Despite the Election, India Still Isn’t Confronting Corruption

In the bear pit of India’s election, voters seem particularly focused on two issues: economic growth and corruption. But while growth manifests itself in many different ways, some of them hard for the average voter to comprehend, corruption is a tangible and daily reality. Corruption has played an important part in Indian electoral politics in the past. As early as 1977 and 1989, voters selected the winning parties in national elections in part because they pledged to fight corruption. But public concern about corruption in the run-up to this year’s election has reached a new high.

The current wave of concern found its first outlet in the 2012 campaign for an anti-corruption body with investigative powers (a Lokpal), which was led by Anna Hazare, a civil rights activist in the Gandhian tradition. His hunger strike in support of the Lokpal led to its adoption by parliament in December 2013, albeit in a diluted form. Meanwhile, over the past year, some key players in India’s political and business elite — the sort of people who normally benefit from a widespread culture of impunity — have been found guilty on corruption-related charges and imprisoned, including A. Raja (former minister of telecommunications), B.S. Yeddyurappa (former chief minister of Karnataka state), and Jaganmothan Reddy (Congress chairman in Andra Pradesh state).

Even the chairman of the all-powerful Board of Control for Cricket in India (BCCI), Narayanaswami Srinivasan, has been implicated in match-fixing scandals. Last month, the Supreme Court required Srinivasan to resign his position. At the same time, under the Right to Information Act of 2005, thousands of applicants have been requesting information on corruption-related issues and pointing fingers at many officials, especially on the state level. (In some cases, those information requests have led to the assassination of those making the applications). At the local level, very successful "right to know" and anti-corruption campaigns — such as the Public Affairs Center and Janaargha (sponsors of the website "I Paid a Bribe," which has had 2 million hits since it was launched four years ago) in Bangalore — have raised awareness of citizens’ rights to a new level.

After the success achieved with the Lokpal Act, Hazare’s closest aid, Arvind Kejiwral, decided that it was essential to channel the energy raised in the Lokpal fight into formal politics. He founded the Aam Aadmi Party (AAP), which won enough support in Delhi state’s December 2013 elections to be able to form a minority government. As a result of a constitutional clash with the central government, the AAP resigned from power in January. This year, nonetheless, it is fielding candidates in over 500 of India’s 543 lower parliament constituencies. Having eschewed big donors, however, it has experienced major fund raising problems.

In this context, both major parties, the Congress Party and the Bharatiya Janata Party (BJP), have stated a new willingness to root out corruption. Rahul Gandhi, effectively the leader of the Congress campaign, spoke out last September against his party’s willingness to allow members of parliament with a criminal record to continue in office. But Gandhi has struggled to achieve credibility on this issue, since the coalition government that his party has led since 2004 is saddled with a reputation for corrupt deal-making in real estate, mining, and telecommunications. Even the reputation of upright Prime Minister Manmohan Singh has taken a hit. Narenda Modi, the BJP’s candidate, does not have that particular kind of baggage, though he is thought to be far too close to corporate leaders like the Ambani Brothers (chief shareholders in Reliance Industries, an important player in the energy sector). They have been his key backers during his 12-year tenure as chief minister in Gujurat state, and have allegedly reaped unjustifiable benefits from industrial concessions.

Beyond campaign rhetoric, to what extent are the parties addressing the underlying issues that drive corruption? The Congress Party is remarkably quiet on the subject, simply promising more efficiency in the national food security program. Both the BJP and AAP agree that a serious attack on corruption requires the return of "black money" held overseas, increased use of e-technologies in public distribution systems, a radical reform of the justice system, and further decentralization to the village level. AAP also considers the distribution of "untied" funds (funding that isn’t earmarked for specific purposes) to villages essential. AAP’s additional major commitment is to launching a new and tougher Lokpal bill, which would end all exemptions of government officials from prosecution. In addition, the party hopes to reform the media (ending the practice of "paid news"), restrict quasi-monopolistic media ownership, and take steps to reform defense procurement, reconfirming the Ministry of Defense’s ban on middlemen.

How do these commitments stack up against three of the major sources of corruption: campaign spending, "black money," and public distribution systems?

First, it’s worth noting that political parties have made no attempt to curb their spending to meet the legal limits. The Electoral Commission sets strict formal limits of around $110,000 per candidate per constituency. Still, during the last general election in 2009, parties exceeded these limits many times over. Most assessments for that election report a total expenditure of $1.5 billion, or $3 million per constituency (though real figures are impossible to come by accurately), largely distributed directly to potential supporters from financial backers. On April 2, the think tank CMS-India estimated that total expenditure in this election would be twice that. These funds are drawn from corrupt as well as legal sources who seek a return on their investment — in political favors, for example — if the candidate wins.

Members of parliament are willing accomplices. The Electoral Commission has published lists of assets declared by candidates showing that personal fortunes have improved by two or three times during the current members of parliament’s tenure in office. In an extraordinarily high number of cases, parliamentarians have themselves been found guilty of criminal offenses. In the last parliament, 76 out of 543 members had criminal cases in court. About 20 percent of the members with criminal charges have been reselected to stand by major and minor parties at this election.

Second, in spite of their manifesto commitments, neither BJP nor Congress has done much to limit the use of "black money," which includes money in circulation that is outside formal and recorded GDP (estimated to be about 50 percent of GDP) and funds held by individuals and companies overseas (estimated at $345 billion in 2011). The AAP has made this issue a major part of its platform
since its inception. These funds play a huge role in political finance, with overseas funds being repatriated into the Indian economy as legitimate finance after an initial deposit in Mauritius or Dubai.

Third, corruption in public distribution systems is notoriously widespread. While in power in certain states, Congress and its coalition partners have failed to combat the high level of corruption in the subsidized food program and the rural employment program. The former is designed to reach 600 million people, the latter about 100 million. Both of these programs are products of the Congress-led government led during the last 10 years, and in their current form each cost about $5 billion per year. Estimated losses through "inefficiency and corruption" are about 50 percent — a huge drain on the exchequer and an insult to the targeted beneficiaries, who are increasingly vocal on the question. In its manifesto, Congress promises to reduce "inefficiency" in these programs — but this is a long-standing commitment that has so far come to nothing. BJP can rightly claim to have had some success in this regard in Chattisgarh state, but not in other states where it has been in power (such as Goa and Gujurat).

These issues are deeply entrenched in the Indian political system but are being debated in the election campaign as never before. The BJP is currently the front-runner, but may well be dependent on four or five smaller, state-based parties support in parliament. The corporate nature of its funding base and ambiguities on the corruption issue both inside the party and within any coalition it forms make it an unlikely champion of real reform. The AAP, with handful of seats at best, will remain the principal of watchdog of India’s fight against corruption.