| Bribe-taking is a fine art
Jaswant Singh, reports say, is likely to place before the winter session of Parliament the rules being framed for implementing the Benami Transaction (Prohibition) Act, 1988. The exercise has been pending for 15 years and if these reports are correct, the finance minister must be thanked for doing a thankless job. Still, it is doubtful whether yet another legislation can stem corruption.
Two examples, both from Calcutta, should suffice. In the first, the managing director of a public sector company was summoned by a Central minister and asked to arrange Rs 50 lakh for him every month. The executive politely demurred, pointing out that his company made a modest profit of a few crores per annum and therefore it was not possible to arrange such a huge amount. The “ministry” hit back by ordering the board of directors to pass a resolution reducing the age of retirement from 60 to 58. The board met, took note of the fact that the resolution would immediately affect around 100 employees and decided to reduce the retirement age six months later. But the ministry would have none of it. Within 48 hours, it forced the board to revise its own decision and reduce the retirement age with immediate effect. The MD, who had completed 58 years, was promptly sent packing.
That this is not an isolated example became clear when the Central vigilance commissioner wrote to the prime minister in October and offered to name the Union ministers who are demanding money from public sector chiefs and threatening them with retribution if they refused.
In the second instance, the income tax department recovered a large amount of cash, Rs 92 lakh by newspaper reports, from the residence of an excise inspector. Later, apparently, a political party officially claimed the money which, it said, was collected from supporters and kept in the inspector’s house for safekeeping! It’s hard to believe, of course, but then there is no law banning people from keeping large amounts of cash. This raid itself was an exception because neither the Central Bureau of Investigation nor the income tax department is encouraged to expose inspectors. “The moment you take action against an inspector, there is a threat of an all-India strike,” explained a senior official.
How can a new law change this ground reality'
Two kinds of benami transactions are rampant in this country. In the first, A sells a property to B but the documents mention C, who may or may not exist and who may have two legs or even four, as the owner. In the second type of benami transaction, A seemingly sells or gifts his property to B, but for all practical purposes retains his control and ownership of the property, often at gun-point. Politicians are known to do it all the time, vesting their property in the name of faithful domestic help, minions, relatives, mistresses or even trusted bureaucrats. The amended rules will hopefully put an end to this, enabling the income tax department to confiscate property owned by people who do not pay any income tax or file any return.
The Berlin-based Transparency International has been releasing the corruption perception index for a decade or so and India is invariably described as one of the more corrupt countries. While Finland has been occupying the number one slot in recent years, India’s ranking has fluctuated from 66th out of 85 countries in 1998, to 69th out of 90 countries in the year 2000, and 71st out of 91 in 2001. It is poor consolation that both Pakistan and Bangladesh are considered even more corrupt.
Yet another study this year — on corruption in the media, particularly in daily newspapers — done jointly by Purdue University and the University of Northern Iowa, is titled “cash for news” and ranks the media on a corruption scale. It concludes that while credible information was hard to get, the media in the developing world were susceptible to allurements. The report found that the practice of paying cash to get reports published was widely prevalent in China, Saudi Arabia, Vietnam, Bangladesh and Pakistan. The least corrupt media are to be found in Finland, Denmark and Switzerland, the study claimed, and ranked India 25th, along with Kenya.
In a separate report, the anti-corruption bureau in Maharashtra disclosed that the state government owed some 2,400 complainants a sum of Rs 39 lakh, which the latter had used to bribe public servants so that the bureau could nab them in the act. The money invariably became exhibits in protracted court cases and the government pleaded a funds crunch and either failed to return the amount to the complainant or delayed the return. As a result, the bureau lamented, fewer complainants were coming forward with the cash to trap public servants. The bureau pointed out that it had caught a municipal council chairman accepting a bribe of Rs 10 lakh and an additional police commissioner in Mumbai receiving Rs 2.60 lakh.
We seem to have given up the fight against corruption; and the cynicism is not confined to the media alone. As N. Vittal, the self-righteous former CVC and now chairman of the Commission on People’s Empowerment, commented — “If wishes were horses, beggars will ride and India will be a corruption-free country.” He had reasons to feel frustrated because, by his own admission, the commission had recommended penalties in over a thousand cases against Central government and public sector officials, but no action had been taken.
Ironically, the fight against corruption has been given up despite tax-payers supporting a multiplicity of agencies to combat it. Vigilance wings are maintained, vigilance weeks observed religiously and a disproportionate amount of tax-payers’ money continues to be spent to secure conviction for petty corruption. Clerks and ticket-checkers are routinely caught “red-handed” accepting petty cash. The agencies then spend much more in securing their conviction. Even then, the conviction rate for the CBI, which does not file a case without first collecting some evidence to corroborate the charges, is said to be around 70 per cent, and falling.
There is a strong case for total transparency in all financial dealings with tax collectors, banks and the government. The All India Bank Officers’ Association has been pleading with the government to make public the list of defaulters who have failed to return money to the banks. As much as Rs 40,000 crore, out of the total non-performing assets of Rs 110,000 crore, is estimated to be due from 11,000 individual accounts. The association felt that in view of the fact that only around Rs 5,000 crore has been recovered in the last nine years, public disclosure of the names would create the desired social pressure to clear the debts.
By the same logic, there is a case for jettisoning the prevailing practice of keeping tax details confidential. In any case, extremists and the underworld are known to gain access to the income tax returns of their victims before making extortion demands. Indeed in such a large country, with an expanding base of tax-payers, it is virtually impossible to keep the details completely secret from undesirable elements. Why not, therefore, make it public'
Once tax returns become public documents, so that anyone paying a fee can get access to them, it is likely to create enormous pressure on people to remain on the right side of the law. It will also help sever the nexus between income tax officials and unscrupulous tax payers.
Sufficient safeguards, if necessary, can always be woven into the system. The law can make it obligatory for people seeking information to reveal the purpose for which they want it and establish their bona fides first. The tax-payer can immediately be informed and asked to file an objection, if any, to the request.
Parliament is periodically informed of the number of income tax defaulters and the names of some of the prominent ones. The information seldom tells the full story though. Every year, many people successfully challenge tax assessments and in successive appeals, manage to whittle down their dues substantially. Such heroic battles before appellate tribunals also deserve to be disclosed to the public.