I was in Delhi between 7 and 15 November 2016, the week during which the momentous announcement on demonetisation was made.
The objective for demonetisation includes tackling corruption and black money. Over the last couple of years the Prime Minister has repeatedly been referring to the menace of black money. I give a few instances of the present institutionalised system that makes it extremely difficult to curb this. This is best exemplified by the unprecedented raid on TN Chief Secretary Rama Mohana Rao’s residence and office on 21 December.
I was with a business leader the other day. He pointed to the compulsory need to set apart 8 per cent of the cost of any project in Tamil Nadu for speed money. He said it is three per cent in Kerala and 5-6 per cent in Karnataka. This compels industry to convert crores of white money into black to meet such demands!
Another prominent politically active bigwig had a different scheme. He had very strong and close connections with North Block, headquarters of the finance ministry in Delhi. He helped in settling dozens of outstanding sick loans of public sector banks. Example: a company defaulted on a loan of Rs 10 crore. This Good Samaritan offered to persuade the bank Board to settle it for Rs 4 crore. Chartered Accountants have been only too willing to prepare strong cases on how the bank has the opportunity to get at least this. Of course our Good Samaritan collected a fat fee in black.
Then there is Annamalai University pioneering hefty capitation fees for various courses, especially for medical seats. The virus spread to other institutions. The vanishing trick of Moovendar Movies’ Madan should be fresh in one’s mind. The promoter and owner of the medical college graciously agreed to pay out the Rs 74 crore reportedly collected by Madan on promise of getting medical seats but vanished and got himself released from the prison. The judge innocently said that he would consider giving such relief, of return of moneys collected illegally, to students who got admission and are presently studying after paying such hefty capitation, if he/she or his/her parents brought the fact to his notice! Of course, taxmen will be ready to pounce upon such, demanding to explain the source of this money running to Rs 50 lakh and more.
Every business has to interface with the go-vernment for a variety of services that range from registrations, building permits, power, water and sewage connections and tackle an army of inspectors. The system is not transparent, simple and time-bound to get any of these without bribe.
Superseding senior officers to appoint officers of choice...
Are you then surprised that chief ministers have been choosy about the chief secretary and other secretaries? Over four decades ago Karunanidhi started the practice of superseding senior officers to appoint officers of his choice. This deteriorated over time to politicising the civil service and resulted in implicating senior officials on the verge of retirement in corruption cases.
Look at the headline on the Madras High Court quashing the appointment of 11 members of the Tamil Nadu Public Service Commission. The first bench presided by Chief Justice S K Kaul mentioned: “this appointing process or lack of it was on account of a misconception that the appointment to the post of members of the public service commission was part of the spoils system based on the patronage of the state government and not requiring men who are independent.” Significantly, 9 of the 11 appointees are politically-oriented lawyers with little experience in administration. And the petition was to get access to such jobs by other castes in proportion and not men who are independent or meritorious.
Of course, one in Tamil Nadu is only too familiar of the huge bribes involved in getting a government job or even a transfer.
Like cancer, black money has pervaded our lives. The recent bold attempts at searches and seizures are aimed at tackling this. But the ingenuity of the tax evader has been far higher than that of the regulator. And hordes of leading lawyers of Delhi are ever ready to act as the Devil’s advocate. One needs the fear of quick, severe punishment and shaming in public, which again is dependent on an efficient legal system.