HOW TO CONTROL CORRUPTION IN INDIA-CONCEPT PAPER

“Corruption is authority plus monopoly minus transparency.”
Availability and management of Currency.

Stop printing and issue of large denomination notes of Rs.1000 and Rs.500.

The above currency denominations will continue as legal tender. Banks can accept them at their counters but should not issue out to the public.

Currency retention limit for Individuals will be Rs.10,000/- and for families Rs.20,000/-.

Limit for various departments and commercial establishment has to be decided taking into account of the genuine need. Any amount exceeding the permitted retention limit can be confiscated to the government.

Currency payment for any product or service and any other money transactions is limited to Rs.5000/-.  Any payment or transactions above the limit of Rs.5000/- can be done through banking channels only. In this context banking channels means Smart Cards and all other existing banking channels.

Banking Spread

PSU bank branches can be instructed to convert our villages and towns to 100 percent banking zones. Each block or ward can be entrusted to one or more branches.

All bank accounts will be linked to the individual Aadhaar number/Pan card.

Introduction of Smart Cards

Banks will issue Smart Cards* with photo and biometric password to use as an Electronic Purse, in addition to the existing ATM Cards. The existing banking transaction modes will continue in operation.

Smart cards can replace the paper currency and therefore a green initiative also. Customers can load the SMART CARDS with required amount of cash and also replenish it from ATMs or Bank branches when necessary. They can also check the balance in the card on a display window available on the card. Display can be seen by pressing on the panel provided on the card using own thump/finger as a biometrics password.

What is a SmartCard?

A smart card is a plastic card about the size of a credit card, with an embedded microchip that can be loaded with data, used for electronic cash payments, telephone calling, and other applications, and then periodically refreshed for additional use. Users can load SmartCards known as an electronic purse with cash value (credit) to pay for goods or services or any other money transactions.

Smart Cards have a number of advantages over magnetic stripe cards due to high security mechanisms. Smart Cards are multi-functional and the Storage capacity is increased by up to 100 times. The anticipated working life of a smartcard is ten years compared to that of a magnetic stripe card at three.

Smart Cards within the next five years will be the industry standard in debit and credit cards. As the major high street banks and finance houses are now investing in the change over to smart card technology. The size of the card is determined by an international standard (ISO 7810).

Usage of Smart cards

The public departments providing services and merchant establishments selling products or services worth more than Rs.5000/- must install Card readers for any money transaction at their end. The credit card readers also can do this function. The currency limit doesn’t preclude use of Smart Cards for amounts less than Rs.5000/-.

More point of Services (POS) have to be provided by the banks for the convenience of customers in rural areas and cities.

Realty Transactions

Real estate transactions are always the mainstay of black money investments. To eliminate such possibility the government can consider the following steps to bring in sweeping changes.

National Realty Regulatory Authority

Establishment of National Realty Regulatory Authority, similar to SEBI and IRDA, can be a positive step in the right direction to formulate necessary rules and issue directives.

Payment through Banking Channels

State Governments should provide Smart Card swiping machines and other necessary accessories at all land registration offices. Realty Buyers and Sellers can transact the amount of the deal by swiping their Smart Cards at the registration office and confirm the transaction by checking the print out from the swiping machine. The amount of the deal will be credited to the sellers account directly by debiting the buyers account. The registrar should confirm that the smart cards belong to the actual buyer and seller. Any discrepancy will make the deal invalid.

Documentation

Central Government can introduce 16 digits numbering as Document Identification Number with the first 2 digits to represent States.  The number should be a self generated one by the system. The ID number and Name with details can be converted to Quick Response codes (QR codes)* and printed on the Outer Cover* and printed on the reverse of document sheets. The document ID number can be linked to Aadhaar/Pan Card.

QR Codes

Bar codes are linear one-dimensional codes and can only hold up to 20 numerical digits, whereas QR codes are two-dimensional (2D) matrix barcodes that can hold thousands of alphanumeric characters of information. Their ability to hold more information and their ease of use makes them smart, when we scan or read a QR code with iPhone, Android or other camera-enabled Smart phones.

Outer cover

Provide an outer cover with water mark of the state for the Title Deed Documents with the unique document identification number and the Photo of the Property owner and details of the property. The old documents also can be brought under the system with a time bound plan scheduled by the government.

Realty Brokers

In India it is necessary to have strict regulations for real estate investments. A central realty regulator can formulate rules for realty brokers and educate them with the new rules.

Registration Charges

Registration charges also have to be paid by Smart Cards. State governments can definitely think of reduction in charges, as all transactions will be through banking channels; which can reflect the actual value.

Precious Metals and Stones

Precious metals and Precious stones are another area where people invest black money.

The sale, purchase and repurchase of Precious metals and Precious stones should be allowed to operate only through Smart Card or any other banking channels.

Other areas of control

• All monthly salaries have to be paid through banking channels.

• Disbursement and repayment of any type of loans/borrowings should be routed trough bank accounts.

• All payments to colleges and schools should be routed through banking channels.

• Tickets for travel by Air, Ship and Upper class train should not be made available against Cash payment.

• All payments for stay in hotels 3 star and above should be routed through banking channels.

• Sale of Petrol and Diesel against cash has to be limited to Rs.2000/-.

• Cash payment for post paid and prepaid telephone charges can be limited to Rs.1000/-

• Public Distribution System (PDS) should be brought under the smart card system. Special smart cards, exclusively designed for the purpose of PDS can be used.

I am of the considered opinion that the above steps might not eradicate corruption completely but definitely it can reduce it to a very great extent. The above suggestions are not exhaustive but indicative in nature. The advantages to the people and the government by the implementation of the above concept are many.

Other Advantages.

Ø      It is a go green initiative by reducing the use of paper.

Ø      Government can save production cost of the currency.

Ø      Majority of money transactions will be through banking channels and more income for banks.

Ø      Money transactions can be traced and taxed. Hence increase in Tax collection.

Ø      Use of counterfeit currency can be controlled.

Ø      Big robbery and thefts will be under control and police force get relief.

Ø      Availability of cash funds for organized crimes and terrorism will be limited.

Ø      Crime rate will come down.

Ø      Property deals will be transparent and ownership of the property can be ascertained easily.

Ø      Hiding black money in cash, land and precious metals and stones also will be difficult.

Ø      Capital fee payments in educational institutions also can be curtailed.

Ø      Bribery other than cash also can be controlled.

Ø      Low supply and Lesser utility of currency notes will prevent hoarding of currency.

Unearth concealed Black money

Government of India may issue 2 types Special Bonds under an amnesty scheme, to uncover the money stacked in India and abroad.

Issue Special Bonds against Indian currency and foreign currency through banks, with a coupon rate of 6% flat rate per annum with 5 years lock in period.

Indian Currency Bonds

The Special bonds available against Indian currency will be issued at par for the first             6 months from the date of commencement. In the next 12 months after the first 6 months the bonds will be available at premium of 10%. In the subsequent years the premium for the bond will increase by 10% every year till the end of the 4^th year.

Foreign Currency Bonds

Foreign Currency bonds also can be issued with 5 years lock in period with similar conditions. But 50% of the maturity amount can be repatriated after maturity. 

Advantage

      Amnesty might give opportunity for the people to bring out hidden funds.

      Enough funds will be available for Infrastructure projects.

      Central Government may share them with the states from where the funds originates.

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Corruption breeds Black Money and Black Money breeds Corruption

India has slipped to the 87th spot in Transparency International's latest ranking of nations based on the level of corruption.

The LokPal movement started by the Gandhian Anna Hazaare forced the Indian Government to present, the anti-corruption bill drafted by the Anna’s team, in the parliament. The movement was able to attract media attention and all out support from all sections of the society.

Former Chief Election Commissioner GVG Krishnamurthy's recent assertion that the idea of a LokPal was first conceived in 1962 after a series of corruption allegations hit the Jawaharlal Nehru government is ample proof of the fact that change is not necessarily the only constant in India's life. The LokPal didn't happen then, as attention shifted to the India-China war; people power may make it a reality this time round. But is this the beginning of the end of corruption, as some commentators are suggesting? The answer, unfortunately, would be a resounding no.

Rome was originally, when it was poor and small, a unique example of austere virtue; then it corrupted, it spoiled, and it rotted itself by all the vices. Little by little, we also have been brought into the present condition in which we are able neither to tolerate the evils from which we suffer, nor the remedies we need to cure them.

Think how poor the ancients were in comparison with our modern day people. They had no luxuries we enjoy. They did not have artificial lights, air conditioners and the innumerable luxuries we enjoy. In face of our habits, they were always Spartan, even when they wasted, because they lacked the means to squander.

Today we can absorb luxury to any extent. Bugatti Veyron, the fastest car in the world, is also the most expensive in the world at $2.5 million. Its Grand Sport version was launched in India in 2010 with a price tag starting at Rs 16 crore making it the most expensive car ever to hit the Indian roads.

It's true that the reforms initiated 20 years ago have helped make India free from some petty corruption - Indians do not have to pay bribes for securing phone or gas connections or a railway/air ticket.

Consider the Bofors scandal in the eighties. The major corruption scandal, which brought down a government, was about Rs. 64 crore in kickbacks. With current inflation rate it could be 1000 + crores. The notional loss to the exchequer in this year's 2G-spectrum allocation scam is 176 times higher than that at Rs.1.76 lakh crore. If anything has changed, corruption has only become bigger now. The study showed half of Indians had first-hand experience of paying bribes or influence-peddling to get jobs done in public offices. India may have more agricultural production now, but for every Kilogram of rice that the government releases in times of drought, only 250gms reaches the poor due to a leaky distribution system which has been hijacked by middlemen.

There are at least two other areas where nothing much has changed in the last 20 years. One of them is subsidies which have remained a sacred cow over the years. And the other is public distribution system which remained notoriously leaky, leading to massive pilferage. Studies have shown that since 1991-92, nearly two-thirds of wheat meant for poor people continues to be lost during distribution and has ended up mostly with hoarders. Also, up to 50 per cent of subsidised kerosene continues to end up being diverted from the PDS and sold elsewhere at higher prices.

The third most visible sign of what some call stagnation in progress is infrastructure. This is ironic considering that a lot of work has been done in this space. Twenty years ago, there were only 31,700 km of national highways; that number has more than doubled to 70,934 km now. Yet, the road construction is in a slow pace considering the amount spent on them. Only Rs.40/- goes to the roads in every Rs.100/- spent by the government. In every Rs.100/- spent Rs.25/- goes as bribes, Rs.15/- to banks as interest and Rs.20/- as profit share to the contractor.

Power is another area where the irony is more than visible. Despite massive addition of power generation capacity, almost half of Indian households continue to be without power. And the rest have to be content with erratic supply. The reasons have been constant over the last 20 years: transmission and distribution losses.

Or, take telecom. Everyone knows the huge increase in mobile phones has been the most visible symbol of India's coming of age. Yet, the irony is that the level of broadband penetration in India is less than a per cent compared to 9.5 per cent in China. It's not a surprise that telecom has been a magnet for corrupt politicians of all shapes and sizes.

Lincoln wrote “I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. . . . Corporations have been enthroned, an era of corruption in high places will follow, and the money-power of the country will endeavor to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in a few hands and the Republic is destroyed”. The corruption is all pervasive in all types of governments irrespective of the color of the flag or form of government.

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