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Saturday, January 29, 2011

Corruption - Lead, Follow or Get out of the Way


Hey all, after a long break - i have come up with a blog here. Hope it serves you all with some food for thought

Corruption - is probably the most talked about topic all over India right now. One usually understands when a topic becomes a hot potato amongst people - when everybody has a opinion on it. Everyone you meet tends to give gyaan about corruption. Most of us i feel dont understand the root cause for corruption

Corruption in very literal terms means deviation from ideal. Deviation from moral grounds is generally attributed as corruption. One thing people fail to understand is - in India, people want corruption. Ya, you read it right !!! But the root cause of this kind of behavior i feel is somewhere else. Its in our upbringing, its in our way of living. We, Indians from childhood have been made to believe that - it's ok to cheat if you are looting the government. Do check the income tax rates in 70s and 80s - its mind-blogging.


Tax rates in India
How has personal taxation evolved in India? 
If one were to look at the table on personal income tax rates in India, the trend is quite shocking. Imagine those who lived in the seventies paid up to 93% of their income in taxes! And to think of it, we complain that we pay high taxes. Anyway, with the continuous rationalization of tax rates, India is only moving closer to global standards when it comes to tax rates.
Year
Exemption limit (Rs)
Number of Rates
Entry  Rate (%)
Peak  Rate (%)
Peak rate income (Rs)
1949-50
1500
4
4.69
25
15000
1955-56
2000
5
4.93
26.25
15000
1960-61
3000
7
3.15
26.25
20000
1970-74
5000
11
11
93.5
200000
1974-75
6000
8
13.2
77
70000
1980-81
8000
8
15
66
100000
1985-86
18000
4
25
50
100000
1990-92
22000
4
20
56
100000
1995-96
40000
3
20
40
120000
1997-98
40000
3
10
30
150000
1998-99
50000
3
10
30
150000
1999-00
50000
3
10
33
150000
2000-01
50000
3
10
35.1
150000
2001-02
50000
3
10
30.6
150000
2002-03
50000
3
10
31.5
150000
2003-04
50000
3
10
30
150000
2004-05
50000
3
10
30
150000
2005-06
100000
3
10
30
250000
2006-07
100000
3
10
30
250000
Source: Report of the Task Force July 2004, Ministry of Finance, Govt. of India


Its root cause has been the demand-supply mismatch in India, children are taught from childhood to grab as much as they can whenever the opportunity arises. We always have been looking for loopholes in the system to exploit them & get special treatment. The problem here is people seem to forget all the moral high grounds they talk about, when the law or moral issues rest on them for closure.

One more problem in India is people respect a person even more if he can evade the authorities & break the laws without any casualty. One's status is estimated by the amount of laws one can break to suit it's own convenience. Everyone would like to have a friend who has contacts in administration, police, politics etc. This allows one to bend the rules/laws - in a sense to receive special treatment.  How often you have seen some person brag about breaking rules & going scot-free in a social conversation? - I bet many times
I can give you many examples:- Tax Evasion - very normal phenomena in India, Govt. tenders, Crime scenes - trying to save your near or dear one from prosecution etc etc. The list can go on and on. 

Its so much a part of our daily routine for e.g. - in chennai - its normal to have yourself looted by rickshaw-walas.  The attitude now in chennai is very simple in case of rickshaws - dont focus on fighting with them, try to negotiate. This tedency to accept immoral behavior as normal & to start negotiating is from where the problem starts. Take one more example - If you are caught by a traffic police - you would like to get away with minimum casualty - negotiate - promote corruption. We all (at least most of us) are part of these promotional activities in India. 


There has always been a two-prong strategy to control any kind of morally inappropriate behavior - carrot (incentive) & stick (punishment) approach. The problem with India is the carrot available for staying away from corruption is not juicy enough and on the other hand the stick is not powerful enough for people who do indulge in immoral behavior. For the matter of fact aspiring for the carrot in this case can lead to severe stick beatings - because no one wants a honest and morally sound person in the system of dishonest & immoral people. Here also a simple funda is followed for indulging in corruption - "Lead, follow or get out of the way"


I am not trying to lead a fight against corruption here, just trying to create a more clearer picture for all of you to ponder over this hot topic - "Corruption".

Do let me know your thoughts on this topic.. comments are welcome...