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Mainstream, VOL LIII No 22, May 23, 2015

Decisions can be Honest or Dishonest, Correct or Incorrect

Friday 22 May 2015, by Arun Kumar


The PM has supported the FM’s idea that Section 13 of the Prevention of Corruption Act (PCA) needs a change if the government’s decision-making is to be speeded up. Last month the PM apparently assured the top bureaucrats of such a change at a meeting with them when they complained that decision-making is hampered by the fear of prosecution even if they take a decision in the ‘public interest’. Policy paralysis has characterised the government since at least 2010 when scam after scam involving bureaucrats, politicians and businessmen came tumbling out of the closet. This move may also be in response to the summons to Dr Manmohan Singh, K.M. Birla and P.C. Parakh in the coal block allocation scam.

The FM is reported to have said at an interaction with the editors of a newspaper: ‘Either there can honestly be two different opinions or there can be even honest errors.’ But, one may ask, can dishonest/corrupt decisions not be passed off as ‘different opinions’ or as ‘honest errors’? There is a need to distinguish between honest and dishonest decisions and correct and incorrect decisions.

Can one make out in the abstract whether the intention of a decision-maker was honest or dishonest while taking a decision? Until caught everyone claims to be honest—whether in the 2G spectrum allocation, CWG scam or the coal block allocations. Very few like, Raju of former Satyam infamy admit to committing a fraud. He also admitted to it after seven years and when he was close to being nailed. By definition, every decision must be presumed to be honest unless wrong-doing is suspected or revealed later on.

Whether a decision is correct or incorrect is also difficult to figure out and even then the issue is who decides? ‘Public interest’ can be the yardstick for doing so but that is also hard to define. What may be correct in the short run may turn out to be not so in the long run. For instance, accelerating growth at the expense of the environment may be a huge mistake in the long run as it results in severe health problems and impact on the climate. Can we forget the brown cloud over much of South Asia? Taking into account the long run slows down decision making and that is what this government is averse to in an attempt to show that it means business in favour of business.

Even if a decision is correct, however defined, it may be taken for a consideration and, therefore, dishonest. By all counts, choosing the Bofors gun was a good decision but pay-offs were made as revealed by the Swedish autho-rities. The same may be said of the Augusta helicopter deal where the Italian authorities revealed a pay-off. Expanding higher education by allowing a large number of private universities and colleges to come up may be a correct decision to increase enrolment and spread education but it has led to many illegalities, including real estate scam, capitation fee, etc. A large number of engineering colleges have been found to have duplicate faculty or what may be termed as fake faculty. This is also the case with medical colleges.

Cases where decisions are taken against the public interest (hence incorrect) for a conside-ration are simple to understand as both dishonest and incorrect. For instance, in the case of the 2G spectrum allocation in 2008 or in the case of the coal block allocations and so on. Most scams belong to this category.

 There may be incorrect decisions where no pay-off may have been made. For instance, the promulgation of the land acquisition ordinances by the NDA may not involve any pay-off. But doing away with social impact assessment or the consent of the local population before acquiring land may be a big mistake even if it leads to development in the short run. Farmers in distress face another adversity. This is the case even though many farmers wish to leave farming given that they do not find it remunerative. But this is the only economic activity they know; hence shifting to doing something else is hardly an option for many of them. Another example may be the appointment of Generals or bureaucrats as heads of institu-tions of higher learning to bring about discipline in these institutions. No pay-off may be involved but it is a mistake in the long run since in the name of discipline if the autonomy of the academia is undermined, the new knowledge generation will suffer and that would defeat the very purpose of higher education.

So, one cannot say that correct decisions are honest and incorrect decisions are dishonest. There is a need to distinguish between honest or dishonest and correct or incorrect decisions.

In the present vitiated environment with rampant corruption in both the public and private sectors, decisions are suspect as they routinely involve pay-offs. Rules and laws are systematically circumvented by devious means. Delhi has building and zoning by-laws which are flagrantly violated. These are visible to all. Those in charge of implementation of the rules make appropriate notings in the files to save themselves from prosecution later on. Encroach-ments on pavements and roads are visible, the police collects hafta and allows it to continue. Traffic mess and growing illegality are secondary to them. This is partly the reason for the growing criminality in society as well as among the police. ‘Initiative’ is defined as the ability to bend rules to suit one’s needs and benefit one’s friends. Courts can be managed by the powerful and this sends the signal to society that illegality can be managed.

 After the Bofors scam, middle men were banned from defence purchases but they continue to flourish; so all purchases are suspect. Top retired military personnel have been known to set up consultancies, etc., and to act as middlemen as in the case of the Augusta deal. Now the Ministry is again thinking of officially allowing middlemen in defence deals.

The fact that an IAS officer is transferred 46 times in a career of 23 years indicates that wherever he was posted he became an impedi-ment to money-making by the government functionaries in collaboration with businessmen. The implication is that dishonesty pervades the system and is not an exception. How many of the top bureaucrats have stood up for their fellow officer who is being harassed? In fact, they have become a party to the harassment. How many of them have stood against the dishonest decisions of the politicians? They know that they would be replaced by others from their cadres who are willing to do the bidding of the political bosses. It is safe not to protest. But then do they have the right to complain that they are hampered in decision-making?

The argument that it is the government’s prerogative to post an officer wherever it deems necessary is a fig-leaf and has not convinced the public. There may be officers who are honest in the sense of not receiving any consideration for taking a decision but who turn a blind eye to the raging corruption around them. These are the survivors who are honest but allow corruption to flourish under their noses. Is this not dishonesty since it leads to the sacrificing of ‘public interest’?

Why blame the bureaucrats alone. Massive corruption has been unearthed not just when Dr Singh was the Prime Minister but also when he was the Finance Minister during 1991-1996. He had the economic intelligence agencies under him and could have cracked down on scams but he allowed them to flourish and hardly anyone was prosecuted.

In 1991, when questioned about the unnatural rise in the stock market indices, he stated that he would not lose sleep over the matter and this stoked massive speculation in share prices which later resulted in the collapse of the markets. The Congress party fought successfully to prevent the JPC from mentioning this phrase in its report. Dr Singh met Harshad Mehta a few days before the 1992 Budget was presented and apparently on the latter’s suggestion withdrew wealth tax on shares. Mehta made a killing since he knew what was coming. Dr Singh stopped the Income Tax raid on Mehta on the Budget day in 1992 so that the stock market could continue its rise. The bubble, instead of being nipped in the bud, was allowed to grow and eventually caused colossal losses to the public and government. The stock markets went into a tailspin and did not recover for quite some time setting back business.

No one accused Dr Singh of having taken a bribe to do all the above-mentioned things. But his honest decisions were not in the ‘public interest’. But, on a larger plane, is it not dishonesty if one looks the other way to save one’s position while corruption grows under one’s stewardship? Does such an attitude cloud decision-making? Be that as it may, can it absolve the PM of the responsibility of stopping decisions that are blatantly against the ‘public interest’? In a case where corruption is being investigated, is it wrong to question the Minister in charge of the Ministry under which the scam took place, even if his decisions were honest?

Vadra may be favoured not because he may have bribed but because he is associated with someone in a position of power. Change of land use (CLU) is permitted under the law and it may even lead to the development of a backward area. But its selective use to favour a few (without taking a bribe) may be motivated by the desire of those in power to further consolidate their positions.

When there is widespread violation or tweaking of laws, is the public wrong in assuming that other decisions where a scam has not come to light may also be dishonest even if no bribe is paid? If decision-making was transparent, dishonesty would become apparent. The RTI could ensure transparency but the government is not interested as is evident from its keeping the post of the CIC vacant for so long. The Whistleblowers Protection Act is pending since 2011. If Section 13 of the PCA is amended in the present non-transparent system, it will provide an escape route to corrupt decision-makers who will claim that their decision was honest.

To conclude, are the bureaucrats being assured that if they implement the politician’s will without questioning, they will have prote-ction from prosecution even if the ‘public interest’ is not served? They will also have protection if decisions involve illegality of which they may not be a part but which they need to overlook. So, the bottom-line seems to be that the politicians want to fire from the shoulders of the bureaucrats.

[This article is based on the author’s article, ‘Who’s Corruption’ in The Indian Express, May 6, 2015.]

The author is the Sukhamoy Chakravarty Chair Professor, Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University, New Delhi. He has also written the book Indian Economy since Independence Persisting Colonial Disruption.

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