At the World Economic Forum's India Summit held in New Delhi earlier this month, I had the pleasure of being a member of an eclectic group of panelists who debated very intensely the issue of "Creating Transparency: Removing Barriers to Growth", the premise being that lack of transparency breeds corruption and a high level of corruption creates a barrier to growth, which hurts society.
The timing of this discussion could not have been more appropriate. Rarely have we been in the throes of more corruption scams and scandals than in the last few monthsCWG, 2G, Adarsh Housing Society, Karnataka CM, banking/insurance, etc. etc. Transparency International, the global anti-corruption watchdog organisation has listed India as a very corrupt country again.
And yet, unfortunately, India is one of the few remaining G20 countries which have yet to ratify the prevention-based United Nations Convention against Corruption. This, even though corruption is seen as one of the most problematical factors for doing business in India.
Not surprisingly, discussions at the panel were intense and keenly debated. The principal perspective on offer was that the government needs to arm regulatory bodies with unflinching powers, make sure that these bodies are peopled by those of impeachable integrity and outside the sphere of benefit and hand out stringent punishment to violators.
Richard Boucher, deputy director of the Paris-based Organisation for Economic Co-operation and Development (OECD) felt that the country needed not just cleanse the system but also award people who excel in ethical practices, to set an example. Mallika Sarabhai, the well known activist and dancer was fairly scathing in her criticism of not just politicians and bureaucrats but also corporates and felt that we are often honouring icons who are "thieves and robbers". She felt that the cleaning of the system had to be a collective effort of the nation, starting with reduction in corruption and an attempt to make corporations transparent. She found support in CV Madhukar, director, PRS Legislative Research, who said that not many in India understand the deviousness of white-collar crime. "I can't find a single incidence of somebody who went to jail (for a white-collar crime) for 200 years," he said.
My own perspectives, coming from my background and experience in IT, angel investing and venture capital were far more sanguine. I mentioned that the Indian IT industry has thrown up a large number of laudable iconsessentially middle class people who took the plunge into entrepreneurship and created India's biggest global brand"The Indian IT industry" and set standards of excellence for the rest of the country, including in governance and transparency.
I then offered my thoughts on how we could leverage technology to "design corruption out of our systems". For a country like ours, where half the people live below the poverty line, rapid and sustained growth is imperative. This requires a high level of innovation, governance through unambiguous, rule based processes and relentless, efficient execution. To get "best of breed" processes it is critical to seek inputs and feedback from those affected by the outcome. This can be accomplished by being transparent about those processes.
This transparency achieves two purposes. First, the inputs from the stakeholders impacted by those processes help us design the most efficient and unambiguous systems. Secondly, since citizens will now become aware of the processes and also their rights, they will demand performance. This combination will lead to efficient execution. Where there is no transparency, there is asymmetry of information and a high level of discretion in the administering of processes. This creates an opportunity for people to be corrupt and in any society where you provide such opportunities, they are invariably taken. It is not that one set of people are corrupt and another set is not; it is whether processes are opaque, ambiguous, discretion based or those that are transparent, unambiguous and rule based.
This is where IT has a major role to play. I gave two examples. The US Social Security system delivers almost $50 billion of benefits to approximately 50 million US citizens with 99.8% accuracy. This is because they make extensive use of IT. On the other hand, our public distribution system has leakages in excess of 50% and there is a wide spread belief that only 15% of the benefits announced in various government welfare schemes actually reach the intended recipients.
The good news is government now recognises this and is committed to leveraging IT for improving services to its citizens. The UID programme is a clear example, but there are many others such as NKN, APDRP, etc. In the next 5 years, the government may spend more on IT than it spent in the last 50 years.
Aparna Ray writing for the Technology for Transparency Network says, "In India, there has been an upswing in various Government-to-Citizen (G2C) e-Governance initiatives. Various government agencies and service providers are now embracing social media and other information and communication technology (ICT) platforms to engage citizens, optimise service delivery and reassure the public with respect to the government's transparency and accountability."
I also tried to set things in perspective by pointing out that India may be an old civilisation but is a very young country and democracy. India is therefore represents an unfinished business.
However, things are rapidly changing. And it is indeed processes that are unearthing many of the scams. The CAG process exposed CWG and 2G and the newly legislated RTI process exposed Adarsh. The fact that we can now publicly expose and discuss scams even when they involve the high and mighty is actually a welcome development and bodes well for our ability and determination to cleanse our systems.
Our people, as the Bihar election clearly demonstrates, are now ready to vote for integrity and performance. And, leading from the front, are our new breed of young, wannabe entrepreneurs, whose passion, drive and ethical perspectives I observe regularly wearing my hat as an angel investor and VC. And, as our politicians begin to realise that good politics means good economics and the latter cannot be achieved with the high levels of corruption that we currently have, we will be on our way to achieving the position that we rightly deserve in the global economy and polity.
The writer is chairman, CA Technologies (India)