Much of the black economy in India is like “digging holes and filling them.” One digs a hole during the day and another fills it up at night. The next day, there is zero output but two salaries are paid.
Anna Hazare's fast seeking the acceptance of the Jan Lokpal Bill, and the widespread mass protests in urban India that followed his arrest from home, have shaken the government. Political parties have woken up to the depth of feeling against corruption. Two factors have come together — the fight for the Jan Lokpal Bill and the violation of the citizen's civil right to protest. The snowballing protests are seen to be against corruption. Obviously, the public are fed up with the day-to-day harassment they face. To put this in perspective, it is important to understand the benefits to society of tackling the huge black economy in India.
Some people argue that the black economy also generates jobs and production. For instance, they argue that a lot of goods are bought in the market using black incomes, and that leads to increase in production and employment. They argue that the black economy generates informal sector employment and helps the poor. Some go to the extent of arguing that India escaped the worst effects of the global recession in 2008, and the economy only slowed down, because a large amount of black money was floating around — which generated additional demand. Some justify bribes as “speed money” that enables work to be done faster. There is some truth in all this. Yet, it can be shown that the ill-effects of the black economy far outweigh its beneficial effects.
Think of bribe as “speed money.” In order to extract a bribe, the bureaucracy first slows down work and harasses the public. If work was automatically done, why would anyone pay bribes? Thus, the system has to be made inefficient so that those who can afford to pay can get their work done quickly but the rest continue to suffer. The administration becomes rundown since rather than devising ways to work efficiently, it is busy thinking of ways to make money by setting up roadblocks to efficient functioning. This has spawned a culture of ‘middlemen' and personal approach to officers. Things hardly happen in the routine manner. The corrupt need the middleman to insulate themselves from direct public contact lest someone reports them. The bribe-giver also, not knowing how much to bribe and how to contact the administrator in charge, finds it a convenient arrangement.
Much of the black economy in India is like “digging holes and filling them.” That is, one digs a hole during the day and then another fills it up at night; the next day there is zero output but two salaries are paid. This is “activity without productivity.” An example is of poorly made roads that get washed away or become pot-holed with every rain and need repeated repairs. Thus, instead of new roads coming up, much of the budget allocation is spent on maintenance. Teachers may not teach properly in class so that students have to go for tuitions. Not only families have to pay extra but the students find learning to be insipid and lose interest. This affects their creativity and future.
Consider how millions of litigants, their families/friends, and lawyers arrive daily in the courts. In most instances, the hearing in a particular case lasts just a few minutes. The next date, weeks or months away, is announced, and they go back home. Not only is justice delayed inordinately, but time is lost and expenses are incurred on lawyers' fees, travel, and so on. Cases that could be resolved in a few months go on for years, multiplying costs. The expense of delayed justice is both direct and indirect. Delay is often a result of the impact of the black economy. Honest people who lose hope start resorting to other means, which dents the notion of social justice and weakens society. This cost cannot be calculated in monetary terms but it is significant.
Because of the growing black economy, policies fail both at the macro-level and the micro-level. Planning or monetary policy or fiscal policies do not achieve the desired results because of the existence of a substantial black economy. Targets for education, health, drinking water and so on are not achieved because “expenditures do not mean outcomes.” The economy does not lack resources but faces resource shortage. Much investment goes into wasteful and unproductive channels, like holding gold or real estate abroad. The flight of capital lowers the employment potential and the level of output in the economy. Capital sent abroad does not generate output in India but does so where it goes. A country that is considered capital-short has been exporting capital. A nation that gives concessions to multinational corporations to bring in capital loses more capital than it gets, and that too at a high cost, from foreign institutional investments or foreign direct investment. India's policies are open to the dictates of international capital because the country's businessmen and politicians have taken capital out in large doses since Independence. The costs are huge.
The direct and indirect costs are of policy failures, unproductive investments, slower development, higher inequity, environmental destruction and a lower rate of growth of the economy than would have been possible. India could have been growing faster, by about 5 per cent, since the 1970s if it did not have the black economy. Consequently, India could have been a $8-trillion economy, the second largest in the world. Per capita income could have been seven times larger; India would then have been a middle-income country and not one of the poorest. That has been a huge cost.
The black economy also leads to “the usual becoming the unusual and the unusual the usual.” That which should happen does not, and that which should not keeps happening. We should be getting 220 volts electricity but mostly get 170 volts or 270 volts. Equipment burns out, so all expensive gadgets need voltage stabilizers. This results in higher capital costs; maintenance costs rise. Water in taps should be potable, but it is of uneven quality because the pipes are not properly laid and sewage seeps in. Thus, people carry water bottles, use water-purifiers and boil water at great extra cost. Even then, people fall ill. Some 70 per cent of all disease in India is related to water, so we spend extra on hospitalisation and treatment. Then there is the associated loss of productivity; the poor are particularly the victims.
Hospitalisation can be traumatic because of the large-scale callousness there. Public hospitals are crowded and the doctors are overworked. Due to unhygienic conditions, patients can get secondary infection or attendants can fall sick. In private hospitals the patient is not sure whether unnecessary tests are being done and whether visits by consultants coming to see them are needed at all. Even after all this, cure is not assured: the drugs may be spurious, the intravenous fluid contaminated, and so on. The poor suffer from the presence of a large number of quacks in the market who give injections or steroids or an overdose of antibiotics. It is by the sheer strength of the human constitution that in spite of these adversities, many people get cured.
The result of all this is that costs everywhere are higher than they need to be — raising the rate of inflation. If capital is over-invoiced by businesses to make money, the cost of setting up industry is higher. If poor quality grain is sold in the public distribution system, the price is higher. If children need tuitions because of poor teaching, the family's cost is higher, and so on.
At the social level, the cost is a loss of faith in society and its functioning. Hence many now seek individual solutions and discount societal processes. At the political level there is fragmentation, with States demanding their own packages because the belief that the nation as a whole can deliver has been dented. The demand for smaller States is a corollary because the bigger States neglect the less vocal regions. Each caste, community and region now wants to have its own party to represent its narrow interest, leading to the proliferation of smaller parties. Can the cost of this fragmentation and loss of national spirit be calculated?
New movements for a strong Lokpal, the right to education, food and information, are likely to recreate a common national ethos that is so necessary, and which may generate the political will to tackle the hugely expensive black economy. The fight for one is the fight for the other also.
(The author is with the Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University, New Delhi. This article is based on his forthcoming book, Indian Economy since Independence: Tracing the Dynamics of Colonial Disruption in Society. E-mail: arunkumar1000@hotmail.com)

Comments:

Very aptly written article. It is very rightly pointed out the value of social disintegration caused by the corruption. People tend to collude for their narrow interest and in all this running from Pillar to post we forget our social responsibilities. There is greater need to strengthen our civic society, that can bring some civic sense which we dearly miss in Indian diaspora. It is really one of the greatest eye-opener article and I would like to see the people, who are participating in 'Jan Lokpal Bill Movement' may set an example by themselves by putting a right step. As had been told by Narayan Murthy we all need to "Work hard, lead by example, shun ego, and take sound decision". This should be followed by each and every person to make this world a better place to live. Thank you The Hindu for publishing such a nice piece of work.
from:  Vikas Saxena
Posted on: Aug 20, 2011 at 05:25 IST
Excellent article!!! this is what I am expecting for change....and these are my grave concerns as well.
from:  Nisaar
Posted on: Aug 20, 2011 at 06:03 IST
The article deals with various aspects of black money with illustration how this affects the society.As the article is a bit lengthy ,I wonder whether all would read it patiently and benefit by it. By paying speed money,the benefit goes to those who pay and thereby others in line get affected.Suppose a passport takes one month to issue and if there is no Speed money cases, all the pass ports in queue would be issued in a month's time.Suppose some speed cases are there,the cases in queue gets correspondingly delayed. Unless people are educated from childhood, moral values are imbibed in them,there is no solution to curtail black money generation The supreme ethical rule is act so as to elicit the best in others and thereby in thyself.Black money is on account of evading payment of taxes and wide spread corruption.Government should try to find out the root cause for these and rectify,only then some improvement can be expected.It should start from politicians first as they make rule
from:  V.Radhakrishnan
Posted on: Aug 20, 2011 at 06:25 IST
excellent analysis from economic perspective
from:  Dr. H. L. Gupta
Posted on: Aug 20, 2011 at 06:59 IST
Mr. Kumar, excellent writing, well argued and presented. The point you made "loss of faith in society and it's functioning" is naturally extended to government. When the governance fails, the people loose faith in society, government, political establishments. No wonder, we have Annas. This Anna is Gandhian, but if he fails the next one may be Maoist. This Anna should not loose this battle, and the war to make India a civil country must continue, otherwise, the country is going to uncharted waters.
from:  SP
Posted on: Aug 20, 2011 at 07:00 IST
The article is well written taking all aspects of the problems faced by the public.A good one.
from:  T.V.Subramaniam
Posted on: Aug 20, 2011 at 07:26 IST
A well written article which shows how depraved we as a Nation are.In 1962 when I was in Switzerland under training, I saw a very frightened looking Indian lady at a Swiss Bank.I went to help her and found to my surprise that she was taking out lakhs of Indian currency from her bag and getting it converted to dollars. She requested me not to tell anybody. I now saw the ugly face of black money and realised how people thrived in the past.Black money is the true cause of our inflation and MMS and the FM are spinning cock and bull stories to explain it away.Why the RBI and the PMEAC can not spell this out is rather surprising? Are they also in this act of making black money. In spite of 11 attempts to curb money supply in the economy made by RBI there is no halting the inflation. Unfortunately text books on economics do not talk about how black money fills the gaps made by these measures and money supply continues to grow. Plain common sense will tell you the cause.
from:  S N Iyer
Posted on: Aug 20, 2011 at 08:12 IST
Wow, excellent article!!
from:  ravi
Posted on: Aug 20, 2011 at 08:24 IST
It is time for Professor Kumar to wake up. You are talking of small corruption. The situation is beyond small scale corruption. They are selling Indian national resources – spectrum, minerals, land, and commodities with impunity. This is plunder and robbery. They are in cahoots with unscrupulous businessmen and murderers in their heinous acts. They corrupt the electorate and continue in power. Only the corrupt get college admissions, jobs after graduation, promotions, and positions. They have created and nurtured an environment of deep rooted corruption, robbery, and criminal loot. It is time to set the record right and argue in favor of the rightful owners. It is high time India cleans up the environment and restores the soil so that good seeds take root and bear great fruits that India is capable of.
from:  Som Karamchetty
Posted on: Aug 20, 2011 at 08:24 IST
After the experience of having to give a bribe and recollecting the interaction of the middleman at a Government office, I now realize the person was just making me perceive the process to be much more tougher by non-cooperation. Two weeks after the deceit I go to the office to enquire on the status and the person is nowhere to be found. But of course the work did get done fast (they make sure that the reward feeling lingers) so that the next time you don't put up much of a fight.
from:  Uday
Posted on: Aug 20, 2011 at 08:25 IST
excellent review of black money and effects by arun kumar.As he points out getting back black money from abroad can increase capital in india and can pay for lot of black holes to dig and fill at least labourers will benefit.
from:  Ramachander Nanduri
Posted on: Aug 20, 2011 at 08:53 IST
I must applaud the author as he has been able to show us the 'cost of corruption' in our country. We have become used to the 'cost of corruption' as a number, albeit a monumental one, and that has moved attention from the factors behind it. But with this article, most people would be better able to understand the effect of various other forms of corruption on the Indian economy.
from:  Aditya
Posted on: Aug 20, 2011 at 09:11 IST
Its a very beautifully written article. it highlights the aspects and impacts of the minor factors which a common man mostly neglects. These type of articles make them aware about the consequences of their wrong doings. We expect this from Hindu at the current situation which will spread the agenda of Anna Hazare through out the nation. Common person never thinks that if he escapes from traffic police by paying a bribe of 50 rupees what effects it will have on national economy and our system. Examples illustrated in this article are very easily understandable by common man because it is happening in his day to day life. I must say author is deeply linked to common man.
from:  Amit Kumar
Posted on: Aug 20, 2011 at 10:05 IST
Many years ago there was some discussion about circulation of black money; and how fast it changes hands. It is obvious that traders who receive black money wish to use it for payments in black and this process goes on. There are well known trades which use the black money on a pretty good scale. This means that a thousand rupees first paid in black may generate as much as one lac of Rupees of black money in a couple of years. Generation is in the geometric ratio and is mind blowing. Another observation is that money paid via the bribes may not generate as many further transactions. Measures to bring the black money in the tax net need to be framed taking into consideration the circulation angle.
from:  Narendra M Apte
Posted on: Aug 20, 2011 at 10:07 IST
Amazing article. Am eager for the book to come out.
from:  pavan
Posted on: Aug 20, 2011 at 11:01 IST
Bang on. Bow down to the author.
from:  Vasav Mahajan
Posted on: Aug 20, 2011 at 11:48 IST
A thought provoking article.India could do wonders if all the blackmoney generated is channelised for proper use.
from:  P L Narasimham
Posted on: Aug 20, 2011 at 12:10 IST
The writer has expertly summarized the entire ramifications of black economy in the penultimate paragraph of this incisive article. Growing belief among the majority of people that they are all by themselves to deal with rampant corruption that has taken over almost all the sectors making their day to day business an ordeal and the perpetuated sense of helplessness arising out of lack of enthusiasm on the part of the unresponsive government functionaries to alleviate their sufferings do not bode well for the democratic future of India.
from:  Mukul Kanti Dutta
Posted on: Aug 20, 2011 at 12:15 IST
Very nicely elaborated different rooms of black money led environment where we are living presently.The chaos due to deep rooted corruption has made our life living in a vicious circle.
from:  Yogesh K
Posted on: Aug 20, 2011 at 12:31 IST
The article is full of economics minus solution. Today what we need is immediate action not debates. The intellectuals in India have confined themselves to the pen and paper. It is pity that with a billion population we have only Anna among us. The teaching faculties in India should initiate direct action to root out economic evils. India produces best managers for the multinational companies but none to manage our house. We need just handful to lead and million are waiting to follow.
from:  khaleelullah
Posted on: Aug 20, 2011 at 12:55 IST
Thanks to Hindu such a useful Article.
from:  Praveen
Posted on: Aug 20, 2011 at 13:11 IST
The legally received income of any citizen or any other entity on which tax as applicable is not paid as well as illegal incomes like bribes or any type of cash payments as generally seen in the real estate and some other businesses are what generates black money. Loss of tax revenue is the main detrimental consequence of the generation of such black money. How many times have the income tax officers and the CBI raided those who sell real estate worth crores of rupees and builders who sell crores of rupees worth of real estate every year, even though it is common knowledge that rel estate business is the major generator of black money since buying and selling of real estate always involve huge cash payments.? May be the government of Dr.Manmohan Singh allows this since the real estate business is a major contributor to the GDP of the country, the growth of which is the government's main objective in governance! The government can at least moderate black money generation if not stop it.
from:  K.Vijayakumar
Posted on: Aug 20, 2011 at 13:11 IST
its really a great article and a real sense of corruption and black money is explained in its complete sense.
from:  Mohit Yadav
Posted on: Aug 20, 2011 at 13:15 IST
QUESTIONS for thinking Indians? Q1 If Growth is 10% and Inflation 10%, what is the real Growth? (Sure, newly printed bank notes in hand makes one feel good. And for some, more easily than others, it is easy to ask for larger bribes or wages as inflation rises.) Q2 Does Inflation erode the value of your savings, including bribes hoarded? (In other words if you retired 15 years ago with bribes of 15 lacs (a good amount then), does it give you the same level of cushion today?)What will be the real value of your bribes to your children in 35 years time and grandchildren in 80 years time? And how much worse will the society be for them then? Q3 Do poorer people find it harder than you to pay these daily bribes? Has their aggressive behaviour and not just labour rates risen lately? Could it be a slow fuse for the future, or do you think 30% of the population can continue to be maltreated in this way forever? Are you worried?
from:  D Mahapatra
Posted on: Aug 20, 2011 at 13:55 IST
Real Estate is the one of the major source of the black money given and taken. So, this sector should be taken care of as soon as poosible as major chunk of black money is present over here. Reforms should be brought and there should be more strict regulation needed in this sector.
from:  ankur
Posted on: Aug 20, 2011 at 13:55 IST
All of us are responsible for generating black money. When we pay part of a cost of a house in cash to avoid paying higher stamp duty or when we bribe a constable to avoid a traffic ticket or when we pay to get any work done at a government office, we help generate black money. It is only when we stop paying bribes and stop bending rules can we bury the monster of black money in our country. What is needed is a genuine change of heart. The rest will follow!
from:  krishnakumar
Posted on: Aug 20, 2011 at 14:00 IST
The article is a Great eye opener. I just remember Mahakavi's poem "...annayavinum punniyam kodi aangor ezhaikku ezhuthu arivithal". All this can become a relaity when all in the society are educated, understand the implications of doing or not doing which will certainly bring in the required change. But everything starts from home. Particularly the people like us who are better placed should vouch and contribute their best so that they deliver what they expect from others. Otherwise it will turn out to be water instead of milk as told in a story wherein everyone thought who is going to notice it.
from:  Lalgudi K. Ganapathiraman
Posted on: Aug 20, 2011 at 14:19 IST
Grossly generalised point of view. Can be directly put into a Shankar's movie climax dialogue.
from:  Srikar
Posted on: Aug 20, 2011 at 14:34 IST
The problem of corruption require a change in world view. Leopald Kohr writing his classical book 'The Breakdown of Nations' says "There seems to be only one cause behind all forms of social misery: bigness...Whenever something is wrong, something is too big. .. That is when they begin to slide into uncontrollable catastrophe. For social problems, to paraphrase the population doctrine of Thomas Malthus, have the unfortunate tendency to grow at a geometric ratio with the growth of the organism of which they are part, while the ability of man to cope with them, if it can be extended at all, grows only at an arithmetic ratio. .. If a society grows beyond its optimum size, its problems must eventually outrun the growth of those human faculties which are necessary for dealing with them... it is always bigness, and only bigness, which is the problem of existence. The problem is not to grow but to stop growing; the answer: not union but division."
from:  N.G. Krishnan
Posted on: Aug 20, 2011 at 14:39 IST
Many articles like this i have read over the years ,this one is just a passing phase.Anna will come and go and India and Indians will carry on.Mother India is but a Pipe Dream,carry on, those dreamers.I have visited India for Fifty years,hopping agaist all hopes and now a gonda of the village is M.P.Huge bunglows overnight and other benefits.Everyone knows it but does the Govt.realise this??NO,only the Faith in God keeps India going and it will carry on.
from:  Gromyko
Posted on: Aug 20, 2011 at 15:07 IST
The opinion is outstanding. It is very big issie. for solving this all the people of our India should be come because the system of our government administration is democratic. They only understand the language of agitation,strike,or boycott the system of this country.if all the pepple of our india did not give their vote in the election of Lok sabha, Rajyasabha and fully boycott the election then some thing might be very interesting.but it is not possible.
from:  Anil mishra
Posted on: Aug 20, 2011 at 15:09 IST
The points are well thought to reflect the needs of the society. Curbing black money and bribe is definitely difficult. At the same time the poor people who can reach the black money market / employment without knowing the what they are doing will be well affected. one rupee invested in black market gets converted 100 rupees in one year by generating lot of employment for many poor people who otherwise will not have any means of earning. Any bill passed should have provision to address such issues which are not addressed any where.
from:  Murali
Posted on: Aug 20, 2011 at 15:14 IST
Rightly pointed out. Corruption is everywhere from top to bottom of our system. Since we are also corrupt in our day to day life we allow the corruption done by big fishes that leads to this huge amount of black money. So its time to wake up for the sake of good future.
from:  Mohammad Azam
Posted on: Aug 20, 2011 at 15:15 IST
Article does a good job of describing the real cost of corruption and black money. However, the author does not appear to appreciate the potential of inter-state competition in reducing corruption, and appears to have a bias against federalism. Interestingly, the the accompanying photo, the Hindi poster is apparently confusing Atyachar for Bhrashtachar (corruption).
from:  Ravi in NY
Posted on: Aug 20, 2011 at 15:43 IST
Effects of Black Money circulation are explained in a simple manner.Very good article. How all this has escaped the attention and action of our very learned economist and PM?
from:  G.Naryanaswamy
Posted on: Aug 20, 2011 at 16:00 IST
The article is written very nicely.The author's forhcoming book must be bearing many enlightening facts.Being a doctor I visit every sunday three villages with a N.G.O. Our coming to the area discouraged one quack who earned thousands rupees by injecting for arthritis.
from:  Radha Kumud Das
Posted on: Aug 20, 2011 at 16:14 IST
Wonderful article. Not that it says something which we do not know but it puts everything together attaches it with a string.
from:  Ankit thakrar
Posted on: Aug 20, 2011 at 16:19 IST
The article comes as an eye opener.Most of us know that corruption has done us much harm, however the writer has brought to fore, through apt examples, the incalculable loss corruption and black money has cost our nation. He has given a fitting reply to those who speak for the advantages of black money. When 'expenditure do not mean outcomes', no budget allocation can mean development. Above all, he has drawn our attention to the 'Loss of National Spirit' which the corruption-culture has cost us. I hope that the current wave of nationalism which the civil society has been able to generate is enough to root out this malaise the common man has been suffering.
from:  Saurabh Khatri
Posted on: Aug 20, 2011 at 17:26 IST
This article is well written and brings out the reality of the present day situations.There are no proper checks,and alternatives in the system,always there is some escape route available on the some pretext or other all get away with the support of corrupt politician. constitutions, parliament, democracies is for the public and by the public but now you see the same people who got elected to rule are dictating terms about their own agenda.If the government follows set rules,system,law etc why should there be any agitation.
from:  Deenanath Nayak
Posted on: Aug 20, 2011 at 17:52 IST
If one thinks of "Unthought-through, Unregulated Liberalisation" as an earthquake in the middle of the ocean, then "National Plunder", 'Money Laundering', 'Black Money', 'Transfer Pricing Manipulation', 'Tax Evasion, not just Avoidance' - all are the Tsunami effects. The visible weather conditions are "Corruption & Bribery". The devastating effects are 'serious distortions to the nation's economy [consumption, investment, hoarding, inflation etc], social/cultural/moral values, politics and governance - ie WELL-BEING & HAPPINESS OF ALL'. Indian politics needs to be more open, transparent, accountable; her governance simpler (using e-governance for most day to day affairs), less bureaucratic, much more accountable (adherence to Citizen's Charter), etc. Its economy needs to be more liberalised to encourage enterprise and development, but with regulations to prevent plunder by own citizens and foreigners. Else she may end up with a 'Mafia economy', where money/power - not values - rule!
from:  D Mahapatra
Posted on: Aug 20, 2011 at 17:54 IST
I do hope that our planners and our PM read this article and are stirred to do something about the cancer-like corruption before it is too late. Or is it already too late?
from:  Krish
Posted on: Aug 20, 2011 at 18:16 IST
Fine article.Thanks to the author and the paper which published it.Some of the methods of creating Black Money have been described.We have to make sure that all areas are covered. Then the details and the volume of the different sources that contributed to the buildup of BM(Black Money) are to be assessed.If the reasons are found out, then steps should be taken to tackle the different problems in deifferent, effective ways. In so doing, it will be better to make the law- breakers also party to the cleanup, we must look at the problem from a practical point of view. We must have restrictions and laws which could be easily maintainable and reasonable. Restricting pillion rider on the poor man's vehicle, was unimaginative and served the only purpose of bribe collection by unscrupulous policemen.Mr.MGR did away with that. Likewise unneccessary restrictions in construction by builders led to corruption and were in vogue only for that purpose.Ratification was producing a lot of BM.ponder over.
from:  T.R.Kallapiran
Posted on: Aug 20, 2011 at 18:23 IST
Great article . A must read for all Indians . That this govenmenet does not want to tackle black money stems from the fact that India's 'growth story' or the UPA's claim to annual 8-9% GDP growth of past 7-8 years has been mainly corruption driven . That most of the scams involving astronomical sums have been committed mainly in the past 7 -8years is proof enough. The scams have a symbiotic relationship with the black economy. In just five years from 2004-08 alone, according to the GFI report , the country lost roughly Rs.4.3 lakh crores to such outflows and is again proof of the link between the GDP growth achieved by this Govt , corruption and the and the black money generated . The 'RISING INDIA' story being cooked and dished out by the Corporates, UPA Govt and select Journalist Groups is nothing but a well planned cover-up for the wholesale looting of the national resources thats been going on in the name of Economic Liberalisation and show of high GDP grwoth . That GDP growth achieved by this Govt and corruption are so closely linked , also explains why the Govt does not want to follow through on the black money trail nor wants to curb corruption through a strong Lokpal bill.
As the author Mr Arun Kumar rightly pointed out , the cost the Indian society is paying "cannot be calculated in monetary terms but it is significant". Indian media and we all need to ask ourselves: "do we need high GDP growth achieved through such means?"
from:  VJ Nambiar
Posted on: Aug 20, 2011 at 18:53 IST
Very well written article which explained the various sources of corruption and the advantage of bringing black money back home...Very strong e-Governance is one good solution to curb the corruption in all government departments..Yesterday when i read the LokalPal bill there is one interesting point which i liked very much is the Citizen Chart. You put list of items every Gov department carryout along with their timelines. If the job is not done on time the punishments are stringent and time to act on delayed jobs are very short. With my own experience in getting a Birth Certificate from a Revenue department, It took two months for me before my father used some influence to get my birth certificate. I chose not to bribe, but then i had lost two months of time...Do we have time in such busy corporate lifes now? RTI is in place but how can effectively it can be used in a Question mark. Good to see a fight for a change and good to read such good article at this moment of change..!!
from:  Kamesh
Posted on: Aug 20, 2011 at 19:05 IST
It is an excellently and lucidly presented article with examples on ill effects of Black Money and corruptible methods. Trust all economists read and understand the examples - mostly related to daily work for common citizens! A participating democracy where the 'Powers that Be' understand the common man's travails on a daily basis will enhance the quality of life. My congrats to 'The Hindu' and the writer for such an illuminating article.
from:  PS Nath
Posted on: Aug 20, 2011 at 19:47 IST
Nice article, but how to solve that is the Q.
from:  sk
Posted on: Aug 20, 2011 at 20:29 IST
Intelligent and great analysis .
from:  Ashwini kumar
Posted on: Aug 20, 2011 at 20:29 IST

An excellent article & should be read by all.
from:  K.A.Narayanan
Posted on: Aug 20, 2011 at 21:24 IST
Fantastic article. The author has touched many important things which opens ones mind on the real dimensions of the effects of routine acts by each of us.
from:  Subbu Padharthi
Posted on: Aug 20, 2011 at 21:29 IST
I wonder What this black economy can do to us if it has been made white. When Mr.Arunkumar knows this much,others who posted this much, Why our Harward educated PM does not know anything like this. He knows, alas he is puppet in the hands of Congress. I strongly request the PM to think that he is and Honest Indian first,then the congress man of Gandhis' next. Can real Dr.Manmohansingh stand up please.
from:  Sathya
Posted on: Aug 20, 2011 at 21:45 IST
Many commentators try to blame the bribe-givers as equally responsible for this corruption. With my own experience I can tell that these are the minority and that also with the aim of getting certain undo profit in material (looting the exchequer) or other benefits. Bribe shows many ugly faces. Coming to my experience: some years back a simple procedure – just for shifting the reading electrical meter from my house wall to a specially built concrete structure, officials demanded some Rs. 1000 apart from the usual fee and when refused the local office sent a letter stating that I should fix lightning arrest, lay cable according to their instruction etc (cost for me go in 6 digits). I posted some 40 registered letters to higher authorities quoting the board regulations and spent quite a sum and meeting them personally – all in vain, silence and inaction is our top bureaucracy. Why? Because I noticed the chain connect top to bottom. Common man is forced to pay bribes otherwise the bureaucrats make him spent ten or fifty times more. I succeeded after 2 years legally. I have many such experiences and I can afford to wait as I reside only few months in India .I request HINDU to start an open column for the readers to narrate their individual experiences.
from:  Somasundaram
Posted on: Aug 20, 2011 at 22:02 IST
very apt article i have read recently.very gud analysis and the reasons for people to support jan lok pal very aptly explained.
from:  shailaja
Posted on: Aug 20, 2011 at 22:16 IST
Well-written. This article needs to be read in different languages, for those who participate in Anna Hazare's anti-corruption movement all over the country. This needs a wide coverage.
from:  M.S.Kamath
Posted on: Aug 20, 2011 at 22:18 IST
Nice and an eye opener....We all face few of these all problems but, don't try to realise,whatever is wrong in it,because of our perception,'it does happen'.
from:  riya
Posted on: Aug 20, 2011 at 22:23 IST
Execellent work. I completely agree with you. We all need a very strong will to fight corruption .we have to fight to win.
from:  amrendra kumar
Posted on: Aug 20, 2011 at 23:00 IST
We as indians need to start teaching our children and be role models in teaching values and respect. The solution cannot solely be by legislation alone. The message of honesty and sincerity should start at home. Its easy to be arm chair critics and say that the world is wrong and I am right. If there is a need for course correction, it should begin from within each individual and each home.
from:  Kiran MK
Posted on: Aug 20, 2011 at 23:14 IST
Well written article. The corruption within us should removed,only then we can have a better tomorrow.
from:  Ramana
Posted on: Aug 20, 2011 at 23:27 IST
Excellent article. The writer described a complex issue in such simple words. for me,the basic need to give bribe arises from the complexity of the rules in our system.the system needs to be as automated as possible.15 days before i went to passport office. They did not accept my application saying that the office is closed and if i give them rs 300 as bribe,they would get it done.i refused to pay,went there again,they found some new problems with my form.Went there again but no luck. The place was far from my place,and i had to go all alone..so finally i resorted to it. Yes i'm equally responsible,but couldnt help it. The system is so complex and plus there is no accountability.wish to see a change!!
from:  Sakshi
Posted on: Aug 20, 2011 at 23:41 IST
One of the best articles on the malaise of corruption. Kudos to the author to weigh the argument and convincingly explain how corruption has affected our nation and the huge hidden cost to the society. In the engineering and medical colleges, huge capitation fees are demanded and the doctors and engineers who come out of these colleges are a cost a lot to the society. Land and building registration is another big area generating black money. Election funding is another area which needs to be addressed. Discretion in allotment of Government resources by ministers is another area breeding corruption. The article has analysed the issues succinctly.
from:  P Sreenivasan
Posted on: Aug 20, 2011 at 23:49 IST
This article gives various example at basic level, how the black money is generated, how it increases the society cost, family expenditure and how it degenerated the soul of man sat at higher position. It is real terrorism of India's growth. It increases the poverty and poor generation as our data shows after independence poor generation increase at higher rate than economy.
from:  rahul
Posted on: Aug 21, 2011 at 00:33 IST
Very good article. I wish every Indian reads this and understands the root cause of Corruption in India. I can foresee if not 100%, at least half of it will be alliviated with this upsurge. God bless India and the honest Indians.
from:  Murugesan
Posted on: Aug 21, 2011 at 00:35 IST
Loved your article!!.. In fact the logic drawn was amzing. I am surprised how interlinked the matters are which we just accept as a part of life.
from:  Ankit
Posted on: Aug 21, 2011 at 01:39 IST
Follows the view of KrishnaKumar. I just wonder no one is mentioning/accepting that corruption is a problem that has to be dealt with both public and the bureaucrats/officers/politicians whoever. Is there something that we can do about those who offer bribes? predominantly the wealthy to get their work done? Will it be addressed in Lokpal Phase 2? Or should we go by the assumption as the article states that source of corruption is just the officers/ politicians/ bureaucrats? This certainly requires a change to happen on either side.
from:  Thiru
Posted on: Aug 21, 2011 at 01:54 IST
Apart from the direct loss of revenue to the exchequer as a consequence of tax evasion, the vast amounts of black money burden the honest taxpayer with the government raising the taxes on commodities as it is unable to plus the leakages in direct taxes. This Money further widens the inequalities in the society by finding outlets in non-essential goods, thus tilting the consumption pattern in favour of the rich and elite. The abundant 'black liquidity' frustrates the government's attempts to control inflation by controlling demand. The Parallel Economy is the source of all funds for all political parties, who oblige their 'supporters' with policies skewed in their favour, further perpetuating its cancerous growth.
from:  Dr.Ankita Chakravarty
Posted on: Aug 21, 2011 at 03:23 IST
Property deals in India are always shady. Market value of a property is never the official value. There is no mechanism to counter check the price actually paid and the value of property which is shown in registration. Every one can be bribed. Whether it is a policemen, a clerk of the municipality or a judge's court. Government officials have assets well over their official salaries. Every one in the society knows but there is little a common man on the street can do to check. When one is talking of a Lokpal to check the politicians and higher ups, simultaneously there is should be an effort to tackle the retail corruption also.
from:  Brijesh Sharma
Posted on: Aug 21, 2011 at 05:05 IST
Thanks for publishing an EYE OPENER.
from:  Ramarao chillariga
Posted on: Aug 21, 2011 at 05:16 IST
Good article by Mr. Arun Kumar. He has shown how black money begets more and how detrimental it is for the progress in India.No bribe means nothing happens.In theory we know now from the article how harmful black money has been and could be to any society. QUESTION is how to eradicate it in a society where giving and taking bribe is a norm.Example: an elected official spends lakhs of rupees to buy votes, and once he gets elected he tries to recoup that amount plus some more for future use!! A ticket collector in a train takes bribe to give a seat to a passenger, however the same guy when he goes out to get some thing of his own done has to pay bribe too.Corruption, bribing, cheating and falsifying etc is endemic to the Indian society. This disease plagues all segments:politician,official,police,academics,business people, entertainment folks etc. It's possible our own neighbor could be the biggest crook.Want to kill a snake smash the head not break the tail. Dr.Singh down to peon!!
from:  Srinivas Nyayapati
Posted on: Aug 21, 2011 at 06:33 IST
Great article and never read an article of this caliber in any Indian newspaper for a long time.Waiting for his book.Hope people like him are consulted in nation building rather than ineffective politicians.
from:  Stephen jose
Posted on: Aug 21, 2011 at 07:12 IST
Nicely and correctly assessed.I do not understand why is it happening despite the fact large number of people are against couruption and breeding of Black Money. Isnt it true that cancerous growth of our greed has imensly spread in our society that no amount of chemotherpy or radiation kills it. We do tend to treat it but its germs are left somewhere to carry the beacon. Let the individuals change and let the political system has to be made coruption free.It is our political system which breeds coruption. We have to hit it at its root, that politicians. Though they are one among us but this clan gets imunity once elected. We are responsible because we actualy do not trust in the political system that is why most educated and elites do not vote. they feel voting is wastege of time. They plan a foliday on the day of voting. Somewhere something is wrong and we are responsible for it.
from:  Alaf Hussain
Posted on: Aug 21, 2011 at 07:20 IST
I fully agree with you but is the solution ie LOKpal is right? problem is at many levels it in the constituation itself. I am afraid getting a Lokpal may create a false sense of security, like somany laws we enacted like anti-dowry etc this one would just throw the problem underground. We need to have strong continued struggle at every level of beurocracy create transparency make everything online, have cameras at work place, make officers accountable with benchmarks if they donot meet bench marks fire them. Last but not the least term limits for MLA and MP after every term there should be 2term probation and immediate family member should have 1term probation. Political parties should be transparent and show how are they offering tickets.
from:  Sireesha
Posted on: Aug 21, 2011 at 07:26 IST
These are exactly the issues over which the country has to work. But the issue still is will the solution shown by team anna will lead us to the desired results. They are proposing the creation of a new method of monitoring the system, I have a major problem with this procedure. It will create a very powerful set of persons whom if misused can create unnecessary chaos like, say a person in the jan lokpal is corrupt and is not caught then he can lodge a complaint on his rival and mislead the system to prosecute him unnecessarily, there can be a chance of favor-ism. And more importantly will it be effective. If we see corruption happens at the base level at a rather quick pace. When the person wants to build a house and wants his plan get approved, he wont wait for as long. He would want his work to be done as soon as it can happen, so a corrupt officer here will delay many such cases which will result in people paying bribes. But this might be the best way forward to begin with.
from:  Arun
Posted on: Aug 21, 2011 at 07:59 IST
Superb analysis. Corruption affects the Nation as a whole but what affects aam admi and non aam admi alike, as projected by Mr. Kumar, is the rampant corruption at field level for which the nation as a whole should resolve not to give and take bribes. But team Anna is on the streets not for this but for the Corruption at higher level. The politician is intelligent to win the vote bank by so many corrupt means because we are corruptible. Giving cash for vote is an offence but a promise of offering a berth in cabinet to a MP/MLA of >other party and the freebies in the manifesto are not. The corruption at higher level is also unwittingly caused by us only. The socio-politico culture imbibed within individuals/sections/caste and religion has resulted in fragmented political scenario or recent years as coalition Govt. of inborn weakness of yielding to the pressure tactics/black mailing of supporting parties. The alarming scams what we shout today are the result of our own deeds.
from:  Prof. N. Gunachandran
Posted on: Aug 21, 2011 at 08:29 IST
Excellent article,sir...but one thing i must want to told Every Indian that Corruption cannot be stopped with the help of laws only, its needs social reforms like Dr.Kalam sir said, "If we really need to eradicate the corruption ,than i personally believed that three person can do it,they are Mother,father and Primary Education teacher.." We must think of it...
from:  Rushiraj Puwar
Posted on: Aug 21, 2011 at 09:06 IST
A great article...it is the need of the hour and which everyone should understand...
from:  Piyush Singh
Posted on: Aug 21, 2011 at 11:04 IST
excellent article. its like every drop of corruption counts and is making it an ocean.
from:  vipra
Posted on: Aug 21, 2011 at 12:58 IST
Excellent article. Finally there is a measure on the immeasurable! The bigger problem however, is that most Indians think corruption is an external problem, which we need to fight on the outside. The truth is the majority of India does not like ending up on the losing side, which means we cannot stand the possibility of losing even in a fair competition. That is why we take the short cut, the "speed money" route. This is because we lack the self confidence as a people to achieve excellence in whatever it is we do. As a result, we need to take these slimy, corrupt, unethical routes to manage our incompetence and mediocrity and give ourselves some chance of "success".
from:  B S Kumar
Posted on: Aug 21, 2011 at 13:56 IST
Very well written article. The author has translated the cost of corruption in common man terms and how it impacts us all. All along in school a child is taught to be honest and be truthfull. But in real life one has to learn to make compromise on honesty , compromise on truth, pay a bribe here and there, maybe justify the means based the end result. Before we know in the last 40 years corruption has become a way of life. It is a miracle that we(India) have come so far in spite of all this, but be convinced that corruption will scuttle India’s progress going forward. As the author quotes - “the usual becoming the unusual and the unusual the usual” it is too weird and scary to think of the unusual that yet to occur if corruption is unchecked.
from:  Sankar
Posted on: Aug 21, 2011 at 14:58 IST
I read 2 paragraphs. I decided not to read fully. Reason: I have self-respect and dignity towards my life. People must be ashamed at discussion the merits of bribing because it is not just an illegal act, it is an indecent act. Its against civility and basic decency towards the society. Harrasing public by any means is a human rights issue. Forget all your plus and minus about it. Its a shameless act and to see it differently is for yourself to decide now; me having made my point.
from:  Praseeta Krishnan
Posted on: Aug 21, 2011 at 15:09 IST
In govt there are three types of processing. 1. The normally corrupt officials and normally corrupt applicant. With any application the money is paid early in advance and things progress super fast. 2. The normally corrupt officials and resisisting applicant. The application is kept pending and moved up and down the ladder if needed. The officials gauge the applicants mind early and decide the course of action. The more reistance you give the more delay is caused. Finally the applicant pays the money and the file is cleared with in a day normally. 3. The normally corrupt officials and resisting applicant who does not want to budge. The processing time in such case is anywhere from 6 months to 2 years as opposed to 1 to 2 weeks in case 1. Of course there is a minority of straight forward officials who has no way to process the papers as there are always hurdles they cannot not pass. In short the system cannot be with out corruption unless time limits are set on all applications
from:  deva
Posted on: Aug 21, 2011 at