Showing posts with label corruption. Show all posts
Showing posts with label corruption. Show all posts

Saturday, June 26, 2010

Bhopal has returned from the dead


The Union Government is set to buy silence through fresh payouts to keep the Congress’s guilty secrets under wraps


Unusually for an event that happened more than 25 years ago, the Bhopal gas tragedy has dominated mindspace for two full weeks since the trial court pronounced its verdict on the guilty men on Monday, June 7. Once the judgement came, skeletons began to tumble out of a range of cupboards, causing acute embarrassment to the Government in Delhi as well as the Congress. The Prime Minister acted with uncharacteristic political acumen by quickly constituting a Group of Ministers (GoM) under workaholic Home Minister P Chidambaram and it seems its report will indeed be submitted within the stipulated 10-day deadline.

The likely contents of the GoM report are not difficult to anticipate. In fact, the most important part has already emerged with the suggestion that the Planning Commission will release Rs 984 crore as grant for rehabilitation, compensation, cleaning up and other leftover jobs of the humungous tragedy. Two rounds of compensation have already been distributed to the victims, ranging between Rs 10 lakh for the families of the deceased to Rs 50,000 for those marginally affected.

The gas leak devastated some of the poorest parts of the city, inhabited largely by Muslims. It is a measure of their resilience, ironically moulded by fatalism that enabled them to revert to their homes and jobs as they tired of waiting for official largesse to come their way. Another dose of compensation will obviously be welcome but nearly 26 years after the event the money can hardly be expected to reach those who most needed it in the tragedy’s aftermath. In fact, over 3,000 listed victims are yet to collect their dues because they have left what they believed was an accursed city and migrated elsewhere.

Therefore, additional compensation is not the core issue as we revisit Bhopal 1984. Arguably, there are ongoing concerns over rehabilitation, reclamation of the devastated localities, relocation of toxic waste, and regeneration of groundwater contaminated by the seepage of chemicals. It is unbelievable that after more than two decades even the waste has not been shifted out of Bhopal because authorities continue to quibble over who should pay for it and where it should be dumped. While the Government contends that Union Carbide (now owned by Dow Chemicals) must bear the costs, the company cites various judgements to say that its responsibility is over. The Madhya Pradesh Government has started to remove the waste but the chosen location, on the outskirts of the industrial town of Pithampura, is being resisted.

NGOs continue to cry hoarse over groundwater contamination around the UCC plant, but the State Government says it spent Rs 14 crore laying pipelines to provide clean water to these colonies so that they don’t have to tap groundwater. Interestingly, property developers seem to have decided that the vicinity of the erstwhile factory is a perfect spot to construct high-rise apartment blocks. Accordingly land prices there have gone up significantly.

To my mind, these are nuts-and-bolts issues that should have been resolved long ago but weren’t thanks to proverbial bureaucratic sloth. Hopefully, the new package will pave the way for these matters to be sorted out without further delay. Basically, there are two facets to the reopening of the Bhopal case — administrative and political. While the administrative lapses have no doubt been Himalayan, we are probably heading towards closure on these issues. But the political aspect has got revived in a big way and till convincing answers are given to the queries raised in the last fortnight, the ghosts of Bhopal will not be excised.

Three things are clear. First, Warren Anderson came to India by arrangement with the Government, having been assured “safe passage” by the Ministry of External Affairs in consultation with the political leadership. Second, the Central Government ordered the State Government to give instant bail to Anderson when he was put under house arrest in Bhopal, and flew him back to Delhi by official aircraft where and he interacted with senior officials during the brief sojourn. Third, despite the specious arguments advanced by the ruling party, Anderson could not have flown in and out of India without the knowledge and consent of the highest political authority, namely, then Prime Minister Rajiv Gandhi.

It is apparent that the Government went out of its way to appease Union Carbide and its then chairman in the purported belief that bending backwards would open the flow of US investments to India. This assessment belied the sycophantic mindset of India’s foreign policy establishment as well as political leadership. The fear of annoying Uncle Sam was so all pervasive that the Congress threw caution to the winds and treated Anderson as if he were a visiting Head of State! In that sense, the Indian Establishment equated one US-based multinational company with the US Administration. Is it surprising that stories are being carefully planted about then President Ronald Reagan having a telephonic chat with Rajiv Gandhi, presumably to direct the Prime Minister to fall in line? Incidentally, this was first hinted at by Congress general-secretary Digvijay Singh who has since been asked to shut up.

On the backfoot, the Congress has tied itself up in knots. Mr Pranab Mukherjee’s semi-credible claim that Anderson had to be “rescued” from Bhopal because of a law and order threat has now been completely contradicted by the interview to CNN-IBN by Mr MK Rasgotra, former Foreign Secretary. Initially, the effort was to put the blame on then Madhya Pradesh Chief Minister Arjun Singh so that Rajiv Gandhi could be portrayed as a babe in the woods who knew nothing of the shenanigans of his partymen. This incredible line of defence fell apart almost instantly and now Mr Arjun Singh is threatening to bare all! PV Narasimha Rao was dragged into the picture as the next fall guy but a robust riposte from his son seems to have smothered that diversionary tactic.

The fact is that the Congress cannot run away from the guilt of Bhopal. It seriously underestimated the extent of the tragedy and was happy when former Chief Justice AM Ahmadi converted the case into one caused by negligence, that is, an accident. It was the agreement, which the Union of India initialled in 1989 with Union Carbide that quashed all claims of justice for the victims of Bhopal. The Government is now trying to apply a soothing balm by doling out taxpayers’ money. But the guilty men sitting in America have been allowed to get away through what amounts to a conspiracy against the people of Bhopal. India did not cause the gas leak; those who did have got away paying a mere $ 478 million. And we are left to pick up the bill for the devastation only because the Government must keep the Congress’s guilty secrets under wraps.

Thursday, July 9, 2009

Best fuel for india's growth


Goldman Sachs, the investment bank that did not collapse in the rout of 2008, has once again produced a report on India which says India could grow 40 times bigger than it is today by 2050. It is indeed hard to imagine this, but perhaps the suave new Human Resource Development Minister, Mr Kapil Sibal, might not find it so.

There are 10 challenges outlined in the new Goldman Sachs report — things that need reforming to make this potential become a reality. The key points are all weighty, and include one on education reform.

In 2009, the surprising thing is that India’s secondary education Budget is the lowest among all emerging market countries, let alone among BRIC nations. This, even as the National Knowledge Commission wants to increase the percentage of 18 to 24-year-olds educated up to university level from the present pathetic seven per cent to a modest 15 per cent. Of course, this means huge absolute numbers in a population of at least 1.1 billion.

To strengthen higher education, the National Knowledge Commission has proposed an increase in the number of universities from 350 today to 1,500 by 2016. The target, we can be sure, is unlikely to be met.

Even if this target were to be met, the corrupt practice of charging ‘capitation fees’ in private medical and engineering colleges, the confusion over AICTE recognition, and the bottleneck of hardly any new universities set up by the Government since independence, tell a sad story about the state of higher education in our country.

This is compounded by dismal quality issues across the educational spectrum and then there is the hot potato of land, which needs to be acquired at market rate if the setting up of a new university campus is not to become a source of controversy and strife.

But assuming these hurdles can be overcome with enlightened handling, we don’t seem to know very much about quality in secondary or higher education. The IITs and IIMs are collaborations, but they are ridiculously short on seats and no amount of hiding behind the merit argument can actually justify the shocking shortage.

So, in the main, all we can provide is education that resembles the processing of herds through the rickety gates of higher learning, and that, too, for those who score in the nineties in their school board examination. Or those who get degrees by never going to college.

In this global age, what we have is clearly a much-degraded form of higher education that turns out graduates who cannot think or innovate. So, as we stand, more of the same will not meet the needs of our future.

And education reform is, after all, just one of the 10 issues that Goldman Sachs has outlined. But judging from our track record, it may be necessary, and practical, to import quality in the form of good foreign universities encouraged to open branches in this country on a FDI basis.

This may also help us meet a part of the National Knowledge Commission’s target by 2016 in a qualitative manner. At present, not even one Indian university features even in the ‘Global 300’! China has six universities that feature in the list of top 300, and all of them are collaborations with Western universities.

Indeed, despite our shortcomings, we have much to thank Goldman Sachs for. It is because it was a Goldman Sachs economist of Irish extraction, Mr Jim O’Neill, who coined the term ‘BRIC’ in 2001. Suddenly India was included alongside Brazil, Russia and China as the shape of the future power structure. This has, over the last eight years, changed the perception of India’s potential.

Gradually the term has gained traction and though very different in themselves, the BRIC countries have decided to pull together of late. There is even a new hotline being put in place between India and China at the highest levels of Government.

Earlier this month, BRIC was referred to, half in jest, as “The Gang of Four” by a commentator on the BBC as its leaders were photographed executing a four-way handshake at Yekaterinburg in Russia. The BBC commentator may have inadvertently upped the ante because BRIC discussed some weighty matters at the Yekaterinburg Summit on June 15-16 without waiting for permission from, or participation by, the West.

Matters such as BRIC ambitions on developing an alternative global reserve currency beyond the US dollar came up for discussion. After all, China has lent the US over $1 trillion and is very concerned about the declining value of the US currency. India, Russia and Brazil have also parked some of their dollar holdings in US treasuries, and are also worried, if not to the same extent.

BRIC also wants a greater say in the disbursement of global development funds via the IMF and the World Bank, to reflect the shifting balance of power.

And perhaps, there was some unintended symbolism at work beyond the ‘gang’ remark, because these deliberations took place at Yekaterinburg. And it was Yekaterinburg too that saw the end of one era and the consolidation of another. For it was there that Tsar Nicholas II and his entire family were executed by the Bolsheviks on the night of July 16, 1918.

Contemporary symbolism was equally evident not just because of BRIC piggybacking on the Shanghai Cooperation Organisation Summit at Yekaterinburg. The SCO even gave President Mahmoud Ahmadinejad of Iran, fresh from a controversial election victory, a forum to fire a vituperous, if predictable, broadside against the US and ‘Western imperialism’.

These are still early days for big ticket Indian reform, even though it has been nearly 20 years since 1991. But even at our slow pace, the world has seen us implement a large part of the Golden Quadrilateral roads project, and surge on to an impressive telecom revolution. They, on their part, don’t think we will fail to reform our education systems as well. What we probably need is a booster dose of self confidence and policy dynamism of our own, to get it going.

Thursday, June 18, 2009

Wrong strategy to fight poverty.


In the 1980s, Prime Minister Rajiv Gandhi rued the bitter fact that only fifteen rupees out of every hundred, earmarked for any poverty alleviation programme in India, actually got through to the ‘real poor’, the intended recipients. The rest went without a trace, presumably into the pockets of various facilitators.

Even at the time, the more cynical set the effective percentage at nearer 5 than 15, with inflated bills and sub-standard deliveries added in. This is obviously unacceptable in a country where the bulk of the people are poor, earn less than $ 450 a year, even 62 years after independence, with nearly a quarter of our billion plus population Below the Poverty Line; defined by the World Bank at an income of $ 1 or less a day or $ 365 a year.

The Indian Government defines the Poverty Line much lower, at an income of just Rs 10 a day, stating that it is enough to buy food that can deliver 2,000 calories of nutrition. It is difficult to see how this is feasible in 2009 unless the presumption is that multiple family members will beg, borrow or steal at least Rs 10 daily. Over 300 million eligible-for-work Indians are both unemployed and languish below the Poverty Line.

Internationally, also in the 1980s, Irish rock-star-activist Bob Geldof of the Boomtown Rats organised the Band-Aid (Song: Do they know it’s Christmas), and Live Aid concerts in 1984 and 1985, respectively, watched live on TV by over 400 million people in 60 countries.

Live Aid, in particular, raised nearly $ 300 million, right in the first flush, for the starving in Ethiopia, while advancing the capabilities of global satellite television, the so-called ‘global jukebox’, with simultaneous live concerts on different continents, hooked up and broadcast in real time.

Geldof persisted with the serious work of getting the succour to the needy after the razzle dazzle of the concert was over. And unhappy with the chronic leakages in disbursement, he set up a parallel administration to reduce the waste, profligacy and corruption endemic in a great deal of charity work, as even more money poured in; but with predictably mixed results.

Much of the funding or the relief material was siphoned off by NGOs and Ethiopian Government agencies, even the carefully vetted ones, that were not above profiteering on the misery of the helpless. Black markets prospered on Live Aid largesse. This, even as the entire effort benefited from the sympathy of the world, provoked by the massive publicity generated — not the least of which were from the harrowing, prize-winning images of the starving and dying shot by highly acclaimed photo-journalists.

The subsequently knighted Sir Geldof’s moral successor in the Irish rocker cum economic activism stakes, Sir Bono of U2, is more philosophical about the actual good that concerned people are able to do, choosing to persist regardless.

Initiated into the charity arena by Bob Geldof, Bono helped organise Amnesty International’s Conspiracy Of Hope global tour in 1986 alongside rock star Sting. Bono subsequently organised Live 8 in 2005 and remains committed to his fund and awareness raising efforts for a host of global issues to this day.

Viewed in broader terms, celebrities and charities, ranging from causes such as AIDS to global warming, and the vanilla, if vital, universal needs of education and health, have been enjoying a mutually beneficial relationship for quite some time now. The protagonists feature the stars of Hollywood, the international sporting world, entertainers of various hues, senior Western politicians and ex-Presidents of the US, Nobel laureates and so forth, in its fold.

But here in India, or internationally, in all the global distress spots, the rate of disbursement of relief to the most needy continues to be badly afflicted.

The United Nations and its agencies, less headline-grabbing, perhaps less glamorous, definitely less self-serving, but with demonstratably long-term commitment and steadiness of purpose, also plough on with dogged determination. They are realistically attuned to doing as much as they can. They carry out authentic and formidable research on their subject areas before acting, despite the corruption and the thicket of political pressures applied to them under the guise of nationalism.

Meanwhile, over 20 years after, Congress general secretary Rahul Gandhi is famously focussed on the trials and tribulations of the poor in rural India, seeing in their betterance the panacea to most of India’s ills.

He is allegedly the prime mover in many of the UPA Government’s recent rural upliftment initiatives, which have been riddled with delays, sluggish implementation, and rampant corruption. Mr Gandhi, on the campaign trail recently, put the figure of actual benefit to the target audience at just one rupee out of ten.

Clearly therefore, something needs to be done to overhaul the popular models of poverty alleviation. The United Nations, no fair-weather friend to the task, privately bemoans the lack of strategic thinking in this regard, the near non-involvement of academics and thinkers who might be able to fashion plugs for the loopholes.

But perhaps the answer lies in buying something to show for your money, creating rural and poverty alleviating infrastructure, instead of targeting the minimum guaranteed employment programmes with their on-paper progress and their dig-a-ditch-and-fill-it-back-up dynamics.

By this reasoning, the rural roads programme, initiated by the previous UPA Government, has/will probably yield better results than yet another ‘rozgar’ programme. Infrastructure development also possesses a bottom, budget overruns notwithstanding, unlike hand-out style poverty alleviation which gives new meaning to the term ‘bottomless abyss’.

The United Nations set itself some millennium goals for ‘all United Nations Member States’. In 2000 it wanted to “eradicate extreme poverty and hunger” by 2015, amongst a host of other objectives such as “universal primary education” and “environmental sustainability”. Peopled by highly skilled professionals, it is nevertheless used to revising its time-lines.

But, perhaps if it developed a consensus with the Indian Government, and those of other countries, that it will only fund poverty alleviation infrastructure, instead of intangibles, more than the disgraceful five to 10 per cent of the funding may yet turn out to the benefit of the poor.

It is not everyone’s case, but those less concerned with the exigencies of creating compliant vote-banks may see merit in encouraging the abject poor to help themselves via decent and plentiful facilities placed within their reach.

Friday, June 12, 2009

Politicians face credibility crisis


With the second Manmohan Singh Government looking more like a Congress Government, it is possible that the illusion of single-party dominance is going to become the framework of political discourse for the next few years, or at least until there is a crisis which proves unmanageable. This effortless return to the mental parameters of the Indira Gandhi and Rajiv Gandhi era may not be a good reflection of ground realities. But the resounding post-facto endorsement of the chattering classes for the Ruling Party of India has, unfortunately, never been marked by profundity.

The natural corollary of this winner-takes-all mindset is that after being at the receiving end of some initial derision, the vanquished will be left to lick their wounds in private. Both the deflated Ministerial aspirants in the BJP and the frustrated puppeteers in the CPI(M) know that they have a lot of listening and explaining to do. But they also know that some perfunctory show of contrition will suffice to defray the immediate frustrations of the foot soldiers. Apparatchiks, particularly those who exist in a cloistered environment of the party offices, know that they can put off exercising hard options by falling back on the need to take a considered decision.

Time and events being great healers, a rigorous post-mortem can be shelved indefinitely if the immediate pressure to take remedial action can be averted.

It is paradoxical that despite functioning in a democratic environment, the internal regime of India’s political parties is grounded in committee room secrecy. This wasn’t always so. Till the late-1960s, the Congress, for example, had a reasonable degree of inner-party democracy. Elections to the All-India Congress Committee and its State counterparts were held regularly and were often fiercely contested. The annual AICC sessions were marked by speeches that were robustly critical of the Government’s policies and the party leadership.

Open, rumbustious discussion was also a hallmark of the Socialists. Ram Manohar Lohia fought bitter inner-party battles with the likes of Asoka Mehta, Chandra Shekhar, NG Goray and Nath Pai. His flamboyant followers such as George Fernandes, Raj Narain and Madhu Limaye were great votaries of the “change or split” path.

Communism in India was nominally wedded to the Leninist tradition of party organisation that ensured a paramount role of the Central Committee and Politburo-the proverbial vanguard of the vanguard. Yet, and particularly after PC Joshi injected intellectual vibrancy into the party in the mid-1940s, the undivided CPI boasted a culture of political discussion.

The subjects of concern-the class composition of the Indian state and the relevance of “bourgeois democracy” were two all-time favourites-may have been abstruse. There was also an exaggerated reliance on what Lenin “himself” or Mao Zedong may or may not have prescribed, and cravenness before discreet instructions from Moscow. However, despite these constraints, the political “line” was thoroughly dissected. The Communists moved seamlessly from “correctness to correctness”.

The tradition of political openness received a grave setback after the Congress split of 1969 and the Emergency. The emergence of an all-powerful leader and the dynastic principle meant that decision-making was arrogated to the one and only leader. In the 1990s, the Congress suffered three major electoral defeats. Yet, apart from one brain-storming session in Panchmarhi, the party did nothing to address the grave problem of political erosion. The Congress’ recovery in 2004 and the awesome advance in 2009 owed little to any well considered plan of rejuvenation. It was an outcome of happy circumstances.

Rahul Gandhi has proclaimed his intention of democratising the Congress. The intention is noble and suggests that the heir apparent may have cottoned on to the root cause of the decline of political culture-a problem he has tried to circumvent by making politics into a caste. However, the extent to which the Congress reverts to its original moorings will depend on the calibre of its top leadership. It is one thing to promote inner-party democracy in the good times. Bad times often prompt a regression.

Curiously, it is the BJP which faces a problem not dissimilar to that of the Congress. If the Nehru-Gandhi family acts as an adhesive in the Congress, it is the RSS which plays Pope in the BJP. The BJP’s problems have multiplied on two counts. First, the RSS has eroded its moral authority and social influence thanks to its unwillingness to face contemporary realities. Second, success in electoral politics has triggered a breakdown of ideological certitudes and added to the charms of aggregative politics. The RSS has tried to hold things together by command. Diktat has replaced informed choice and this enforced regimentation has in turn stymied the party’s renewal.

After Atal Bihari Vajpayee and LK Advani, the party’s presidents have lacked the depth to pursue creative politics. Since the defeat in 2004, the BJP has curtailed inner-party debate, not least because the minders and their nominees have lacked the competence to handle intellectual scrutiny.

Restoring the credibility of politics and the political class is a national challenge. As democracy strikes deep roots, more and more people want a say in how parties behave and who they project. The Primary was once an American quirk but it has now become crucial to the British system as well. In India, people are offered choices on election day but have no say in determining the shortlist. To strengthen the quality of democracy, a system of constant interaction involving the top and the bottom is imperative.

The country pays lip service to the argumentative India; it is time to show similar respect to the arguments.

Thursday, May 28, 2009

Republic of scams

Benjamin Franklin once said, “There are three things that men are most likely to be cheated in: A horse, a wig, and a wife.” One can easily substitute the word horse for wealth, as the former was considered a measure of a man’s wealth at the time. The desire to become rich has been at the root of all scams recorded in history.

India is not new to scams — they have plagued us right from the time of independence. But the regularity with which they are taking place is truly shocking. Also, given that most of the scams involve the same old tricks of cheating such as underwriting or fudging company books, one will not be wrong in saying that history is repeating itself. The only thing that distinguishes one scam from another is that the companies and the principle actors are different. But the motive remains the same in each case.

The Rs 7,000-crore scam that chairman of Satyam Computers Services Ramalinga Raju has admitted to has taken the wind out of corporate India. He has disclosed that the company’s balance sheets were dressed-up over several years. It is a crime for which he and his brother as well as the chief financial officers of the company have been arrested.

There can be no doubt about the fact that this was a case of corporate fraud of epic proportions, which like other similar white-collar crimes will take centrestage in public memory for some time to come. In the aftermath of the fraud there has been a lot of talk about effective and transparent corporate governance and a system of institutionalised checks and balances.

The role of checks and balances is best illustrated in the thriller Silver Blaze, wherein Sherlock Holmes deals with the theft of an expensive racehorse on the eve of an important race. Asked whether there is any point to which Holmes wants to draw the Scotland Yard detective’s attention, Holmes points to “the curious incident of the dog in the night-time.” The detective replies, very aptly, that the dog did nothing, to which Holmes responds that the dog made no noise because it knew the thieves well. Perhaps, this is what happened to the internal and external auditors in Satyam’s case. As it is, the laws in our country are so lax that a thief who has stolen a bottle of liquor gets almost the same quantum of punishment as that of a prince embezzler.

Much has been made of the role of independent directors in the Satyam saga. I asked an officer, who had retired from a top audit and accounts service, as to what he was doing these days. He said that he was an independent director in a large number of companies. Then I asked him as to how seriously he took his job, to which he replied that he was only interested in the sitting fees and perks, and that if he raised too many queries he would be eased out of the board.

The truth is that even Government companies and organisations do not function as models of probity and efficiency because of the continuous interference, not only in taking decisions but also in awarding contracts. Large amounts of funds are misused by those who exercise control over these companies from their seat of power.

When the infamous Harshad Mehta scam took place, Mr Manmohan Singh, who at the time was the Finance Minister, described the scam as a system failure and had subsequently declared that steps would be taken to rectify the situation. But promptly after that surfaced the Ketan Parekh scam.

Each scam that comes to light seems to be bigger than the previous one. And each of them is due to greed and the lack of any deterrence. The best of laws with the worst of men can be misused and the worst of laws with good men will never deter these corrupt practices. There is no coherent, integrated machinery in our country to deal with such fraud in the private corporate sector.

The responsibility of enforcing the law in the corporate sector is split between the Serious Fraud Investigation Office, Department of Company Affairs, SEBI, Banking Department and the State police. The police comes in the final picture and can take action only for offences of cheating, fraud and defalcation. A police case can mean a long-drawn affair, which may take even 10 years to be finalised.

Truly speaking, there is hardly any worthwhile punishment for the collaborators and the auditors in such cases of fraud. The Companies Act undoubtedly lays down the duties and powers of the auditor. But the penalty for non-performance is pathetic and puny. If an auditor fails in carrying out his duties properly, the maximum penalty is a fine of Rs 10,000.

Incidentally, PricewaterhouseCooper, the firm which audited the books of Satyam, received a consolidated audit fee of Rs 4.3 crore for the financial year 2007-08, almost twice as much as Satyam’s peers like TCS, Infosys and Wipro pay to their auditors. Satyam promoters and others who have benefitted — some by insider trading — could not have carried out their scam with the fear of being found out by the auditors. According to one report, about Rs 800 crore was made by insider trading and sale of shares in this scam.

The truth is that there can be big or small money involved in auditing, depending upon the size of the company. No auditor, unless he wants to be out of the business, would be too harsh or expose any wrongdoings. There are many Ketan Parekh, Harshad Mehta and Satyam scams waiting to emerge if company auditors are willing to put their neck on the block and lose their business. But it is doubtful, if anybody would commit harakiri.

According to company law, for fudging of accounts there is a maximum fine of Rs 5,000 and imprisonment of up to two years. No doubt the Companies Act does provide for special audit, investigation, reconstitution of the board of directors and even ‘dawn raids’. But the penalties for non-compliance are as good as non-existent. Moreover, there is no mechanism even for test-checking a few corporate balance sheets and accounting statements certified by auditors.

Those who do not learn from history are condemned to repeat it. The investigation into the Enron fraud had also shown its auditors, Arthur Anderson, as guilty as Enron’s CEO. No doubt that there are a number of very good companies with impeccable records, though the same cannot be said about every company. The Government must decide what it should do and then do it to end such occurrences. It would be prudent to remind it of what Mrs Indira Gandhi said: “My grandfather once told me that there are two kinds of people, those who work and those who take the credit. He told me to try to be in the first group. There was less competition there.”

Saturday, May 23, 2009

Sorry, but not so sorry

The principles of Westminster system, the democratic parliamentary system that we adopted, modelled after the British government, help us govern the largest democracy in the world. Now that we have finished the gigantic task of electing worthies who will represent us in the national capital, we must look beyond our shores, as we often do for inspiration.

The Palace of Westminster is the seat of Parliament of the United Kingdom and, practically, all former British colonies, with the notable exception of the United States of America, have adopted the legislative model used in Westminster.

While India has adopted the British system, there are differences, and one that has occupied headlines in the UK recently is that the British MPs can, and do, claim expenses for a second home, outside their constituency, in London.

Ever since the British paper, The Daily Telegraph, published expenses claims made by senior British MPs under the controversial Personal Additional Accommodation Expenditure for MPs or second homes allowance, what Freedom of Information activists long held, became obvious-that this is an expense most open to abuse.

Media exposure of glaring cases — like claiming the cost of cleaning a moat, fitting chandeliers and in another case, jacuzzi-style bath — stunned taxpayers, as they learnt exactly what they were subsidising with their hard-earned money.

We must keep in mind that historically, all over the world, more tax is paid by those who do not have homes with moats or chandeliered hallways where their visitors might wait while the butler announces them, or retire to the rest room for a jacuzzi bath. These are blue or white collared workers struggling to pay bills as they balance various aspects of their lives. For them, this extravagance is a bitter pill to swallow, indeed.

Not that all MPs were extravagant in their purchases: They even billed for routine things like an ice tray for £1.50, and to top it all, a chocolate Santa, for 59p! Hey, a guy’s got a right to a snack. Others were billing the British taxpayers as much as £18,800 over four years in “unreceipted” expenses for food consumed at the designated second home!

Now that they have been exposed, the honourable members are not terribly contrite, they are sorry, but not so sorry as to resign from their positions following public outcry at their extravagances. They have actually found the scapegoat — the House of Commons Speaker, Michael Martin, who has announced his resignation for failing to handle the crisis of confidence that followed the evisceration of the expense accounts scandal.

Considered the first person from a working-class background to sit on the Speaker’s chair in the House of Commons, Martin presided over a house that for a long, long time held allowances as a supplementary salary, and receipts as notional, because they were anyways secret.

Now that they had been “outed”, the MPs bayed for blood, and punished their leader. Yet, even after they elect a new Speaker, they will have to reform the system, or be seen to be on the wrong side of fair play, which would definitely lead to the loss of public support. The Honorable Members can still have their chandeliers; clean their moats or have jacuzzis installed, provided they pay for them, like the rest of us.