Posts Tagged ‘ Kaushik Basu ’

Whose sin is it anyway?

Kaushik Basu, the Chief Economic Advisor to the Ministry of Finance, Government of India, visited KC College in Mumbai on 6th January 2012 to manufacture consent on the subject of legalizing a class of bribes amongst many ideas for readying India for the global stage.

 Many Indians responded with anger when Basu first made this statement a few months ago, in the light of the brewing 2G spectrum scandal. This was soon followed by the czar of the Indian IT industry, Narayan Muthy, giving credence to Basu’s idea and promoting it. There was more anger. It certainly did not help the situation when Law Minister Salman Khurshid, on the SC rejecting the bail pleas for the 2G spectrum case accused, remarked that institutions of  the government had to factor in the “political-economy” that we are faced with today, lest it would have a freezing effect on our investor relations.

 I was very angry at this absurd suggestion too. I wanted to disprove it as much as I wanted P Chidambaram to discontinue as our Home Minister. So when Kaushik Basu published an initial paper on his new theory on his website, I thought it a good opportunity to do some homework. After all, we’re supposed to be living in the age of reason, so let’s try and discuss the merits and de-merits of this “out of the box” idea.


 Harassment Bribes

Basu begins the paper with the premise that a disproportionate amount of cases of bribery that take place between government officials and a private person (here, person shall mean a citizens well as organizations) are harassment bribes. For example, a person goes to register his land titles and the government official won’t budge unless he gets some chai-paani.

What Basu states is that, as per the proposed legislation the bribe-giver be given total immunity in lieu of his coerced bribe-offer, and the government official be fined to pay back twice the amount of money that accounted as the bribe money. Hence, once the act of bribery is done, and as per the proposed legislation, the interests of the bribe-giver and the bribe-taker are at a divergence. If apprehended, the bribe giver will have total immunity from prosecution as he was coerced into giving a bribe, while the bribe-taker faces a hefty punishment.

Since a bribe giver is immune from prosecution and is likely to co-operate with the investigating officials in getting the guilty government official caught, this creates a psychological barrier in the mind of the potential bribe-taker to ask for bribes, hence significantly reducing instances of corruption, argues Basu.

The most patronizing part of Basu’s paper is where he imagines that once the proposed law comes into force, the aam-aadmi will record some evidence of the bribery – a secret photo or jotting down numbers on the currency notes handed over and so – so that the victim can immediately turn in the evidence for swift action. Do we really need a new law to motivate us to be more proactive in being more diligent while dealing with government officials? What’s stopping us now from doing that?

Institutional details

Basu then goes on to critique the existing anti-corruption law in the country, The Prevention of Corruption Act, 1988. The overtones of the language in the paper clearly suggest Basu’s disapproval of the Act considering the act of giving a bribe as abetment of the offence of bribery.

Section 12 of the POCA 1988, the provision that punishes offences described u/s. 7 or 11, goes as follows –

“Whoever abets any offence punishable under section 7 or section 11 whether or not that offence is committed in consequence of that abetment, shall be punishable with imprisonment for a term which shall be not less than six months but which may extend to five years and shall also be liable to fine”.

S.7 and S.11 deal with acts of public servant when they accept gratification or a valuable thing for an official act.

S. 24 of the POCA, 1988 states the exception to the rule of prosecution for punishing acts of bribery, and goes as follows –

“Notwithstanding anything contained in any law for the time being in force, a statement made by a person in any proceeding against a public servant for an offence under sections 7 to 11 or under section 13 or section 15, that he offered or agreed to offer any gratification (other than legal remuneration) or any valuable thing to the public servant, shall not subject such person to a prosecution under section 12”.

Basu is gracious enough to cite this provision, and it is exactly at this point in the paper that you begin to see through the propaganda. When there’s already a provision of law (S. 24 above) that protects a bribe-giver in instances of harassment bribes in a situation when he is willing to turn a witness for the prosecution, then why do we need a new law that presumes all government babus to be corrupt and give the benefit of the doubt to the aam-janata? It’s just good politics, silly! The government loves to act like the Messiah who gave power to the people. By reposing such faith in the incorruptibility of the ordinary citizen, the government is running a massive disinformation campaign to engineer a citizen versus the government official revolt, the results for which are likely to climax in a big agenda election campaign.

Non-Harassment Bribes

Basu then goes on to discuss the occasional cases of non-harassment bribes, where the bribe giver benefits from offering a bribe to the government official as he has something substantial to gain. Should the bribe giver be given full immunity be given in such cases? His answer is ‘No’.

This proposed law will have to answer a big question – how does the prosecution come to the conclusion that ‘harassment’ occurred or not? Does it get any more circumstantial than this? Will this new law make it easier for persons like those accused in the 2G spectrum case to get away because of the presumption of guilt going against the public official? The current procedure of following the due process of law in determining the guilt of the accused only after a thorough investigation is our best bet, for the offence of corruption has surpassed the categorization of a ‘white collar crime” due to its pervasiveness in our system. We need to consider both the parties, the bibe-giver as well as the bribe-taker as equally guilty.

This brings us to Basu’s bias against the public servant. He advances the argument while discussing non-harassment bribes that the punishment meted out to the bribe-giver should be substantially lesser than that given to the bribe-taker, as the public servant is tasked with the moral responsibility of being the guardian of public resources, hence his punishment should be more severe. So in Basu’s world there is no such thing as Big Industry “lobbying” with the governments. He just came short of suggesting that A Raja bullied Ratan Tata into paying up a bribe. What’s interesting to note here is that the hierarchy of the act of bribery reverses when you go from the bottom to the top. As middle-class citizens, many of us would be aware of the reluctance of the authorities to act unless offered some chai-pani(it’s disgusting how the popular reference for bribes in our national language has come to mean money for basic sustenance), while it is hard, if not impossible, to imagine A Raja arm-twisting Ratan Tata into stashing away crores of rupees in NGOs managed by him and his family members. With the 2G scandal investigations and trial it is now amply clear how a PR Executive(that designation commonly passes for a lobbyist) orchestrated political negotiations between the Congress and the DMK to allow A Raja to occupy the seat of the Minister of Communications and Information Technology. In Basu’s worldview when Eve accepted the Devil’s temptation in the Garden of Eden, it is Eve alone that shall be punished for her sins. We need to factor in the “political-economy” of the situations in which these acts were committed, and have quick reforms to deter Eve from succumbing to temptation again. Let the Devil run amok, that’s okay.

Just as the public servant is tasked with the moral responsibility of protecting public resources, shouldn’t it be our moral responsibility too, to not abet the breach of such responsibility? I guess that is a whole different debate how we as an increasingly “developed” society demand our Rights, but shirk off our Duties.


Basu suggests that if the proposed law comes into existence it will also make it difficult for the serial-briber to operate. It moves ahead on another preposterous presumption that the serial briber now will have to weigh the cost of:

a)      Loss of credibility amongst the corrupt circle of officials with whom he lobbied with to get his plans to fruition; against

b)      The gain of getting his money.

I certainly don’t think so that Basu is ignorant of the modus operandi for such shoddy deals, with a new category of agents coming into effect to safeguard the high and mighty, in exchange for some big compensation for the big sacrifice they’re willing to make – the ubiquitous fall guy. All our notorious Prime Ministers have survived their terms by ‘activating’ a sleeper-agent whenever it suits their interests. Manmohan Singh would himself be the greatest case-study on this subject.

Basu’s game theory can be turned on it’s own head, where he says that human ingenuity is so great that no matter how many plugs we put into to stop corruption, people will almost invariably find a way around it. If the instances of high-level bribes continue plague the system, it will be inspite of this law, not despite it.

Notes – 

1. See Kaushik Basu’s paper on “Why, for a class of bribes, the act of giving the bribe should be treated as legal” –


2. Unblanking the Tapes, Outlook cover-story –