Tuesday, March 30, 2010

Corruption is the engine for progress in India

Have been working with government at the highest level and can say this with certainty...corruption is the driver for 7.9 and 8 % growth in India. I do not condone or justify it, but surely when you read my arguments, you may end up agreeing with my assessment.

When one visits various major departments of the government, you will find officers, clerks and entire staff burning the proverbial midnight oil working diligently. What drives them? When you see newer projects - major ones like bridges, roads, airports, shipyards, SEZs - think what drives the quick approvals and encouragement? No one is interested in small incremental works - the large, big-ticket ones are what interests all. In my interaction with Ministers, politicians, bureaucrats and others in power - all are ready and willing to help for BIG projects. What drives them?

Take away corruption and the entire machinery of the government will become somnolent. The 8% will turn to less than a percent. The engine for growth in India is corruption.

When Chimanbhai Patel was the CM of Gujarat (called Chiman Chor by the Navnirman student movement), he was probably the most corrupt CM in India's history. The growth of Gujarat started during his time as he passed one major project after another and development and work became the watchword. He made a lot of money, and even started the system of a few lakh cash per month to each MLA, irrespective of party. Then when Keshubhai Patel, a true RSS honest man came to power - work stopped, Gujarat was in the throes of inertia, till Shankar Waghela came and the money mill started spinning.

One of the Civil Aviation Minister had been called one of the most efficient Ministers as he gave order for redevelopment of various airports, bought new planes and spent big time. He made crores and crores off the contracts and purchases. Its a different matter that he has brought AI close to bankruptsy, but the country has got some of the World's best Airports.I could go on and on to make a case for the title of this blog.

Maybe if one stopped flight of money from India and periodically gave opportunities to convert black money into white, by cancelling 1000 and 500 Rupee notes or changing design and pattern of Rs 1000 and 500 notes to make them compulsorily come out of the parallel economy...we could grow by 15% too. The influx of money from the black economy would invigorate the nation and start many more development projects and the corruption would oil the govt mechanism and lead to prosperity.

Unless the electoral system, which has an insatiable appetite for more and more black money, is altered, corruption will continue to be the engine for growth in India.


  1. lol..we could probably legalise it if it drives growth! every politician should be legally given incentives and commission for passing big projects instead of a fix salary! a lot of unsustainable projects may then come up but may be we should work on a policy where the incentives for good projects are so high that a politician would want to choose the good project.

    probably its time to use corrupt practices for the good of the nation! as long as good work is done at a quick pace, some politican making too much money doesnt bother me!

    or we wait till our entire system of taxation and governance changes and people become more ethical so that honest hard work and innovation will drive growth!

  2. MG,
    The whole cycle of Corruption isnt as simple as it looks. Each n every citicen of this country is responsible, partly or wholly, but unless we instil value based culture in our society this deman isnt gonna stop, no matter whatevr kind of wishful thinking we may have. Till then the politicians n bureaucrats will rule the roost..

  3. I have a niggling suspicion that this thought of 'corruption fueling growth' has been reported some time ago somewhere. While trawling today, I came across this link: http://www.rantburg.com/poparticle.php?D=2010-03-29&ID=293564

    Here the basic outcome is similarly stated.

  4. I suppose you have watched Syriana, Mayank? If not do so. There is the clear and very amusing outburst by one of the lobbyists in DC about how corruption is so important as it keeps them in business and makes the wheels of DC run! The movie is my favourite...great political commentary.

  5. Yes, there have been a few, who have concluded similarly. It was interesting reading the Rantburg blog and will try and watch Syriana.

  6. Young friends from Balrampur, Firozabad, Etah, Ghaziabad, Bahraich, Moradabad, Lucknow who are in regular email + skpye contact - additionally, we in Delhi Durbar realise & know CORRUPTION has eaten into our moral fibre. Swedish brand manager infact commented, it is ironic that the most unreliable co in India has a name of Reliability!
    Spirituality coupled with Nationalistic spirit will minimise corruption & non must buckle in, promod chawla, NNFI, Common Cause & PUCL follower.

  7. Fighting corruption is a more potent and dignified way to grow. About a $1 trillion is paid in bribes every year -- an amount equal to India's GDP!

    The word corrupt means to destroy -- often used to describe something that is completely broken. In the short term, profiting from destruction and exploiting a broken system may grow the GDP -- but can such growth be sustained over a longer term. After all, the bureaucrat that accepts a bribe for doing their job more effectively has a perverse and self preserving incentive to be ineffective.

    I am intrigued by Shaffi Mather's difficult but not impossible proposal to create a for-profit, fee-based service to stop bribes and prevent corruption -- an untapped market that offers a dignified way to profit from(fighting)corruption.

  8. At what cost do you accept corruption as a facilitator for efficiency? Air India's annual losses could comfortably upgrade half of Mumbai's homeless into better housing. Or educate 10% of our illiterate Indians. I don't buy this line of thinking- costs are too high for the results obtained.

  9. I am neither condoning nor arguing in favour of corruption, I am just observing and analysing. So, the solution is to attack the source of the appetite for corrupt money and that is not just greed, but the electoral system which cannot exist without HUGE illegal money.

  10. Very interesting piece Mayank!!

  11. Developed nations did not have corruption backbone for growth in past. Then we as developing country how do you envisage that corruption is helping in growth.

  12. THINK, PLEASE think, without corruption how much progress INDIA can make? Lokshahi has become
    Lootshahi because elected politions have no high
    P. P. Swami Ramdev needs support from all of us.
    Only 120 corrupt persons need to be hanged - For that Swamiji needs support from all of us to change the Government. We are 90% and need to be united.

  13. Mayank: Is this not a negative way of thinking and analysing? Corruption means destruction of the society and moral values, killing one's conscious, "Maanavataa". And without moral a person, a society or a country is dead. People of the world will look those societies with disrespect, hate, and distrust. And without those essentials of living one is as well a living dead. It does not raise your growth, it kills you spiritualy. And perhaps you know it that without the spirit or life the body is no better than dirt.

    Money has never been everything in life. It is just a means of trade and no more. Money when comes in wrong hands do more destruction than any gain. It makes a lowgrade man proud and disrespectful to others. One can not make a single grain of dust with all the money in the world. Put live people first than dead money; join hands with those sages and seers of truth like Swami Ramdevji to eradicate corruption from your motherland (I presume you are born in India).

    This is the problem with smart? educated people, they do not THINK right. You are not alone in this. Many scientists, Ph. D.s and so called educated people think the same way. We must not confuse vices with virtues. Is not an analysing mind no better than a loving mind, caring mind, putting the welfare of others ahead of selfishness? Knowledge devoid of love, devotion and humanity can be dangerous, as said, "Gyan Ki Panth Kripaan Ki Dhaar, Padat Na Laag Khagesh Na Baar; ----->"

  14. Dear Jit and Anon - I do not accept corruption as a process. I am just observing and analysing. Not condoning at all.