Should we remain silent spectators ?
By Reeta Sharma

WHEN people say that corruption is no more an issue, it is an expression of frustration and self-resignation. But the reality of overwhelming corruption present in our lives has not yet actually dawned upon us in all its manifestations.

People already know that the milk we drink could be synthetic, that our dal could be coated with synthetic dyes and colours, that other foodstuff could be adulterated, that our infants could be using spurious milk powder, that hospitals, government departments, markets, banks, and all types of institutions are infested with corruption. Yet, we like to believe that we are still safe and that we are neither a part of it nor are affected by it. Are we not amazing characters?

From all available accounts, corruption has been rampant during all stages of our history. When India was divided under various rulers or during the Mughal invasions, its people had a taste of corruption. All the palace intrigues, conspiracies, promotions, favours etc were primarily the outcome of corrupt means. From those periods to the after-effects of the World Wars, corruption has been a fellow-traveller. The only difference is that in the good old days it rarely touched an ordinary citizen’s life directly. Also, that those who wished to lead an honest, corruption-free life could afford to do so. Corruption had not become all-pervasive.

Professor Syed Hussain Alatas, National University of Malaysia, has recently published a book titled, Corruption and the Destiny of Asia. He has devoted one full chapter to India. He observes, "There is hardly any corner of Indian life which has not been defiled by corruption".

He also points out that the donations and offerings at all places of worship are mostly embezzled systematically. He quotes the incident of the disappearance of 40,000 acres of land which belonged to the Brihadeswara temple in Thanjavur, Tamil Nadu. He has further commented, "All sections of government bureaucracy have been infected with corruption. Then also that a large number of smugglers help the political parties in elections". We don’t disagree with him, do we?

From the national scene, let’s move to the scene next-door. What prompted me to write this piece is an e-mail received by the regional CII headquarters at Chandigarh. The writer, who has refused to disclose his identity, appears to be a young man who runs a small-scale industry somewhere in Haryana. The e-mail expresses his disenchantment and utter frustration in running his unit in the face of corrupt practices prevalent all around him.

"Many government agencies and several associations like yours teach and preach to youngsters to move into the direction of self-employment instead of hunting for a job in the government or in the private sector. One in a thousand picks up the courage and pools in personal resources to venture into (setting up) a small-scale industry with all his/her ideologies intact.

"Five to ten years down the line, he finds his own enthusiasm and capital diminishing. (The writer here laments that SSI units are soon declared "sick" and taken over by the government and put on sale through auction.) As a leading industrial and a business association, would it not be appropriate for you to set up a panel to highlight these problems so as to save future young enthusiasts from ruining themselves?

"I am enclosing a list of the main culprits (read causing these situations and trends). We are a small-scale modern unit and (with great difficulty) have been able to pull on for the past five years. All my personal resources have been invested in it and the entire property pledged with the bank. (The recession in the market does not change or alter our aforementioned situation and the ground reality in anyway). The culprits (mentioned above) do not care about the loss of a company as long as the machines are running. They must collect. They are equipped with such powerful arms of the law that they can afford to indulge in arm-twisting. We are forced to generate unaccounted money to pay them. We cannot disclose our identity. If we do so, even the Prime Minister of our country and all the chambers like yours would not be able to save us from these sharks. We pay nearly Rs 18,000 a month to JEs, linemen, SDOs, power station in charge, telephone persons, excise people, sales tax officials, provident fund people, ESI, labour, fire and safety department, police, weight and measure officials and labour welfare officials. (The writer has given the exact break-up of each payment which totals to Rs 17,625. In addition, he says that he is expected to give gifts to bureaucrats and all these people on Diwali and New Year).

He ends his letter saying, "There is no one single department which can be called honest in its dealings. Corruption is 100 per cent".

Is this gentleman the only person who is suffering these high levels of corruption? If we were to look around ourselves, there would not be a single exception. We are all trapped in the vicious circle of corruption in one way or the other. I shall like you to take a look at the SSI sector in Punjab and the role of banks in "promoting" it.

There are over 2 lakh working SSI units in the state. The fixed capital invested in these units is about Rs 5250 crore. The working capital (mostly worked out on unrealistic grounds) is expected to be provided either by banks or state funding departments. As per the date available, the banks have contributed approximately Rs 2000 crore and the Punjab Financial Corporation has pumped in about Rs 850 crore.

The role of banks in this regard is significant. The banks have collected Rs 31,000 crore as deposits from Punjab. Despite such huge deposits, the banks have failed to establish themselves as efficient and honest promoters of SSIs in the state. Of the 2.10 lakh SSIs in Punjab, only 2,000 have been declared sick. In sum, out of the Rs 2,000 crore funded by the banks to SSI units, only Rs 62 crore is stuck in sick units, which amounts to hardly 3.1 per cent of the total investment. Why, then, have the banks not played their role along expected lines in a state which has not let them down?

Interestingly, promoters of SSIs claim that there is not even a single case of fraud faced by any bank in this state. Besides, they point out, that the methodology adopted by the banks to establish the viability of an SSI unit depends directly on an entreprenuer’s capacity to please the bankers. To substantiate this they said that of the 2,000 SSI units declared sick, only 60 (.3 per cent) were found viable for rehabilitation. How come all the 2,000 are not viable? These very banks had earlier declared them viable and thus legitimately funded them. They accuse that the banks are more keen on encashing the collateral security in such cases than helping the already frustrated and demoralised entrepreneur.

Many a promoter of SSI units accuse that the banks charge the highest rate of interest and provide the most inefficient services. There is overwhelming resentment against the banks and yet the promoters are terrified of disclosing their identities. " Bankers today have been given the liberty to fix interest rate as per their risk perception of the proposal. This freedom has been grossly misused by bankers. All the banks are charging 3 to 6 per cent. This exploitation is primarily because SSIs have no other avenue of getting finances. In addition to charging such inflated rates, the SSI units pay up to 3 per cent of the total loan towards various charges such as discounting charges, guarantee commission, cheque book charges, statement of account charges, cheque returning charges, DD charges, telephone charges, godown inspection charges, search report charges, processing charges, etc.

But inspite of paying such penalties of being an SSI, this sector receives inefficient service. Collection of outstation cheques takes three to four months, discounted ones remain in the drawers of clerks/officers without being posted to their destination. The personal treatment to the entrepreneurs is most humiliating and they are given the lowest priority.

I have touched on just one part of our life. It’s time to pause and introspect as to which is that part or field of our life where corruption has not crept in. Should we remain silent spectators?

This feature was published on October 2, 1999