Why Land Acquisition By The Government For Private Entities Should Not Be Done

As the eminent domain power gives enormous power to the state functionaries it is important that the rules governing the use of eminent domain power should be as insusceptible to misuse as possible. If the State can acquire any property for any purpose whatsoever and fix compensation at any level then various kinds of misuses and abuses of the eminent domain power will become possible, indeed likely. One way that it will open the floodgates of corruption can be illustrated by the following example. Suppose there is a property worth 1 million in the market. The state functionaries with a view to make illegitimate gains acquire the property using the eminent domain power and pay a compensation of one hundred thousand to the property owner. Thereafter the property is transferred at a price of two hundred thousand to a private entity. The private entity as a consequence of this transfer benefits to the tune of eight hundred thousand. These gains then can be shared with the state functionaries as bribes. This example makes it clear that, given that the government can acquire property for any purpose whatsoever, unless there is a provision that the compensation must not be less than the market price, not some administratively fixed rate like the circle rate (circle rates are in general much lower than market prices), there will always be opportunities for unscrupulous bureaucrats and politicians to make money by acquiring valuable properties at nominal compensations and then transferring these properties at throw-away prices to industrialists and others with whom they have made advance deals for sharing the gains.

Even if there is a provision that the compensation must not be less than the market price, it does not mean that there can be no misuse of the eminent domain power. The provision of compensation being at least as large as the market price only ensures that the corrupt state functionaries will not be able to benefit by first acquiring the property under the eminent domain and then transferring it to some private entity, assuming of course that transferring property at a price less than the amount for which it was acquired is prohibited. But it does not ensure that the eminent domain power cannot be used for harassing political opponents. If a person owning a plot of land is not contemplating selling it at the ruling price, it follows that his valuation of land must be at least as large as the ruling price. In the case of land and other immovable property often the subjective valuation of the owner exceeds the market price; and in many instances by wide margin for varied reasons including those pertaining to family and community ties, and way of life. In case the subjective valuation exceeds market price, if the property is taken over under the eminent domain and the owner is given compensation equal to the market price he is going to sustain loss equal to the amount by which the subjective valuation exceeds the market price. Therefore if the State is required to pay only the market price as compensation for taking over of private property then there will be potential for harassing opponents by taking over property whose subjective valuation exceeds market price. This possibility of misuse of the eminent domain power can be eliminated only if the compensation is at least as large as the subjective valuation.

Thus we see that when private property is acquired under the eminent domain there are two kinds of misuses which are possible. There is the possibility that the acquisition from one private entity and subsequent transfer to another private entity might be done at less than the market price for illicit gains; and there is the possibility of harassing political opponents by acquiring private property by paying compensation which is less than the subjective valuation. The first of these possibilities can be eliminated by having the provision that the compensation must be at least as large as the market price and second of these possibilities can be eliminated by having the provision that the compensation must be at least as large as the subjective valuation. It is clear that if property is acquired by the State through purchase in the market then neither of the two misuses can take place. Voluntary nature of market transaction also ensures that the property owner will receive in return for his property an amount at least as large as his subjective valuation.

In view of the above, the use of eminent domain does not seem to be desirable if the situation is such that a market transaction is possible. If market transaction is not possible, say because of holdout problem, and therefore the use of eminent domain power becomes necessary then ideally its use should be constrained by the provision that the quantum of compensation must not be less than the subjective valuation. The difficulty with subjective valuation is its intractability. If the quantum of the compensation is going to be linked with the subjective valuation then the owner will obviously have an incentive to exaggerate it. One can only infer an upper bound for the actual value of the subjective valuation from the figure revealed by the owner.

As it is not feasible to have a provision which links compensation to subjective valuation, the only practicable thing seems to be to link it with market price. One can either have a provision requiring compensation to be equal to market price or equal to some multiple of market price, multiple being greater than one. In either case, as seen above, the misuse of the eminent domain power for illegitimate gains by acquiring and disposing of property at less than market price will not be possible (assuming of course that the property is never given away by the State for a sum less than the amount at which it is acquired). However, as compensation equal to market price will often imply under-compensation, the possibility of misuse for political purposes will remain. In case of compensation being equal to a multiple of market price, with multiple greater than one, one can expect cases of under-compensation as well as over-compensation. Higher the multiple, lesser will be the cases of under-compensation and greater of over-compensation. The possibility of misuse will remain in cases of under-compensation. Thus, no matter which multiple of market price is chosen, the possibilities of misuse cannot be ruled out altogether, although higher the multiple the lesser will be the possibilities of political misuse.

When there is over-compensation, the possibilities of corruption reenter in a different way. As an illustration, consider a plot of land with market price of one hundred thousand and the subjective valuation equal to the market price. If this plot of land is acquired under the eminent domain at twice the market price then the owner will benefit by an amount equal to one hundred thousand. This benefit can be shared with the state functionaries involved in the decision. Consequently, whenever it is permissible to fix compensation at a level greater than market price, there will be possibilities for corruption. Two points in this connection, however, should be noted. First, from the perspective of possibilities of corruption through over-compensation the market fares no better than the eminent domain if the property is being purchased by the State for its own use or it is permissible to transfer property to a private entity at a price less than the purchase price. The `agreed upon' price can be set by the corrupt state functionaries and the landowner at a level higher than the subjective valuation and the excess of the agreed upon price over the subjective valuation can be divided between the landowner and the corrupt state functionaries. Secondly, unlike the case of acquisition of land and its disposal at rates less than the market price where the corruption possibilities for all practical purposes are unlimited, the possibilities of corruption where land is acquired at rates greater than the subjective valuation tend to be quite limited because of budgetary constraints.

If one wishes to minimize possibilities of misuse of the eminent domain power then from the considerations discussed above it is clear that the acquisition of land under the eminent domain should be done as sparingly as possible and only in cases where the transaction in question is not possible through the market; and furthermore the compensation must not be less than the market price.

There is another reason why the eminent domain power should be used as sparingly as possible. When land is acquired under the dominant power the costs fall  on the landowner if he is under-compensated, as is usually the case. The benefits, on the other hand, accrue to some private individuals (generally super-rich) in case the acquisition is done on behalf of a private entity; and to a section of public in case the acquisition is done by the government for some public facility. Consequently, under-compensated acquisitions necessarily involve unfairness to those whose properties are acquired. Benefiting private entities at the expense of  landowners seems to be particularly unfair.

One way to limit the use of eminent domain power is to constrain it by the requirement of public purpose. The public purpose requirement will however be of little use in limiting the use of eminent domain if the idea of public purpose is construed so broadly that almost any acquisition whatsoever can be termed as furthering some public purpose or the other. Take for instance economic prosperity. In the contemporary world economic prosperity is considered highly desirable by every country. In view of this one may decide to term any wealth-enhancing activity as serving a public purpose. As in general one can expect change of land-use from agricultural to industrial to be wealth-enhancing, taking of agricultural land under the eminent domain on behalf of industrialists can be characterized as serving a public purpose. It is clear that with this kind of interpretations of the public purpose requirement the eminent domain power becomes essentially unconstrained; and its large-scale resorting to can be expected to result in widespread misuse, involving both corruption and harassment of political opponents, as well as unfairness.

There are several different ways by which the public purpose requirement can be made more meaningful. One way is to specifically rule out those purposes which are far-removed from the general understanding of what is meant by the expression `public purpose'; and the purposes which are particularly susceptible of misuse.* Another is to use an expression different from `public purpose' which is not amenable to the kind of extensionality that `public purpose' seems to be capable of. One such expression is `public use'. In United States if the use of the property is such that is open to use by public at large, or at least by a large number of people, then the use is termed as `public use'. Use of land for roads, railway-tracks, airports etc. are examples of public use. In United States the concept of public use is generally considered to be narrower than that of public purpose. One rather important point to note in the context of public use is that invoking of it does not rule out acquisition on behalf of private entities. If land is taken over on behalf of a private entity for the purpose of a public utility like a power plant then the taking will be regarded for public use.

It will be argued in what follows that if properly interpreted the idea of public purpose is considerably narrower than it is generally thought to be the case; and that it is inextricably linked with the State. In the context of what does and what does not constitute public purpose the following point is very important: In the context of a democratic society one set of values with their legitimate domains is particularly important; namely, the set of values which are enshrined in the constitution of the country. Given a set of values, in general, it would be the case that there would be circumstances under which it would be possible to uphold these values in their proper domains; and there would be circumstances under which it would not be possible to uphold these values in their proper domains. The State being the custodian of the constitution as well as the protector of the society would be under an obligation to see to it that the domain of no value expands to such an extent that it becomes incompatible with the continued upholding of other values in their proper domains. If the undertaking of a certain action by the government results in wealth enhancement, and also in a situation where the survival of some of the losers may be at stake, then the State must either not undertake the action or alternatively must undertake the necessary remedial measures as no democratic constitution can countenance such an expansion of the domain of one value at the expense of the values so crucial for a democratic polity. A right as important to a democratic polity as the right to life and liberty for instance cannot be given go-by merely by invoking some beneficial consequence like wealth-enhancement of the action leading to a violation of the right. In a democratic polity it is taken for granted that the governmental actions will either be in conformity with the constitutional values or in case of any incompatibility the corrective steps will follow.

In contradistinction with the State, a private entity has no duty to conduct itself in a manner so that its actions are in conformity with the constitutional values as long as they are legal. If a private entity is engaged in an activity with a profit motive or some other motive, under some circumstances, success of the private entity in its activity would be such that it could be said to be serving a public purpose. But, this fact in itself does not make the activity a public purpose activity. The private entity is solely concerned with its own objectives. If its activities have a beneficial impact on the society, well and good. But even if the unintended consequences of its activities are of a negative character, as long as these unintended consequences do not make the undertaking of the activity illegal, the private entity could not care less. A private entity, unlike the State, is under no obligation to protect all constitutional values in their respective domains. If the State can use its eminent domain power for a public purpose only then it is clear that the project making use of the acquired land must either be in the public sector or alternatively regulated appropriately to ensure serving of a public purpose.

Land acquisition on behalf of private entities often meets stiff resistance from the owners of land. From this it is evident that compensation amounts which are generally offered to landowners are nowhere near their subjective valuations. Thus there can be no doubt that through the medium of land acquisition on behalf of private entities often transfer of wealth takes place from landowners to owners of private entities for which land is acquired using the eminent domain power. 

Most land acquisitions in India and elsewhere are being done on behalf of big industry, implying therefore in most cases transfer of wealth from the poor to the rich. Often the industrialists are given land acquired under the eminent domain for sums considerably less than the amounts which are paid to the landowners implying transfer of wealth to the industrialists from the general public. Furthermore, in most cases the landowners in addition to suffering economic loss on account of compensation being less than the subjective valuation also suffer loss of livelihood. Consequently large-scale land takings for private entities in the long run can be rather inimical to social harmony and cohesion.

* For instance the state of Louisiana amended in 2006 the takings provisions of its constitution to limit the definition of `public purpose'. The amended provisions make it clear that `[n]either economic development, enhancement of tax revenue, or any incidental benefit to the public shall be considered in determining whether the taking or damaging of property is for a public purpose.'

Satish K. Jain

satish.k.jain@gmail.com

The Contemporary Indian Situation and the Consequent Need for Urgent Steps for Preservation of Cultural, Literary, and Historical Texts for Posterity

Although the contemporary Indian situation is alarming from several perspectives, the most worrisome aspect is the threat it poses to the country's heritage and wealth, particularly that part of it which is irreplaceable. The two most important features about the contemporary Indian society constituting serious threats to its heritage, wealth and long-term functionality are: overwhelming corruption of every aspect of life and prevalence of shockingly high levels of incompetence almost everywhere. It is not only that large numbers of politicians, bureaucrats, and other government functionaries are corrupt; the fact of the matter is that it is only a small section of people who have managed to escape the tentacles of corruption. Regarding general competence levels, it is doubtful if there has ever been any period in the history of India when average competence levels were as low as they are today. These two features of the contemporary India seem to have developed a symbiotic relationship with each other.

In order to understand clearly the dangers that corruption in India is posing, there is need to comprehend its character. The first thing to note is that it is particularly destructive. Through corruption wealth is transferred from the public to the corrupt. By their very nature, such transfers involve some loss of wealth. But the amount of wealth which gets destroyed because of corruption can vary widely. When a corrupt builder uses sub-standard material and as a consequence the building collapses, the destruction of wealth in relation to the ill-gotten gains is likely to be quite high. Most of the corruption that exists in today's India being of this type the rate at which our natural, material, and heritage wealth is being destroyed is very high. Forests, rivers, lakes, ponds, hills, flora, fauna, monuments, all are imperilled. The fact of the matter is that our entire natural and cultural wealth is in grave danger of depredation, disfigurement and disappearance.

The corruption that exists in the present India is massive, extraordinarily wide-ranging, and multidimensional. Because corruption exists at every level, it is having profound impact on institutions. The first nodal point is that of appointments. Most appointments are now made on monetary and other extraneous considerations, and not on the basis of the suitability of those being appointed for the tasks associated with the positions in question. This has two implications: those who would have done a good job would be unable to use their expertise, and those who are appointed would be unable to perform the required tasks on account of lack of expertise. Both these result in decrease in the creation of new wealth. The second nodal point is at the level of discharge of functions associated with the positions. Before talking about the implications of individuals performing on the basis of bribes, it is important to note what performing the assigned tasks honestly and sincerely implies. When a person performs his tasks as he is supposed to in theory it has two very positive consequences. As most of what learns in life is through doing, performance of one's assigned tasks makes one acquire expertise over time. This is true even if one has chosen to do things for which one does not have  any great ability. Furthermore, performance of one's assigned tasks, without bribes and without causing harassment, is in general facilitating and consequently conducive to wealth creation. Consequently, when tasks are performed on the basis of bribes and other non-monetary corrupt considerations, the development of expertise does not take place. If the level of expertise of most individuals in an institution becomes low the institution will not be able to serve the purpose for which it is supposed to be in existence. In fact, low levels of competence of personnel together with bribes and non-monetary corrupt considerations playing a dominant consideration in the discharge of duties can even convert an institution into an instrument doing things opposite of what it is supposed to perform in theory. When one looks at the institutions of contemporary India the most striking thing is the disassociation between their avowed objectives and what their functionings are actually resulting in. This is true across the entire spectrum of institutions; be it the parliament, assemblies, courts, government offices, universities, colleges, or schools. The private sector is as corrupt as the public sector and the state institutions.

An important point in this connection, often lost sight of, is that when the proportion of persons belonging to an institution who are incompetent crosses a critical threshold then the degeneration of the institution acquires a self-sustaining character. Because even if those in charge of appointing new personnel are desirous of appointing people who can deliver they would not be able to do so as only those who are themselves competent can judge the competence of others. There can be little doubt that the degeneration of most institutions in the country now has this self-sustaining character.

For wealth creation facilitating and functional institutions are required. When institutions become degenerate and removed from their basic purposes the process of wealth creation is impeded in various ways; misallocation of resources, wastage of talent, distorted incentives, inculcation of wrong values being some of them, among others. The focus of this note is however not on creation of new wealth or even saving of existing wealth in general, but on saving of irreplaceable wealth.

As mentioned before corruption and incompetence together are imperilling our natural, cultural and civilizational wealth. As an illustration we can consider the endangered species. The endangered status of the tiger has been in the limelight for decades, but all the publicity that the cause of saving the tiger from extinction has received has not been able to make any dent in the situation. The status of the tiger continues to be greatly endangered. The reason why no change in the situation has come about is because the entire chain from top to bottom which is supposed to protect wild life is instead complicit in the poaching of tigers. For all one knows the persons at the bottom of the killing tree might be involved for the sake of paltry sums as low as few hundred rupees. When so much media coverage is unable to deter anyone involved in the poaching of tigers one can imagine what must be the case with respect to cases of destruction where there is little or no publicity.

Although much has been lost there is still extant a vast amount of literature in classical and medieval languages. Only a very small part of this vast literature has ever been published. This means that for most extant books only a small number of copies are in existence, in many cases there being only one copy. Corruption, incompetence, and poor work ethics prevalent in the country are posing very serious threats to the survival of the unpublished literary heritage. Just as some individuals have no compunction in aiding and abetting the killing of tigers for the sake of small sums of money, there is no dearth of individuals who would be willing participants in the destruction of our literary heritage for meager financial benefits. In fact, the destruction can come about by utterly mundane activities; for instance, the person in charge of looking after the manuscripts may simply decide to pocket the money meant for mothballs. As neither the government nor the elite of the country has thought it to be necessary to compile a list of the manuscripts in existence, if a manuscript is destroyed because of commission or omission of some functionary one may not even learn of such an occurrence.

Because of the deep-rooted and widespread character of the causes which are resulting in threats to the country's natural, cultural and civilizational wealth, there does not seem to be any possibility of them disappearing in the near future. Therefore, urgent steps are required for preservation of the irreplaceable wealth. Unlike the case of forests, rivers etc where only a concerted effort by large numbers of people has any chance of success, in the case of texts, even the efforts of a single individual can save some books from disappearance by the use of digital technology and internet.

For the purpose of saving as much of irreplaceable wealth and heritage as possible, and also for contributing towards removal of the causes which constitute threats to them constructive programme along the lines of the following two points should be considered.

1. Digitization and Dissemination of Literature

The long-term goal should be the preservation of Indian literature in its entirety, and making it freely accessible to all. To begin with, one could undertake activities mentioned below.

(i) Wherever possible, unpublished manuscripts, particularly those in Sanskrit and other classical languages, should be scanned and uploaded on the internet. Free downloading should be allowed for everyone.

(ii) As a pilot project the task of digitization of the entire Hindi literature on which the copyrights have lapsed should be undertaken and completed in a time-bound manner, preferably before the end of 2016. The entire digitized literature should be made accessible in easily downloadable form, free of charge. In case of the project taking off successfully it can be replicated for all contemporary Indian languages. Although the primary purpose of the project is preservation of literature, the possible societal changes consequent upon easy and universal access to almost the entirety of the Hindi literature barring the copyrighted part of it which might ensue, particularly the deceleration in the process of deculturalization currently going on at an alarmingly fast pace, should not be lost sight of.

It is very important that the entire programme of digitization and dissemination through internet of Indian literature should be undertaken purely on a voluntary basis. Getting work done on a commercial basis will hamper the transformational possibilities inherent in such an endeavour.

Those who join the constructive programme should also explore possibilities of saving other forms of irreplaceable wealth which are under threat, particularly the bio-diversity.

2. Education and Knowledge Dissemination

As at present possibilities of development of expertise and competence through public or private educational institutions are minimal, there is need to explore alternative fora through which education and dissemination of knowledge could be carried out. One possible way could be along the following lines:

(i) Anyone who joins the constructive programme should commit to give at least eight hours per month for voluntary work. Individuals with expertise could volunteer to teach those willing to learn.

(ii) As degrees no longer convey much information about expertise, there is need to identify those with possessing expertise in different subjects and crafts and disseminate this information to those who require it.

(iii) For the purpose of knowledge dissemination on a voluntary basis and for other cognate objectives setting up of an e-university could be explored.

(iv) A network of experts who would be willing to contribute on a voluntary basis will also result in a positive consequence of much import. Given the kind of corruption and  incompetence that exist in the country, an average person's daily encounters with other fellow countrymen are mostly of a negative kind. When most individuals' experiences with other members of the society are unpleasant day in and day out, it tends to weaken the fabric of the society, not at all good for the long-term societal health. A network of people who would be willing to help others on a purely voluntary basis on the other hand would enhance social solidarity.

Satish K. Jain
satish.k.jain@gmail.com

On the Nature of Corruption in India and Some of Its Implications

Satish K. Jain


Notwithstanding that corruption, widespread and deep-rooted, has been with us for a long time, it is only since the time just before the commencement of the Commonwealth Games (CWG) that it has started occupying a prominent place in the political and media spaces. Partly it is because of the humiliation that the nation had to suffer on account of adverse publicity brought about by corruption and mismanagement in the organizing of the CWG; and, partly because of the astronomical sums involved in the CWG scam, and in the 2-G and Antrix-Devas scams which came in the limelight shortly after the CWG scandal. Although everyone knew about the ongoing loot of public money, not many knew about the breath-taking gigantic character of it. Because of the sheer size of the loot, at the moment it is this aspect which seems to be dominating the discussions on corruption in India. There is no doubt that the size of the loot is an extremely important aspect; but in the Indian context it is by no means the most important one. At this juncture, corruption in India has acquired a character which has the potential of imperilling the nation and the society in serious and unpredictable ways. The purpose of this short note is to delineate some of the important features of corruption in India and their implications for the nation and the society.

One important adverse effect of corruption is that almost invariably it results in some destruction of social wealth. If persons in charge of getting a stadium constructed use substandard material, and the stadium collapses as a consequence thereof, then all the resources expended in building the stadium will have been wasted. Some of the CWG structures collapsed even before the start of the games; it is not particularly difficult to extrapolate the quality of the structures which did not collapse in view of the revelations of massive corruption which have now come to light. Through corruption corrupt people transfer money belonging to others to themselves. In this process of transfer how much wealth will be destroyed depends on the nature of the process. The wealth destroying effect of corruption can be summarized by a simple measure, which can be termed as the wealth destruction multiple (WDM). If the process of transferring one rupee to the corrupt results in destruction of m rupees of social wealth then the wealth destruction multiple will be m. If a stadium on which Rs. 100 crores have been spent collapses because someone for a gain of Rs. 1 crore used substandard material then the wealth destruction multiple will be 100. One of the most significant features of corruption in India is that this wealth destruction multiple is very high. And, as a consequence of it corruption is resulting in large destruction of social wealth. A high WDM has another significance as well. If a person does not mind destruction of a large amount of social wealth for a small gain for himself, it is unlikely that his sense of belonging to the nation or the society will be particularly strong. Therefore it follows that if a large number of people in a country do not mind indulging in acts of corruption involving large WDMs then the continued security, prosperity and cohesiveness of it cannot be taken for granted.

Although, because of the endemic nature of corruption in India, wealth destruction is taking place in all domains, it may be worthwhile to mention certain domains where the problem of wealth destruction is particulary acute. One domain where massive destruction of social wealth is taking place consists of forests, wild flora and fauna, and medicinal herbs which are found only in forests. The rate at which the forests in India are disappearing, because of corrupt politicians and forest officials, many species of flora and fauna are likely to become extinct or highly endangered in a matter of years. The WDM in the domain of forest related wealth is particulary large in India. The national heritage of monuments, excavated sites and artifacts of historical importance constitute another domain where the situation is extremely grim. The collusion of politicians and officials is likely to result in, through encroachments of land on the one hand and plundering of artifacts and other material of archaeological importance for the purpose of smuggling out on the other, in disappearance or disfigurement of a large number of them. Another important domain is that of construction activities in the public sector. The CWG kind of construction may be an extreme case, but the general character of construction in the public sector is unlikely to be radically different from the CWG type as the underlying factors are essentially the same everywhere. The only differences might be those of degree.

There is one very widespread form of corruption in India which consists of individuals collecting the remuneration but not performing the duties for which the remuneration is paid. Because in popular thinking corruption involves taking bribes or other kinds of illegal and immoral transfers of money, this form of corruption is not even recognized by many as corruption. If a government official is drawing his salary but not performing the tasks which fall under his duties properly, there is no reason why the relevant part of the salary should not be construed as ill-gotten gain and treated on par with other illegitimate transfers of money. This form of corruption, for obvious reasons, can be extremely wealth-destroying. Whether the killing of a tiger takes place because of collusion between the poachers and forest officials or on account of dereliction of duty on the part of officials makes no difference with respect to the consequences. Life of a building gets reduced by the use of substandard material as well as by poor maintenance because of neglect by those charged with its care.

Corruption not only results in wealth destruction; it also in general impedes creation of wealth. This effect takes place through several different routes. One particularly important route in the Indian context is corruption in appointments. When a person is appointed because of his proximity to some politician or bureaucrat, or because of vested interests of those doing the selection, or because of transfer of money from the appointee to the appointing officials and higher-ups, such an appointment impedes creation of wealth in two different ways: The person who is appointed, in general not having the requisite qualification for the job, will tend to create dislocations in the system; and the person with the requisite qualifications who is not appointed will not able to use his expertise for wealth-creation in the most efficient manner. If someone with a poor knowledge of a subject is appointed a teacher of that subject on a permanent post, it will ensure that the next 25-30 generations of students will be deprived of proper education in that subject with the obvious consequence of diminished wealth-producing capability of the students concerned. Also the person with the expertise in the subject may have to engage himself in tasks for which he is not really well-qualified. As corruption even in the context of some appointments can adversely affect the possibilities of wealth creation, it is clear that if most appointments are made on the basis of extraneous considerations, as by now is the case in India, then the possibilities of wealth creation can get seriously affected. Another important feature of corruption in contemporary India is that it is impeding wealth creation in a severe way.

According to the figures published in the newspapers, the total expenditure on CWG was about Rs. 70000 crores. China spent about Rs. 28000 crores on organizing the Olympic Games. China received well-deserved accolades from throughout the world on the superb organizing of the games; and in the process built the infrastructure for holding sporting events in the future. Assuming the figures in the media to be correct, it follows that even if half of Rs. 70000 crores had been embezzled but the remaining half had been properly utilized there is no reason why India could not have organized the games in a befitting manner. The international sporting events like the CWG cannot be organized properly if the outlay is below a certain critical level. If through corruption so much money is siphoned off that what is left over is below the critical level then the kind of shameful outcome which occurred in the case of CWG would be inevitable. When the extent of corruption crosses a certain limit then it is no longer possible for the task in question to be adequately, not to speak properly, performed. With respect to the extent, in India the corruption in many domains is essentially of the CWG type, making the country at least partly non-functional in those domains.

The diminution in functionality mentioned above is being reinforced by two other forms of corruption. Even if it is the case that the amount of money left over after embezzlement and other forms of illegal transfers is sufficient for completing the task, it may not be possible to do so because of incompetence of those assigned for performing it. As a large number of appointments are made on the basis of monetary or other extraneous considerations, rather than on the basis of the suitability of persons for the jobs for which they are employed, by now a large percentage of people who hold positions in the country simply lack the capabilities essential for the jobs they are supposed to perform. Moreover, a considerable part of what one knows one learns by doing. In a society where people perform or at least attempt to perform, one can expect even unsuitable persons to learn in the due course of time to perform, even if not very satisfactorily. But in a society where one of the most rampant forms of corruption is non-performance of tasks for which remuneration is paid, the question of such a thing happening does not arise. On the contrary, even those who have the potential to perform efficiently will not be able to do so because of the most perverse work-culture that has taken hold of the Indian people at this juncture.

Sufferings of an average Indian because of corruption are immense. For even utterly trivial things one has to waste enormous amounts of time, suffer humiliation and harassment, pay bribes, be cheated, and put up with shoddy performance. Overwhelming numbers of Indians are victims of the massive and all-enveloping corruption which plagues the nation. One of the most peculiar features of the corruption in India is that most of the victims have the same attributes as the corrupt politicians and bureaucrats. In terms of moral depravity there is practically no difference between those at the helm and those at the bottom. Therein possibly lies the intractability and persistence of the corruption problem.

From what has been discussed above, it is clear that the nature of Indian corruption at this juncture is such that it is resulting in large destruction of social wealth, in erection of powerful impediments against wealth creation, societal non-functionality in many domains, and in reduction of competence levels, in some domains to dangerously low levels. The present generation of Indians seems to be bent upon stealing the future of generations yet to come.

A natural, and extremely important, question that arises relates to the reasons for this phenomenon. While a search for the causes of this all-pervasive affliction is likely to be difficult and long drawn-out and consequently outside the scope of this short note, certain, rather significant, correlations which have the potential to throw light on the causes of the corruption phenomenon should be noted. Although corruption has been with us for a long time, even few decades back the situation was not as grim as it is now. With respect to each of the dimensions: extent of corruption, work ethics, and the nature of appointments, the situation was considerably better. In early nineteen-sixties Gulzarilal Nanda was India's Home Minister, one of the most powerful positions in the Central Government, first under Nehru and then under Shastri. He was also acting Prime Minister twice, first in 1964 and then in 1966. The landlord of the flat where Nanda was living on rent after he ceased to be Home Minister, threw out his belongings on the road because Nanda did not have money to pay the rent for the accommodation. The photograph of Nanda's belongings lying on the road made it to the front-pages of newspapers. Indians of today have forgotten the likes of him, who refused to be tempted and selflessly devoted their lives to nation-building; but see it fit to honour those who did lasting damage to our democratic institutions and those whose names would forever be associated with betrayal of trust that the people had reposed in them for lucre. For Indians of today only money and power are worthy of being on the pedestal; not any of the principles and values essential for societal functionality and progress. From this perspective of loss of values, it is doubtful if in our long history the situation has ever been grimmer than what it is today. We must remember that Indians of Kabir and Surdas centuries when invasions, wars and massive societal dislocations were taking their toll had the great sagacity, wisdom and judgment which made them put these indigent poets above all the mercenary ones who abounded in those times.

In this connection it is also interesting that in recent times the rich people in India have reduced their monetary outflow for charitable purposes to insignificant levels. In sharp distinction, spending on conspicuous and vulgar consumptions has of late increased by leaps and bounds. Unlike in the past, contributions to charitable causes do not as a rule result in enhancement of one's status in the society. But, vulgar display of riches, even when it is widely known that much of these riches are ill-gotten, can be depended upon to bring about a rise in one's status.

When for a people Mammon worship becomes the only value worth pursuing, the kind of degeneration that we are witnessing today is something that is inevitable. It is not just the society that is evaluating worth of persons in terms of their possessions and consumptions, persons themselves are doing the same. Assuming this line of thinking to be correct, we get our first clue as to what may in fact be required to come out of the morass that we are in. In some way, no matter how small, but demonstrable, one must reject this correlation between worthiness of individuals and their possessions and consumptions. To combat the vise-like grip that the corruption has over the country, what will be even better would be to establish association between certain types of consumption patterns and societal degeneration.

As was mentioned earlier, one of the most worrying implications of corruption in India is that our average competence levels in many walks of life have become dangerously low. Because of the widespread nature of corruption and general decline of non-lucre values, the incentives for skill-formation have also become greatly weakened. It no longer pays to have expertise in any area, either in terms of money or of prestige. Because of the precipitous decline in learning and expertise our institutions have become caricatures of the real things. There is need to document the real character of today's institutions. A truthful account, without any embellishments, has the potential to make at least some people start worrying about the country. Also, if the attempts mentioned in the preceding para could be combined with inculcation of the idea that learning and expertise are to be valued in themselves then at least a glimmer of possibility for the reconstruction of the nation might emerge.

In a fundamental sense, protecting India from the dangers flowing from the all-encompassing corruption and building it in accordance with the ideals which inspired our freedom movement is not going to be any less difficult than the freedom struggle itself. But an awareness on the part of the concerned that the conduct and life-style of the Indian elite of today as well as the values underlying them must be rejected and that the norms like valuing learning for its own sake need to be revived will augur well for the task of saving the country from the perils inherent in the kind of corruption which afflicts it today.