The Indian Budget 1996-97 The Indian Economy Overview

Scam, Bribery and Corruption

Emerging political scam culture in India

A child learning English in India by pouring through newspapers would come across a word being used almost daily of late "Scam" . If he were to ask his father what does this word mean it would take Dad hours to explain. Because scam has not only entered our lexicon of common usage here but has become a part of the social, political and economic culture.

Not a day passes without some scam or the other coming out into the open. A tourist passing through India for a week would get the impression that India is a land of scandals, a kind of laissez faire state where the high and mighty are out to loot the system and the devil take the hindmost. Everyone, it appears, has his hand in the till.

Ironically, the scam culture has received a boost during the last five years or so the years of liberalization and "reforms" when the government loosened controls to invite foreign investment into the country. That invitation has given a carte blanche to those in power to take the cream off the top as the latest scandal hitting the front pages would indicate.

This one involves the former Minister of Telecom, Sukh Ram, who is currently in hiding at his daughter's place in Southend-on-Sea, near London. Sukh Ram, was heading the ministry whose responsibility it was to deregulate the telecom sector, till now the preserve of the government. The business potential being in tens of billions of dollars, all the world's biggies rushed in to bid for basic services.

Sukh Ram apparently thought he should get part of the action too and though the bidding process was transparent, the highest bidder found his files moving at a snail's pace even after the contract was awarded. Others, who had the ear of the minister, found themselves becoming rich overnight. One company turned into a mega corporation within three years, all due to getting lucrative government contracts.

So blatant was he that even while he was a minister, allegations about his favoritism flew thick and fast and the opposition parties stalled parliamentary proceedings for a week late last year, demanding investigations against him. The government did not give in, but in telecom circles and even within his own party, there were loud enough murmurs about his tendencies. Now it turns out that people did not know half of it. The honorable ex-minister has managed to build several plush houses, has interests in a other properties. The raids on his property, anti-corruption agencies found over a million dollars in cash and millions of rupees worth of jewellery. Not bad for a man who was a lowly clerk barely 25-30 years ago.

A key lady official of his department was arrested for her complicity in granting favorable contracts, but Sukh Ram, who was conveniently abroad has managed to stay out of the clutches of the law. He has delayed his return ostensibly on medical grounds and there are dark rumors he even applied for asylum, but sooner or later he will have to come back.

But Sukh Ram, though the most blatant, is hardly the only politician or civil servant involved in corrupt activities. In the state of Bihar in central India, government officials created bogus bills and invoices to divert billions of rupees which should have gone to buy subsidized fodder for cattle. In the Southern State of Tamil Nadu, the former Chief Minister "Empress" Jayalalitha held a wedding for her "foster son" which was estimated to have cost over 15 million dollars. Of course, as a mark of her dedication to the people, she took a token salary of 1 rupee per month.

In Delhi, several top politicians were named in the diaries of a businessman for having accepted bribes in foreign exchange the list includes top names from the right wing Bharatiya Janata Party which makes a virtue out of being different from the other parties. Even the former Prime Minister Narasimha Rao himself is under a cloud for having conspired to cheat a Britain based Indian businessman. Another minister in the Rao government reportedly made millions in sugar contracts.

Early in the reforms process the sheer scale of the stock market scandal, where more than 60 billion rupees (approx. 2 billion dollars) of public institutional funds were diverted by a group of brokers into the stock markets and then siphoned off, took everyone's breath away.

Not all these scandals took place during the five years of reforms, nor were they necessarily linked to the liberalization process, but the general public impression is that under the guise of liberal economic policies, ministers have got a free hand to make money by underhand means. The hunt for lucrative contracts has brought multinationals in droves and many of them are not averse to spreading a few million dollars around. Last year, the Houston based energy company Enron corporation was found to have earmarked 20 million dollars for "education" in India and critics wanted to know who got those funds.

Not that kickbacks are a uniquely Indian phenomenon and the link between deregulation of the economy and bribes is a universally accepted reality as even the events in South Korea and elsewhere have demonstrated. But the sheer blatancy shown by politicians, the everyday tales of corrupt petty officials, the greed of the private sector has made most Indians completely cynical. They are convinced that the political leadership is totally corrupt and their daily experience with petty government officials tells them that bureaucrats are no better either. Businessmen who pay to get contracts and then treat their shareholders badly are no better either.

Now the common man is looking at the investigative agencies and the judiciary which has of late shown remarkable independence in pursuing the corrupt and guilty. Past record shows that the Sukh Rams of this world managed to get away by either delaying the judicial process or ensuring that there is not much evidence against them. This time the people are hoping things will be different.


Sidharth Bhatia is a senior Indian journalist who runs a well known television program on Indian business and current affairs. A former newspaper editor and foreign correspondent, Bhatia has written for several publications in India and abroad.


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