Really, Mr.Bhagwati?


Why do foreigners of Indian origin (like Prof.Bhagwati) think they know much more about India – and are much better than we desi Indians?

I wonder why is it so difficult to understand that 'corruption is a global pheomenon' - because Desert Bloc political systems are now a global phenomenon. (Cartoon by Kirtish Bhatt; courtesy -  pressvarta.wall.fm).

I wonder why is it so difficult to understand that ‘corruption is a global phenomenon’ – because Desert Bloc political systems are now a global phenomenon. (Cartoon by Kirtish Bhatt – Dec. 10. 2010; courtesy – pressvarta.wall.fm).

Anxious are the ignorant

Recently, at a book-promotion event in Kolkatta,

A Britisher in the audience offered that Indians were more honest about being corrupt, naming Mayawati as a favourite, provoking titters all around. (via The Telegraph – Kolkata| Metro | When corruption is a daily habit)

The Britisher may be more right than most Indians imagine.

Mind games, verbal cues

Discussing ‘corruption-in-India’ a common belief is that yesterday was better. Data, facts, statistics, events, and other corroboration tools are for the birds. When a sentence starts with, ‘these days …’ or its Hindi equivalent ‘आज के ज़माने में’or when ‘It is not like olden days …’ or ‘पहले ज़माने में …’ you know what is coming your way.

Professor Jagdish Bhagwati, a Nobel prize candidate, for instance, believes that the Indian governance in ‘the 1950s had a civil service, and a political class, that were the envy of the world’.

Really, Mr.Bhagwati? Is that true?

Between 1934 and 1940, the Sugar Syndicate functioned as an association of millers largely based in northern India and made repeated attempts to help its members “manage” the market. The price of sugarcane was fixed by the government itself, while the price of sugar was controlled by a Syndicate. In September 1940, Purushothamdas Thakurdas wrote to Rajendra Prasad thanking him for his help, and hoping such help would be extended in future also: “We (Indian Sugar Syndicate) are extremely thankful to you for having taken up the cause of the industry and arranging meetings for the purpose of bringing home to the growers and cane cooperative societies that the problems facing the industry were as much their problems.”

Thapar went on to add: “In May 1940, under instructions from B M Birla, I had sent you a cheque for Rs 5,000 to enable you to help the sugar industry in whatever manner you might think best. I have advised the ISS office to send you another cheque for Rs 5,000 which I hope you will be receiving very soon.”

Was this a bribe? Was this payment for “lobbying”? How much would Rs 10,000 in 1940 be today? Can we accuse, with hindsight, that India’s first president was in the pay of the sugar cartel? Not necessarily, after all Rajendrababu was paid by cheque and all this was placed on record, and is now available in the archives of the Nehru Memorial Museum and Library. So, it was not a “bribe”, but a regular payment for services rendered — as an intermediary. The word “lobbyist” is more recent! (from Sanjaya Baru: Cartels and competition).

Desert Bloc polity creates modern day 'polity'. Indian outrage is partly because they have known better - Bharattantra. (Cartoon by Kirtish Bhatt ; courtesy - apnablog.in).

Desert Bloc polity creates modern day ‘polity’. Indian outrage is partly because they have known better – Bharattantra. (Cartoon by Kirtish Bhatt ; courtesy – apnablog.in).

A biographer of Nehru writes,

Even before taking office as head of the interim government in September 1946, Nehru lashed out at what he called “the colossal corruption and nepotism that are rampant everywhere.””Corrupt people have to be swept away by a broomstick,” he cried while campaigning for his Congress Party in late 1945. The attack on corruption began in earnest after Nehru became interim prime minister … (from Comrades at odds: the United States and India, 1947-1964 By Andrew Jon Rotter).

Dr.Rajendra Prasad was equally concerned about corruption. Soon after Independence, he wrote, as the President of India, to Prime Minister JL Nehru about how corruption would ‘prove a nail in the coffin of the Congress’. Or another case, during India’s de-colonization campaign, in

the Raj era when a Congress worker kept aside money collected for the party. He returned it only after a shakedown by Gandhiji himself. (via The Telegraph – Kolkata| Metro | When corruption is a daily habit).

After all, how many remember that

Nehru’s cabinet minister Rao Shiv Bahadur Singh was jailed as early as in 1949 for accepting a mere 25,000 rupees for forging a mining document. (India’s free-market mantra-DAWN.COM).

Of course, the writer does not adjust for inflation. Based on a gold index, the value of 1949 Rs.25,000 is now (January 2011) more than a crore of Indian Rupees.

Not exactly a small sum.

Looking back in wonder

In the early fifties, Nehru set up a Corruption Commission with JB Kripalani, Paul Appleby (a Ford Foundation consultant), AD Gorwala (a retired ICS officer) as members.They submitted various reports – Report on the Efficient Conduct of State Enterprises (A. D. Gorwala), 1951; Public Administration in India-Report of a Survey (Paul H. Appleby), 1953; Railway Corruption Enquiry Committee (J. B. Kriplani), 1955 et al. The Great Gift of the British to India, railways was not only a vast scrap heap of metal, but a den of corruption. Corruption and safety took another 50 years – by the 1990’s, by when the entire railway system was modernized and computerized.

Corruption in India has seriously reduced in railways, telephones, banks, industrial policy. What we have are now fewer bigger scams. (Cartoon by Kirtish Bhat; courtesy - bamulahija.blogspot.com.).

Corruption in India has seriously reduced in railways, telephones, banks, industrial policy. What we have are now fewer bigger scams. (Cartoon by Kirtish Bhat; courtesy – bamulahija.blogspot.com.).

This was followed up by a committee headed by K. Santhanam, an MP. This committee’s report, the Santhanam Committee Report (1964) suggested institutional mechanisms and process-related steps to fight corruption. The Santhanam Committee recommendations of 1962-1964, led the Government of India to set up the Central Vigilance Commission in 1964.

But much before this, way back in 1928, a much-less famous man then, wrote

Corruption will be out one day, however much one may try to conceal it; and the public can, as its right and duty, in every case of justifiable suspicion, call its servants to strict account, dismiss them, sue them in a law court or appoint an arbitrator or inspector to scrutinise their conduct, as it likes. – Mahatma Gandhi in Young India (1928).

Yesterday, Once More?

So, Bhagwati-bhau, corruption was an old problem – that continues. Of late, what has happened is that Indian media has certainly become more vocal. Maybe you should check if Kuznet’s Curve applies to corruption also – in its many avatars.

Before you give uninformed opinions, it is a good idea to take a 2ndlook.

While discussing ‘corruption-in-India’ a common belief is that yesterday was better. No data, facts, statistics, events, and other corroboration tools are offered to support this statement.When a sentence starts with, ‘these days …’ or its Hindi equivalent ‘आज के ज़माने में’ or when ‘It is not like olden days …’ or ‘पहले ज़माने में …’ you know what is coming your way.


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  1. Galeo Rhinus
    February 23, 2011 at 10:50 pm

    I agree with your basic premise that India’s corruption in the “bygone” days always existed. Simply because we did not know, does not mean it did not exist.

    However, your attempt to minimize the difference in scale is weak because neither your examples nor your data reveal anything important.

    Since we are both “guessing”, my gut tells me that the role of government has expanded in the last 60 years. Because people have implicitly accepted the liberal paradigm, far more government “schemes” are now at play – thus raising the scale tremendously.

    I think even a normalized metric (inflation, population etc., adjusted) will probably show that the government has intruded far more into our pockets.

    I think a significant portion of this comes from the expansionist monetary policy of the RBI combined with the heavyweight programs such as NREGA.

  2. March 12, 2011 at 4:27 am

    I agree with your basic premise that India’s corruption in the “bygone” days always existed. Simply because we did not know, does not mean it did not exist.

    Corruption has gone hand-in-hand with concentration of power – a salient feature of Desert Bloc polity. During the British Raj, and later too, corruption was a significant problem.

    However, your attempt to minimize the difference in scale is weak because neither your examples nor your data reveal anything important.

    I have devised a Corruption Metrics board to measure seriousness of each major occurrence of corruption.

    Quantitative study, estimates, of corruption will be a vast exercise, requiring a vast multiple of statistical skills and resources at my command. Remember, I am just a blogger.

    But let me say, that in the last 10 years, corruption has reduced quantitatively in railways, telephone dept., posts & telegraph, by possibly as much as 99%. These were corruption encounters with the common man.

    Corruption in Land records is close to nil while accessing records. But, recording of property transactions remains mired in corruption. Industrial licensing has seen a huge reduction in corruption.

    Still India is way behind EU & USA when it comes to Special Interest Groups SIGs or lobbyists. Policy intervention by special interest groups has increased – in the footsteps of the West.

    Since we are both “guessing”, my gut tells me that the role of government has expanded in the last 60 years.

    In terms of employee size, India has a remarkably thin govt. USA, for instance has 2 cr. Govt. Employee + contract, off book staff of possibly another 2.5-3.0 cr. employees. Across Federal, State and Local Governments. On a population base of some 33 cr.

    Indian Government is possibly half the US Government – on a population base of 120 cr. Indian Government includes railway, post & telegraph, telecom, employees too. Easy to privatize. US Government has a large Social Welfare dept. – impossible to dismantle.

    Indian Government accounts for 11%-12% of Indian GDP; up from 6%-7% in 1950s. But this figure is based on an understated GDP. There are huge unreported swathes of Indian economy and business – which will increase GDP by an estimated 75%-120%. Further, if you inflate Indian GDP on PPP basis, the Indian Government is not even close to the EU & USA in employment or expenditure norms.

    People have implicitly accepted the liberal paradigm, far more government “schemes” are now at play – thus raising the scale tremendously.
    I think even a normalized metric (inflation, population etc., adjusted) will probably show that the government has intruded far more into our pockets.
    I think a significant portion of this comes from the expansionist monetary policy of the RBI combined with the heavyweight programs such as NREGA.

    You are completely right here.

    With the UID project, a more ‘efficient’ State may, finally, vastly increase its expenditure – without increasing employees. This is the mixed piece of news.

  3. October 7, 2011 at 5:37 am

  4. November 22, 2012 at 7:03 am

  5. Surya
    April 15, 2013 at 7:48 am

    Jayprakash Narayan (Lok Satta) said that we had best set of politicians in the 1950s echoing whatever this foreign Indian said.. Corruption became a huge problem when Indira Gandhi increased the tax rates to >98% for the highest slab.. We are talking of this disproportionately high corruption now, 1.5 lakh crore of 2G scam… Megesthanes describes India to be one of the least corrupt states.. I find it strange that Nehru talks of corruption, I believe that he was the first Indian to get corrupt, he looted the INA money

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