Liberalisation has led to mega corruption'

N. VITTAL: "CORRUPTION depends on three factors: values cherished by people at the individual level; values cherished by society; and the system of governance."-T.M. KARUNAKARAN

Interview with N. Vittal, former Chief Vigilance Commissioner and head of the Telecom Commission.

IN the context of the 2G spectrum allocation scam and the scandals relating to the Adarsh Housing Society in Mumbai and the Commonwealth Games in New Delhi, Frontline met N. Vittal, a former Central Vigilance Commissioner (CVC). The 72-year-old Vittal is a former Indian Administrative Service (IAS) officer who, before becoming the CVC, was Chairman, Telecom Commission, and Secretary, Department of Information Technology. He lives in Chennai. Excerpts from the interview:

The office of the CVC during your tenure in the post was proactive and transparent, leading to exposes on corruption in the bureaucracy. In the light of that experience, how do you look at the present level of corruption involving the bureaucracy, politicians and the top brass of the defence services in scams such as Adarsh Cooperative Housing Society, Commonwealth Games and 2G spectrum?

I was Central Vigilance Commissioner from September 3, 1998, to September 2, 2002. During my tenure, I tried to ensure that cases regarding corruption were looked into seriously and quickly.

You mentioned about exposes. It is not the function of the CVC to do exposes on corruption or do investigations of its own. The CVC is an authority that is meant to exercise supervision over the vigilance function of the Government of India departments and render advice to the Government of India, especially the disciplinary authority, for specific action they have to take for cases coming under the Prevention of Corruption Act at the level of group A and B officers.

During my tenure, I tried to see how best the basic objective of fighting corruption could be achieved within the limited power of the Central Vigilance Commission. I brought transparency, effectiveness and visibility to the system. I brought transparency by using the Internet, and all information was available on the CVC website cvc.nic.in

We used the Internet to expose the names of IAS and the IPS [Indian Police Service] officers who had been found guilty of corruption and against whom major penalty had been recommended and the CVC had recommended prosecution. This created a big impact. In a criminal case, thanks to the IPC [Indian Penal Code] and the CrPC [Code of Criminal Procedure], an accused is presumed innocent until proved guilty but his name is widely known.

Unfortunately, under the anti-corruption law, when an officer is proceeded against, there are two options: prosecution in a court of law, which is undertaken only in cases where the evidence is sufficient and the guilt can be proved under the Evidence Act. [In the second option], in most of the cases, where the strength of proof is not beyond reasonable doubt, it is sufficient to come to a conclusion under the principle of preponderance of probability. [That is] Circumstantial evidence is sufficient to hold a person guilty.

That is why 4,000-plus names were put on the CVC website where the departmental inquiry had been held and the CVC had recommended that they should be given major punishment such as dismissal, reduction in rank and so on.

This was the first time it was done and it brought a lot of visibility to the CVC. Secondly, I was easily available to the media because this was a subject on which I used to give 100 lectures every year. In four years, I gave 400 lectures. Thirdly, I went beyond the administrative issues on what citizens should do to fight corruption. That is why I came up with a citizen's guide to fighting corruption. I introduced the observance of Vigilance Awareness Week every year, which has continued for the past 10 years. So, in all the departments of Government of India, the need for vigilance and fighting corruption was brought about and greater awareness created.

But the CVC's recommendations are only advisory in nature and its jurisdiction covers only Government of India organisations. It does not cover State government organisations, politicians and so on. If a complaint came up against a politician, what should the CVC do? Should the CVC take a stand that it is beyond its power and keep quiet or can the Central Bureau of Investigation [CBI] inquire into political corruption where the CVC has no jurisdiction and the CBI reports to the CVC?

What did you do?

Whenever a complaint of corruption came up against a politician, I used to send it to the CBI Director for action/investigation. For example, Subramanian Swamy met me soon after I took over as the CVC and gave an application to me, during my morning walk, against the then Minister Ram Jethmalani. I sent it to the CBI Director, R.K. Raghavan, and the matter was inquired into. With the complaint he [Swamy] made no damage was done. The case was finally closed. Here, as the CVC, I used my power on the ground that the Director of the CBI is selected from the panel recommended by the CVC and others as members of a selection committee. This was on the directives of the Supreme Court.

Does the Supreme Court judgment say that the CBI Director should be appointed.

The whole idea was that in the Vineet Narain case the Supreme Court realised that two key government agencies, the CBI and the Enforcement Directorate, were being manipulated to delay the cases. It wanted to make the CVC an independent agency that can supervise the functioning of the CBI and the Enforcement Directorate, and this was to ensure that these organisations functioned independently. Further, the tenure of the Directors of the CBI and the Enforcement Directorate was assured [for a minimum of two years] and they could not be transferred without the permission of the CVC.

Since I put everything on the website, I was able to monitor how many of the recommendations of the CVC were implemented. I discovered to my horror that for two years and more, many recommendations of the CVC were not implemented. So I took up the matter with the secretaries of the disciplinary authority, saying that after the departmental inquiry the CVC had recommended a major penalty such as dismissal or reduction in rank, and if, as the disciplinary authority, you do not carry it out, it can only mean two things: either you are inefficient or you are colluding with the corrupt'.

This made the disciplinary authorities take follow-up action. This improved the effectiveness of the CVC's recommendations and I am happy to say that during my tenure, 98 per cent of the recommendations were implemented. So visibility, credibility and effectiveness were assured.

I retired in 2002. Mercifully for this country, there has been an explosive growth of television news channels and of the print media, particularly in the regional languages. The media are doing an excellent job of making India what Zulfiqar Ali Bhutto called a boisterous democracy.

There is a school of opinion that what we are witnessing now is the cumulative effect of the rampant corruption that has prevailed for the past 20 years. Do you agree?

Looking at the issue as a sort of historical process where the dosage is going up incrementally does not give you a real understanding of the dynamics of corruption.

Corruption depends on three factors: values cherished by people at the individual level; values cherished by society; and the system of governance.

Each one of us has seen that even in the most corrupt government departments, there are honest people. How do you explain this phenomenon? It is the result of an individual's values. Former President [A.P.J.] Abdul Kalam has emphasised that values should be cherished, and this can be done only by parents, primary schoolteachers and peer pressure in the initial years of a person's life.

Societal value depends on what the leaders in society do. How many doctors, lawyers, chartered accountants, businessmen and successful people who are respectful people in society declare their real income and pay full income tax? If more than 50 per cent of our economy today is black money, it means that all these people as a class are under-reporting their income and creating a parallel economy. Since politicians are very visible in a democracy, blaming them alone is not correct. Societal values have deteriorated.

When I became the CVC, I sent a circular [to government departments], asking them whether we can display the photographs of corrupt people who have been found guilty and punished, just as photographs of criminals are displayed in police stations.

A reply I received said if I did that in their office, there would be no place on the wall for Mahatma Gandhi's picture! Another man from a public sector bank asked, If you do that in our bank, who will do business with our bank?

The third important aspect is that the system of governance decides the level of corruption. In Chennai, one can throw rubbish anywhere one wants. But when the same people go to Singapore, they will not throw rubbish on the roads because they know that the system there will punish them. What we have done in our country is to design a system that encourages corruption. Having done that, to say that today's corruption is an accumulation is wrong.

Mahatma Gandhi collected money for every signature he gave. Sardar [Vallabhbhai] Patel was in charge of the Congress' organisation. He handled lakhs of rupees. Can anybody point a finger at Sardar Patel that he took a penny away from the party? The Dewan of Mysore, Mokshagundam Visvesvaraya, used personal ink and pen for his personal work, and government ink and pen for doing government work. Such was the level of integrity we had seen in politics and the bureaucracy.

When we became independent we used to cast our votes in elections. Now we vote our caste. As P. Sainath [rural affairs editor of The Hindu] has pointed out and the Election Commission itself has conceded, elections have become an exercise where humungous amounts of money, that too black money, are required.

Every political party is against corruption when it is in the opposition. Once it comes to power, it has to play the game. When it is caught, it will always point the finger at the opposition party that was earlier in power and played the same game.

Corruption caters to the basic human tendency of greed. Today, people want to grab power to make money or grab money to come to power. It is a vicious cycle and the question is how to break that cycle.

When you were the CVC, you listed five major factors that resulted in corruption in India. They were: (1) scarcity of goods and services; (2) red-tape and complicated rules; (3) lack of transparency in decision-making; (4) legal cushion for the corrupt under the principle that a person is innocent until proved guilty; and (5) tribalism among the corrupt, who protect each other.

Corruption in our country is a vicious cycle in which the entire society is somehow involved. Now muscle power and technology have led to such a development that a voter can be bribed and monitored. Short of getting into the voters' booth and monitoring, there are methods to see that a voter once corrupted stays corrupt.

Is there any addition to the list of five?

In the dynamics of corruption, there are five elements: the neta, the babu, the lala, the jola [represented by non-governmental organisations] and the dada.

Neta is political corruption. It leads to bureaucratic corruption. There is business corruption. Then there is NGO corruption. The NGOs are a global phenomenon by which a lot of money comes to them. There is the Foreign Contribution Regulation Act (FCRA), which itself is a well of corruption. Many NGOs used to tell me that for whatever money they get from the Ministry of Social Welfare, they had to pay a bribe. If you go to Bihar, there are ghost NGOs siphoning off money. So these jola walahs have become another area of corruption. Then [there is] the dada, the criminal. What is the reason for terrorism or Maoism growing? Corruption.

What is the way out?

There are institutions to fight corruption. The first is the judiciary. However slow it may be, it has taken a number of measures to fight corruption. Even now it is the Supreme Court that is highlighting corruption in many areas and doing something. Secondly, the Supreme Court, through public interest litigation [PIL], has been able to strike a blow for citizens' rights. In 2004, a Supreme Court judgment that every candidate [contesting an election] has to declare the number of criminal cases filed against him, his educational qualification and his wealth brought about a great element of transparency in the electoral system.

The entire political class shows that it is afraid to face transparency. Why has the Lok Pal Bill been pending for 30 years? It was introduced in the Lok Sabha eight times. Politicians have lost their credibility. They cannot fight corruption because they thrive on it. The way out is to create a system like the one in Singapore.

The second agency [that can fight corruption] is the Election Commission. T.N. Seshan made a great contribution to better governance by educating the people about the powers of the Election Commission. He cleaned up elections and brought about some discipline by insisting on a code of conduct for candidates. The Election Commission's power to derecognise political parties and cancel elections is working on politicians.

The third is the CAG [Comptroller and Auditor General]. But it has a very limited role. Unfortunately, a great weakness of the CAG is that it is mostly post-audit. The fourth agency is the CVC. But it does not have direct powers. It has to fight with a wooden sword. That is what I did for four years.

A great mystery of our democracy is that in spite of so much of wealth declared by politicians in their election affidavits, agencies such as the Income Tax Department and the Enforcement Directorate watch silently. Has any head of the Central Board of Direct Taxes, Customs, Excise or the Enforcement Directorate asked how a politician in one election declares his/her wealth at Rs.4 crore and in the next as Rs.8 crore? Only when they are directed by political leaders in power to act against opposition parties they move.

The Supreme Court has asked whether P.J. Thomas can function effectively as the CVC when a charge sheet is pending against him in a case in Kerala. He was earlier Telecom Secretary. What is your view on this?

[James Michael] Lyngdoh, [former Chief Election Commissioner], whom I know as an honest officer, has said Thomas is a man of personal integrity. I do not know Thomas personally. So I will not say anything about him as an individual.

But I have a comment on an issue that the Supreme Court has raised and a point made by Attorney General G.E. Vahanvati. The point is, Is impeccable integrity a requirement for every job?' Vahanvati's point is that if that is made a condition for every job, there are petitions pending against even the appointment of judges.

I will give the reason why a person of impeccable integrity should be considered for the post of the CVC: (1) Justice should not only be done but also be seen to be done. If the CVC is a man of impeccable integrity, then whatever action he takes will be believed.

The question the Supreme Court raised was that if the CVC himself is facing a charge, then in every case [he is inquiring into], an application can be made that he is facing this [the charge].

Do you agree with the view that liberalisation and globalisation have taken corruption in India to very high levels that were non-existent during the licence-quota raj?

I think this is in the Global Financial Integrity report. Liberalisation has brought a lot of good for the country. Economic development has taken place. A telecom revolution has taken place. Another sector, information technology, has brought in so many employment opportunities.

But the question is, has it increased corruption? Liberalisation has led to mega corruption. Earlier, under the permit-licence raj, it was retail corruption because individuals were trying to get licences. After liberalisation, politicians can make money only by mega corruption, which can come only through policymaking. After liberalisation, the capital market became dominant. So you had the Harshad Mehta and Ketan Parekh scams.

The second is the sector-related scam. Sector means policy. Mr Ratan Tata talked about how he was prevented in the aviation sector [from starting an airline]. The simple policy change was that we opened up the aviation sector but said a foreign partner should not come into the aviation business. Imagine a policy like this being made! Ratan Tata has been pretty open about what happened. The policymaking that is involved has made the scale of corruption mega.

Do you think the 2G spectrum scam also took place because of the policy change?

Because corruption-minded people were there. After all, in the 3G spectrum allocation, corruption did not take place. The enormous money realised from the 3G auction highlighted in sharp contrast the extent of the 2G scam.