Worse, but also better

Corruption's scale has grown, but its scope has narrowed

When the Reddy brothers, accused of illegal mining, demonstrate their grip over a state government, most people will rightly bemoan the role that corruption plays in public life. However, vital as it is to tackle the issue, it is also important to view it in perspective. Most people would not have realised, for instance, that India has been improving on at least one corruption score. Transparency International, the Berlin-based body, has been surveying international businessmen on their perceptions of corruption in different countries since 1995. In the latest ranking, for 2009, India occupied the 84th spot in a list of 180 countries, with an absolute index of 3.4 (any score under 5 is considered a poor show). But five years earlier, in 2004, India scored 90th in a smaller list of 146 countries, with an absolute index of 2.8. On both absolute and relative scales, perceptions about the levels of corruption in India have improved.

Admittedly, this reflects the perceptions of international businessmen, who can see that India has de-regulated. But even in the domestic sphere, most people will recognise some improvements. The days of black marketing of everything from steel to paper, and from tyres to cement, are gone — because price and distribution controls in these sectors have been scrapped. Similarly, the abolition of import licensing and sharp cuts in tariffs have rung the death-knell for an entire smuggling industry that used to focus on synthetic textiles, gold, watches and consumer electronics items — and fuel an illegal foreign exchange market (which too has been liberalised). More improvement will show up as governments computerise their land and other records and allow digital access to these, and once the unique identification system gets going.

Still, it is also true that most people believe the bureaucracy to be far more corrupt than before, and that there has been a quantum increase in the scale of politicians’ greed. But much of the corruption is focused in a few areas: defence deals and other large purchase decisions (e.g. for aircraft) where governments have a role, choosing from among bidders for large contracts (for spectrum, building power stations and highways, and mining rights), rules governing the use of land (zoning, floor space index, etc.), and leakages from government spending programmes like the rural employment guarantee scheme. Corruption also flourishes in the legal system, and where price distortions and distribution controls remain, as with sugar and diesel/kerosene. It is also true that the “inspector raj” problem has got worse, not better; that environmental clearances had become a racket; and that corruption in the tax administration is worse than before — as evidenced by the preference among many civil services candidates for the Indian Revenue Service over even the Indian Administrative Service. But to define the problem is to also outline what needs to be done. If the government sets its mind to it, the issue can be tackled in a manner that perceptions of corruption in the country improve sufficiently to quickly get its score above 5 (which would yield a rank of about 50).