How do people cope with the unsatisfactory state of public services? That depends on who you are. Some observers believe that the elite in Indian society manage to get most of the services they need either through influence or money. We have evidence (presented in a later chapter) showing that the poor pay a larger proportion of their income as bribes than the rest of the population. Those who can exert influence need not go through such travails.

Influence can take many forms. People with good connections take help from politicians or bureaucrats to get out of turn allotments, approvals, etc. Members of Parliament, ministers, and other elected representatives have special quotas of telephones, gas connections, etc., that they can distribute at their discretion. Political support to parties during elections may be quid pro quo arrangements from which certain individuals or groups who provided the support tend to benefit. Friends, relatives, and other kinship networks get special treatment in the allocation of services.

It is customary for civil servants to institute rules for getting preferences for certain services. In capital cities, senior public officials are assured of essential public services like power and water. Their repair needs are attended to through special arrangements. Similarly, they may get preferences in the allotment of land for housebuilding under certain schemes. The special preferences they enjoy are undoubtedly one reason why some public officials cling on to their government supplied houses and perks even after retirement. In the process, they also become insensitive to the problems with public services that ordinary people face. When the priority is to look after the needs of the few in authority and others connected to them, the motivation to improve overall performance or to modernise the system for the general public is absent. The dissatisfaction of the vast majority of people who approach public agencies to get services or to solve a problem gets exacerbated as a result of these practices.

At the root of the different manifestations of corruption discussed above lies the malaise and corruption in our political system.
Business and industry are also customers of the same public agencies referred to above. In addition to the infrastructural services and facilities that they use like other citizens, they also need a variety of approvals and licenses from many specialised agencies. Fortunately, recent economic reforms have rationalised or reduced such approvals at least at the level of the Central Government. The state and local level clearances and permits, however, continue as before except in a few states that have tried to streamline their procedures. Business and industry complain frequently about delays, non-responsiveness, and harassment at state or local levels. But how do they overcome these problems?

Influence probably plays a limited role when business runs into hurdles with the bureaucracy. But in major transactions between business and government, the belief is that bribery is the most potent lubricant. Many of the "scams" reported by the media and the "sting" operations carried out by investigative journalists are the basis for this belief. Of late, systematic studies have begun to shed light on this murky phenomenon, though there is no reliable quantitative national estimate of its severity and spread.

It is naïve to conclude from this that if the interface between public agencies and the people is improved and made more efficient, corruption can be brought under control. At the root of the different manifestations of corruption discussed above lies the malaise and corruption in our political system. The murky financing of political elections, the doubtful quality of many electoral candidates and the non-transparent ways in which many political parties function have no doubt contributed to the rising spiral of corruption and the reluctance of political leaders to set in motion a root and branch reform of pernicious corrupt practices. When candidates are encouraged to contest, spending money on which returns have to be reaped while in power, they will no doubt have a strong incentive to sustain and expand the scope of corruption. In our cities where citizens can have a ringside view of democracy at work, elected corporators are directly involved in the allocation of public works contracts and other purchases. These are lucrative sources of income for them and a major reason for many of them to contest elections.
Related :Read about the recent SC Verdict on electoral reforms.

A Public Affairs Centre (PAC) study on the progress of industrial projects in Karnataka shows corruption as the primary hurdle encountered by the investors who had interacted with various public agencies. Based on the feedback from foreign businessmen, Transparency International (Berlin) has ranked India high on the list of most corrupt countries in the world. Admittedly, this is a partial picture as foreign investors constitute only a very small segment of business in India. On the other hand, it confirms the view that the scope for and severity of corruption increases directly in proportion to the stakes involved (e.g., size of investments) and inversely with the strength of local influence and connections.

The difficulty in assembling credible data on corruption can be explained largely by the nature of this phenomenon. In terms of its mode of operation, corruption falls into three categories: collusive, extortionary, and anticipatory. Collusive corruption is when the customer (businessmen, citizen, etc) and public officials colluding to give and take a bribe because it is in their interest to violate rules or misrepresent the facts. It is difficult to say who initiates the process, but there will be a consensus on the actions involved. It is collusion that makes it difficult to get to the bottom of the phenomenon. Extortion is invariably one sided, but the customer may remain silent for fear of retribution. Anticipatory corruption is when people are willing to pay a bribe even without any pressure from the other side. Many old communities have a tradition of offering gifts to their rulers or those in authority who can do them favours. Those who come from this tradition pay a bribe in anticipation of the service or benefit they are seeking. They do this willingly and are unlikely to complain about the practice as they do not see anything improper or unethical about it.

At the root of the problem is the failure of many public agencies to plan and organise their services in a way that will minimise the need for their customers to go from pillar to post. The lack of clear guidelines and information on services, lack of time deadlines, lax supervision and monitoring of staff performance, and absence of remedial and appeal mechanisms exacerbate the problems that people face in public offices. Many who have experienced these dysfunctional operations prefer bribing in anticipation than paying a heavy price in terms of delay and harassment.

Citizens pay the taxes, but public hospitals are known for the indifferent services they provide to the common folk. Yet, they offer "VIP" rooms and treatment for high level officials and and the well connected at modest rates.
It can be assumed that those who experience extortionary corruption are the most likely sources of information on corruption. This is borne out by the results of the surveys reported later in the Holding the State to Account. The vast majority of those who have given data on corruption are those who also claim that bribes were demanded of them. Business and industry typically have service agents who deal with the required public agencies on behalf of their clients. Agents, sometimes called "consultants", are invariably the conduits through which money is passed on to public officials. In fact, the extent of the use of such agents for transacting business with government and the amounts of expenditure incurred through them could give some clues on the pervasiveness of corruption in the business sector.

Irrespective of the mode of corruption, however, the consequence of this practice is to make services more costly for the customers, misallocate resources, violate the rule of law, and reduce transparency in government. Misallocation of resources results from improper and inequitable public decisions, with some of the resources flowing into private pockets.

Corruption of the "grand" variety involves only a few people. It receives much publicity because of their sensational value and the opportunity it offers for bashing political leaders and other public figures. On the other hand, the "retail corruption" that ordinary citizens face when they seek services from the different public service providers results in much harassment and avoidable costs to numerous people who can least afford them.

Corruption corrodes the values people cherish and projects the state as predatory and unjust. Instead of being a lubricant for efficiency as some economists have argued, corruption tends to undercut the legitimacy of the state and make a mockery of the rule of law. What is most disturbing is that influence and money together give the small elite groups in society an unfair advantage in their access to public services at the cost of the vast majority of the population. Public hospitals, for example, are known for the indifferent services they provide to ordinary citizens. But they offer "VIP" rooms and treatment for high level officials and other well connected persons at modest rates. Citizens pay the taxes, but only a few are able to get the best facilities available. In brief, a predictable consequence of corruption is the diversion of services and staff attention from large numbers of people who are unable to influence or bribe the officials to those who can.

It is often argued that poor salaries in government explain the pervasiveness of public corruption. But this is at best only a partial truth as well paid higher level officials and affluent politicians are often behind most grand corruption cases. Salary reform by itself is unlikely to compensate for these gaps and weaknesses. Other important reforms and reinforcements will no doubt be required to control corruption. The tolerance of corruption in the society at large, inadequate legal frameworks and law enforcement, and the neglect of internal organisational reforms are among the more basic issues to be addressed.

Series : Why are our Public Services Unsatisfactory?

(Next: IV)