Thursday, October 11, 2012

Time India got its own bribe-giver act….

We have a plethora of rules that threaten to investigate and prosecute the bribe taker. This was OK at a time of petty corruption – when the government official receiving the bribe did so from sundry non-corporate givers. Since the Indian economy has got increasingly corporatized, corruption too has changed in complexion. Major cases of corruption usually originate from the corporate sector’s unfettered and relentless pursuit of super-fast growth and profits. It’s time India got an Act targeting the bribe-giver as the PM has indicated.

For every bribe taker, there has to be a bribe giver. If the bribe giver happens to be a corporate, it is that much easier to investigate and bring to book. There are far fewer corporates than there are bureaucrats and politicians. If nothing, the job of tackling corruption will become easier if the bribe giver is under the threat of prosecution. Further, the cleaning up of the corporate sector is easier – typically when a corporate gets “listed”, the SEBI rules that apply to it make disclosures far more mandatory and extensive. It becomes that much more difficult to indulge in bribe giving. As a case in point, if DLF shareholders want to check out the facts of the recent Kejriwal accusation, they can demand a probe. As more and more Indian companies get listed, the chances of indulging in blatant big-ticket corruption reduces at least partially. Of course, those who operate businesses in benami names, or keep their companies behind a complicated corporate veil may still get away – but a start is still a good idea.

Major countries like the US and UK have specific acts targeting the bribe giver. The US’s Foreign Corrupt Practices Act is one such. It restricts “issuers” (listed companies mainly), “domestic concerns” (largely unlisted domestic companies) and “any person” (covering ordinary US citizens) from bribing “foreign” officials (foreign official, political party or even a candidate for political office). The penalties range from $ 250,000 per violation and a prison sentence of 5 years for individuals to $2 million for corporations. Likewise, the UK Bribery Act launched recently provides for similar acts of corporate corruption. It is stricter in the US act in several respects of applicability and “exemptions” (promotional expenses, facilitiation fees etc) and it also provides for up to 10 years of imprisonment and “unlimited” fines if found guilty. Both acts have had a salutary effect on curbing corporate corruption outside the US.

This approach to tackling corruption appears better than creating another massive bureaucracy of the Lokpal. In many ways, it changes the entire approach to corruption. Uptil now, giving bribes is not considered to be a crime; only taking is. But by changing this dynamic, there is finally a recognition that corruption is a two way process. The fact that the existing corruption-fighting agencies (CVC, CBI, Anti Corruption Bureaus in the states) will remain responsible for curbing corruption is good. We need to reduce the size of the Government in this country; not increase it.

The PM’s statement also indicates a certain commitment to fighting corruption. To my knowledge, there have been no major ideas floated in the fight against corruption except for the Lokpal. The BJP for all its platitudes against corruption has failed to offer viable solutions to fight corruption. The PM should now take his idea through. It will go a long way in convincing the people of India about its intent. The BJP has to support the initiative. The Left parties – which are ever ready to reign in the private sector – should be happy to support the initiative too. The trick now is to finish off the job quickly.

The real truth is that catching corruption at the “giver’s” end is easier than tackling it at the “taker’s” end. It wont help cut petty corruption, but it will surely go a long way in attacking big ticket stuff. Its worth giving it a shot….

No comments:

Post a Comment