TIOL-DDT 629 · Wednesday, 6 June 2007 · story 3 of 3

Laws help corruption?

++ one of the basic causes of corruption in our country are the laws themselves. To begin with, it is the laws, rules and regulations which are twisted and exploited by the corrupt elements to enrich themselves.

++ In fact behind practically every corrupt act, you will find some rule or regulation which is explored by the corrupt public servant. The permit licence raj introduced after independence probably provided a very rich soil for corruption to grow.

++ The second method by which the laws have contributed to corruption is the purely technical approach focusing on the letter rather than the spirit of the law. For example, in the Hawala case, people who confessed publicly that they had taken money have been discharged because confession alone was not enough to prove the guilt in the court of law.

++ if a corrupt person takes a bribe of one crore, he can use that money itself to engage the best lawyer and quibble all the way to freedom and be a respected member of our society.

++ The classic example of law protecting the corruption at the highest level is the interpretation given to Article 105(2) of the Constitution by the Supreme Court in the Jharkhand Mukti Morcha case to the effect that even though Members of Parliament are public servants, if a Member of Parliament receives any bribe for matters connected with his functions within the Parliament, he will not be guilty because of the parliamentary privilege and the basic structure of the constitution. The net result, however, is that we are not only the biggest democracy of the world but also the only democracy where a Member of Parliament technically can accept a bribe for a work being done within the parliament.

++ one of the reasons why India is corrupt is because it is a land of too many laws. What we have today is a society where there is the implementation of the law and not the implementation of justice.

++ Black money in India is like God. It is everywhere.

++ Government has made valiant efforts in the past to tackle the problem of black money mostly in the form of amnesty schemes. The net result of government's effort has been more like trying to use petrol to put out fire. The latest was the VDIS scheme which added insult to injury by providing for the black money hoarders, a soft 30% rate of taxation (which in effect was only 10% according to knowledgeable experts), as against the 40% which honest tax payers had paid.

++ The Customs and Excise Act provide excellent opportunities for corruption because of the ambiguity and discretion at different levels to decide what should be the applicable rate. It will be much simpler if there is an approach of zero discretion by precisely indicating the rate that is applicable for a particular product or services. In fact advance ruling must become a regular part of the system so that well before industrialists import, export or move goods out of the factory, the precise rate is known. For instance, if we take a product like KitKat, is it a chocolate or a biscuit? Many would say it is a chocolate. I am told it has been adjudicated to be a biscuit whereby there is considerable saving for industry and government loses revenue.

++ So far as judiciary is concerned, the Brahmastra or the shield of 1971 Contempt of Court Act protect them. Any attempt at even making objective criticism runs the risk of person making the comments being held up for contempt of court. Truth is no defence against judiciary.

++ Our legal system now is more oriented to protect the corrupt rather than punish the guilty.

++ Unless we bring in drastic change in the system, we will continue to have an environment in India where the laws will be implemented but not justice.

- from former CVC Vittal’s speech six years ago.