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India Indian Bribery Website Reveals $8M In Petty Payments

Jan 6, 2005
Metro-Vancouver, B.C., Canada
April 27, 2011

Indian bribery website reveals $8M in petty payments

April 27, 2011
Erika Kinetz

MUMBAI, INDIA—For the last 12 years, a businessman in the northern Indian city of Kanpur has been paying a 5,000 rupee ($113) bribe to government officials to get his income tax refund.

The difference now is that he’s talking about it on ipaidabribe.com, a website that serves as an outlet for pent-up frustration with corruption in India.

That discontent — fuelled by India’s vociferous media and a blossoming sense of empowerment among the middle class — has burst into the open after a series of galling corruption scandals began roiling Asia’s third-largest economy late last year. Thousands have taken to the streets, the courts are pursuing rare high-level prosecutions and the government is scrambling to enact a tougher anti-corruption law.

The website is Raghunandan Thoniparambil’s way of fighting endemic graft, which many say has worsened as India’s economy grows and opens up, creating enormous wealth without adequate regulation and fostering a culture in which everything — from pilot’s licenses to school admissions and telecom spectrum — is seemingly for sale.

“Contrary to popular perception, economic liberalization increases corruption in the short term,” said Thoniparambil. “What people do not realize is that liberalization and opening markets requires regulation.”

Privatization has thrown open huge infrastructure contracts ripe for kickbacks and increasing competition for votes has encouraged India’s patchwork of political parties to use any means possible to build up their war chests, he said.

In just over eight months, the site has documented 360 million rupees ($8.1 million) worth of small bribes paid — the largest number of them to police. Over 9,000 messages have been posted and the site has gotten more than 426,000 hits from viewers. The White House was impressed enough to schedule a chat between the site’s founders and President Obama when he visited India in November.

Thoniparambil, who spent 26 years working for the elite Indian Administrative Service, said bribery has existed since his early days in government — but cases were isolated.

Today, he said, “every department has their supply chain for corruption.”

“It has massive social costs,” he added. “It transfers a lot of wealth to those who do not deserve it.”

The Asian Development Bank has warned that India — which last year was ranked 87 out of 178 countries on Transparency International’s Corruption Perceptions Index — is in danger of sliding into Russian-style oligarchic capitalism if it doesn’t shape up.

Allegations of graft involving last year’s Commonwealth Games, legislative vote-buying, and a rigged auction for 2G telecom spectrum that auditors estimate cost the national treasury $39 billion have spooked investors, many of whom long tolerated corruption.

Aging Gandhian activist Anna Hazare successfully tapped into the mood of outrage, demanding that India’s parliament create a powerful, independent watchdog committee to investigate corruption. His highly publicized hunger strike brought thousands of first-time protesters to the streets, expanding the fight against corruption from the poor to India’s growing middle class. Prime Minister Manmohan Singh said he hopes anti-corruption measures will be introduced during Parliament’s next session.

Thoniparambil’s site, meanwhile, offers a microscopic map of how paying “tea water” is woven into the fabric of daily life.

Typical postings include people complaining about having to pay bribes to get marriage certificates, passports and driver’s licenses. One person even complained of being forced to pay a bribe at a municipal office in order to obtain a receipt to prove that he had paid his property taxes.

Thoniparambil hopes the site will do more than let people vent their frustration. He pours over the anecdotes he collects to uncover patterns of graft and packs the site with tips on how to avoid paying bribes.

The site offers “10 commandments” to avoid corruption, including “Get Receipts,” and “Demand in writing why your document/form is being rejected.”

Thoniparambil said many of the middle-class Indians now Tweeting against corruption often have themselves to blame for paying “facilitators” to bribe officials on their behalf.

“People of otherwise high integrity and professionalism in their outlook are like lambs led to slaughter when it comes to dealing with the government,” he said. “They don’t do ten minutes of homework required. Instead they just go pay a bribe.”

Thoniparambil is working with the transport department in his home state of Karnataka to come up with ways to reduce opportunities for bribery and has launched a campaign to get India to ratify the United Nations’ anti-corruption convention, which would require India to strengthen its anti-corruption laws.

Under India’s 1988 anti-corruption law, offenders face a maximum of five years in prison and unspecified fines, but prosecutions are rare and fines rarely exceed a few hundred dollars, lawyers say. Moreover, only illicit transactions involving a public servant qualify as corruption, although companies can — but rarely do — prosecute corruption in the private sector under other laws.

Some argue that corruption is a symptom of India’s economic adolescence, as reforms begun in the early 1990s transform the country from a state-led to a market-driven economy.

“If you look at the state of the U.S. or the U.K. when they were at corresponding points of their democratic capitalism and evolution, they were just as bad,” said R. Gopalakrishnan, an executive director at Tata Sons, the Tata group’s holding company. “We’re only 20 years into our journey.”

Few believe there will be a quick fix to India’s long-standing corruption problem — past scandals, after all, have come and gone without leading to lasting change. Critics say New Delhi has not shown the leadership required to stamp out corruption, and many believe eradicating India’s culture of graft will require better technology, better education and better management of government services, all of which will take years to effect.

Even if tougher anti-corruption legislation does get passed, the law alone is rarely enough in a place like India.

Corporate lawyer Nishith Desai said India’s anti-corruption laws not only need to be strengthened — they need to be enforced.
“Without enforcement, law has no meaning,” Desai said.

More than law, some argue that eradicating corruption requires leadership — a strong head of state who can take on powerful families and politicians previously deemed untouchable, said Robert Klitgaard, a professor at Claremont Graduate University in California.

“Anyone who goes after corruption has to make it credible and go after impunity,” he said. “It means getting some big fish and frying them.”