In 1991, when neoliberal policies were unleashed in the country, it was promised by many BrettenWood-bred economic pundits that the end of “license-permit raj” and its cumbersome regulations and protectionism heralds a new era of corruption-free India. Barely two decades later, Dr.Manmohan Singh, the very person who launched these policies, finds himself in the midst of a glut of scams – that have siphonedoff billions of rupees from the state exchequer. So, what went wrong? The utter failure of “Manmohanomics” raises many pertinent questions. Weren’t the “promises” of an economically prosperous India and a corruption-free India a subterfuge to initiate policies which would benefit the capitalist class? Haven’t the financial corridors been sneakily opened to the FIIs and FDI, in the name of ‘free market’, to allow the gobble-up of the huge domestic savings by the finance capital?
SCAMS GALORE
The Bofors scandal was a major corruption scandal in India before the neoliberal era. The then Prime Minister Rajiv Gandhi and several others were accused of receiving kickbacks from Bofors AB for clearing a bid to supply 155 mm guns. The scale of the corruption was far worse than any that India had seen before, and directly led to the defeat of the ruling Indian National Congress party in the November 1989 general elections.But now, the Bofors scam which involved a bribery of Rs.64 crore will fade into oblivion, if it is compared with the series of scams that have hit the nation in the recent past.
The CAG has estimated the loss from the 2G scam at a staggering Rs.1,76,000crores. According to Sonia Gandhi headed National Advisory Council’s estimate, we require Rs.88,000crore to provide 35 kgs of foodgrains to every family in our country, including APL families. We could have achieved food security in the country continuously for two years, had the 2G scam been prevented. The Right to Education Act has failed to see the light of the day so far. The NIEPA (National Institute of Educational Planning and Administration) has estimated that Rs.35,000 crore is required annually for the next five years to build new schools, recruit teachers and provide for mid-day meals etc., The total estimated amount for 5 years comes to Rs.1,75,000 crore which is less than the state exchequer siphoned off in the 2G scam. And, it is nearly seven times the health budget of Rs 25,154 crore, and nearly fifty percent more than the Centre’s total subsidy bill, including those on food, fuel and fertilizer, which is budgeted at Rs 1.16 lakh crore.
More disgracefully, the scam blurred the ethical lines between corporate houses, corporate lobbyists, journalists, bureaucrats, and politicians and gave birth to a new model of capitalism – viz., ‘crony capitalism’.
CRONY CAPITALISM
Cambridge dictionary defines the term ‘crony’ as “a friend, or a person who works for someone in authority, especially who is willing to give and receive dishonest help”. In that sense, crony capitalism means a capitalist system, where a nexus exists between the government, capitalists, bureaucracy and media – and this nexus determines the nature of an economic activity. For example, the 2G scam happened when companies with no expertise in telecommunication were allotted 2G licenses by flouting the general procedure of open auction and by inventing a cunning “first come – first served” route. And these companies quickly sold their shares to multinational corporations at 9-12 times the money they paid for the spectrum. Therefore, a revenue of Rs.1,76,000crore which the government lost by selling the spectrum to the first buyers (instead of selling directly to the last buyers), had been distributed amongst the ‘cronies’. In the case of Common Wealth Games, the renovation cost for JawaharLal Nehru stadium in Delhi alone worked out to be 12 times the cost of building a brand new stadium in Nagpur.
Apart from looting the resources of the country, Crony Capitalism also inflicted a collateral damage to the environment. For instance, in the Karnataka-Orissa-Andhra belt alone, 1.6 lakh hectares of forest land has been diverted for illegal mining of iron ore. It has also distorted the very concept of democracy with electoral victory “purchased” by sheer money power. And recently, even after the Chief Minister B.S.Yeddyurappa was forced to step down after the Lokayukta report indicted him in the mining scam; we have seen visuals on television as how his ministerial colleagues – Reddy brothers – openly defied the Supreme Court ban on mining activities. This brazen display of crony capitalism is a corollary of neoliberalism.
‘GREED’ AS A CATALYST
In the neo-liberal doctrine, corruption had been described as a phenomenon that breeds in an environment of state intervention and regulation of the economy. Therefore, the usual neo-liberal prescription for the cure of this illness (corruption) has been the ‘withdrawal of the state’ in welfare as well as economic activities. If this view was correct, corruption should have been eradicated by now, two decades after the launch of neoliberal reforms! Therefore, we need to understand as to why ‘reforms’ have gone awry and made corruption a Frankenstein’s monster?
When the government started to withdraw from public enterprises and took up the role of a facilitator to the private players, “greed” became the launching pad for creation of wealth. Smaller companies soon faced unethical competition and were swallowed by the bigger ones through acquisitions. It was akin to big fish gobbling up the tiny ones. Centre and the states vied with one another to dole out huge lands to the SEZs. Public sectors were branded as inefficient and wasteful enterprises and disinvestment of profit-making Public sector undertakings was cited as the panacea. Many other major sectors that have been opened up for increased participation of the private sector included banking, insurance, power, mining, airlines, petroleum and gas etc., The government also withdrew its responsibility from public welfare. Key sectors like Health and Education became the monopolies of the corporate houses. Another important component of the liberalization programme viz., public-private partnerships in infrastructure development also has a similar potential for corporate monopoly. This scenario led the seed of corruption to germinate. Democratic institutions and policy makers started living under the perks of large corporations. Their sole job was to create policies favouring private players. The very large number of tax sops granted to corporate India, like the one enjoyed for a long time by the highly profitable IT sector, stand testimony to this.
During the course of these ‘reforms’, blatant celebration of money-making became the order of the day. The policy-makers and bureaucrats who set the rules of the game that favoured the capitalist barons were being ‘suitably’ rewarded. They also became more conscious about the prospect of a lucrative post-retirement career in the private sector for their actions of nepotism. The corporate media also got its pound of flesh for glorifying the private enterprises as the symbol of excellence and as the real (sic) contributors to economic growth. The corporate houses distributed their ill-gotten largesse in a structured package deal to some favoured political parties, to ensure their stony silence on major issues, whether they are in power or sitting on the opposition benches. In a nutshell, the upshot of the so-called ‘reforms’ was…an unholy nexus between corporate houses, policymakers, politicians, media lobbyists, bureaucrats etc…all involved in a conglomerate of corruption.
In this milieu, the demand for an autonomous institution and an effective system to rein-in corruption is justified. The Jan Lokpal Bill suggested by Anna Hazare and other civil society organizations demands Prime Minister and judiciary under the ambit of the bill, a Lokpal with powers to register FIRs, investigate and prosecute in a time bound manner, powers to recover the looted public money from the guilty, make the appointments and functioning of the Lokpal and Lokayuktas free from political intervention, and demands protection for whistle-blowers. It is also the time India clipped the wings of neoliberalism which was the root cause for a widespread corruption.
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