Demonetisation, Corruption and the Aftermath

Demonetisation, Corruption and the Aftermath

Major General Mrinal Suman

Black money has been an integral part of the Indian narrative. Pervading environment of corruption is invariably faulted for all the ills afflicting India. Surprise demonetisation of high value currency notes has been hailed as a radical step against black money and corruption in India. Will demonetisation succeed in curbing corruption? Optimists are confident while the doomsayers are sceptical.

In the simplest terms, corruption is unethical conduct by a person in authority. Anyone who misuses the authority entrusted to him for personal gains is guilty of resorting to corrupt practices.

Authority vested in a person may be governmental or non-governmental. Undoubtedly, governmental corruption has much wider and graver implications; both in range and quantum – from an office peon expecting tip for moving a file to the top official demanding percentage cut for dispensing favours. Bribes are passed on in a number of clever ways. For example, it is a common sight to see bribe givers intentionally losing huge sums to the bribe takers in pre-Diwali flash sessions.  

Personal gains are not limited to financial exchanges. They could be in terms of getting expensive gifts at children’s weddings, a flat from a builder at subsidised prices, fully paid overseas jaunts, foreign scholarship for the progeny and even donations to the family-run trusts. While dealing with foreign nations, green cards for the offspring are an irresistible attraction.

Corruption can take many other forms as well. Many consider Dr Manmohan Singh to be the most corrupt Prime Minister of India. Coalition parties realised his unabashed lust for power. They bribed him with the prime ministerial chair; in return, they got a licence to loot the nation. Civil aviation, food, coal, communications and other ministries were subjected to open plunder. It was a pure quid pro quo arrangement – corruption at its worst.

Likely Impact of Demonetisation

Corruption is of two types – collusive and coercive. Collusive corruption is generally not talked about much as both parties are comfortable with it. Paying a small amount to a conductor for a berth in a train suits everyone. A contractor does not mind paying a mutually agreed sum to officials for getting unauthorised deviations. A judge may agree to acquit an accused for a fee. A tax evader may willingly give a few lakhs to the appellate tax authority rather than pay huge amounts of penalties to the exchequer.

Ingeniously, collusive corruption is referred to as speed money, convenience fee, facilitation expenses or departmental overheads. The bribe giver willingly offers gratuity to the official for out-of-turn favour. Many businesses thrive on such dealings. No one complains.

Demonetisation may not be able to rule out collusive corruption as it is a win-win situation for both the bribe giver and the bribe taker.

It is the coercive corruption that is resented by all. Herein the bribe giver feels coerced to offer bribe to get his entitled dues. And, he begrudges it. When a builder is forced to shell out money under the table to the authorities for getting his fully-compliant building plans passed, he feels wronged. When the provident fund officials demand cut to release an employee’s hard earned savings, he curses the system. Therefore, coercive corruption has become the real fall guy in India. 

In some cases, collusive corruption acquires coercive overtones subsequently, resulting in open spats. For example, all bidders for major contracts are told the percentage they should factor in for the department’s cut. Bidders comply willingly. The problem starts when they are asked to pay more than what had been catered for. Excess demand could either be due to the arrival of new officials or a change in the ruling party. Contractors cannot oblige. Consequently, either they abandon the contract midway or compromise on quality. That is why we see stalled projects and collapsed bridges.

Demonetisation is likely to curb coercive corruption considerably. Lack of hoarded currency will act as a great impediment. 

The Political Corruption

Political corruption is India’s bane. It is collusive in nature. All political parties resort to bribing voters through different means. Government coffers are emptied out to distribute freebies (cycles, laptops, sarees and so on). Loans are waived. Farmers are given free electricity. Unauthorised colonies are regularised. Agricultural income, even of rich landlords, is kept tax-free. Liquor is distributed openly. Currency notes are delivered to the voters through innovative way.

Sadly, most voters fall for such free goodies and tall promises. Kejriwal promised everything free to the Delhi voters and they voted for him.

An incident that this writer witnessed in 1999 is symptomatic of the extent to which political corruption has afflicted India. A local MLA of an eastern state was being pestered by a noisy crowd for not constructing the promised road to their village. “We gave you votes. Fulfil your promise”, they chanted. When his pleas failed to mollify the crowd, the MLA lost patience and shouted back, “You did no favour. I gave every voter a bottle of hooch, one thousand rupees and a blanket. I owe you nothing. Get Lost.” Knowing the statement to be true, the crowd started dispersing, albeit grumblingly.

Most interestingly, even after the above episode, the said MLA has been getting re-elected from the same constituency on the same set of promises. Undoubtedly, the value of free goodies would have gone up with every election. The much promised road is nowhere in sight. This is the normal narrative of political corruption in India.

Will demonetisation help curb corruption? If the violent reaction of the opposition parties is any indication, it will certainly help. Parties have amassed thousands of crores in cash to buy votes. They are feeling aggrieved as their treasures have become worthless.  Will politicians find another way of buying votes? With their proverbial penchant for resorting to corrupt activities, no one can be sure.  

When Heavens are Roped-in

Human ingenuity has no limits – even heavens are not spared. Attempts are made to corrupt gods as well. By sharing a part of the corrupt earnings with gods, divine shield is sought against the heaven’s wraths and the long arm of the law. Duly placated gods are expected to protect corrupt devotees.

Significantly, propitiatory corruption is purgatorial in nature and not penitential. There is no remorse.  Such an offering becomes a conscience cleansing act and flushes out all feelings of guilt. All places of worship flourish on tainted money. Propitiatory donations include expensive diamonds, precious stones, gold, silver and wads of currency notes.

As offerings of honest devotees can barely meet their routine maintenance expenses, demonetisation will certainly deprive the religious places of large donations by the corrupt. 

In a lighter vein, perhaps the most interesting and common form of collusive corruption relates to Mannat (vow to a deity). Deity’s intervention is sought for favourable outcome of an important issue. In return, the deity is promised a visit (pilgrimage), donation, consecration or any other votive. It is made very clear to the deity that the offer is purely on ‘no success: no votive’ basis, thereby hoping that the deity would be forced to intercede to retain credibility.

Needless to say, demonetisation will have little impact on Mannats as the government has no role to play in a matter that concerns humans and their gods.

Finally 

       

In a survey carried out by a leading newspaper, 81 percent respondents termed demonetisation to be a ‘good idea well executed’; 15 percent called it a ‘good idea badly executed’; and only 4 percent opposed the step.

Two posts on WhatsApp put the entire issue in an honest and objective perspective.  When queried, a veteran in a queue at a bank said – “If I can stand for hours at Balaji for one minute darshan without any assurance of divine support, I can surely stand here knowing well that demonetisation will help my country”.

Similarly, a young man at an ATM declared – “I spend hours outside the booking window to get tickets for the first show of popular movies. Wait of a few hours here to curb black money is no big issue”.  

     

If Kejriwal, Mamta, Yechuri, Mayawati and leaders of the ilk oppose any change, the change must be considered good for the nation. This litmus test applies to demonetisation as well. All opposition leaders are crying wolf and shedding crocodile tears – faulting the government on the grounds of inconvenience to the public and the trade. That is all hogwash. It is the loss of hoarded cash chests that is hurting them immensely and they are writhing in electoral dilemma – how to bribe voters to win elections.*****