A Culture of Corruption? Democracy and Power in India
Sumantra Bose

Introduction The political life and public institutions of India have been in a nervous state of flux following a series of damaging revelations during 2001. At a time when senior government ministers are seriously implicated in bribery and arms-purchase scandals, many would argue that corruption is embedded in the everyday functioning of India. What is puzzling is not the occurrence and frequency of such corruption, but that this is often taken to be the status quo--and sometimes quite blithely--by the media and the public at large.

In this article, Sumantra Bose, Ralf Dahrendorf fellow and lecturer in comparative politics at the London School of Economics and Political Science, tries to unravel the reasons why corrupt practice appears to be routinised and widespread in India, especially when compared to the West.

In March 2001, Internet journalism came of age in India in the most unexpected of ways. A Web-based news site specialising in sensational scoops from the worlds of politics and showbiz dramatically disclosed the results of a sting operation it had been conducting over the previous seven months. Two of its journalists had approached a variety of Indian politicians, bureaucrats and military officers purporting to be representatives of an arms-dealing firm called West End International, based in London. On behalf of the non-existent company, they claimed to be interested in selling to India's armed forces hand-held thermal imaging cameras (a type of surveillance and detection equipment, which would be useful, for example, in detecting guerrillas infiltrating the border between Pakistani and Indian Kashmir).

Their initial contacts were civilian employees of the Indian defence ministry. But in a matter of months, the fake arms dealers had worked their way up 'the food chain' (their term) of official India. Filming throughout with concealed cameras, they caught on videotape the national president of India's largest political party, the Bharatiya Janata Party (BJP, which is also the central element of India's current coalition government) casually accepting the equivalent in Indian currency of £1,500, and commenting, with an equally blaseé air, that he wouldn't mind receiving dollar payments in future.

The tapes also contain lengthy discussions with an Indian general and other senior army officers (contacted by the reporters through civilians known to operate as middlemen in defence deals), who describe with startling clarity--while consuming large quantities of whisky--the bribes and cutbacks apparently routine in weapons' purchases. Some of the taped conversations border on the farcical. For example, at one point a high-ranking military official enquires of West End's representatives where they are located in London and who their bankers are. The journalists' reply that the firm is located at 'Manchester United' and its bankers are 'Thomas Cook'. The official is visibly impressed.

The exposé dominated India's newspapers, television channels and other media for a couple of weeks, and forced the resignations, among others, of the BJP president and the veteran politician serving as defence minister. It also triggered a predictable ruckus inside the national parliament, as opposition parties like Congress sought to extract maximum political mileage from an embarrassing situation for the government. Within a few weeks, however, the scandal seemed to have largely blown over, as media and public attention shifted elsewhere. It seems that the short-lived wave of media and public interest was primarily due not so much to the nature of the revelations as to the innovative methods used by the journalists on the case.

The sting clearly exposed an intricate web of official corruption running vertically--(from clerks through middle men to top politicians and senior military officers) --as well as horizontally (a highly developed nexus between members of the civilian bureaucracy, the political elite and the military's officer corps). It also shows that giving and receiving bribes is an integral, indeed routinised part of India's public culture. This is not, however, 'news' to Indians--the only element of surprise was the extent to which the rot has spread among military professionals, generally regarded as a relatively untainted arm of the establishment.

In the past 10 to 15 years, Indians have been saturated with high-profile scandals, ranging from the infamous field-artillery deal with the Swedish arms company Bofors--for which former prime minister Rajiv Gandhi has been posthumously indicted--to the case for which another former prime minister, P.V. Narasimha Rao, was convicted in 2000 (this involves money given to parliamentarians of a small political party in 1992 in exchange for their support to Rao's government, which lacked an outright parliamentary majority). Both Gandhi and Rao were Congress prime ministers, leading the current BJP prime minister to openly warn agitating Congress members in parliament that those who live in glass houses should not throw stones. Indian politics is a moral wasteland, and a career in politics is commonly viewed as a typical resort of the scoundrel. But the tentacles of corruption radiate outward from the political class to affect, and implicate, society as a whole.

From everyday experience, Indians know that acquiring a job, a place in medical or engineering school, or even a telephone, gas or electricity connection frequently entails a bribe to someone on the 'food chain'--the municipal councillor, the local political leader or legislator (or his agent), or some other official with the capacity to deliver opportunities and services. Corruption is endemic in all levels and spheres of public life, and has become deeply embedded in Indian society and the way it functions on an everyday basis.

The reasons for this situation are multiple and complex. A survey of the major factors at work reveals similarities as well as differences--some of substance, others of degree--between India's democracy and those of the West. The differences may help to explain why corrupt practice may be relatively more routinised and widespread in India compared to Euro-Atlantic states.

Government and big business

Since independence from Britain in 1947, India has had a comparatively greater degree of state regulation of industrial activity than the Western norm. This has involved a combination of direct state ownership of 'key' or 'strategic' industries, and legal powers to control and regulate those areas ceded to private entrepreneurship. This tightly regulated system inevitably gave rise to a phenomenon known as the 'licence-permit raj' (literally, licence-permit regime), involving politicians empowered to make decisions, bureaucrats who ran the system on a daily basis and knew its workings far better than politicians, and representatives of domestic capital in a triadic relationship.

The nexus between the Indian political elite and a handful of 'big business' houses, with the bureaucrats as essential intermediaries, is a longstanding one. For decades, the prospects of Indian big businesses have depended on their degree of cosiness with the decision makers (politicians) and administrators (bureaucrats) of the licence-permit system. India's most successful big business of the last 20 years, the Reliance Group of companies, owes its phenomenal growth to the owning family's perfection of the art of cultivating politicians, bureaucrats and other useful conduits to corridors of power such as influential journalists. For decades, Indian big businesses also secured captive markets for their frequently substandard and overpriced products in some sectors (for example, automobiles) by relying on the state's power to exclude foreign competition. This system has only begun to be dismantled following the adoption in the early 1990s of an alternative economic strategy, emphasising domestic de-regulation and openness to foreign investment. A deep nexus between government and big business is also found, for example, in the United States, but in India the traditional role of the state in the industrial economy has been even more direct and intrusive.

Taking that comparison further, access to large amounts of money is perhaps even more essential to political success in the US than in India. In most instances, it is simply not possible to run successfully for political office in either country without access to substantial campaign funds--the higher the office, the greater the need for cash. Contestants in major races in the US routinely spend millions on television advertising alone. In India, with its hyper-competitive political arena, elections are similarly very expensive propositions. Unlike the US, however, India does not possess even the rudiments of a regulated system of campaign financing.

The system in the US may be heavily loaded in favour of the big fish in the pond, and not entirely transparent, but in India there is no system at all. Most party funds, including campaign finances, therefore have to be secured through non-transparent channels, in so-called 'black' money, from friendly (read 'obliged' or 'expecting favours') corporate interests--or through cutbacks secured on defence deals. Indeed, taking money from such sources to finance legitimate political activities is considered not just acceptable but almost honourable by the standards of public life in India. Some figures caught out by the website exposé defended themselves by saying that while they had taken money, it was meant for party expenditure and not personal purposes. Less 'principled' beneficiaries of the system routinely spend ill-gotten money on conspicuous consumption for themselves and their families. In recent years, an increasing number of senior bureaucrats, for example, has been indicted by anti-corruption investigations in 'disproportionate assets' cases--that is, for possessing movable and immovable assets far in excess of known sources of income.

Chaos that works

Although the operation of India's gigantic and multi-layered system of political pluralism frequently presents a chaotic appearance, it has survived and evolved over decades. Appearances notwithstanding, the system is not dysfunctional. It actually works. The main reason for this success is that India's democracy has an institutional framework which is diffuse and multi-tiered--national parliament and government, state (province) parliaments and governments, each with its panoply of institutions, down to the municipal and village- council levels--eminently suitable for a vast and diverse country.

The conflicts in Indian society and politics are legion, but the system has a capacity to diffuse (and eventually, defuse) most conflicts by multiplying the arenas of contestation, which simultaneously act as arenas of brokerage. That means, however, that the system also produces power brokers at all levels. The routinised corruption of the higher levels has an obvious effect on the lower levels--the way to get ahead and climb the greasy pole quickly is clearly to dispense with moral scruples.

India's public culture

If graft is the norm in India's public culture, effective investigation of offenders leading to penalties is an exception. Agencies such as the Central Bureau of Investigation (CBI), India's FBI, have launched a number of high-profile investigations in recent years, and the higher organs of the judiciary (the country's Supreme Court as well as the province's High Courts) regularly issue rulings and directives designed to curb corruption in the public domain. Yet the problem is so pervasive and so routinised that a general climate of impunity still prevails. Investigations tend to be costly, laborious and lengthy, with no guarantee of success in many cases.

Narasimha Rao was convicted, but he escaped actual imprisonment. It has taken the CBI's investigators in the Bofors' case over a decade to compel the Hinduja brothers--transnational tycoons based in London with high political 'connections' in both India and the UK--to come to India to be interrogated (the Hindujas are suspected of being the principal conduits and launderers for bribes paid by Bofors to Rajiv Gandhi and other Indian officials of the time). This is primarily because the Hindujas have exploited every possible legal means and loophole to avoid cross-examination in India, but political obstruction in India is also said to be a factor.

The Congress, Gandhi's party, controlled India's central government until 1996, and the Hindujas are reputed to have close friends in the high ranks of the BJP. Ultimately, the Indian establishment's corruption is self-reinforcing and self-perpetuating because all sides are implicated. BJP prime minister Vajpayee's riposte to Congress outrage over the website revelations was loud and clear: You are not exactly clean, so don't taunt us beyond a point. Almost concurrently with the Internet expose, a CBI investigation found that Congress leader Sonia Gandhi's longstanding personal secretary (who was also her husband Rajiv's personal secretary when he was prime minister) had amassed wealth entirely disproportionate to known sources of income. The culture of corruption is deeply intertwined with the ways in which power is won, exercised and retained in India's democracy. It is here to stay.

This lecture was delivered at the London School of Economics on November 9, 2000. Copyright The London School of Economics and Political Science.