The UPA government in its second term is the
favourite whipping boy for the country's
current ills. Nuanced commentary examines
institutional dysfunction. Such diagnosis is as
helpful as detection of fever is for treatment
of cancer.
Of course, UPA-II is in disarray. It turns
defensive on record reduction of poverty, of
sustained increase in rural wages, of setting up
in five years one-fourth of India's installed
power generation capacity, of laying power
lines to 4.6 lakh villages, of initiating a
programme that would give millions of Indians
a way to proclaim and prove their unique
identity, of thus paving the way to financial
inclusion, of laying fibre optic cable to
2,50,000 panchayats, of ratcheting up rural
tele-density from 1.7 in 2004 to over 40 in
early 2013, of orchestrating structural
transformation of the economy that finally
sees the proportion of the workforce engaged
in agriculture come down below 50%.
UPA leaders leave uncontested the proposition
that the current mess is solely the UPA's
creation. Its scams have shorn it of authority
and paved the way for the courts to hijack
policy.
Its dither has led to paralysis and missed
opportunities on the foreign policy front. Its
turn towards "socialism" of the giveaway kind
has ballooned the fiscal deficit and widened
the current account deficit.
This picture of the UPA as a wrecking crew,
targeting its own home, has one empirical flaw:
all the scams summoned to call this the most
corrupt government in history date back to
UPA-I, whether the 2G, coal or Commonwealth
Games scams.
But, under UPA-I, things were going
swimmingly. India was growing at its fastest
pace ever, its global prestige was high, it won
a breakthrough nuclear deal in the face of stiff
opposition, Indian companies bought up
foreign ones.
India was an emerging market and emerging
power. It was the same UPA, led by the same
Sonia Gandhi and the same, won't-speak-
unless-spoken-to Manmohan Singh. Why was
this corrupt, dole-happy, socialistic leadership
fine then, but not now?
Systemic Corruption
The problem is not just with the UPA but with
the entire polity. Unless we accept this and
tackle the real problem, India will continue to
languish, whoever is in power.
The problem is that nobody pays for Indian
democracy. India's biggest private sector
company, Reliance Industries BSE 1.64 % , for
example, makes zero contribution to political
parties. The story repeats itself as you go down
the rungs of the corporate ladder. Just a
handful of companies admit to making political
contributions. The rest pay off the books, to
individual politicians, with a keen eye on the
quid pro quo.
Political parties file income-tax returns
showing puny incomes. 2008-09 registered the
highest incomes:Rs497 crore for the Congress
and Rs220 crore for the BJP. In reality, these
parties spend tens of thousands of crore
rupees: not just for elections, but also for the
regular functioning of their parties. Which
means, quite simply, that India's great
democracy is funded by the proceeds of
corruption.
This corruption takes three forms: loot of the
exchequer (the fodder scam, commissions on
procurement), sale of patronage (allocation of
mining leases) and plain extortion (no
clearance till you pay up, complex
administrative procedures, each one of which
serves as a rent-seeking opportunity).
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