Why A Single Lokpal Will Not End Corruption: Loopholes In India”s Anti Graft Laws

Posted on June 19, 2014 in Politics, Society

By Akshay Thakre:

Corruption, today in India, is more than just a word. It’s a phenomenon, a way of life to many, a mobilizing tool for the political parties and it’s something we all loathe but can’t seem to rid ourselves of. A recent survey by Ernst &Young, one of the four big auditing firms in the world, revealed that India comes only second to Egypt when it discussing corruption and bribery in business. As many as 71% of the respondents in India said it was justified to offer entertainment, personal gifts or cash payments to win or retain business against a global average of 49% and 37% said they have been asked to pay bribes, against a global average of just 7%. That’s just the appalling facts about the business world in India. Let’s not even get started on the corruption in public systems of the country. In the last few years we have witnessed scams of humungous levels and watched silently as corruption ate in our public institutions. We even had the biggest andolan in the political history of independent India 3 years ago which agitated and captivated the nation at the same time.


The andolan led to the previous government succumbing to the public demand of introducing a Jan Lokpal anti graft bill. This year the AAP chief Arvind Kejriwal who made an impressive debut in the Delhi assembly elections 2013, resigned as his version of Jan Lokpal could not foster a majority in the house. India currently has a variety of anti corruption laws. These are IPC 1860, Prevention of Corruption Act 1988, Prevention of Money Laundering Act 2002, Right to Information Act, 2005, Central Vigilance Commission Act, Lok Ayukta Acts of States etc. So then, why was there such big hue and cry over the Lokpal bill issue? Why is the phenomenon of corruption seen like a deadly virus which is extremely difficult to eradicate? To try and answer these questions we must first analyze the various anti graft laws.

“The problem with India is not a lack of laws, but rather their proper implementation and loopholes” says Delhi-based independent political analyst, Paranjoy Guha Thakurta. This couldn’t be truer, especially in the present scenario where the grand old political party of India suffered a humiliating defeat over the various scams and corruption scandals.

– The first thing that we observe when we scrutinize the current anti graft laws is that most them are applicable (more or less specifically) to public servants. Section 12 of Money Laundering act of 2002 which lays down the guidelines for Banking Companies, Financial Institutions and Intermediaries of securities market however, exempts them from any civil proceedings against them for furnishing information under clause b of Section 12. This loophole in the act may allow for many “under the table” deals for the corporates. Even the Lokpal and Lokayukta bill 2013 specifically targets corruption in the public systems and the public servants.

– The major flaw of the Lokpal act is that it excludes religious bodies and NGOs which account for major foreign inflows to the nation. Leaving aside the recent IB report and the outcry against NGOs, there are some good NGOs engaged in the public domain and there are these others which are simply a front for turning black money white. Religious bodies along with NGOs and educational institutes accounted for 19 % of the total foreign inflows last year. Leaving these bodies outside the scrutiny of Lokpal act is the same as leaving political parties out of the jurisdiction of the RTI. Although such a move can raise a bigger outcry in a highly “religious” country as ours, there needs to be a regulatory authority to check the finances and accounts of these religious bodies and NGO’s.

These are amongst the many flaws of the current anti graft laws in India. While we can spend hours debating them, we need to understand the basic cause behind the challenges of implementing these laws. It’s the lack of a comprehensive compliance framework for acts of corruption. Contrary to what many people may think, a single Lokpal act will not help solve the problem of corruption; in fact there is no single act or law which can help eradicate this malice. There need to a comprehensive framework for the anti corruption machinery to function, which is sadly lacking in our country today.

There are many good bills pending in the parliament which are complimentary to the Lokpal act and will further strengthen anti graft framework of the country. The Right of Citizens for Time-Bound Delivery of Goods and Services and Redressal of their Grievances Bill is meant to promote transparency and accountability in the government’s delivery systems. The Whistleblowers protection bill 2011 which provides a mechanism to protect the identity of whistle blowers recently passed by the parliament got the president’s approval and is still waiting to be implemented. It seems that the deaths of Satyendra Dubey and Manjunath Shanmugam were not enough to shake the apathy of the nation towards its brave whistleblowers who met gruesome ends. That is not the only bill which is awaiting implementation though. The Prevention of corruption (amendment) 2013 which treats bribe as an offence and also covers commercial organizations along with the Real Estate regulatory bill 2013 which regulates real estate and checks corrupt practises in the sector are still pending in the parliament. There is also a landmark Right of Citizens for time bound delivery of goods and services which call for transparency and accountability in public services along with time bound execution of services, still pending in the parliament. This bill shall check the malpractices in the various government schemes like MNREGA, Food Security Act etc.

So while we are prepared with enough laws to crack down on corruption, we need a vision and a framework to deal with corruption. The current government which is talking of tax reforms must also take into account the exorbitant 32.45% corporate tax rates and unanticipated regulatory hurdles for corporate companies which make them at times venture into the world of malpractices. There is also a lack of diligent compliance to international anti graft laws like FCPA & UK bribery act, two of current most successful anti corruption acts on the part of India. This lack of compliance makes it difficult to crack down the corrupt practises of multi-national corporations. The country also lacks strong comprehensive compliance policies with respect to dealings of public servants, companies, unaided organizations etc. This makes it difficult to implement the anti graft laws on the ground. The companies’ bill 2013 which calls for transparency and accountability of companies finances is mum on setting up an effective internal monitoring mechanism to check illegal acts by employees, and also ensure that incentives do not exist to engage in such illegal acts.

Lastly, even stringent laws and elaborate framework to deal with corruption will prove futile if we as citizens are apathetic to the cause of corruption. We may protest on the streets, brave water cannons and face the lawmakers boldly asking them for accountability, but how can we check corruption when most of us won’t think twice about paying a bribe to get out of an iffy situation? There has been a huge outcry over corruption in the past few years, yet while awareness against corruption has increased, so have the cases of corruption. If we as citizens don’t practice solidarity in what we preach, how can we expect the people in charge of the system to be accountable?

Corruption is a societal evil and should be viewed as same. Everyone is a part of this intricate web of corruption, including us. We create it and only we have the power to destroy it. The next time when you’re thinking of paying a small bribe to get your work done smoothly, do take a moment and think about consequences and the larger picture of your act. If you need more help there’s always Gandhiji’s talisman to help you out.