By Srinivasan K. Rangachary
It is tragic that the whistleblowers (on corruption) are being murdered by vested interests. But the interest in the media and the general public is showing signs of waning.
The same is happening to another movement, namely, the Occupy Wall Street movement (directed at the bankers who created the financial crisis and the sharply rising inequality in income and wealth in USA) that blossomed in many parts of the western world a few months ago. One common feature of such popular movements is that these consist of motley crowd having many different ideas and concerns.
Most people gathered under the Anna Hazare banner were victims of petty corruption and harassment by government officials in day-to-day lives who simply hoped that a personally clean man can somehow cleanse the system. They do not understand the legal niceties of a Jan Lokpal bill drafted by some legal experts or the debatable accounting complexities of CAG estimating the loss to government treasury arising out of not auctioning 2G spectrums (Rs. 1.76 lakh crore) or coal blocks (estimated at Rs. 10.7 lakh crore) and Tatra truck scandal worth several thousand crores. They just believe that another set of new institutions (like Lokpal) would put an end to corruption — big and small — notwithstanding the failure of the existing institutions and laws to do so.
The Supreme Court has now cancelled all 2G spectrum licences allotted by former telecom minister A. Raja and directed that in future the government will have to auction all such natural resources. This, in a sense, shows that existing institutions, if they want, can remedy blatant violation of rules and procedures. The major hurdles are extremely slow moving judicial process, the interference with the investigating agencies (CBI, CID and police) inability to collect and present evidence before the courts, the high costs (for ordinary people) of fighting court cases and intimidation of witnesses by vested interests.
Setting up fast track courts with truly independent investigating agencies and providing protection to witnesses can remedy the situation considerably. But it is easier said than done, as testified by the shameless manoeuvring (telecast live by TV channels) by MPs to dilute and delay the introduction of an effective Lokpal Bill in the last session of Parliament. This is not surprising, given the large number of legislators against whom various criminal charges are pending for years and witnesses are mortally afraid to testify against them. Such people would never allow independent investigating agencies, fast track courts and effective protection to witnesses.
It is a sad commentary on our democracy that a chief minister, a former school teacher by profession with no inheritance, can amass more than Rs. 110 crore of (declared) wealth while no income tax department seriously investigates how this is possible. Can an ordinary school teacher escape the prying eyes of IT officials with even a fraction of such wealth? Politicians (including from left parties) cry hoarse over black money but no one demands that such blatantly disproportionate accumulation of wealth by politicians must be investigated thoroughly and the guilty punished according to law. In these days of coalition politics, one never knows whom one would need as an ally in future.
Does venting of popular anger serve any useful purpose? The answer is: Yes, to some extent. The massive support for the anti-corruption movement in India and media publicity have emboldened the judiciary to become more assertive. As a result, even some ministers and high officials are spending time in jail. Industrialists are being forced to obey the laws and regulations of the land which they were accustomed to violate with impunity. Civil society organisations are being consulted while drafting new laws. The top bosses of banks and companies are being more circumspect and transparent in awarding bonuses to themselves. Some steps, however slow and reluctant, are being initiated by the government to slow down the proliferation of illegal foreign bank accounts held by Indians abroad.
However, there are several major areas where reforms are urgently needed to address popular discontent all over the world. First, there is no justification — economic or moral — for allowing tax-havens like Cayman Islands or Mauritius which are routinely used to evade taxes and launder black money in other countries. More than 80 per cent of all FII money to India comes through the tax-free Mauritius route. Second, the treatment of long-term capital gains from financial transactions at a lower rate (or even zero rate as in India) than that applicable to wage income and allowing plethora of tax exemptions to rich people and companies is leading to a situation where Warren Buffet, one of the richest persons on earth, ends up paying tax on income at a lower rate than his secretary.
Third, the marginal rate of tax applicable to the super-rich has been systematically brought down over the years in most parts of the world on the plea that this is needed to encourage investment, growth and job creation. As many top economists (like Paul Krugman) have pointed out with historical data, there is no basis for this assertion. Unfortunately, interest group politics is preventing policymakers all over the world from taking decisive steps in these vital areas, notwithstanding the popular discontent over the unsavoury outcomes. INAV