Thursday, April 7, 2011

Corruption and Black Money:The Ultimate Solution

Various scams like CWG scam, 2 G scam, Adarsh Housing Society scam and the cases of huge wealth accumulation by Hasan Ali, Shahid Balwa and many others are just the tip of the iceberg of this menace.After engaging all the enforcement, vigilance, investigation and judicial authorities of the country we are still not sure as to what will be the outcome of this. These are just a few isolated cases of something which is rampant in the country and out of which only these few have come to light somehow. In fact the the scale and magnitude at which corruption and black money generation is going on in this country may be tens of thousand times the combined scale of these scams.
The colossus effort involved in unearthing corruption and black money and the time frame in which something can be done can be gauged by the number of agencies involved, number of persons to be interrogated and the amount of raids carried out in dealing with these few cases. For Commonwealth Games with a budget of few thousand crores, top bureaucracy, CPWD, DDA and other officials were interrogated and many times raids were also conducted on their premises. Imagine if similar problems of CPWD, DDA, and their counterparts in all states and other ministries like railways, defence, road transport and highways etc. are to be dealt with, where the construction and infra development budgets run into lakhs of crores of rupees. The quantum of corruption money and black money generated in this activity can be easily assessed through a small basic calculation. A meagre 5% extra derived from the rates, 5% from the measurements and another 10%  from relaxation of specifications and material quality and quantity used makes available a whopping sum of Rs 50000 crores as the loot being shared between contractor, political bosses, bureaucracy and technical personnel involved in various facets of  the activity. It will be worthwhile to add that these percentages are  almost impossible to detect and prove but are a routine in these activities. The only way they can be checked is through strict monitoring of assets of connected people. Similar loots are going on in excise and taxation, income tax, food subsidy, midday meal scheme. Imagine how difficult it is to keep a check on millions of people involved in this loot. Even if we increase our enforcement staff and judiciary tenfolds we may end up by reducing this menace by a small 5-10%. Therefore some innovative and sincere methodology should be thought of in fighting this demon.
The only viable solution seems to be through linking of all immovable and movable assets with UID number. These assets will include all commercial and residential property, all agricultural land, gold and jewellery, all vehicles ( commercial and private ), all luxury items, DMat accounts, investments in commodities, banks and mutual funds etc. etc.. Along with these linkages the following steps are also a must.
  • Government should have the power to acquire about 5-10% of real estate deals in the secondary market by paying 10% premium to the declared value of the deal.
  • Practice of power of attorney in respect of real estate should be abolished.
Once the investment avenues of ill gotten money are plugged, we can see a ray of hope in improving the living standards of Indian masses at a much faster rate.