Odisha Chief Minister Naveen Patnaik took everyone by surprise recently when he declared that all State government officials and functionaries of the Biju Janata Dal, including himself, would henceforth be mandatorily required to file their property returns with the Lok Ayukta at the end of every year. Further, all these returns would be disclosed publicly on a web portal.
This may well be the first attempt to hit out at the politico-bureaucratic nexus that has largely been attributed to the growing systematic, grassroots corruption in India. While detecting and punishing the corrupt, if caught, always remained in the rule book, the preventive aspect remained neglected.
Though the Lokpal and Lok Ayuktas Act, 2013 has existed for more than half a decade nationally, its implementation has been patchy. The deadline to file the property declarations has been constantly deferred. Initially set at September 15, 2014, it has been extended six times.
Reducing info asymmetry
Public declaration of assets of all political and bureaucratic functionaries from the panchayat to the party president level makes sense because this fundamentally seeks to promote transparency between the citizens and those in power at every level by reducing the information asymmetry.
Information asymmetry is the primary culprit for the infamous principal-agent problem that breeds rent seeking behaviour and creation of ill-gotten wealth by the agents (in this case bureaucrats and political functionaries) acting on behalf of the actual principals who are the ordinary citizens.
What makes the Odisha declaration more relevant is the possibility of creating evidence to fight corruption — a baseline data-base of assets that can provide significant insights into the asset ownership pattern of officials at different positions and portfolios in the government and which can be extrapolated to identify ‘outliers’ for further surveillance and investigation.
In one of the most widely used frameworks to understand systemic corruption, American academic Robert Klitgaard argues that “corruption depends on monopoly (M), discretion (D), and accountability (A)”, often denoted as C = M + D - A. However, drawing from my experience as a bureaucrat, I believe that people’s participation (P) is critical in preventing, detecting and, therefore, reducing corruption in the system. I, therefore, read the formula as C = M + D – A – P. More the participation by people, less is the likelihood of corruption. People’s participation can increase if more information about assets of agents/seats of power is published regularly.
The Odisha declaration does this and more. For, the State government has also adopted technology in a big way and online transactions to reduce discretion. Accountability has also been addressed through tough action taken against recalcitrant government servants. In the last one year alone, about 100 government servants have either been dismissed, removed or compulsorily retired.
More can be done
But, admittedly, this will not be the end of the fight against corruption.
While it is a good preventive step, it is not only the severity of the punishment but the certainty of detection that would deter the corrupt. Once the new preventive mechanism kicks in, processes to monitor irregularities and outliers will need to be developed by Lok Ayuktas.
Current monitoring practices rely only on inspections and raids, mostly on intelligence reports. However, we need to move towards an institutional approach in identifying targets of those inspections. Randomised audits using technology and artificial intelligence without any human bias in selection of the auditee (in this case those who file the returns), can be the next logical step.
One other key element in ensuring the effectiveness of this anti-corruption exercise will be promoting and safeguarding whistle-blowers. Although the Whistle Blower Protection Act, 2014 was passed at the Central level, the law itself is not operational yet.
Since those who enjoy power may try to find ways around the new requirement through family or proxies, who should be subject to the Prohibition of Benami Property Transactions Act, 1988 by the Income-Tax Department, it is important that the Odisha Lok Ayukta nurtures a safe environment for whistle-blowers by maintaining their anonymity besides other measures. Odisha can show the way to the country in this respect too by notifying a separate framework for protection of whistle-blowers.
Corruption has a huge economic cost. The UN estimates that developing countries lose approximately $1.26 trillion to corruption, bribery, theft and tax evasion, every year. Moreover, governments risk losing the trust of citizens if their officials and their political masters are not held accountable for wrongdoing.
However, knowledge of officials’ assets among the people, complemented with protection for whistle-blowers and certainty of punishment can create an environment that can be conducive towards cleaner and efficient governance regime.
The writer is a Rajya Sabha Member of Parliament from Odisha; and a former CAG bureaucrat
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