Implosion (38 page)

Permissive Religion

One of India’s many curious contradictions is the way widely publicized acquisition of obviously illicit wealth is not only practised but is tolerated in an open society when two-thirds of the population struggle to make a living. ‘The only surprising fact about most corruption stories is that anyone in authority gets surprised. Everyone in charge knew that the Commonwealth Games Organising Committee was buying toilet paper at art paper prices, and turf at the rate of platinum. This was not considered unusual, let alone criminal, because the price of cream is built into public expenditure,’ says M.J. Akbar, a newspaper editor and author,
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in a colourful reference to problems that dogged preparations for the Commonwealth Games in Delhi in 2010.

‘The biggest culprit is society itself,’ says Nitte Santosh Hegde,
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a leading anti-corruption campaigner who was the Lokayukta (state corruption ombudsman) for the state of Karnataka from 2006 to 2011, having earlier been India’s solicitor general and a Supreme Court judge. ‘Wealth is regarded as a sign of success – you are felicitated. Society has lost the sense of differentiating between legitimacy and illegitimacy. When I was young, people didn’t respect the corrupt – you never invited people perceived to be corrupt to a function,’ adds Hegde, who was born in 1940. ‘Now hordes of people welcome them when they are let out of jail.’

That this should happen and be tolerated leads to the suggestion that India’s religious and cultural base encourages, or at least tolerates, such crimes and bending of rules. In the Bhagavadgita, Lord Krishna advocates doing one’s duty detachedly without caring about personal consequences, but he breaks the rules of warfare – one could say cheats – to win a battle in the larger epic of the Mahabharata. ‘In Hinduism, there is no binding or universal code of conduct that gives unequivocal primacy to the moral dimension,’ says Pavan Varma, a diplomat-turned-politician and a prolific author. Ethics do ‘not have an absolute or unalterable definition,’ he suggests in his book,
Chanakya’s New Manifesto
.
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‘Our understanding of right and wrong appears to be related far more to achieving whatever result is desired than to absolute notions of morality. To pay something to an official to lubricate the movement of a file is right if it smoothens the way to the desired goal. The payment of bribe is routinely looked upon as a matter of judicious investment, not morality. No invocation to Lakshmi, the goddess of wealth, emphasises the importance of making money only by conventional legitimate ways. The goddess represents wealth and prosperity; she is worshipped for these, not for how that prosperity is arrived at … In fact, for all the condemnation that corruption publicly provokes, Indians are ambivalent about the practice. They consider it bad when they have to bribe when they don’t want to; they consider it good if a bribe gets them what they want. In this sense, corruption is like litmus paper; it takes on the colour of the specific experience.’

This is echoed by Namita Gokhale,
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who says that the Hindu concept of an ‘individual view of destiny’ leads to a disregard of the greater common good. ‘A society segmented by caste and community is often narrowly focused on the advancement of the immediate family and kin. Although there may be enormous public outrage about corruption, moral ambiguity sets in and justifications come into play when it becomes convenient to do so. Presented with a choice of transforming their family’s prospects, by bending the rules or taking a bribe, large or small as the situation may merit, they will rationalize it into an ethical or pragmatic framework.’ Although Gokhale is talking here about Hindu culture, it applies across India and in other developing countries where improving the lot of oneself and family is a primary aim, especially at a time of economic expansion and rapidly rising expectations.

Fifteen years ago, I wrote:
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‘Politicians have little alternative but to take bribes because there is no other way that they can finance their political party activities, while officials’ salaries are so low that they are easily tempted. Even the most honest officials say they will take bribes, or at least not object to others doing so, providing decision-making is not upset.’ At the most petty level, officials have always charged the public for doing ordinary work like issuing government forms, keeping telephones working or even delivering post. In rural areas, local officials persuade members of remote tribal and other communities to accept cash in place of subsidized goods, such as seeds or fertiliser, but then pay them only a fraction of what the goods are worth. Road builders bribe officials to award them contracts and to ignore inferior materials and poor workmanship, making extra profits for the builder and guaranteeing him more work (and the official more bribes) when the road breaks up.

‘At a higher level, in the pre-1991 days of India’s investment controls, companies bribed officials to obtain business licences and block competitors. Go even higher, and government ministers and officials took and still take multi-million-dollar bribes on large projects and contracts, frequently leading to shoddy work – often paid through consultants or partners so that the companies (especially American, because of US laws) can deny they paid anything. Such bribery and extortion is not confined to the public sector: executives in private sector corporations take bribes for giving business to suppliers and contractors.’

Since I wrote that, the scale and extent of corruption has escalated dramatically. Economists often argue that it should decline a few years after a country liberalizes its economy and removes restrictive regulations that had previously created openings for graft. That has not happened in India, as it theoretically should have done from the mid-1990s, partly because the government still wields extensive basic powers that give politicians and bureaucrats in the central and state governments the freedom to interpret laws and regulations as they wish and to generate massive riches for themselves and their cronies.

Large-scale illicit wealth now comes largely from manipulating the allocation and regulation of licences for natural resources such as the development of land, mining rights, oil exploration, mobile telecommunications, airlines and aircraft landing and maintenance slots at airports, and permissions to import new aircraft. Illegal mining is widespread across the country, ranging from sand in river beds to marble, coal and other minerals, often carried out in defiance of Supreme Court orders and closely protected by well-rewarded state-level politicians. There are associated environmental and other approvals that govern when and where such resources can be used, plus approvals for construction and completion of buildings and other items. Then there are large-scale contracts for building and operating highways, ports, and airports that are fixed. As Raghuram Rajan said in 2010, ‘the predominant sources of mega wealth in India today [are] the guys who have access to natural resources or to land or to particular infrastructure permits or licences. In other words, proximity to the government seems to be a big source of wealth.’

Most of India’s fastest-growing companies, aside from those in information technology, operate in these sorts of areas – the Ambani brothers’ two Reliance businesses (oil and gas exploration, telecommunications and infrastructure), Naresh Goyal’s Jet Airways, the Adani group of Gujarat (coal imports and trading, ports and energy), K.P. Singh’s DLF (Delhi land and real estate), and the GMR, GVK and Lanco infrastructure companies from Hyderabad and Bengaluru. The families and their executives in charge of such companies are closely connected to central and state-level politicians and bureaucrats. Politicians also invest in companies that they are helping. Often (without pointing specifically at any of these names), a company’s unusually rapid expansion raises suspicions that financial investment is coming from politicians’ bribe money, maybe through proxy names. The funds are often kept abroad and are funnelled back through private equity and other investment companies located in the African island nation of Mauritius, India’s officially recognized tax haven, or elsewhere.

Talking about links between companies and bureaucrats, a source told me that ‘they buy people’s souls, offering senior officers, with five years’ career to go, double their salary’. He was referring to defence industry agents and armed service officers and said that the agents would have ‘twenty-five generals still in service on call at any time’. This happens far more widely than armament deals and is another example of how tolerant India is of potentially corrupt relationships. The boardrooms and top echelons of many fast-growing companies are littered with retired bureaucrats and officers, often people who spent much of their career in industries such as power and telecommunications where the companies operate. ‘Some of the large business groups also fund politicians in the Opposition as a hedge to ensure that any decision that may be given in their favour is not opposed by them. They also treat such funding as a long-term investment,’ says B.V. Kumar, a former head of the government’s economic intelligence bureau. Most business houses, he says, ‘maintain’ MPs to influence government policies or decision-making.
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Corrupt Democracy

The roots of corruption are to be found in elections, starting with would-be candidates paying parties to be allocated a constituency. Candidates then bribe voters with liquor, cash and other inducements ranging from saris to laptop computers (though people frequently accept the gifts from opposing parties and then make their own decisions). Payouts continue during the formation of governments when massive amounts of money are paid in ‘horse trading’. This happens in local and state assembly elections and, in various forms, in both houses of parliament. A Congress MP has claimed that he was once told that a candidate for the Rajya Sabha had budgeted Rs 100 crore to secure a seat, but only had to spend Rs 80 crore.
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Later the MP withdrew the allegation, but I have been given (confidentially by a reliable source) the name of a businessman who paid Rs 35 crore to a national political party and Rs 40 crore to a regional party to ensure election in the Rajya Sabha’s preferential vote system.

Leaders of potential coalitions use an array of political and other contacts to cajole small parties and individual members to join them with a mixture of money, ministerial posts and other favours. Lakhs of rupees change hands, as they do sometimes when a government faces a confidence or other threatening vote in parliament. In what is famously known as the JMM case, a small party in the state of Jharkhand was bribed in 1993 with Rs 2.8 crore to vote in parliament against a motion of no-confidence in Narasimha Rao’s Congress government.

Politics have become criminalized and elections have become the ‘biggest source of corruption in the country’, says former chief election commissioner S.Y. Quraishi, explaining that candidates spend vast amounts of money they cannot afford and need to recover after they are elected. ‘Political power is strong and competition bitter and involvement of criminals is a challenge,’ he says.
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As many as 162 of the 543 members of the 2009–14 Lok Sabha had criminal charges pending against them, compared with 124 in the previous parliament.
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Criminals began by influencing politicians and then decided to get into politics themselves, he adds. According to data collected by two Delhi-based political monitoring organizations, about 30 per cent of members of parliament and of state assemblies had declared criminal cases pending against them in their own election affidavits.
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Quraishi’s solution is to ban candidates facing charges that had been lodged in a court for six months (which would give potential candidates time to counter false charges trumped up by opponents). Moves along these lines have begun in the courts.

Politicians amass huge funds while they are in power, both in state and central governments, which they use for organizing elections, buying votes, horse trading and other party activities, as well as building up enormous and ostentatious personal wealth. More than a third of the 4,013 candidates who contested in six state elections during the twelve months to May 2013 declared assets of over one crore rupees, far in excess of what they could have earned legitimately and well beyond the dreams of most people in India.

Real estate and construction companies are especially useful for laundering and storing funds because their accounts are easily fudged, which encourages close relationships between politicians and the companies. At the time of elections, builders send funds to help finance campaigns. An academic study that looked at the cement industry found that demand decreased when builders had to slow down their projects after sending money to the politicians.
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In another example, a chief minister in north India was said to ensure there was continuing income by telling builders to pay their dues to her over a period of 15–20 years. ‘The relationship between land, builders and politicians is symbiotic because the builder can’t get land without the politician’s help, and then gets locked into the financial exchanges,’ says a member of parliament.
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Kumari Mayawati, who has been chief minister of Uttar Pradesh four times, is a notable example. The daughter of a post-office worker, she is a leader of the Dalits, the desperately poor ‘untouchables’ at the bottom of the Indian caste system. She built up such extensive wealth – and declared at least some of it – that she ranked with famous film stars and cricketers as one of India’s top 20 taxpayers in 2007–08 when she paid Rs 26.26 crore. Affidavits she filed at election time showed that her assets had inexplicably doubled during her last term as chief minister (2007–12) to Rs 111.64 crore. The income was euphemistically declared as admirers’ gifts and, apart from sporadic court cases on specific projects, no one has seriously pursued the reasons or sources of such unaccounted wealth. Mayawati’s personal extravagances included sending her private jet empty to Mumbai to get her preferred brand of sandals at a cost to the state exchequer of Rs10 lakh, according to US diplomatic cables written in 2008 and published by WikiLeaks.
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The cables said she was paranoid about her security and ‘fears assassination’, employing ‘food tasters’ to guard against poisoning and maintains a ‘vice-like grip on all levels of power’.