Trickle-down corruption

The malaise persists at state and local-level governance

Prime Minister Narendra Modi’s promise to establish a corruption-free government in India would have come up against a reality check of sorts from the results of the 2019 India Corruption Survey conducted by Transparency International and Local Circles, a social media firm. Although the headline findings of the survey point to a five percentage point drop in corruption levels — 51 per cent of Indians admitted to paying a bribe this year against 56 a year ago — the figure for 2019 was higher than the 2017, which was 45 per cent. The survey covers 81,000 respondents in 248 districts across 20 states.

The striking point about the more granular findings of the survey is that the bulk of the corruption is at local levels. Thus, even if we assume that Mr Modi is able to make the central government corruption-free, the malaise will persist at the lower levels of the country’s governance structure — at state and local government levels. This has critical implications for India’s future as an investment destination, since local administrations are, so to speak, the business end of the ease of doing business environment. For instance, almost half the respondents (49 per cent) said the bribes were for property registration and land-related matters. Only 12 per cent of citizens said corruption on these two accounts had fallen over the past year. Equally worrying is the fact that Indians who admitted to paying bribes said they did so multiple times in the year, suggesting that corruption remains as endemic as ever. The survey also contradicts the common notion that posits technology interface as the optimum bulwark against corruption, especially in citizen-facing services. Some 44 per cent of respondents said they paid a bribe in an office that had computerisation, and 16 per cent said that they paid a bribe despite the office having a functional CCTV system. That Telangana, one of the first states to introduce a citizens’ portal for a slew of common goods and services, figures as India’s fifth-most corrupt state tells its own story (Rajasthan, Bihar Jharkhand, and Uttar Pradesh preceded it). It is worth noting, however, that well over a third of the respondents who admitted to paying bribes paid in cash, a potent signal that at least one of the key objectives of the tectonic 2016 experiment with demonetisation had failed.

Although Transparency International's global Corruption Perception Index showed that India had risen three places in the ranks, those results are at variance with the findings of this intra-country corruption survey — some 48 per cent of respondents felt that states had taken no effective steps to tackle corruption. Corruption persists in India despite the passage of the Prevention of Corruption Act, which deems a bribe an offence attracting seven years’ imprisonment or a fine or both. This situation points to the inherently weak institutional foundations of governance in India, which creates a vicious circle of venality. The absence of robust systems to punish bribe givers plays into the hands of the political class. It enables them to enhance their powers by becoming centres of routine approvals and clearances. They may offer investors a degree of certainty in place of the tortuous uncertainties of dealing with wilfully inefficient local officials but it involves an unhealthy element of discrimination and arbitrariness in governance, which are embedded with risks for investors. It is for the political class, then, to set the standard first.