Changes to Anti-Graft Law Will Stick Only If the Centre Acts with Renewed Vigour

While the changes will unshackle India's civil servants, if a perception arises once again that corrupt persons are flourishing, it will result in the amendments being rolled back.

In emerging economies like India, the most crucial factors that the impact the well-being of a country’s citizens are their incomes, the quality of infrastructure, healthcare and education support provided by the State.

While India is the third largest economy in terms of purchasing power parity, our per capita income is extremely low. We are categorised as a low middle income country by the World Bank. Poverty and extensive malnutrition are present in vast swathes of the country and it’s clear that we will need to grow at a sustained level of 8%+ for the next two decades just to get a respectable middle income level.

This requires a forward-looking governance system. Our civil service officers must innovate, plan and take decisions. They must not be unduly worried that due to deficient anti-corruption laws, their bonafide actions will be questioned later, where one will land up in jail, lose her lifelong reputation and spend her pension on lawyers defending cases launched by the government of the day.

On the other hand, probity in public life is extremely important. Corruption results in gross abuse of public funds, which slows down growth. It also undermines the development of an ethical society, which is the foundation of a developed nation. In the global polities, India is ranked 81, much lower than China, Malaysia, South Africa, Singapore, Sri Lanka, and Bhutan, and most Western and European economies.

Why we get corrupt civil service officers

A lot of corruption can be traced to three factors. First, our laws and procedures are complex. This gives opportunities to civil services to indulge in corrupt acts and force users of services to pay bribes to expedite decisions or get favourable decisions. Second, politicians require a lot of money to fight elections. They use government resources and the governance system to collect money by abusing their authority. Many weak and corrupt civil servant acquiesce in this and in fact willingly take part in it.

Third, the opening up of the economy has led to large investments by the private sector. In the total investment in our economy, the share of private investments has grown rapidly and is more than 80%. The induction of these funds requires a lot of government approvals, policies to incentivise these investments and interaction of ministers and civil servants with big business. This provides an opportunity to collect illegal money by them.

The recent amendments to India’s anti-corruption law have to be considered in the context of issues mentioned in the above two paragraphs.

We must consider its impact on efficient decision taking on governance without fear of questioning of bonafide decisions. We must also consider whether these promote probity in public life so that our resources are not misused leading to slowdown of growth and people’s income.

Amending anti-graft laws

The amendments in the Prevention of Corruption Act, 1988, broadly cover three areas.

First, under Section 8 of the Act, the bribe giver is now liable for punishment up to seven years. However, if one is being coerced to pay such bribes, she can approach anti-corruption agencies within a prescribed period. This amendment has brought our law in full compliance of the UN Convention against Anti- Corruption, of which India is a signatory. It has also made bribe givers criminally responsible. Unless there are people willing to stand up, we cannot limit the supply side of corruption. Many private sector business houses who thrive on bribing the bureaucracy are now equally liable.

Second, an amendment in Section 13(1) has done away with the draconian provision of Section 13(1)(d)(iii) under which public servants could be punished even for bonafide acts. Under the new law, a public servant is liable for criminal misconduct if he has intentionally enriched himself illicitly during the period of his office or of he dishonestly or fraudulently misappropriates (or converts) for his own use any property entrusted to him or any property under his control. This introduces responsibility on public servants for corruption where his actions are dishonest. This implies that for bonafide acts, public servants are not liable and only manifestly corrupt dishonest acts where he enriches himself, action under this provision can be taken.

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Third, under Section 17A of the Act, police officers have been barred from conducting an inquiry or enquiry or investigation without the previous approval of the Central or state government where the said offence relates to any recommendation made or decision taken by such public servant in discharge of his official function or duties. This protection is available to retired public servants and officials too. Such decision of the government or concerned authority for permitting inquiry etc. has to be given within four months after the request is made to it.

This provision has provided added protection to honest civil servants particularly those who are pensioners and have limited income. It also would result in unnecessary mudslinging where inquiries are initiated and leaked to the press by interested parties. Even when nothing comes out of inquiry, the mudslinging besmirches the reputation of officers earned over a lifetime. This provision will provide protection against this.

Fourth, there are other provisions relating to the time bound disposal of such cases and a fuller exposition defining ‘advantage’ which can be gained by corrupt public servants.

The amendments were needed for several reasons. First, the law on corruption was enacted in the late 1980s when the nature of challenges before the governance system were different from those when the economy opened up in 1991 and private investment became the driving force for economy. Amendments were needed to take account of this. Second, the concept of the bribe giver being equally liable was needed to be introduced specifically to focus on responsibility of supply side of corruption. The earlier law did not do so.

Third, the concept of corruption had to include an ingredient of ‘quid pro quo’ for performing a corrupt act or promising to do so. Cases where no advantage was gained or promised could not be considered part of corruption. The need for making ‘mens rea’ as a necessary ingredient of corruption was necessary. This gap had to be rectified. Fourth, bonafide mistakes or action of civil servants needed protection to encourage them to take risks and not just shuffle papers from one desk to the other without taking any out of the box decision.

The amendments have provided clarity in the corruption law and will help curb growth of a group of public servants who are all the while looking behind and are afraid to take decisions for fear of making mistakes (which was being treated a criminal act under the earlier law).

What still needs to be done

There are, however, several issues which will need to be addressed to punish the corrupt expeditiously, improve probity in public life and ensure faster economic growth.

First, it has to be recognized that amongst civil servants, the level of adherence to value systems has grown weaker over the period of years. They are handling large finances and surfeit of new goods coming in the market are an attraction. It will be therefore necessary to monitor the assets of public servants very closely and watch how these are growing. Somewhat in the nature of US law called Ethics in Government Act 1978 and creation of an institution to promote ethical values, we should evolve our own system. Any infraction must result in departmental action including dismissal from office.

Second, expansion of digital systems in all activities relating to government, availability of online services in practically all services being provided by government, award of contracts of large value through e tendering are all issues which must be adopted across the nation and public funds use must be subject to these restrictions. Third, the decision on funding of elections (or political parties if that is considered more practicable) must be taken quickly. Elections are the biggest cause of corruption. We must make them clean.

There is a worry which was articulated by several civil servants and investigating officers in police that often officials do not take a stand and follow the illegal directions of the minister. During this they may not take bribes, but do not show a mettle to oppose the corrupt acts of ministers. Such officials will go scot free under the current amended law as they do not derive any benefit from government decision. We must ensure that officials, if they have acted against rules, must be preceded against (unless the decision was bonafide) under departmental proceedings. In such cases we could make procedure simple and award punishment quickly.

Also, officials could be repeatedly reminded of this policy especially in economic ministries and warned to avoid weak governance. This will be far more effective in preventing corrupt acts than trying to proceed against them under the old law.

To punish the corrupt quickly, rules under the amended law need to be notified quickly. It has to be realised that government permission is now required to initiate an inquiry, or enquiry or investigation under the PC Act. This permission is required to be given in three months and for special reasons in four months. Since there are a large number of such cases, government will have to make rules to ensure that the system of giving such permissions works smoothly and fairly. The government will have to also provide greater clarity on role of Lokpal in the entire process. Past experience where such permissions were required for a class of civil servants before filing of charge sheets, was that a lot of time was taken. The institutional mechanism to provide for such approvals and the nature of people deciding it will have to be decided quickly, but with quick public consultation. Since Lokpal act has already been notified, this could be sent to them for such approvals. The government will also have to provide that if such permissions are not available in time prescribed, it will be deemed to have been given.

Unless the government acts quickly, arguments will be advanced that corrupt persons are flourishing since anti-corruption agencies like the CBI have become toothless as they cannot inquire against anyone suo moto. This will result in a clamour for amending the law again. That process will again vitiate the atmosphere.

Probity in public life is dependent upon the level of economic well-being of the people, the simplicity of our rules providing public services, our ability to control corruption in the electoral process and how quickly we punish corrupt ministers and senior civil servants who amass illicit wealth.

The amended law is a good opportunity to improve governance, encourage honest civil servants to take risks and decisions for faster growth. But we would need to act simultaneously on several fronts to enable the development of a more ethical society. Unless we do that, we cannot have a modern nation meeting the needs of the 21st century.

B.K. Chaturvedi is a former Cabinet Secretary and Member of the Planning Commission.