The last few months saw a number of allegations of corruption in issues such as contracts for the Commonwealth Games, allocation of 2G Spectrum, and the building of the Adarsh housing society. Professor Kaushik Basu, the Chief Economic Adviser to the Ministry of Finance, has proposed a modification in order to make the anti-corruption law in the country more effective. The Prevention of Corruption Act, 1988 penalizes both bribe giving and taking. Bribe giving is punishable under the Act with imprisonment ranging between six months to five years. He argues that bribe giving should be legalized. Professor Basu distinguishes “harassment bribes”, which he defines as “bribes that people often have to give to get what they are legally entitled to” from the remaining, “Non-Harassment Bribes” which would involve illegal benefits accruing to the bribe giver at a potential cost to the public interest. He argues that legalization of harassment bribes would reduce the nexus between the giver (victim) and the taker of a bribe. Giving complete immunity to the bribe-giver would ensure higher reporting and co-operation of the giver in bringing to justice the bribe taker. The present law acts as a deterrent to reporting of bribery. Courts have also highlighted this issue. The High Court of Delhi in the Bharadwaaj Media Case (2007) observed that a “bribe giver is normally on the mercy of the officials and babus who compel him to pay bribe even for lawful work.” The Court further observed that “Instead of expressing gratefulness to the persons who expose corruption, if the institutions start taking action against those who expose corruption, corruption is bound to progress day and night.” It can be inferred from the judgement that steps ought to be taken to provide protection to those exposing bribery. The proposed legalization of bribe-giving may result in increased reporting of bribery and co-operation of the victim during prosecution. The fear that a bribe giver may report the public official could reduce corruption, at least in terms of harassment bribes. However, this proposal may reduce the stigma attached to bribe-giving and result in corrosion of morality. Much of the recent debate around corruption and the Lok Pal Bill revolve around effective prosecution. This paper looks at the incentive structure for reporting bribe-giving, and merits public debate.
Recently, the government issued letters de-allocating coal blocks of various companies, based on the recommendations of the Inter Ministerial Group (IMG). This post discusses the history behind the de-allocations, the parameters the IMG used while examining the progress of various coal blocks and the action that has been taken by the government. The Comptroller and Auditor General (CAG) released a performance audit report on 'Allocation of Coal Blocks and Augmentation of Coal Production' on August 17, 2012. Some of the key findings of the Report were:
The IMG on Coal was constituted for the periodic review of the development of coal blocks and end use plants. The IMG had requested a status paper from the Coal Controller, MoC. This has been submitted to the IMG but is not available. The IMG will decide if private allottees have made substantial progress based on certain parameters. The parameters used by IMG are: approval of Mining Plan, status of environment and forest clearance, grant of mining lease and progress made in land acquisition. They are also examining the physical status of End Use Plant (EUP), investment made and the expected date of opening of the mine and commissioning of EUP. The IMG has made the following recommendations:
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Of the coal blocks that the IMG has recommended for de-allocation, until now the government has accepted the de-allocation of the following: Bramhadih block, Gourangdih, New Patrapara, Chinora block, Warora (Southern Part) block, Lalgarh (North) block, Bhaskarpara block, Dahegaon/Makardhokra-IV block, Gondkhari block and Ramanwara North block. The government has accepted the deduction of bank guarantees for blocks such as Moitra, Jitpur, Bhaskarpara, Durgapur II/Sariya, Dahegaon/Makardhokra-IV, Marki Mangli II, III and IV, Gondhkari, Lohari, Radhikapur East, Bijahan and Nerad Malegaon. The letters issued by the government de-allocating coal blocks and deducting bank guarantees are available here.
For a detailed summary of the CAG Report, click here.
