Simpler regulations required to tackle corruption

Simpler regulations required to tackle corruption

New Delhi: One of the key indicators of an economy’s strength is its level of transparency and India scores very poorly in this regard, while the economies of Switzerland, Sweden and Singapore are graded the highest.

Corruption is perceived as the third most problematic factor for doing business in India, but there are solutions in the offing and transparency is possible if India’s information technology (IT) competencies are leveraged to remove this barrier to growth, concluded panellists at the World Economic Forum’s India Economic Summit in Delhi on Monday.

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The core issue with corruption is that it takes away efficiency from governance as it steals from the poor and the vulnerable and thereby erodes growth, said Richard A. Boucher, deputy secretary general of the Paris-based Organisation for Economic Cooperation and Development (OECD).

Regulatory systems have to follow cleaner models where they are simplified and therefore allow for more transparency and accountability. The greater the regulation, greater the bureaucracy and greater the corruption, Boucher added.

“The simpler the regulation, the more compliance is seen and, thereby, more transparency," Boucher said. “We need to look at corporate business models and processes and develop systems that ensure lesser corruption."

Bringing in the activists’ point of view, Mallika Sarabhai, director of the Darpana Academy of Performing Arts; and Regional Agenda Council on India, said that no regulatory body in the country is independent from politicians or political parties that would be inclined to influence investigations. In Singapore, the government, faced with spiralling corruption, created a body independent of the political establishment with its own funding.

“The body went on to remove some 109 police officers within a few weeks," Sarabhai said. “The Rajya Sabha is full of captains of industry who are making the regulations that govern their very own industry."

But then, companies cannot play the role of government and government cannot play the role of companies, countered Boucher. Companies have their own points of focus, including the shareholder, and public shareholding is one way of making companies accountable, Boucher added.

From the perspective of victims of corruption, C.V. Madhukar, director, PRS Legislative Research, talked about the availability of information as an effective tool in fighting it. He cited the example of a three-hour parliamentary debate over the special economic zone legislation during which not a single legislator brought up the land acquisition aspect, clearly due to lack of information.

Madhukar said that in India, no corrupt officer has ever been caught and spent significant time in prison. “At most, what happens is that some junior officer somewhere will get a three-month suspension."

Representing the corporate sector on the panel, Saurabh Srivastava, chairman, CA Technologies, said one of the most effective ways to fight corruption was by building awareness. “When you give people the opportunity to be corrupt, they tend to be," Srivastava said. Ensuring people’s awareness about their rights is an effective way of discouraging corrupt ways and he believes “the UID (unique identity project) is one initiative that will go a long way in this. We need to design out corruption from the system through simpler regulations and awareness," he said.

Technology allows for automation in processes for procurement and also enables greater information dissemination. When there are fixed processes in place, then the corruption is kept to a minimum, he said.

This can be seen by the IT and telecom departments that are in the same ministry under the same minister, but the processes in the IT industry ensure minimum corruption, Srivastava said.

Another important aspect in the fight against corruption is consistent backing from the powers that be. One reason that Singapore’s transparency has worked was the steadfast backing of the government that did not retreat even after the riots that ensued after the arrests and sacking of so many police officers, Boucher said.

But things are changing and India is taking some initiatives to improve transparency and reduce the opportunity for corruption.

A large part of the existing corruption is a legacy of the licence regime that existed in the past, but the new breed of entrepreneurs have a different mindset. “They are following the rules and know that if you have to compete globally, then you are required to follow the global rules," Srivastava said.

Another way to tackle corruption is by making it “unfashionable". “It won’t happen overnight but will slowly and steadily become the method that leads to fewer incidents," Srivastava said.