In 1963, when Jawaharlal Nehru had just let Punjab chief minister Pratap Singh Kairon off the hook for some hanky-panky, a deputy secretary in charge of vigilance in the Home Ministry proposed to the Home Secretary that India should set up an Ombudsman (Lok Pal). The deputy secretary had also been the secretary of the Santhanam Committee on Corruption.

The Home Secretary, an ICS officer, returned the file with a one-word response that cannot be repeated here. Suffice it to say that it denotes a commonly used round object in many games.

Many years later, when the Bofors scandal was at its height, the original proposer of the Ombudsman idea gloomily recalled this incident and said that corruption had gone from greed to need because the sums needed to finance our democracy were simply too large.

That is why, he said, even honest politicians are forced to demand bribes and honesty is measured by how much and often they demand them. The proportionality is reverse.

A quarter of a century on, we have gone from greed in the 1960s, to need in the 1980s and 1990s, and back to greed now. Political corruption has come a full circle.

It is once again being driven by greed, not least because the Prime Minister and the Congress President regard it as a lesser evil compared to another general election. The Prime Minister is on record on this. By adopting this approach, the two have reduced corruption from a moral to an instrumental issue.

Not mutually exclusive

Morality and instrumentality, however, are not mutually exclusive. Indeed, instrumentality should be driven by morality. Greed must not inspire need, and vice-versa.

A great deal can be said on both sides of the argument but until the distinction between administrative and political corruption is recognised, we will not be much closer to a solution.

Administrative corruption, which is entirely driven by greed and opportunity, is a direct consequence of two things: the need for speed money at the lower levels of the bureaucracy and excessive discretionary power at the upper levels arising out of ambiguous rules. The answer to administrative corruption has been known for long — reduce the procedural hassles (mostly caused by inter-departmental confusion because each department makes its rules without consulting other departments) and use IT for self-help.

The answer to the latter is to constrain discretionary rule-making power in some way because it cannot, and perhaps should not, be eliminated altogether. The stickiness of the fingers when the senior bureaucracy abets the minister must also be reduced. This is very hard to do.

Political corruption

Political corruption is an altogether bigger problem because it is driven in equal measure by both need and greed. Need, because elections have to be financed; and greed, because liberalisation has created bigger opportunities.

Consider the need aspect. We have over 700 million voters. If a national political party aims at even a third of them, it has to reach around 500 million voters.

Even if it spends no more than Rs 50 per voter on perfectly legitimate things, such as posters, fuel for campaigning and election meetings, it needs to generate Rs 2,500 crore. Even if we were to halve the amount, it comes to Rs 1,250 crore.

Taking a mean of Rs 1,800 crore, the two largest parties — the Congress and the BJP — have to generate Rs 3,600 crore, at current prices, for just a general election. Then there are Assembly elections, municipal elections and Panchayat elections. The total for the two big parties alone would come to more than Rs 5,000 crore — for just these two parties.

Multiply this by the dozen or so large regional parties and, at a very conservative estimate, the figure would come to anything between Rs 10,000 and 12,000 crore in a five-year cycle. This is on top of what the Government spends in organising the elections.

In economic parlance we are faced by an unfunded gap or a budget deficit or a current account deficit which is being ridged by corruption. In that sense, need-based corruption is exactly equivalent to the creation of tax havens aimed at facilitating capital inflows into capital-scarce countries.

Lok Pal

The Lok Pal has to be viewed in this context. Its role has to be defined clearly and I, for one, would say that administrative corruption should be left out of its ambit because it already has instrumental rather than moral solutions to it. Narendra Modi has done it. So can the others.

Political corruption, on the other hand, is a combination of the two and very much harder to tackle, not least because after Bofors, politicians have begun to take bribes for doing the right thing!

Morally, how do you view a right decision that is taken only after a bribe has been paid?

The answer is to establish, with evidence that will be acceptable to a court, that a bribe has indeed been paid. Can the Lok Pal do that? How?

So, as long as punishment depends on evidence, and incontrovertible evidence is hard to come by, the Lok Pal debate is a morally good one but pretty much useless from the practical point of view.