It's the governance, stupid.

In both the 2G scam and CWG scam - the biggest source of public anger against government - the corruption in my opinion was an important but side issue. I believe the biggest issue was incompetence or bad policy making. I believe our anger is more than justified but that anger is misplaced. In both the CWG and 2G cases the corruption part is just a small side issue. For instance in the 2G case the biggest lose was caused by the daft policy decision of government to follow the same prices that were used in 2001 to give away telecom spectrum. They could have continued with first-come-first-serve policy but could have calculated spectrum prize with prevailing market conditions in mind, which would have resulted in significant rise in spectrum prices without the need for the telcos to raise tariffs. This was a daft policy making but it cannot be termed as corruption unless it is proven that there was some quid-pro-quo between new telecom entrants and govt. for keeping the prices at the 2001 level. The little corruption gig that Raja had going on the side where he did not follow govt's policy of first-come-first-serve entirely and did favors was the real corruption and while it was bad the real damage was done by the bad policy making in determining spectrum price rather than corruption.

Same way in CWG it is even more clear the incompetency of Kalmadi and gang and the whole games village fiasco was the real loss because it effectively defeated the whole purpose of the exercise which was to shore up brand India abroad and energize the locals and increase their confidence. It achieved exactly the opposite. The corruption part frankly nobody knows how big it was. It seems we have decided that there is some corruption that has taken place and are searching for it desperately. While the bigger issue of why the DDA and Emmar-MGF didn't finish the games village on time and with satisfactory quality (and didn't even seem to be aware of the state of condition until athletes arrived) is forgotten, we are chasing small scams, which does need to be investigated, but the incompetence at various levels that hurt us the most also need thorough investigation.

Would we have cared about the scams in CWG if the actual events had gone off perfectly and be hailed as a great success around the world? Would we be searching for scams had the headlines world over been about successful games and India's arrival at the world stage? Similarly would we be so much outraged about Raja's scams if the govt. had priced the spectrum more aligned with the market conditions? Perhaps we should have in both the cases. But the point is ultimately it is the incompetence and bad policy making or lack of good governance that hurt us the most. And our outrage should be most about that.

You may say why is it important, the govt. is getting flak regardless whether be it for corruption or bad governance. Because if you don't know what specifically ails you, you end up getting the wrong medicine. Vast populace of India doesn't know the nuances of 2G "scam" and CWG "scam". So while we did need anti-corruption crusade like Anna's because of other scams like Aadarsh and mining, we also need to improve governance by voting better people in and making them accountable. And if we have better more accountable and more responsive govt. then the corruption is naturally taken care of.

Reforms Vs. Lokpal.

Lot of people has said that Lokpal is not the answer to our corruption problem. The answer to solving our corruption problem is reforms and more reforms, market competition, transparency, accountability. And I agree largely with that hypothesis, but the problem is we already have in many places all those things and in certain areas we have reached a limit to how far we can go with just reforms. Let’s look at certain examples of recent corruption scandals.

For example the best way to avoid corruption in telecom sector is to auction away the spectrum first by the government, give telecom license to competent serious parties and then let the competition take over and market forces will make sure that consumers get the best service and lowest tariffs possible because of the competition. And we already have that. The fact is the telecom sector in India is the most liberalized and open sector with already minimum government interference and that too only restricted to giving out spectrum and telecom license. The whole 2G scam in so far as the loss of $39 billion is concerned is that government didn't follow the process of auction. But the problem is can we be rigid about following the auction process each time?

Now we can have a strict policy that there must be auction and bidding every time government wants some service done, whether building roads or giving spectrum for running telecom operations, but the problem with this is the system becomes too rigid. There are instances when the auction is not the best practice like when the first phase of telecom licenses were given out. At that time the market was not big enough and auction would have meant that the price of spectrum would have gone too high for the market at that time and which would have meant high telecom rates which in turn would have meant much slower telecom penetration in the country.

In the telecom sector we have minimum possible government interference except when giving out spectrum and license, we have transparency because we know how much exactly each telecom operator paid for the spectrum, we also have accountability on one person that is telecom minister for forming policies and making sure policies are followed properly. And precisely because we did have all these things in place the corruption was restricted to just one place and we know where it happened, how much was the amount, and who was the responsible. The fact is even with minimum government interference there will always be interaction with government like here in giving out licenses and spectrum in the beginning. Also having transparency in the process and accountability to one person only meant that we know where exactly corruption happened and who was responsible. But if that person owing to political power makes sure there is no investigation against him and nobody can even remove him then there is not much use of that info. We cannot do anything about it despite all these reforms in place. If not for media pressure he would still be telecom minister for years and might have gotten away with it. That is why here we need independent lokpal to look out for such cases and investigate and then punish such people.

But at least telecom sector provides for market competition there are sectors where market competition is not possible like mining sector or road construction sector.

Let’s look at the mining sector, which is another area with a huge problem of corruption. There are a certain reforms that can be done to solve the corruption problem here. First of all earlier the problem was the royalty that the government charged was too low and was based on the old price so first thing to do there is to link the royalty to the market price so royalty keeps moving with the market price. Second thing that can be done is to make auctioning compulsory to give out a particular area to be mined, which would mean that mining rights would go to the highest bidder and government would get the appropriate amount of compensation for the mining rights. But here too this kind of reforms can do only so much.

We have already seen how ministers and local MLAs involved can tinker with the auctioning process like changing the date of submitting bid early to help a particular firm, disqualifying someone on a technical ground, or putting up conditions like only local firms can bid and so on. Then after somebody has been given license to mine that particular firm can also engage in corruption by mining more than stipulated amount, mining in areas other than what you have permission for, giving royalty on only half the amount and taking the double load on trucks illegally by bribing local officers. So as you can see there are many ways to cheat here. There can be no market competition here. Transparency and accountability also doesn’t help if everybody involved becomes corrupt. 

There will always be interaction with government, however small, where there is scope for corruption, individual companies will indulge in corruption in connivance with local police and mining officers as well as local MLA and MPs. Transparency and accountability doesn’t help if the whole law enforcement agency has been compromised like the corrupt police and mining officers who look the other way and nobody is there to monitor these things. This example too proves that we need strong lokpal at the center and lokayuktas at the state level to keep an eye out for such kind of corruption.

Reforms alone can only work when a sector allows for competition and choices to the end user like in the case of telecom sector which forces everybody to be most efficient and cost effective, but as we saw here that too is not enough. There can be corruption in little government interaction that there is. And other sectors where competition and consumer choice is not available has no hope in hell, like mining and infrastructure sector. People do not have choice to change the company that is mining or stop the exploitation of environment. There is no switching over to someone else. Same in the road construction sector. Once the contract is given by the government only they can regulate quality of work. If the road that is built of poor quality consumer has no choice but to complain to the police, who in turn might be powerless with the road constructor and local MP or MLA conniving to make illegal money. In such case we have to have independent strong ombudsman to keep an eye on such things. There is no other way. Market reforms don’t apply everywhere and even when they do still there is corruption because government will always be involved in some ways to regulate and to at least hand out licenses initially. Transparency and accountability only tell us that there is corruption and who is responsible but if nobody has the power to investigate and prosecute then there is not much use of that info, especially when concerned politicians are getting elected based on identity and other things.

Middle Class Fantasies

The year is 2011 and it is almost Diwali. Government is planning to finally pass the Lokpal bill and present it to the nation as a Diwali gift. Speculation is rife on how the final bill is going to look like. When the bill eventually passes it is a compromise between different parties and actual bill is a lot closer to the NCPRI version of the bill. Lower bureaucracy is included but under the CVC, however, Lokpal can monitor CVC on this. Citizen's charter and grievance redressal is to be brought in with a new bill and Lokayukta decision has been left on to states with just guidelines given to states on model Lokayukta based on Karntaka's system. Team Anna has been told to campaign with various state governments to make them individually pass Lokayukta bill based on center's recommendations. There is lot of acrimony and noise from Team Anna regarding the final bill about how it is a betrayal and there is talk of another agitation but eventually they agree to the government bill and wisely decide that this is much better than having nothing.

Now the year is 2013 and it is March, Team Anna has been working for over a year with various state governments to try to make them pass Lokayukta bill with limited success. Lot of states like UP, Guj, AP, MP, TN refuse to pass the Team Anna version of bill or refuse to make any changes in the existing Lokayukta system in the state. Some states like Mayavati of UP even refuse to talk to Team Anna. With prolonged frustrating discussion and battle in every state over mechanism of appointment of Lokayukta to jurisdiction of Lokayukta to powers given to Lokayukta Team Anna grows ever frustrated with the system. Also earlier their attempt  at bringing in electoral reforms with agitation in August 2012 had been met with limited success. This time the government had decided to not listen to them at all and refused to even talk with Team Anna despite weeks of agitation. This time Team Anna had smartly decided to go on a padyatra leading to Delhi instead of hunger strike which was losing its effect. Increasingly belligerent and angry government only relented and agreed to talks with Team Anna when the padyatra with approximately 25,000 people was about to reach Delhi and there was an IB report that crowed could go out of hand. In the end government gave only promises to Team Anna of speeding up the bill to weed out criminals from the election process and to make funding for elections more transparent. 

It is May 2013 now and it is clear to Team Anna now that government is not going to cooperate with them and their strategy of agitation from outside for every kind of reform and change is not working. There is increasingly talk among civil society, media, and other influential personalities of the need for Team Anna to join politics if they wish to bring in any kind of meaningful change in the polity and reform the system. There is a rumor going around that Arvind Kejrival and Kiran Bedi are seriously thinking about standing for election in 2014 but Anna is not in favor of it. Around this time a huge defense scam breaks out and this time PM is directly implicated to have known all about it and not done anything about it. There is a huge uproar in parliament and opposition are now directly asking for removal of PM and some even calling for fresh election. Parliament doesn't function for weeks as opposition demand removal of PM. There is a talk of Rahul taking over and Manmohan stepping aside. But eventually congress decide against this and call for fresh election to be held in September in five phases.

Eventually the rumor turns out to be true and Arvind and Ms. Bedi openly say to media that they are thinking of contesting election and forming their own party. First it is rumored that Anna has agreed to support and campaign for Arvind and Ms. Bedi from outside but then is eventually convinced to actually stand for election himself. Eventually Arvind Kejrival announces in a press conference that he is forming his own party and they are going to contest in 150 parliamentary seats.

As soon as Team Anna announce that they are entering politics attacks start coming at them from left, right, and center. First charge at them leveled by some congress MPs and Lalu is that this is what they were always after. They always wanted power. Lalu declares that "bhrastachar to bahana tha. In logo ko power chahiye tha. Power ke liye dikhava kar rahe he. Mene bola tha yahi first time 2010 me hi. Me pehechan gaya tha in logo ko. Ye to power ke liye sab kuch dikhawa he bhai." Team Anna refutes and says that they are in it to make a genuine change and not in it for power or money. Other attacks start coming in soon. After the candidates list is announced by Team Anna with inclusion of some leftist activists, BJP smarting from repeated snubs by Team Anna cries foul and calls the Team Anna party to be the official political party of the Maoists with anti-national agenda. Attempt is made to separate middle class from Team  Anna by repeatedly saying that Team Anna is full of Maoists sympathizers and and anti-national elements. Also Anna is forced to declare publicly that he has no intention to bring in prohibition in the whole country and it was a specific solution for the local problem in his village.

Team Anna meanwhile runs a beautiful campaign somewhat like the Obama campaign with college kids and internet activists in huge number voluntarily campaigning for them tirelessly. College kids and middle class professionals in cities go to knock on door to door to campaign for Team Anna. Every rally organized by Team Anna draws in thousands of spontaneous crowds without any incentives especially in the urban areas. There is a huge battle taking place on on the internet between BJP supporters on the internet and Team Anna supporters (Congress has virtually no presence on the net). Twitter is awash with campaigning and fighting from both sides. BJP supporters dig out lot of dirt on them, most of it located to the Maoist connection and some old corruption cases against some candidates. They also point out the fact that Team Anna has stopped saying Vande Mataram in an apparent bid to woo the Muslim voters and how Team Anna's party is going to be same like Congress with minority appeasement and corruption. Media too questions what is the vision they have of India, what foreign policy they intend to pursue, what is their strategy to combat Naxal menace. The question about Naxals is asked again and again and whether they really have any sympathy towards their cause or are they going to go hard at them. Arvind and Anna finally clarify that they do not have any sympathy or support for the Naxals and that their methods are completely wrong. They (naxals) should join mainstream politics like us if they want to bring in change, but they also clarify that military tactic is not going to win this war for us, development work in the tribal area is the key. Still opposition keeps calling them Maoist sympathizers.

The next attack on Team Anna comes from the left about the funding of their election and how they are allegedly funded by foreign governments and big corporations to further their agenda. BJP and congress also jump in declaring "public deserves to know where the money is coming from". Arvind gives media persons the URL of his websites where he has detailed the source of his funding and terms his as the only political party in the history of India with such transparent funding policy and dares Congress and BJP to do the same. Campaign is going very well for Team Anna though intellectuals are still skeptical about the Team Anna's chances in the election and most saying they are not likely to win any kind of significant number of seats. The media has dubbed this election as the battle between Urban India with the Rural India, the battle of New India with the old, battle between India and Bharat. Media has so far been sympathetic to Team Anna. Internet Hindus RT each other on how media has devoted 56% of their time on Team Anna's party. Some intellectuals accuse media of being biased too. Team Anna has also used media brilliantly using every kind of symbolic opportunity. Anna himself draws huge crowds but also his full speeches are telecast live on TV with great enthusiasm and shouting from the crowds. Team Anna uses technology brilliantly too with giant screens being set up in many cities for people to come and watch Anna speeches and cheer for him. Intellectuals are generally ambivalent about Team Anna but do fear the leftist leaning ideology of the party and fear stalling reforms and anti-industry policies. But they conclude with their characteristic smugness that Team Anna are not going to win much to matter and declare that drawing crowds in urban area is one thing and winning election is quite another. 

Just as the crucial second phase of polling is nearby the first media gaffe of Team Anna occurs when a prominent Bollywood celebrity (who were till now smartly kept away or controlled by Team Anna) campaigning for them says something derogatory about the congress but more importantly about country itself with everybody-in-the-country-is-corrupt rant which draws widespread criticism form congress and media for bad language and for being unpatriotic. At the same time India TV comes up with a footage of Arvind and Kiran sitting on a stage in a Maharastra village with a plastic flag kept nearby touching the ground and passerby even stepping on part of it to walk. Everybody jumps on the controversy. Incredibly Hindi media and some part of English media turn against Team Anna suddenly. They accuse Team Anna of being arrogant and to have gone too far. Arvind and Kiran too appear increasingly angry with certain section of media and constant silly controversies. It appears that the campaign is suddenly going horribly wrong. Intellectual debates on English media conclude that with this controversy so close to election it is going to hurt them and "they are not going to win even 5 seats with such attitude". 

Eventually the polling ends and everybody awaits with bated breath for the results. So far the race is still between Congress and BJP and Team Anna is still thought to win no more than 10 seats at best. Visibly relaxed Kejriwal now smiles for camera and says we are going to win much more than that, but so does everybody else. Just as the last phase of poling is over the opinion polls are out and they all declare BJP to likely emerge as single largest party but not outright majority. But most importantly most of the opinion polls give Team Anna anywhere between 20 to 40 seats and dub them possible game changer. BJP suddenly start sweet talk publicly about Team Anna for possible post-poll alliance and so too some congress members. Animosity is gone. Team Anna has gone through their trial by fire and now are accepted serious parties.

Few weeks before Diwali results are out and to everyone's surprise Team Anna wins as much as 53 seats and emerge as second biggest party in 30 more seats. Their strategy of concentrating on Gujarat and Maharastra and urban areas in other states pays off big time. They become the single largest party in Maharastra almost sweeping the state. The whole Vidarbha region is wiped clean by them, particularly area surrounded by Anna's village. Anna wins with the record 98% of votes in his constituency. In Bombay city too they win significant number of seats, except shivsena stronghold of Thane and some other areas. NCP is severely depleted with constant attacking of Pawar by Team Anna for corruption and inflation caused by his food ministry. Team Anna also sweeps Delhi. Many other urban areas are also won by Team Anna. In Gujarat Team Anna becomes the second largest party with Modi winning by just one seat and Congress being reduced to just one seat. Face of smiling triumphant Arvind, Kiran, and Anna is seen on all news channels whole day with congratulations and smiling interviews with some media behaving as if they have won the election. Media declares that "New India" has won. Everybody forgets in this commotion that BJP has emerged as the single largest party with congress suffering major loses, particularly in north. Divide of urban middle class vote hurts BJP but they still emerge as single largest.

Ultimately Team Anna refuses to support BJP to form the government citing communal nature of BJP and chooses to remain in opposition. BJP forms the government with support of other allies like AIDMK. But Team Anna do mange to get some good work done by having significant numbers in parliament. As soon as new parliament session starts Kiran Bedi comes up with private member's bill for police reforms and despite much opposition to losing control over police by the politicians the bill is passed with some compromises. Eventually other reforms are pushed by Team Anna. BJP gives good support to Team Anna in the background and help them pass these bills. Decentralization of power is pushed by Team Anna with direct election of mayors of the cities by the people with power and accountability for all the needs of the cities like roads, water, sanitation; a campaign promise to middle class voters by Team Anna. In villages  Panchayats are also given more power and accountability is fixed on them for certain village duties.

Eventually the real game changer comes in 2014 when Team Anna decides to contest Maharastra assembly elections and emerge as the single largest party with congress-NCP being second. Anna eventually transforms much of the rural Maharastra the same way he transformed his village all those years ago and farmers suicides in the Vidarbha becomes the thing of the past. Decline of Mumbai is also halted with builder-politician nexus being broken and much improved civic response. 

And thus India became three-party democracy from being two-party democracy. In the future Team Anna party becomes secular right party of the middle class.