Even in a nation that has always used repetition through the high-level corruption, the numbers reported in the telecom scam called 2G is amazing. In 2008, the Union Government of India licensed use of spectrum in nine companies to provide mobile telephony services in 122 circles. The amount raised was around Rs. 1.658 million rupees (around U.S. $ 370 million). The Comptroller and Auditor General of India estimates, based on spectrum auction for 3G services, what happened later, that the Indian treasury was defrauded to the tune of Rs. 176,000 crore (around U.S. $ 40 billion) in the sale of 2G spectrum.
It was alleged that A. Raja, former minister in charge of telecommunications licenses awarded arbitrarily in a very transparent process, and prices did not reflect the real value of the spectrum. Appropriate prices for much lower teledensity of 2001 (compared to 2008) were accused of giving licenses to favored companies - some of whom do not even have experience in telecommunications - in a "first come, first served only through competitive bidding.
Despite the alleged malpractice immediately after the sale in 2008, it was only in November this year, Manmohan Singh, Prime Minister of India, Raja forced to resign. The position of Minister of Telecommunications became untenable after the Supreme Court intervened, and several potentially damaging phone records involving a lobbyist for high power and leading journalists filtered. In addition to forcing the resignation, telecommunications fraud has tarnished the Prime Minister's office as well.
The Cost of Corruption
The telecommunications infrastructure of an economy is the equivalent of the nervous system of an organism. Without a robust telecommunications system, affordable, efficient and reliable, no economy can prosper in what is called the "information age." Corruption in the licensing of spectrum can be expected to damage the deployment and use of telecommunications infrastructure. Telecommunications are important links back and forth with all other sectors of the economy. The economic cost of India may well be in the hundreds of billions of dollars.
Corruption has become, unfortunately, a feature that covers everything from India. The Indians are very familiar with it. For citizens to address all levels of government, the systematic abuse of power has lost its ability to download or even evoke a comment. Most people accept corruption as a fact of life. What really is disturbing is corruption in the public sector. The telecommunications fraud is a terrible example of public sector corruption, Transparency International (TI) is defined as "the abuse of entrusted power for private gain."
The magnitude of telecommunications fraud is enormous but not unique. In resource-rich states, scams involving mining rights in major cities, which often deal with real estate. The details vary but the underlying story is the same.
Only in recent months, the Commonwealth Games in New Delhi were marred by allegations of massive financial corruption worth billions of dollars. Another case of grand corruption, which recently came to light - called Adarsh Housing Society scam - politicians involved, defense contractors and top brass. These financial malfeasance are nothing new. Washington, DC-based Global Financial Integrity report, drivers and dynamics of illicit financial flows from India: 1948-2008, published this month in which estimates the present value of all illicit flows of India is at least $ U.S. 462 billion, an amount that is twice the current debt of U.S. foreign India $ 230 million.
True Stories
To explain how deeply corruption has permeated Indian society, let me tell some stories I've heard from friends and business partners. It is only when you hear these true stories that you realize how our system is flawed.
• A large company won a contract for a waste management project in a global offering. Soon, they received a call from a political party asking for money. The company paid for fear that their work is interrupted. Then, a second political party demanded more money. Once again, paid. When a senior leader of a third political party called up, the company had had enough and refused to give in then received a letter from a government ministry stating that the project was on hold. The CEO was to meet with the senior leader and was abused and said that unless the company paid, the project will not happen.
• The real estate prices in all major metropolitan areas in India have gone through the roof. Rates of up to Rs. 100,000 (U.S. $ 2,200) per square foot in South Mumbai are not uncommon. They reflect the well known fact that real estate is one of the main avenues of politicians to generate funds. About one-third the cost of land and construction is attributed to the bribes paid to the political system - from the municipal corporation officials, all the way to the highest offices of government.
• The other day a friend in the construction industry told me about the escalation of costs and time in your business. At each stage I had to pay people who had the power to delay and disrupt operations. Among the dozens of officials with whom he had the misfortune to interact in a hotel project ended, he found that just one was honest. Even now, my friend has to have cash on hand to pay "the inspectors." Projects typically have twice as much time and money than could reasonably be expected.
The problem of corruption is eroding confidence. Limit welfare improving trades that are so important to the economic efficiency of any system, capitalist or socialist. It also leads to inefficient resource allocation. The spectrum of telecommunications fraud for selling is a clear example. As it happens, some of the companies that obtained licenses cheaply turned a nice profit by reselling the spectrum. For price manipulation of the spectrum, the value that should have accrued to the Treasury, which could have been used for public projects, instead ended up as higher than normal profits for companies. The economy of India is not lost only in terms of direct revenue from the licensing of spectrum, but also by the effects of the high costs of telecommunications services (as a result of the final purchaser of spectrum to pay more high). Corruption is in effect an unlawful tax that enriches individuals and acts as a brake on economic growth.
It is instructive to examine the causes of corruption so staggering scale. The reasons are certainly structural. When the government exercises too much discretionary control over the allocation of resources, it is tempting for bureaucrats and politicians to gain from the concomitants of power. The minister of telecommunications had significant discretion over who acquired spectrum, and when and by how much. Apparently, it uses this power to the detriment of the country.
The criminals in power
The opportunity to accumulate great wealth offered by the political power is the main driver for people with the desire nor the ability or the government to go to enormous lengths to enter politics. Over time, this leads to erosion of public morality and ethics. The results of assembly elections in Bihar recently illustrate this reality. In the assembly of 243 members of legislative Bihar, 141 newly elected members have criminal cases pending against them. The charges include murder, kidnapping and robbery.
It should be shocking that people who are responsible for making laws are very likely to be broken. There has been a clear decline in standards of what is acceptable behavior. That voters actually elect the criminals to the legislative bodies must be the most shameful aspect of Indian democracy. The trend is not all positive, it seems that now even the media is involved in dark transactions that were once limited to some politicians and corporations. It also appears that the cancer of corruption may have spread to the courts.
In the final analysis, the prevalence level of public probity and integrity is a function of the social demand for them. In a democracy, the people ultimately decide who will govern. The solution to the problem of corruption of public officials is absolutely to the public. The kind of leaders and policy makers that people demand ultimately determine who will make the rules by which society functions.
India is a democracy. In the words of Abraham Lincoln, the country has a "government of the people, for the people and for the people. "But the Indians have to understand that most of the diseases in India are a result of his abdication of responsibility that necessarily accompanies the Indians have rights in a democratic system. Democracy is not just about voting voting but not reported. The people must act together against those who have brought disgrace and shame for the country. They have a responsibility to clean up corruption. This can be done most effectively by refusing to vote for criminals.
The news is not all bad. Citizen groups are emerging that aim to solve the problem of corruption. This is a collective problem can be solved only through the mobilization of voters informed. Among many others, a nascent group of such, called "Unite the voters of India," is an association of people who agree to vote only for candidates who are capable and clean.
Our problems must be solved within the system through the democratic process. The good news is that advances in information technology and telecommunications have changed the balance of power of government to the people. People now have the means to educate and organize collectively to force reform in the system. The telecommunications scam should serve as a warning to all Indians that it is time to act. If so, maybe the scam have served a positive purpose, after all.
No comments:
Post a Comment