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The hidden costs of corruption

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  • Corruption is operationally defined as the misuse of entrusted power for private gain. Like most colonised countries, India too became a victim of this scourge in post-Independence days, when power was transferred into unmeritorious hands. Corrupt practices came to be recognised as clever aberrations, not as despicable misdemeanours.

    Some argue that gift giving and taking as part of negotiating and building relationships is a normal practice in many non-Western cultures. Cultural relativism ends where the Swiss bank account enters the scene. There are limits set in all cultures beyond which an action becomes corrupt and unacceptable. In a democracy, the political mandate is given by the people. Misusing this publicly entrusted power for private gain is inherently contradictory and cannot be reconciled with democracy.

    Facilitation payments — where a bribe is paid to receive preferential treatment for something that the bribe receiver is required to do by law, constitute ‘according to rule’ corruption. A retired major-general visited the Regional Transport Office 15 times, to get a simple job done since he chose, out of conviction, not to bribe him through an ‘agent’. On the other hand, is a bribe paid to obtain services the bribe receiver is prohibited from providing? A typical example is the recent news report of a raid at the residence of a high-ranking army ordinance officer, involved in the purchase of ‘war-like’ equipment, unearthing disproportionate assets to a tune of Rs 50 crore. In order to amass Rs 50 crore, the corrupt officer must have allowed at least 10 times that amount — the nation’s precious assets — to be ‘earned’ by the bribe-givers.

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    It is virtually impossible to quantify the actual cost of corruption since payments of bribes are not publicly recorded. Take, for example, a power plant being built at a cost of Rs 1,000 crore. It could be argued that, were it not for corruption, the cost could have been as low as Rs 700 crore. The financial damage to the public would then be Rs 300 crore. In practice, quite often projects are planned simply so that those involved can make huge private profits. Assuming that the power plant was superfluous, the financial damage would have to be assessed at Rs 1000 crore. In addition, all major power plants leave a trail of environmental destruction. The results are increased pollution, a lowering of land prices, resettlement of local residents, an increased debt burden for the country, and so on. This calculation is immensely complex. Corruption impacts people’s lives in a multitude of ways. It costs lives, freedom, health and money. Those who died in the Uphaar fire, for instance, were victims of corruption.

    Corruption thrives where temptation coexists with permissiveness. Where institutional checks on power are missing, where decision-making remains obscure, where civil society is thin on the ground and where great inequalities in the distribution of wealth condemn people to live in poverty, there corrupt practices flourish.

    The writer is a retired major

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