Corrupt India

There have been several occasions when I have heard countless people in India crib about that fact that we do not seem to have an honest government. The ministers are corrupt, the officials are corrupt, the assistants are corrupt, so much so that even the peons are corrupt. All in all the entire system is corrupt.

Why is this the case? Is there no solution to this?

Some call for martial law, some dictatorship, some even for civil war, some kind of revolution that will put an end to all of this.

Well, let us look at some facts. Lets take the case of a ministry and work it out.

Telecom ministry

The telecom ministry has generated 45000 Crores in this year alone. Let us assume this to be the revenue of the ministry. Now the salary of the Telecom minister is Rs. 30,000 per month. Don't jump at me, I know there are a few perks, some calls, house, pension, air travel and the likes.

Now, if we consider the Reliance Group, Mukesh Ambani who is the CEO of the company, which has a turnover of roughly 1.2 Lac Crores; gets a salary of about 44 Crores annually.

Where is the parity, by these standards, the telecom minister should have got, 15 Crores per year, instead he is getting less than what an MBA pass out would get. Why would there not be corruption in the system?

They make a furore over the fact that the Indian government expenditure is a 1000 Crores on all of the ministers, it is supporting an economy of USD 1.16 Trillion. Let us say Reliance was making that kind of revenues, would there not be salary expenses to such tune? In fact it would be several times that figure.

Salaries of this nature are incentive to corruption. Well, I am managing 1.16 Trillion USD, would it be wrong if I get one percent of that as service charges, which by the way works out to 55,000 crores. We are nowhere close to paying that kind of salaries.

When Lee Kuan Yew first took over Singapore as an independent country, the first thing he did was to make sure that every minister had a top notch salary, if not at par with private sector, at least close. This was essential to attract the best talent in the country and abroad to manage the show. We have some of the worst politicians that the world can see primarily for this reason. If you are talented, why on earth would you get into politics? It pays peanuts.

Now the next argument will be that the politicians are corrupt not because of need but because of greed.

Well some of them are, no denying it. It the entire corporate world, there had to be a Ramalingam Raju who had to show that there always is room for greed. But he does not define the system; that is not what corporate India is all about. There is more to it.

Similarly, if the salaries of the people who are a part of the government improves, you will root out the incentive to go after more. The incentive for risking ones image and reputation will outweigh the additional money that they can make. Furthermore, the enforcement can also take place more effectively. Currently, enforcement officers are some of the most poorly paid government employees. It makes it easy for those wish to bribe their way out of a problem.

The same is also been stated in economics long back as the 'Decreasing margins of returns'. Currently the benchmark has been set so low, with salaries that could have been considered good in 1980, that corruption is prevalent.

Unfortunately, I don't see this happening. There is such a furore for a minor salary hike of government employees and our budgets are stretched hard due to the amount of money that we spend on oil and defense, that there is no room for such lavish increases.

One things I am pretty certain about is that, this is the only thing that can put and end to corruption in this country.