Call it Grease Money or Speed Money
Bribe is a Bribe
India has always been world famous in not only accepting bribe but also for paying it. But over the last two years, the corruption pervading India’s government has received remarkable media attention, thanks, in part, to scandals surrounding the Commonwealth Games, 2G telecom licenses, and the Adarsh housing society. This has shaken the complacency of many citizens who heretofore saw bribes and kickbacks as an inevitable part of daily life, and has provided fodder for the anti-corruption movement led by Anna Hazare.
The ‘AAM AADMI’ of India is fed-up with this system which needs ‘grease’ at every point for smooth functioning. But it seems that the Indian Corporate is OK with this messy and ‘greasy’ system. It could be made out because on 14th of November, 2011, Adi Godrej, the chairman of Godrej Industries supported the suggestion of Chief economic advisor Kaushik Basu of legalizing "harassment bribes". Godrej, who is also the president-designate of industry chamber CII, suggested that "small payment" of speed money by industry could be legitimized for a "short period of time". Not only him, few others also justify bribes and term it as “speed money”, that enables work to be done faster.
According to a survey by leading global consultancy Ernst & Young (E&Y), Corporate India tops the global league when it comes to bribing and financial frauds, with 28 per cent of top executives being keen on making cash payments to win new businesses or retain existing clients. The top executives are also not bothered about the consequences of future prosecution for their fraudulent acts, as they are under tremendous board pressure to perform.
Releasing the survey finding on May 23rd, 2012 E&Y stated that an alarming 28 per cent of top executives from corporate India (against a global average of 15 per cent, which is up from 9 per cent in 2010) polled are willing to make cash payments to win or retain business. Also given the extensive media coverage, it is not surprising that fraud, bribery and corruption are seen as significant risks here, with 70 per cent of respondents (against global average of 39 per cent) opining that bribery and corruption are widespread in the country.
People who are in favor of legalizing bribery may have some ground in all this yet the ill-effects of bribe far outweigh its beneficial effects. For instance, in order to extract a bribe, the bureaucracy first slows down the work and harasses the public. If work was automatically done, why would anyone pay bribes? Thus, the system has to be made inefficient so that those who can afford to pay can get their work done quickly but the rest continue to suffer.
The administration becomes rundown since rather than devising ways to work efficiently, it is busy thinking of ways to make money by setting up roadblocks to efficient functioning. This has spawned a culture of ‘middlemen' and personal approach to officers. Things hardly happen in the routine manner. The corrupt need the middleman to insulate themselves from direct public contact lest someone reports them. The bribe-giver also, not knowing how much to bribe and how to contact the administrator in charge, finds it a convenient arrangement.
According to World Bank estimates the ‘cost’ to get a public contract in our country is over 15% of the contract value. The Government loses about Rs 2 lakh crores annually due to tax evasion while about Rs. 40,000 crores is lost due to delay in projects. Transmission and distribution losses in the power sector are about 50%, out of which about 30% is due to theft in connivance with the electricity boards employees. Indeed, if India was corruption-free the public sector would improve their profit margin by almost 20%. And if bribery is reduced to the Scandinavian countries level then investment would rise by 12% annually and GDP would grow at an additional 1.5%.
The Indian Government has long been criticized for not creating a strong firewall against corruption. In India the most prominent Act on this front is the Prevention of Corruption Act, 1988, which is a federal law enacted by Parliament to combat corruption in government agencies and public sector businesses. The Act prescribes penalties ranging from imprisonment for up to five years to an unlimited fine. But the Act also does not expressly seek to punish corrupt acts of private parties, except to a limited extent.
Another important anti-corruption Act is the Benami Act, 1988, which was introduced to provide for government acquisition of property held benami. This was put in place considering that most of the wealth in India which is accumulated through corrupt means gets invested in benami immoveable property, gold and jewellery, high value consumer goods. However, the rules to make the confiscation of property and other provisions effective have not been issued.
However, on 27th of May, 2012, the government has proposed to make bribery in private sector - both giving and accepting it - a criminal offence as well by amending the Indian Penal Code (IPC). The Centre has asked all States and UT administrations to give their views on the proposed amendments in the IPC. The draft Indian Penal Code (Amendments) Bill, 2011, circulated to States and Union Territories by the Centre for their comments, would cover graft by an individual, firm, society, trust, association of individuals, company, whether incorporated or not, which undertakes any economic or financial or commercial activity. It has a provision of imprisonment up to seven years for the offenders in the Private Sector.
We probably live in the worst possible times for India. Never before has the ordinary man been as disgusted as now, with the way our system functions or ‘dysfunctions’. Corruption has permeated every area imaginable, making life so difficult that we can only oscillate between anger and despair. Slowly but surely, the people’s patience is running out, and running out fast.