Wednesday, November 16, 2016

Black Money & Corruption

Q1:. What is the largest source of black money?
A1: There are two broad (flow) sources of black money: Tax evasion & tax terrorism and politician-bureaucratic-police corruption from lowest to highest level, unrelated to taxation. In the 10 year period 2004 to 2014, the second has far exceeded the former.

Q2. The website, very eloquently, talks about 'privatization of government services by officials' and discretionary powers exercised by high-level officers as reasons for systemic corruption. The solution suggested is breaking up monopoly, privatization and boosting competition apart from institutional reforms. But would such reforms eliminate retail-corruption?
A2: e-governance & digitization of interaction at retail level is the only thing which will reduce retail corruption. Name of any1 interacting directly with govt must be put on digital record.

Q3. In your blog, Dialogue with Virmani, you have stated that it is a blow to corrupt politician-bureaucrat-police relations. But how has it done so? The beat cop is still collecting Rs.100 for jumping street lights, Rs.500 for allegedly not wearing seat from from cab drivers instead of challans.  Is there any report that you can guide me to that states that there has been a reduction in bribes and corruption because of demonetization?
A3: We have direct evidence of this (stock effect-asset losses) in the public complaint of leaders of parties whose screams against demonetization were heard well before reports of problems of public. Political-bureaucratic-police corruption (flows) will not be affected without institutional reform, that is political, legal, police, judicial, bureaucratic reforms

Q4. You've also spoken about previous reforms that have been enforced to curb corruption. How effective has the Lok Ayukta been in that process?
A4: My reference was to natural resource auctions, move from subsidy to direct benefit transfer (DBT), tax reform & other policy reforms. Much of the institutional reform has to take place at States level, though center has done some legal reform & tried judicial reform but been stymied by SC. 

Q5. Last but not the least the website elucidates to institutional reforms and simplifying norms to neutralize the its misuse in decision making by high-level officers. My question is will eliminating discretionary power by limiting over-regulation of procedures would be an effective measure to curb corruption?
A5: Reform is about changes that will reduce corruption & inefficiency, not about magical elimination of a problem/problems. All the reforms I have suggested in my writings (available on 3 different web sites) will reduce corruption and administrative inefficiency & these benefits will grow over time

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