Deterrence Counts

Towards an Anti – Corruption Strategy

What do the trends show :

Transparency International ranks India at 70 out of 163 countries. Significant improvement since 2005In ranking of states : Bihar, J&K, MP, Karnataka & Rajasthan are amongst the worst; Kerala, HP, Gujarat and AP least corrupt.Corruption hurts the poorest most and cuts across all Service Delivery sectors particularly the Police, Health and …..

The main actors : PoliticiansHas Political Corruption increased/decreased over the last three years : data from AP

Increased, 67%

No Opinion, 17%

Remained Same, 10%

Decreased, 6%

The main actors: Government Officials :Has Official Corruption increased or decreased over the last three years? Data from AP

Increased 67%

No Opinion 16%

Remained Same9%

Decreased 8%

The Scale of Corruption:Perception Surveys not perfect but indicate the extent of the problem

31% of Food Grains and 36% of Sugar meant for the Public Distribution System diverted: Total Food-grain subsidy = Rs.150 billion. Therefore Rs.50 billion lost to corruption.

Survey of ten sectors including medical services, judiciary, police and revenue adm : Citizens paid over 28000 crores/year ( 50% of Defence Budget) ( Source: CVC of India)

Corruption in Service Delivery Corruption Ranking of Services (2005)

1Schools

2Water Supply

3PDS

4Electricity

5Govt. Hospitals

BASIC

1RFI ( Farmers)

2Income Tax ( Individuals)

3Municipal Services

4Judiciary ( Lower Courts)

5Land Administration

6Police ( Crime/Traffic)

NEED BASED

RankServices

Corruption in Service Delivery

Need Based Services are seen as more corrupt; Corruption is greater where there are no alternative service providers ( e.g: schools) and where the repercussions of not paying a bribe are high.

Total monetary value of petty corruption is over Rs.21000 crore.

The largest number of bribes reportedly paid are for medical services in rural and semi urban areas( 3 crore households).

Why does Corruption Exist:

“Just as it is impossible not to taste honey or poison that one may find at the tip of one’s tongue, so it is impossible for one dealing with government funds not to taste at least a little bit of the King’s wealth.”

Kautilya, The Arthashastra

But structural incentives can expand the space for human greedThe Incentives for Corruption abound:

Poor Enforcement SystemsComplex and non-transparent administrative systems of command and controlMonopolistic Service ProvidersUnderdeveloped Legal FrameworksWeak notion of citizens rights

So what would constitute a practical strategy?

Strengthening the Policy Framework

Electoral Reforms

Expanding and Reforming Enforcement

Focusing on Prevention

Investing in Public Awareness

Strengthening the Policy Framework

India needs to fundamentally reform its Legal Framework:

CrPC Act needs to be overhauledNew Laws need to be instituted :

Lok Pal ActWhistleblowers ActForfeiture of Corrupt Civil Servants Property Act

Vigilance and Enforcement

Enforcement : Scale vs Response Registration of cases in Selected States

State 1997 1998 1999 2000 2001 2002 Total

Maharashtra 390 456 445 456 478 497 2722Orissa 313 266 240 264 293 283 1659Andhra Pradesh 176 218 232 211 236 345 1418Karnataka 256 211 211 214 195 151 1238Madhya Pradesh 154 160 144 207 231 271 1167Uttar Pradesh 56 42 66 54 122 137 477Bihar 43 24 39 32 17 12 167West Bengal 6 6 3 3 3 0 21

Source : Crime in India2003 data of Crime in India not available

Issues in Enforcement

Vigilance Departments are under-funded, under-equipped and open to political and administrative interference.It is extremely difficult to proceed against All India Services Officers due to prosecution hurdles.Vigilance is seen as a specialized function not as a cross cutting issue that every business unit is responsible for.

OrissaPending Departmental Proceedings

72834%

20810% 952

43%

27613%

3 Depts: Panchayatiraj/ Forest/ Revenue

5 Depts:H&UD/WR/Edn/HealthWorks

3 Depts: Home /Energy/Agl

15 Depts: RestDepartments

The Judicial System does not serve as an adequate deterrent

The criminal conviction rate in India is about 6%.Enormous delays in the disposal of cases. The CBI has filed over 6000 cases : 50% are pending for over 5 years.At the state government, pending cases are even higher.In Orissa, the study shows that 12% of the defendants die before there case comes to trial; The evidence base collapses and memories blur.

Trial CourtPending Cases in Orissa Courts

1%25%

12%

20%

45%

2%

For 25 years & above Between 20-25 years Between 15-20 yearsBetween 10-15 years Between 5-10 years Between 1-5 years

Enforcement : So what can be done

Creating a more independent Vigilance system at the State level ( e.g A.P’s Vigilance Commissioner, Karnataka’s Lok Ayukta and to some extent Orissa Vigilance Department)Making Vigilance wider than the Police : Bringing in more technical specialistsExpanding Internal Vigilance in the Departments and DistrictsSetting up Special Courts and Review Committees for Departmental Enquiries

But Enforcement can never be enough : Prevention and Public Awareness is key

Corruption Proofing the SystemAdministrative reforms and simplification of systems and procedures are critical : Examples :

Computerization of railway tickets; E- Sewa in AP;Computerization of land records ( Karnataka);

Decentralization can lead to greater transparency but also expand the players in the corruption gameReducing the layers of approvals and levels of interface between clients and service providers is vital.

-------013 daysANM sends certified form to PHC clerk

5

Rs.30/-012 daysForm to be certified by ANM4.

SarpanchRs.250/-

043 daysLegal heir requires Form 4 from Panchayat office/ANM to be filled and verified

3

------0315 daysList sent to Magistrate for finalization

2

Rs.500/-10 60 daysList of dead persons prepared independently by ANM, Police, Anganwadi worker and sent to CDMO, BDO, Tahsildar & Collector

1

CorruptionDifficultyTimeStages

The Anatomy of Corruption: Accessing Death Compensation in Jagatsinghpur District :

And it doesn’t stop there :

Rs.1500/-10 45 daysTahsildar authorizes death date and Issues cheque to legal heir. Witnesses needed: ward member, Sarpanch, government servant, woman member (SC) and OBC member

11

------0303 daysHeir deposits Death Certificate10Rs.300/-0930 daysDeath Certificate issued9

------017 daysPHC matches affidavit with Magistrates Report and Sarpanch list

8

------021 dayAffidavit and Chalan deposited in PHC7.

Affadavit:

Rs.50/-

011 dayLegal heir has to make an Affidavit at Thasil office along with Treasury Chalan

6.

Corruption proofing the systemTransfers of civil servants is a fertile ground for Corruption : need to have a transparent transfer and tenure policy; Performance based incentives; Need to protect honest civil servants

Procurement Reforms at the central level have considerably squeezed space for malpractice. Only few states in India have passed Procurement Laws. Critical need.

Separate Regulatory and Service Functions.

Outsource services where possible : e.g Urban hospitals

Monitoring and Evaluation Systems at the state level are weak and at the district level are almost non-existent. Need to institute a system of periodic Satisfaction surveys and link budgets with outcomes.

Corruption proofing the system:

The Right to Information Act provides a strong National Framework within which Administrative reforms and Public awareness can take place.Provides framework for many critical reforms in basic administrative systems : - File Management, government rules and procedures, audit.Need to build awareness amongst citizens about the Act.

Public Awareness is critical…

Public awareness campaigns are still not seen as a core area of government investment and continue to be an add-on. Asymmetric Information flows where the “supplier”controls knowledge leads to weak accountability norms. Need to invest and resource Government institutions with the capabilities to create and disseminate knowledge.Civil Society organizations are critical and need to be partnered ( e.g. Parivartan in Delhi, Lok Satta in AP).

Karnataka’s Lok Ayukta:Focus on Service Delivery

Combining deterrence with public awareness:Most powerful of 16 Lok Ayuktas in India.Investigations:

Drug adulterationPublic hospitals (absenteeism, exploitation)Transport and registration departments.Corruption in municipal government

Wide publicity may be the best way to check corruption when vigilance systems are weak and courts don’t work...

Lok Ayukta In Action

So what are the lessons:

While better enforcement is essential :Investments in enforcement need to be combined with investments in Prevention and Public Awareness.Work incrementally : Corruption needs to be tackled at the level of the business unit; Analysis matters : Process re-engineering needs to be seen through the filter of anti-corruption; Creating competition helps : but replacing public monopolies with private monopolies is dangerous