Opinion Corruption business faces

Indian studies to document corruption businesses face in three stages.

New DelhiDecember 10, 2010 05:40 PM IST First published on: Dec 10, 2010 at 05:40 PM IST

Saratov Chamber of Commerce and Industry undertook a project with local chambers in Astrakhan,Volgograd,Kirov,Smolensk,Perm,Khabarovsk and Novorossiysk. This was implemented by Centre for International Private Enterprise (CIPE) and methodology and survey results are there on CIPEs website. Support was from USAID.

The objective was to reduce corruption of a certain variety in functioning of business and provision of government and municipal services to business. The results need not be reproduced,they are along expected lines.

In the Russian context,here are the recommendations. (1) Enact a Russian Federation Law on administrative regulation. (2) Adopt regulations on maintenance of a single registry for State and municipal services. (3) Monitor the effectiveness of laws annually. (4) Use the methodology to analyze (read streamline) administrative regulations. (5) Use the methodology to monitor regional and local implementation. (6) Incorporate concept of transparency into relevant legislation. (7) Establish procedures for legislative bodies to review regulations issued by the executive. (8) Involve the academic community in drafting regulations.

Once in a while,there are Indian studies along similar lines,to document corruption businesses face in three stages entry,functioning and exit. World Banks Doing Business surveys are along similar lines.

Often the focus,especially when undertaken by industry associations,is on large corporate sector. However,it is small business that faces brunt of these regulations and informal and unorganized self-employment is higher in India than in developed countries. Three findings from the Saratov survey deserve mention. (1) The more legal regulation is effective,lower the corruption. (2) The more effectively laws are implemented,lower the corruption. (3) Implementation lags behind enactment of laws. One way to interpret this in the Indian context is that greater the discretion,the more corruption there is.

Notwithstanding e-governance,some improvements in some States,ad hoc reports,World Bank and reports of Second Administrative Reforms Commission,the last time this was systematically examined in India was in 2001/2002,when PM set up a Council on Trade and Industry. One problem is recommendation (7) mentioned above. Subordinate legislation (regulations) issued by executive is in principle placed before legislative bodies,but rarely are they reviewed by legislative bodies,or by anyone else for that matter. Recommendation (2) is also one that can be adopted. One need not look at Russia for answers. Reform principles are the same everywhere. The short point is that this isnt on the agenda as much as it should be.