Friday 19 February 2016

Structural Reforms to curtail Retail Corruption in India



Introduction




After India obtained independence from the British in 1947, they faced a lot of internal problems which still haven’t been tackled completely.  One of the major rampant issues India still fights though, is corruption. Corruption can broadly be split into big-token corruption and retail corruption based on the level it’s done at.

Big ticket corruption scams are those which are done by large private entities of huge amounts of money. Good examples of his type of corruption include the 2G scam as well as the Adarsh Scandal. However, retail corruption is the type of bribery common people face in their everyday lives. It is the exchange of a small sum of money or gratification in order to get a favor from the public official. It ranges from paying to get their sale deed registered to bribing for a traffic violation. (Bank)

Although, petty sounding, Retail corruption is a serious issue in India and needs to be tackled at the root level. Petty corruption can be more corrosive than wholesale corruption because of its deep roots in the Indian culture and needs to be addressed first. Complied below is a brief understanding of the structural reforms that can be exclusively followed in India to prevent corruption at the street level. (Bank, Reforming Public Services in India)






De-monopolization



A monopoly is usually seen when one particular organization has the reigns to provide a particular service. Since, its product/service is unique, it cannot be boycotted. Furthermore, with the absence of other organizations trying to win a profit in a competitive market, a monopolistic system can charge exorbitant amounts. A monopoly is unhealthy for an economy and needs to be broken. It usually is broken by dividing the burden of delivering services to various organizations.  It is also decentralized by levying heavy taxes on the organization such that the profits are too low for the monopoly. Another way to de-monopolize a system is to remove asymmetric information from the market and make people aware. There are 2 examples to explain this phenomena in the Indian scenario –

1)      Indian Telecom Revolution –

The first attempt to bring mobile telephony in India was made by Rajiv Gandhi and Sam Pitroda. Rajiv Gandhi and his consultant tried to bring telephony to India using state indigenization. They sought with the World Bank to deploy cellular networks in India. The World Bank supported the cause and provided funding for the same. However, this move was heavily criticized by the masses. They believed that in a country full of starving and hungry people, luxurious mobile telephones could not take precedence. Emphasis must be given on the growing problems India faced and then luxurious items must be looked at.

The attempt to bring about a telecom revolution using state policies failed in India. Although, the increase of tele-density from 0.5% to 3% can be deemed as a highly successful operation, the aim was not achieved. In 1999, Atal Bihari Vajpayee thought of a new way to bring about the revolution. He opened up the telecom market for the public. Furthermore, he broke down the monopoly of DOT (Department of Telecommunications) and created BSNL. Additionally, he reduced the customs duty on imported phones by a huge margin.

This move allowed competition in the sector. With multiple companies vying to make profits, they started providing lower rates and more efficient services. The sector grew by leaps and bounds. By 2012, India had a tele-density of 70% which was a lot more than estimated. As soon as competition was introduced in the system, the monopoly broke down, and led to provision of better services in the sector. (Sridhar)
 

2      E-choupal system initiated by ITC

Till the year 2000, farmers used to rely on state provided mandis to sell their crops. There was asymmetric information in the market as the farmers didn’t know about the sellers. The middlemen had monopolized the situation. Since, the farmers were not aware of the mandi charges, the middlemen used to exploit them. This practice is a moral hazard. The farmers would only get low rates prescribed by these men.

In that year, the chief minister of Madhya Pradesh realized this fact and decided to act on in. He altered the bye-laws of the Mandi board to allow the farmers to bypass the mandi and sell their crops. The farmers could now directly contact the buyers. The monopoly was broken, but the interesting thing to note is how this was brought about.

ITC (Indian Tobacco Company) introduced the e-choupal system. The idea was to bring about computers and internet in small villages. Each farmer would be allowed access to an internet kiosk. Using the kiosk, a farmer could know the mandi prices. Furthermore, these computers provided farmers with newer and better methods of farming.

The initiative was a huge success. Firstly, there was a high yield by the farmers because they now used better methods. Secondly and more importantly, the farmers could know about the real-time mandi prices. The middlemen no longer had an upper hand, and hence the whole system was demonopolized. (Bowonder)




The above 2 examples show how a monopolistic system was broken in India. Breaking a monopoly leads to multiple organizations competing for profit. This leads to cheaper and more efficient services for the people. However, the e-choupal initiative is very important to us since it shows how corruption was prevented using technology.

What the e-choupal system did was break the moral hazard of a monopoly. With the farmers now having equal information, there was competition in the market. The middlemen could no longer dictate the prices. This end in domination lead to the farmers getting what actual value of their products.

Reducing human interface




One of the main reasons behind corruption can be traced down to the heavy presence of human interface in our system. The power afforded to the authorities in our system corrupts them. The officials feel dominating because of the power and use it to their own benefit. One way to tackle this problem is to reduce human interface in our present system. This can be done with the use of developing information technology. A successful story of using ICT to battle corruption has been seen in Andhra Pradesh


    E-seva system in Andhra Pradesh

Like most states, people had to line outside government offices in A.P to get their work done. To hasten the work, or sometimes just to get it done, they had to pay bribes. Most officials were corrupt in the state and took bribes to do their official duty. To put an end to this, the Telegu Desam government introduced the E-seva system in A.P.

A center was set up in Andhra Pradesh with internet accessibility. The kiosks at these centers would provide services like payment of utility bills, taxes and registering for essential certificates. This plan looked to follow the Singaporean model which was initiated earlier in the 90’s. The main theme behind the project was to reduce human interaction and keep the process very user-friendly.

This project was a huge success in A.P. The project’s main achievement was the removal of the whole concept of approaching a government official to get your work done. Furthermore, it made everything more transparent. There was no concentration of power anymore. This decentralization of power from the government officials led to the smooth and non-corrupt transactions in daily lives. (Gurumurthy)

The FREES scheme in Kerala took this initiative one step forward. It allowed for access to these public services from home. Hence, the people no longer had to physically go to these centers and wait in lines. They could avail all the possible services from the comfort of their houses.

The schemes referred to above demonstrate an efficient way to diminish human interface in the current system. These projects have removed the need of a human agent to dole out these public services. Hence, it removes retail corruption from its root. The whole idea of retail corruption laid in the paying a public official to perform a particular service. With the absence of a public official to pay, and services being rendered out more conveniently from these centers, retail corruption in offices can be put to an end. (mission)

Besides the striking out of a major part of this form of petty corruption, these schemes also provide an alternative to the people. A major bribe paying culture has risen due to the fact that people did not have any alternative. They had helplessly learned to pay a bribe to get their work done because of the absence of another mean. However, with the introduction of these schemes, the people can receive these public services without approaching a public official.

Most people would always prefer to use this new method to redeem public services without having a pay. Also, if a major shift is observed from a particular public official’s office to these centers, that specific official can be subjected to inspection for being corrupt. Hence, these projects will also act as deterrents to public officials from partaking in bribery.



2    Bhoomi –

This was a software launched by the Karnataka government post-independence. The land records were scattered after India achieved independence in 1947. This lead to a lot of ambiguity and confusion amongst land-owners. Furthermore, the rich farmers used to take advantage of the incomplete records. They could easily bribe the public official in their favour.Hence, the government launched the software “Bhoomi” to digitize these land records.

The main consequence of digitizing land records was the abolishment of human inefficiency. With the presence of kiosks displaying these records, human error was eliminated. Additionally, it was an end to the preferential system followed earlier. With the presence of machines, it boiled down a first come first serve basis which was fair. (Karnataka)




The schemes referred to above demonstrate an efficient way to diminish human interface in the current system. These projects have removed the need of a human agent to dole out these public services. Hence, it removes retail corruption from its root. The whole idea of retail corruption laid in the paying a public official to perform a particular service. With the absence of a public official to pay, and services being rendered out more conveniently from these centers, retail corruption in offices can be put to an end.

Besides the striking out of a major part of this form of petty corruption, these schemes also provide an alternative to the people. A major bribe paying culture has risen due to the fact that people did not have any alternative. They had helplessly learned to pay a bribe to get their work done because of the absence of another mean. However, with the introduction of these schemes, the people can receive these public services without approaching a public official.

Most people would always prefer to use this new method to redeem public services without having a pay. Also, if a major shift is observed from a particular public official’s office to these centers, that specific official can be subjected to inspection for being corrupt. Hence, these projects will also act as deterrents to public officials from partaking in bribery.

Lastly, this method puts an end to the preferential system. The presence of a computer interface allows everyone to be served on a first-come-first serve basis. Hence, no one can get their work done faster by paying more. Even more, no one can bribe to get a particular work done illegally. Hence, as demonstrated, e-governance can be deployed very successfully in India.






Restructuring Agency Processes




Governmental institutions in India need to be restructured in order to achieve our aim of eliminating corruption from the system. Restructuring agency processes involved change on several dimensions: re-engineering intraorganization processes, empowering senior management through the creation of centralized monitoring systems, improving inter-agency coordination, and developing more effective linkages with civil society. 


Transformation of Stamps and Registration department in Maharashtra –

The radical change in this particular department of Maharashtra can be pinned back to the appointing of a new Inspector-General in 1998. The Inspector was a very straight-forward man and sought to bring about extreme change in the system. His first measure was to make the sub-registrar sit with the other offices. This was done to promote team-work and transparency in the system.

The inspector followed his act with multiple other procedures to prevent retail corruption in the department. He brought about new technology which would help the citizens determine the rates they would need to pay. This removed any scope of the officials lying to earn extra money off the civilians.

However, several offices in Maharashtra were unable to understand the new technology and hence, he needed an alternative. This led to his next step, which was to allow a private company to manage these kiosks. This broke the government official’s monopoly and their ability to ask for any price they see fit. This acts as the perfect example of how a human-computer pairing could work at each level of a department to provide efficient services. (Technology)




Case studies on certain transformations as seen in the Stamps and Registration department in Maharashtra, the Hyderabad Water Supply and Sewerage Board, the Karnataka State Road and Transport Corporation and the Surat Municipal Corporation have paved the way for improvement. Certain strategies used in these organizations have stream-lined the approach to be followed.

The incentive behind reorganizing an office lies with the aspect of a better governance. Governance is a concept which revolves around the making and implementation of laws. However, good governance has certain characteristics which are requisite to be involved. The basic idea of good governance can be limited to the proper performance of official functions. Prevention of corruption is both a reason and a consequence of good governance. Though a term thrown around extensively in modern political literature, good governance plays an important role in the development of every country.

One of the main characteristic of a good government is that it should be open in nature. Transparency is essential in a government department to enable proper functioning. A transparent department enables team-work in an office and eliminates the possibility of an illicit activity being carried out in secret. It directly leads to accountability of a person who is in part of the system and eventually leads to the prevention of corruption. 



References

 

Bank, The World. "Helping Countries Combat Corruption." 1997.
—. "Reforming Public Services in India." 2006.
Bowonder, B. "Developing a Rural Market e-hub." 2012.
Gurumurthy, Anita. "Pro-Poor access to ICT." n.d.
Karnataka. Bhoomi.karnataka.gov.in. 2012. 25 May 2015.
mission, Kerala IT. itmission.kerela.gov.in : FRIENDS. 2014. 28 May 2015.
Sridhar, Varadharajan. The Telecom Revolution in India. Oxford, 2011.
Technology, Directorate of Information. E-governance in Maharashtra. Mumbai, 2013.

-          Naman Khatwani
2nd Year, NUJS
 

 

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