Demonetization reduces corruption?

Let us talk about the latest amnesty scheme, the second one in 2016 which is ratified by the parliament.

A thanedar asks a thief what is he carrying. “Open it and show me.” Chor replies, “huzoor, it is ill gotten gains that I stole.” The police officer smiled and said “Are koi gal nahi. 50% jama kara de. Ja, ab tu imandar ho gaya.”

On a serious note, there are four forms of corruption:

  1. Highway robbery: It can be as simple as LPG delivery guy extorting extra money for the cylinder delivery to low level officials asking bribe to perform their designated duties
  2. Fraud where management, directors & proprietors collude to steal from shareholders, banks, government and even employees by over-invoicing & cooking up accounts
  3. Neglect of duty & fiduciary responsibility: Also called as high level political corruption which involves deliberate tinkering with the laws and policies for personal gain & influence
  4. Corruption need not be always monetary. Polarization of the masses and manipulating their emotions is also corruption. Debasing the population can be achieved through deliberate propaganda, false information and misrepresentation.

My question to all of you is “how do you think any one of these four evils will be curtained by demonetisation?”

It is easy to rally the voters to wage the war against corruption & black-money. However the leadership needs to realize that it is not an war against a single individual or region. It requires a planned systematic cleansing of the entire eco-system. If you want to keep corruption under check, here is the five point formulae that is globally accepted:

  1. Simple & practical rules: The easier it is to understand, interpret & implement it, the less scope there exists for manipulation & divine intervention by the signing authorities.
  2. Social stigma against the corrupt. Today the corrupt are revered for their wealth, influence and willingness to get things sanctioned. While the honest are marginalized as idealist who are not practical. I believe in the 10-80-10 rule. 10% of the people will be moral, no matter what. 10% will be always corrupt. It is the middle 80% who always try to “hitch their wagon to the star” they adapt to the circumstances and take decisions according to the reward & punishment environment that they perceive.
  3. Transparency & accountability: tender process even after the reforms & digitization is more complicated and less transparent than most of the world. PWD official is rarely held accountable for a bridge collapsing. Crony capitalism is on the rise as political favors wins contracts & eliminates competition through bending the rules & requirements.
  4. Making it difficult to spend & launder ill-gotten gains. The “no questions asked” income tax disclosure & amnesty scheme that are being rolled twice this year is actually a step in the reverse direction. As per economist magazine: Only 5-7% of the seized unaccounted wealth in the last 4 decades has been in form of Indian currency. Rest is in form of property, gold, foreign currency and other high value items.
  5. Speedy justice & extemporary punishment in the cases. CBI & CVC are not independent organizations like the election commission of India. Hence have been reduced to toothless tigers who often serve the political agenda of their masters. The court cases last for decades, leaving the accused enjoy the rest of their lives on bail while the witness live in exile for the fear of their lives.

Demonetization is no Sanjeevini booty that can cleanse corruption. Digitization can impact the laundering but we are here to discuss demonetization. You don’t need to purge the country into chaos to promote cashless economy and digital payments.

I am not here for a political debate or even comparing the short comings of one regime against the other. What I am highlighting, is that the system is rigged and demonetization is barking the wrong tree.

Each parliamentary election candidate spends a minimum of 5cr INR for campaigning & canvassing. Additionally, he bears a share of the high command expenditure on TV, social media, national rally and even political campaigns in neighboring states. The MP salary & pension cannot cover these costs. Further-more there is no audit or political funds. No donor discloses how much they contributed and to whom and no political party even records the names. Add to it the vagaries of political uncertainty & even the time till next re-election. How can one possibly stay clean and yet afford the required resources to get re-elected?

In fact, what my friends failed to appreciate, is that hard Indian currency is not the only form of corruption. Gifts, gold, silver, forex & foreign account transfer, shares to the company or property is often considered adequate payment. Harshad Mehta had difficulty in stuffing 1cr in a suitcase. Today’s 2000-rupee note is smaller and has higher value. So one can stack several crore in the same space.

I guess the only achievement is this whole 50 day drive is to raise the base price for any petty bribe from 500/- to 2000/-. In fact, it has open newer streams of corruption. Bank officials & agents helping launder the money. Shops, jewelers, co-operative banks etc. are back dating receipts to accept old currency. While I need to wait for an hour to withdraw a single 2,000/- rupee note from the ATM, hordes of new pink notes are neatly stacked in the houses of corrupt.

 

Advertisements

Leave a Reply.... we want your views

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s