Funds siphoned off from welfare schemes, meant for the benefit of the poor, is also an act of corruption and must be dealt with with a heavy hand
Setting aside the anticipatory bail granted by the Gujarat High Court to an IRS officer in a corruption case on April 17, 2023, the Supreme Court said “Corruption poses a serious threat to society and must be dealt with an iron hand as it not only leads to abysmal loss to the public exchequer but also tramples upon good governance”.
The observation of the top court has catapulted to the centre stage a malady that has afflicted India for generations. The Government of India’s standards of financial propriety lays down that “no authority shall exercise its powers of sanctioning expenditure to pass an order which will be directly or indirectly, to its advantage; and the expenditure from public moneys should not be incurred for the benefit of a particular person or a section of the people unless a claim for the amount could be enforced in a court of law or the expenditure is in pursuance of a recognised policy or custom”.
When, a bureaucrat or politician sitting in a position of authority, takes a bribe instead of granting favour to a private businessperson in giving a government contract or approving a project proposal or foregoing tax revenue, he is violating both the conditions of financial propriety. Put simply, he is indulging in corruption.
Funds siphoned off from welfare schemes meant for the benefit of the poor, is also an act of corruption as the concerned politician/bureaucrat is using public money for self-aggrandizement. Likewise, a loan given by the manager of a public sector bank (PSB) instead of a bribe also falls in this category. An inevitable outcome of corruption is that national resources meant for the benefit of millions of persons - mostly poor – fill the coffers of a few individuals (read: dubious businesspersons and corrupt bureaucrats and politicians). While, the former suffer due to denial of even basic facilities viz. home, education, health, food, roads etc the latter make disproportionate addition to their wealth.
The money with these few persons being ill-gotten is kept ‘unaccounted’. Known in common parlance as ‘black money’, it is not available for funding development and welfare activities. There is every chance of its being funnelled into activities such as hoarding food grain, pulses etc which exacerbates inflation adding to the miseries of the common man.
The corruption money is also used for activities such as terror funding, drug trafficking, smuggling etc. This forces the government to spend more money on defending national security thereby putting more stress on limited resources. To combat the menace, the central government is working on three fronts viz., (i) setting an example; (ii) use of technology in implementing welfare schemes and delivery of services; (iii) making decision process ‘policy driven’ leaving no scope for discretion.
First, all actions of the Prime Minister, Narendra Modi are guided by the philosophy of what he terms “Naa khaunga, naa khane doonga”. The last nine years of his government at the Centre have been free from corruption at the highest level in the political establishment. Several charges levelled by the opposition leaders about the existence of a scam have come unstuck.
Second, with maximum use of technology in running welfare schemes, it has minimized human intervention thereby hitting at the root of any financial irregularity. Using Direct Benefit Transfer (DBT) on the JAM platform, lakhs of crore are being transferred to the beneficiaries every year without any leakage. Of Rs 2700,000 crore transferred since 2015, it has saved around Rs 225,000 crore which would have been siphoned off under business as usual.
However, there is a need for more caution especially regarding the identification of beneficiaries. If not correctly identified, there could be misuse on a mammoth scale. For instance, under the PM-KISAN (annual income support of Rs 6,000 is given to every land-holding farmer) during 2021-22, 24 million ineligible persons received assistance. This happened because Aadhaar wasn’t used for checking their genuineness. The Centre is trying to recover the money, which is a daunting task.
The government should make use of the Aadhaar mandatory for validating the genuineness of beneficiaries under all its schemes to eliminate the scope for undeserving entries in the list enabled by greedy officials and politicians in exchange for a cut.
Before 2014, tax evasion was rampant as the machinery for tax collection was manually driven and corruption was ingrained in the taxman-access interface. Under Modi, the use of IT, artificial intelligence (AI) and data analytics, has helped the government detect GST evasion of Rs 308,000 crore between July 2017 to February 2023. During 2022-23, alone it detected evasion of over Rs 100,000 crore enabling it to achieve a record GST collection of Rs 1800,000 crore.
Likewise, in the direct tax area – corporate and personal income tax – a sharp focus on the ‘faceless’ architecture of filing returns, scrutiny and assessment co-terminus with the use of technological inputs helped in ensuring tax compliance and preventing evasion. It resulted in an unprecedented gross direct tax collection of close to Rs 2000,000 crore during 2022-23.
Under the erstwhile UPA – dispensation, the decision-making process was infected with bureaucratic red tape leading to policy paralysis and delays in getting approvals. Modi - the government has cleaned up the mess and all approvals are granted - mostly through e-mode - without promoters having to even visit ministries/departments. Projects in roads, highways, railways, defence etc worth lakhs of crore are being executed promptly without any trace of corruption. In PSBs, the infamous ‘phone banking’ has given way to the sanction of loans based on due diligence of the project proposal, assessment of its viability and borrower’s ability to service the loan.
Modi – government’s determination to shun quid pro quo arrangements is also reflected in its bold decision to sell Air India (under the previous regime, it was used to curry favour with private parties in exchange for a bribe) and keep public sector undertakings (PSUs) at arms’ length from the concerned ministries and departments. However, there are some grey areas where corruption may be subtly making its way. This has to do with how food and fertilizer subsidies are administered. Food subsidy is given to over 800 million beneficiaries through government agencies such as Food Corporation of India (FCI) which deliver coarse cereals/wheat/rice at Rs 1/2/3 per kg and claim reimbursement of the excess of cost (albeit actual) over this from the Centre. How much of the cost should be allowed to claim reimbursement?
It is here that the discretion of the bureaucrat in the agriculture ministry comes into play. There are umpteen cases of inflated payments made to vendors. A similar situation exists in fertilizers where subsidy to farmers is routed through the manufacturers and reimbursements are made to the latter on a cost-plus basis. In a host of other areas such as the pricing of natural gas, its allocation, setting power tariffs and so on, the all-powerful bureaucrat calls the shots which can swing the fortunes of individual business persons either way. Modi should try to drive the ‘policy driven’ concept in all such areas to minimize the scope for discretion. Even as things are looking up at the Centre, the state's record in dealing with corruption is pathetic. The latter should follow in the footsteps of the former in eradicating this menace.
(The author is a policy analyst)
