What’s going on in India?
In the space of an extraordinary week, the whole nation has been convulsed by a wave of popular anger at the routine corruption Indians – and in particular the middle classes – face in everyday life. The focal point for that anger is the apparently humble, decidedly “Gandhian” figure of Anna Hazare. This 74-year-old veteran social activist first came to national prominence in April, and is currently on a “fast unto death” until his demand for a draconian new anti-corruption law is met. In an attempt to close down the swelling protest, the Delhi government last week jailed him as a “preventative measure” to stop a mass protest in Delhi. The tactic backfired – millions rallied to Hazare’s call for a “second independence movement” for India. “Team Anna” has used social media to amass such massive popular backing that some fear the stability of the government is under threat.
Is the government corrupt?
In 2008, the government of Manmohan Singh survived a no-confidence motion, allegedly by bribing a group of parliamentarians to vote in Singh’s favour. Paradoxically, however, Singh has a reputation for probity, and is considered one of the more upright leaders the country has had since independence. Nevertheless, under his watch India has seen an explosion of financial corruption, with the boundary between public power and private gain becoming ever more blurred. Singh’s government was savaged for frittering away $40bn through rigged auctions of 2G telecoms licences. Last year’s Commonwealth Games became a national embarrassment after a series of corruption scandals linked to the construction of stadiums; most have already fallen into disrepair. A massive real-estate scam in Mumbai has also rocked the country.
How has this affected business?
Foreign direct investment has fallen sharply, due to concerns over investing in what one local banker described (to the FT) as the “land of the scams”. According to a survey by KPMG, 51% of the business people surveyed said corruption affects the overall stability of the investment environment. In recent years waves of scams and scandals have frequently triggered stockmarket crashes. Meanwhile, Washington-based Global Financial Integrity has put Indians’ illicit assets held abroad (gained through corruption, bribery, criminal activities, tax evasion, etc) at $462bn. On India’s own figures, the annual capital flight involved is worth 17% of GDP – a phenomenon described by India’s Supreme Court as a “plunder of the nation”.
How does India compare internationally?
Anti-corruption group Transparency International ranks India at 87 out of 178 countries in its corruption index. Among the BRIC economies, India is broadly “comparable to China, doing better than Russia, less well than Brazil”, reckons Robin Hodess, the group’s research director. However, what is really “extreme” in India is the level of bureaucratic and petty corruption that Indians face. This includes the unofficial and semi-official licences, permits and constant payments required to lead an everyday life or run a small business. One small businessman interviewed by The Guardian this week calculated that he spent one third of his turnover on bribing everybody from local police to health inspectors. To get his children into a local state school required a “donation”. It’s the same for driving licences, doctors’ appointments and the traffic police, who stop motorists and demand 100 rupees to “avoid too much bother”.
Wasn’t it ever thus?
Following independence, petty corruption was part and parcel of the way India’s “Permit Raj” worked. Demanding a little “baksheesh” – a payment somewhere between a tip and a bribe – was an accepted way for government employees to eke out their puny earnings. As the country prospered and liberalised, the culture of petty corruption remained entrenched. As GDP surged (doubling in the last decade), corruption surged with it. It is this legacy the fresh wave of anti-corruption campaigners hate. Many of them are members of the fast-growing middle-classes – now numbering 200 million and with a growing proportion in private-sector employment rather than public service. Delhi’s elite have long thought themselves immune from the threat of middle-class revolt, says James Lamont in the FT. “Rising incomes and increased aspirations were meant to bring people onto the streets of autocratic China, not democratic India. But now an activist in white kurta pyjamas and a Nehru cap may be about to prove them wrong.”
Hazare: a freshly minted saint?
Not everyone is impressed by Anna Hazare. In a damning piece this week in The Hindu newspaper, the novelist and activist Arundhati Roy writes that, while his methods might be self-consciously Gandhian, his aims are anything but. She, and other critics, argue that the sweeping powers Hazare (this “freshly minted saint”) wants to award to a new “lokpal” (ombudsman) and giant anti-corruption bureaucracy are anti-democratic and authoritarian. They would amount to the “overthrow of the Indian state”. Roy also accuses Hazare, a Hindu nationalist, of supporting xenophobic politicians and ignoring pressing social issues. As the Hindustan Times put it, there is no doubt India needs “cleansing” of corruption, but Hazare is no “second Gandhi” – and his populist “juggernaut” is already veering down the road to “anarchy”.