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….
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