCC’s Lavasa unit and real estate firm DB Realty. As expected, all three have denied any wrongdoing. The probe is bound to widen if other banks were involved. Once again things came to such a pass that Finance Minister Pranab Mukherjee had to issue a statement. He had to assure investors that this is a case of individual wrongdoing and not a widespread scam and that the banking sector will not be affected by it.
In October New Delhi played host to Commonwealth Games involving 53 countries members of the Commonwealth of Nations and 71 teams. The $6 billion sporting extravaganza was dogged by several cases of alleged corruption, including the purchase of equipment and issuing contracts. The anti-corruption watchdog identified more than 16 projects with possible irregularities and following the conclusion of the Games, the ruling Congress party sacked Suresh Kalmadi, chairman of its organizing committee and secretary of the Congress party’s parliamentary wing.
Three of his close aides have been arrested as the probe has widened. The allegations include manipulations of tenders in the building of stadia and other games infrastructure, and inflating bills for equipment such as treadmills and toilet paper rolls. The CBI recently raided the homes of the Games Organizing Secretary and the Games Committee Offices, part of a probe into $21.7 million of misplaced funds.
Yet another major scandal to have come up recently was the Adarsh Housing Scam in which Congress party politicians, bureaucrats and military officials were accused of taking over land meant to build apartments for war widows. The scam involved 103 apartments in an upscale Mumbai district which violated norms, including environmental laws and land-use rules. Apartments that were estimated to be of $1.8 million each were sold for as little as $130,000. As the story emerged the government first had to sack the chief minister of the state and has since taken back permissions allowing owners to occupy the apartments, leading to the disconnection of water and power supply. The CBI is investigating this case as well.
Fortunately, India has managed to chart a path of progress despite this spate of scandals since independence. The country’s recent rise as a global power is due to its solid foundations and corruption is only an irritant in this process. However, to sustain this progress India will have to bring this monster under control. For that to happen though, those in the corridors of power and beyond will have to realize that the stakes are high and they swim and sink together. 
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