Tackling Corruption: Demonetisation and digitalisation not enough

It is a million-dollar question whether the latest anti-corruption law to punish bribe-givers with a jail term of maximum seven years would reduce corruption or add fuel to the fire of corruption.

The government placing onus on bribe giver presumes that people pay bribe rather than officers concerned force people to pay bribe to get their work done.  It may be hoped that it would reduce corruption as is the spirit of law. But one needs to understand that the common man who is extremely vulnerable at the hands of the authority has been made more vulnerable with the current law.

Giving a bribe is not a choice

Giving a bribe is not a choice in most circumstances but a compulsion that one needs to fulfill in order to receive legitimate approvals or sanctions from the government.

Complaints against corrupt officials are either not heard or are given a lenient view. The person making a complaint tends to suffer as he tends to spoil his case where the authority finds more deficiencies in his case and make it impossible for the person seeking sanction or approval to receive one. He is left with little choice but to bribe. In case he refuses to pay bribe to the officer concerned, the officer concerned can now make complaint against an honest citizen and the onus to prove that he is honest and has not bribed would fall on the common man.

Demonetisation not enough; need greater transparency

The law is likely to add a premium to the bribes as the risk associated with giving bribes increases. Reporting of bribes given to corrupt officials would also go unreported for the fear of a jail term.  The law gives greater protection to the corrupt officials instead of protecting the vulnerable citizen.

To reduce corruption, there is need for greater transparency and accountability of service deliveries by authorities.

The government has been trying to put its best foot forward on corruption with this law, demonetisation, GST and push it to the digitalisation drive. However, little has been achieved through these initiatives.  Demonetisation that aimed at curbing black money could not deliver with the entire money in circulation coming back to the banks and remonetisation has only doubled the amount of cash money that has been in circulation previous to the demonetisation phase.

ALSO READ: Imran Khan's 'simple' swearing-in ceremony makes perfect sense

Demonetisation has not been successful to meet the objective with which it was undertaken despite the crackdown on shell companies and bank accounts that had suspicious transfers.

The government was successfully able to put an end to the Inspector raj in central and state taxes with the introduction of the Good and Services Tax (GST). 

Despite the difficult implementation and teething troubles, GST was successfully implemented but the problem of input tax credit and refunds has taken a toll over the day-to-day business requirement of businessman.

It is believed that network would ensure that officers and their subordinates do not trouble the common businessman for indirect taxes as the system provides an online mechanism to fill GST forms and receive automatic credits and the system by itself would ensure compliance.

Constrains in the digitalisation process

However, there has been continuous complaints of the GST network (GSTN) unable to take traffic load making it difficult for people to comply. It is too early to suggest if any tax credits not given would entail any corruption, though no such case has been reported as yet.

The government has also initiated several programmes like the Pradhan Mantri Jan Dhan Yojana, targeted public distribution system, PaHal Scheme, Pradhan Mantri Gramin Digital Saksharta Abiyaan, and Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) to give a push to the digital India framework and e-governance to ensure that the common man through digitalisation is served better, hassle-free and with less corruption.

The aim of these schemes has been to ensure that delivery of the benefits especially welfare schemes reaches the beneficiary without paying any middleman. Yet a middleman called the bank official plays a crucial role in ensuring that the benefits are easily encashed by the beneficiaries. Banks with charges on accounts of ATM cards, SMS services, passbook charge, minimum balance charge tend to eat away the some of the benefits of the beneficiaries.

At times for mismatch of signatures and account being dormant, the bank officials seek bribe. Also, the less educated and non-financially literate population finds it difficult to go to banks and use their services. Despite the benefits reaching them, many are unable to cash them.

ALSO READ: Trump insulting Modi will only hurt long-standing India-US ties

Despite government schemes that ensure electrification of villages, laying optic fiber for internet, financial and digital literacy drive, the lack of this basic infrastructure constraint the digitalisation process and makes it difficult for the common man to take the benefits of the e-governance schemes. He who is poor and uneducated is unable to benefit from e-governance measures.

Digitalisation can create the requisite infrastructure for possible transparency but cannot ensure accountability. If online submission or file is not cleared by the official, it for unnecessary reason delayed and deficiencies are identified, the person is again in the clutches of the officer, who would have to be bribed in order to remove the deficiencies.

Most corrupt practices involve discovering deficiencies in the applications which are difficult to overcome. Accountability can often not be established as it takes several years before any file moves in the judicial system. 

Digitalisation has for sure ensured that government services reach the common man’s doorstep, but it is yet to be corruption free. Digitalisation can ensure that there is minimum government and maximum governance but with that minimum government how does one ensure that it is corruption free. If and only if there is a change in the attitude of both the people in authority and the service user (the common man) and the government takes strict action against the bribe taker, bribe giver and the officer delaying the work then only can we ensure a corruption-free society.

CLICK HERE for More OPINION

(The writer is Professor of Finance and Dean Research, Indian Institute of Finance. Associate Editor, Finance India)