Archive for December, 2012

Of corruption and contentment

Thursday, December 13th, 2012

Mint, 14 December 2012

A politician friend of mine was recently attempting to explain to me the difference between “scam” and “corruption”. He comes from a state that had been given up as lost many years ago, till a new chief minister took over. Since then, the state has become a case study in good governance. Access to government services is now dramatically easier and smoother, infrastructure—especially road connectivity—has improved nearly beyond recognition, corruption is drastically down. The people appreciated the changes, and voted the chief minister and his party back to power. On all development parameters, the state was reporting much better numbers. In short, all was well, and no force on earth, it seemed, could stop him from winning a third time.
Then, suddenly last year, there were stirrings of trouble. Across the state, the poor were unhappy; there were grim mutterings that this government was as corrupt as the one before. This seemed incredible and baffling, and my friend was sent to investigate.
The Indira Awaas Yojana is a Union government welfare scheme that provides monetary assistance to the rural poor to build homes for themselves. The central funds are disbursed by the state governments through block development officers who, with the help of local panchayats and village mukhiyas (headmen) prepare the list of the deserving poor. What had been going on in the past was that the block development officers (BDOs) and the mukhiyas had been running a pretty little scam. In any block, there are, let us assume, 100,000 poor families. Now, Rs.4.5 crore comes to BDO for disbursement to 1,000 families at Rs.45,000 each. He and the mukhiya select 100 families, and hand them Rs.45,000 in cash in a transparently fair process. No bribe is asked for. The rest of the money—allotted for another 900 families—is then shared between BDO and mukhiya and his men. Thus, only 10% actually reaches the target and 90% is siphoned off.
However, the beauty of the system was that you had 100 families swearing that this was a non-corrupt government machinery, and those who hadn’t got the money accepted the fact that their names were not on that year’s list, but they would possibly get in next year. (They had no idea that 1,000 people were supposed to get the money, and the list was made only of 100 people).
This was what had been going on for years and both parties were happy—the scamsters and the poor. But the chief minister found out and was enraged. So he changed the system to direct bank transfers. BDOs were told to make a list of a thousand people, get bank accounts opened for them, and the money was sent directly by the government into the beneficiaries’ accounts. This was a simple one-stroke solution that killed the scam, because the local functionaries were unable to touch the money.
But they found a way round that too. Now, BDOs and mukhiyas would approach 1,000 families and tell them that if they paid up Rs.5,000, their names would be put on the disbursement list. The hapless families paid up, bank accounts were opened in their names, and the full amount of Rs.45,000 was transferred. In effect, a thousand families got Rs.40,000 each, whereas earlier, only a hundred were getting Rs.45,000. Only 10% of the money was now being lost in transition, not a shocking 90%.
But the effects of this crackdown were completely contrary to what the chief minister had expected. Earlier, when 90% of the money was being siphoned off, you had 100 families extolling the virtues of the government and no one was unhappy, because no one knew what was going on. Now, when 90% of the money is arriving at its destination, you have 1,000 families complaining that the government is corrupt, because everyone has got less than his entitlement.
A scam affects few people directly and only becomes a scam when people find out about it, my friend told me. Corruption, however, is easily identifiable and information inevitably becomes public. The chief minister had crushed a vast state-wide scam and improved the lot of lakhs of people, but this had given rise to routine petty corruption that affected all those lakhs of people. As a result, hundreds of mukhiyas have lost elections this time. Earlier, when they were pocketing much larger sums of public money, they were winning comfortably.
My friend freely admitted that he could think of no solution to this strange problem. Corruption had actually been cut from 90% to 10% and the consequences had been uniformly negative. It doesn’t even make much political sense to try to explain to the people what had happened, because, one, they probably would not understand, and two, in any case the scam was taking place under the same government. The only silver lining is that even the opposition can’t get much mileage out of it. And there simply is no practical mechanism to make sure that 10% is not siphoned off.
What about the Aadhaar card, I asked him. It would improve matters quite a bit, he agreed, but mere technology cannot be a cure-all, and even the most automated processes require a human touch at some point or the other. And at that point, corruption will find a way to slime in. The human mind is ingenious and inventive. And the Indian mind is especially strong in these qualities. My friend’s story, right from the grassroots of governance, was, I thought, definitely educative.

Kolkata: comfortably numb

Thursday, December 13th, 2012

Mint, 12 December 2012

I was in Kolkata last week to attend the global pan-IIT (Indian Institute of Technology) alumni conference. Nearly 2,000 alumni from all over the world had congregated, among them—in alphabetical order, civil aviation minister Ajit Singh, co-founder of the HCL group Arjun Malhotra, activist-turned-politician Arvind Kejriwal, Tata Steel vice-chairman B. Muthuraman, solar power visionary Harish Hande, uber-engineer Lord Kumar Bhattacharyya, Goa chief minister Manohar Parrikar, Infosys co-founder and Aadhaar czar Nandan Nilekani, industrialist and investor Purnendu Chatterjee, Tata Sons director R. Gopalakrishnan, and ITC chairman Y.C. Deveshwar. The three days saw many sessions where IITians discussed issues facing India, and how they could contribute in various ways, but on the first morning of the conference, everyone was waiting eagerly for West Bengal chief minister Mamata Banerjee to deliver the keynote address.
Well, I cannot say that she came, she saw and she conquered, although she certainly charmed. At the end of her 15-minute speech, the almost entirely male audience, ranging in age from 23-80, gave her a standing ovation. I heard an elderly alumnus sitting next to me telling a friend: “She’s hit six sixes in an over!” Some miles away, at the Eden Gardens, the English batsmen were running riot.
What did she say in her speech? Truth be told, it was less of a speech than an extempore stream-of-consciousness monologue on the virtues of Bengal. She contradicted herself several times in those 15 minutes, first saying “we are a small state,” then saying “we are bigger than the UK, bigger than Italy, we are a big state”, and then returning to “small is beautiful”. She started off listing great Bengalis of yore, and after Rabindranath Tagore, Nazrul Islam (not a name very familiar to non-Bengalis) and Swami Vivekananda, there was an embarrassing pause as she tried to recollect names of other luminaries. After a few seconds of silent data crunching, her random access memory threw up another name: Ramakrishna Paramhansa. This happened twice.
Obviously, she wanted IITians to invest in West Bengal, but for some reason, she seemed to be looking for only small investments and small industries. This was baffling, or maybe, after the Singur and Haldia fiascos, she has given up hopes of large-scale investment. Still, she spoke with confidence, sincerity and a simplicity that clearly touched the hearts—yes, hearts—of a lot of men sitting in that huge, packed hall. There was nothing in what she said that rose above the level of well-worn clichés, but everyone later agreed that she had a lovely smile.
I had landed in Kolkata the evening before and spent half the night in an adda with old friends from all over India, who I had not met for a long time, some of them for as long as a quarter century. The Kolkata residents were uniformly pessimistic. The message that came to me from all my friends, whether they were businessmen, or executives from the public or the private sector, was clear. Corruption had increased manifold under the Trinamool regime, business uncertainty was up, irresponsible trade unionism was reaching new heights. My businessmen friends were no longer making new investments in West Bengal. One said all his new plans were for Bihar. Several private sector executives (including US citizens who had come back to settle in their home town) admitted that if they left their current jobs, they wouldn’t find another equivalent one in the city. The only positive aspect anyone could think of was that after a few years in Kolkata, you got addicted to its comfortable pace of life and undemanding work culture where expectations were always calibrated to the path of least resistance, and couldn’t imagine going back to the hurly-burly work life of a Mumbai or Delhi. But was that comfortable numbness really a good thing?
I must here mention that none of them had been admirers of the Left Front and had all thought Mamata could only be a change for the better. All said that they had been mistaken.
During a car ride, a friend pointed out some new street lights—each post carried three lamps, the nicest lamp post designs I have seen in India. “She promised she would make Kolkata London,” explained my friend. “So she made a start with retro London-style street lamps. But that’s where it ended.”
But didi managed to charm a lot of IITians, at least the ones not living in Kolkata. And expert as she is on little gestures, she even produced a surprise at the end of her speech. She had a gift for every IITian at the conference: a jute bag with a pouch of the finest Darjeeling tea, the best Bengal rice, and a piece of Bengal handicraft. She sat and waited till the bags were distributed to all the 1,500 people in the hall.
As I said before, in her speech, she dealt only with clichés, and she ended with the biggest one of all—the one that sets the teeth of many Bengalis on edge. “As all of you know,” she said, “what Bengal thinks today, all India thinks tomorrow.” When that great Maharashtrian Gopal Krishna Gokhale said these words nearly a century ago, he could hardly have known that it would be the most abused utterance in Indian history and would contribute significantly to the complacent ruination of a race.
When the charming Banerjee said that, shivers ran down my spine.