2010: Year of scams

The rate at which the information about fraudulent business practices involving several thousand crore of rupees is doing the rounds in the media, the year 2010 is bound to go down in modern Indian history as “the scam year”. Most of these scams had their origin two or three years ago but the public has come to know about the sordid details of these deals only this year. In a survey conducted by the Washington-based Foreign Policy about four years ago, India ranked 97th in the list of 146 countries in the Failed States Index. According to the latest grading of the Transparency International based on the criteria of cleanliness in business practices, India’s position is 70 in a list of 183 countries, a fairly low one in a country that boasts of being the third largest economy in the world.
The details about the scale and nature of frauds started creating genuine doubts in the minds of the ordinary citizens whether the progress in economic growth has really been a healthy one promising a brighter future or are we also witnessing signals of decline that may drag the state into the list of failed states that exist in our neighbourhood?
Swedish Nobel Laureate economist, sociologist and politician Gunnar Myrdall mentions five characteristics of states in danger of being stuck in the track:
lack of social discipline arising out of deficiencies in law observance and enforcement,
lack of obedience to rules and directions handed down to public officials,
collusion between these officials and powerful persons,
general disinclination of people to resist public control and
their implementation and corruption.
The 2G spectrum scam — that has caused a loss of `1,76,000 crore to the exchequer — has earned the name of “mother of all scams”. Equally shocking has been the information on the manner in which public funds were plundered by certain officials and contractors in the recently-concluded Commonwealth Games. While people are still trying to find explanations as to how such frauds could take place in an administrative system claiming to be based on the principles of accountability and collective responsibility, news about frauds in Adarsh Cooperative Housing Society in Mumbai and the allotment of valuable land by the Karnataka chief minister B.S. Yeddyurappa to his close relatives, makes one wonder whether even at the chief ministers’ level such misuse of power has become common?
The allegation about the Vedanta project in Orissa involving allotment of vast extent of land to a private company is another case of chief minister misusing the power. The recent revelation that Indians have $1,456 billion in black money in Swiss banks and is the largest national group with deposits of black money has tarnished India’s reputation. Also, disgracefully India has the distinction of being assessed as No. 1 bribe payer in the list of 30 countries based on the readiness to pay bribes in order to secure business or clinch contracts.
I wish to avail of the opportunity provided by the revelations so far on the 2G spectrum allocations to the ease with which those in power in the government, and in business, can subvert the rules and regulations to enable few people to enrich themselves. This is a typical example of what I have referred to Gunnar Myrdall’s observation earlier in this article namely lack of social discipline arising out of deficiencies in law observance and enforcement.
When I first heard that the former telecom minister A. Raja had ignored the advice given by the Prime Minister’s Office and other ministries regarding his scheme of allocating 2G spectrum, I could not believe it as true. As a person who had worked at all levels of decision-making in the administrative side at the Central government, the question that arose in my mind was how it was possible for any ministry to take decisions on subjects like this without obtaining the concurrence of all the concerned ministries? More important, how could in a parliamentary democracy like ours, a minister ignore the advice of the Prime Minister in such a matter? Equally difficult is to believe that why the ministers in-charge of the concerned ministries remained silent when they found that their advice was not followed by the telecom ministry?
In the Central government differences of opinion between the implementing ministry and other concerned ministries are common occurrences, but they are sorted out through a variety of ways like inter-ministerial meeting at the highest levels, or seeking the intervention of the Prime Minister to sort out the differences or to place the issue before the relevant committee of the Cabinet or before the whole Cabinet itself.
It was only later that information became available that the Prime Minister had agreed to leave the 2G spectrum allocation solely to the implementing ministry namely, the telecom ministry.
The Prime Minister in a parliamentary democracy does not send mere advices on matters like this to a minister through a letter. What he communicates is the decision to be followed by the ministry concerned and not a pious advice that can either be taken or rejected. The government is of the Prime Minister and the ministers are appointed by the President on the recommendation of the Prime Minister. The ministers of finance, law etc. are quite aware of the rules and conventions in decision-making at the Central government and ordinarily would not have stopped with communicating their views. Now, the whole blame for what had happened is placed at the Prime Minister’s doors and the ministers concerned appear to believe that a Prime Minister like Dr Singh’s sound reputation for integrity and zeal for conforming to rules and regulations would ultimately help in preventing any mud sticking to their own ministries.
Even without waiting to know the full and correct facts about this matter from the decision of the Supreme Court which is seized of it now, I thought of raising a warning signal about the likely damage that this type of decision-making, unless corrected immediately will cause to our young democracy and therefore am doing it through this article.

P.C. Alexander is a former governor of Tamil Nadu and Maharashtra