Santhanam Committee on Prevention of Corruption (1962)

Santhanam Committee on Prevention of Corruption (1962)

Nature of the Problems

The problem of corruption is complex having roots and ramification in society as a whole. In its widest connotation, corruption includes improper or selfish exercise of power and influence attached to a public office or to the special position one occupies in public life. In this sense, the problem would have to be viewed in relation to the entire system of moral values and socioeconomic structure of society which we could not undertake. We are primarily concerned with the investigation of the problem in so far as it relates to the Central Government and its employees; but even for this limited purpose, we shall have to consider it in a somewhat wider setting.
It is difficult to define precisely the word ‘corruption’. Section 161, Indian Penal Code, states the most common form of corruption as follows:-

“Whoever, being or expecting to be a public servant, accepts, or obtains, or agrees to accept, or attempts to obtain from any person, for himself or for any other person, any gratification whatever, other than legal remuneration, as a motive or reward for doing or forbearing to do any official act, or for showing or forbearing to show, in the exercise of his official functions, favour or disfavour to any person, or for rendering or attempting to render any service or disservice to any person, with the Central or any State Government or Parliament or the Legislature of any State or with any public servant as such”

Section 5(l) of the Prevention of Corruption Act, 1947, defines criminal misconduct of a public servant in the discharge of his duty. Section 123 of the Representation of the People Act, 1951 defines corrupt practices in relation to elections. While it is true that the securing of some kind of pecuniary or other material advantage directly or indirectly for oneself or family, relative or friends, constitutes the most common form of Corruption, other forms of the evil are coming into existence in the ever increasing complexities of modern society.

Perspective

Corruption in one form or the another has always existed. Kautilya in his Arthashastra refers to the various forms of Corruption prevalent in his times. In his book on “Ethics of Government” Paul H. Douglas, Senator from Illinois, points out that corruption was rife in British public life till; a hundred years ago and in USA till the beginning of this century. Nor can it be claimed that it has been altogether eliminated anywhere. Nor is corruption peculiar to India.

In primitive and medieval societies the scope of public authority was minimum. Many of the matters that were looked after by the community have now become a function of the State. The few authorities which existed for the collection of taxes. administration of justice or other purposes did not act according to any definite written laws or rules, but largely at their discretion subject to good conscience and equity and directives from the higher authorities. So long as the officials were loyal to the existing regime and did not resort to oppression and forcible expropriation, t hey were free to do as they liked. If through tactful methods, they amassed wealth for themselves or advanced their other material interests they were praised rather than censured. Often offices were hereditary and perquisites which would today amount to bribery were con-growth of the currently accepted standards of integrity. The modern conception of integrity of public servants in the sense that they should not use their official position to obtain any kind of financial or other advantage for themselves, their families or friends is due to the development of the rule of law and the evolution of a large, permanent public service.

Levy of taxation by law, parliamentary control of expenditure, and the regulation of conduct of public servants by rules, the breach of which would subject them to penalties including dismissal and prosecution in courts, contributed to the present notion of integrity of public servants. The fact that fair, honest and just principles are adopted and declared in matters like recruitment, promotions, terminal benefits and. Other conditions of service of public services, has further encouraged the growth of the currently accepted standards, of integrity.

Till about the beginning of the Second World War corruption was prevalent in considerable measure amongst revenue, police excise and Public Works Department officials particularly of the lower grades and the higher ranks were comparatively free from this evil. The smaller compass of State activities, the “great depression” and lack of fluid resources set limits to the opportunities and capacity to corrupt or be corrupted. The immense war efforts during 1939 to 1945 which involved an annual expenditure of hundreds of Crores of rupees over all kinds of war supplies and contracts created unprecedented opportunities for acquisition of wealth by doubtful means. The war time controls and scarcities provided ample opportunities for bribery, corruption, favouritism, etc. The then Government subordinated all other considerations to that of making the war effort a success. Propriety of means was no consideration if it impeded the war effort. It would not be far wrong to say that the high water-mark of corruption was reached in India as perhaps in other countries also, during the period of the Second World War.

After the peaceful “transfer of power, the new popular Governments took office in an atmosphere surcharged with patriotism and high ideals. In spite of the fact that the new Governments were faced with grave problems that arose after the partition of the country and other urgent tasks of reconstruction and had to run the administration after having lost the services of many senior and experienced offices, the new Government did exhibit commendable energy in dealing with the problem of corruption. The quest for political power at different levels made successful achievement of the objective more important than the means adopted. Complaints against the highly placed in public life were not dealt with in the manner that they should have been dealt with if public confidence had to be maintained. Weakness in this respect created cynicism and the growth of the belief that while Governments were against corruption they were not against corrupt individuals, if such individuals had the requisite amount of power, influence and protection,

Causes

When India became independent, the country was mainly an agricultural hinterland of the other highly developed industrial countries, with a weak industrial base, low incomes, low consumptions, gross unemployment and under-employment, low capital formation, lack of fruitful channels of investment and all the other indices of backwardness. The climate for integrity had been rendered unhealthy by the war time controls and scarcities, the post-war flush of money, and the consequent inflation. After Independence, a conscious and deliberate effort is being made to change these conditions by undertaking reforms and reconstruction in all directions simultaneously, the emphasis, however, being on the economic sector. The attempt is to accelerate the pace of development in such a manner as to make good the loss of time, the loss having been spread over two centuries. The direction of change is modernisation.

A society that goes in for a purposively initiated process of a fast rate of change has to pay a social price, the price being higher where the pace of change excludes the possibility of leisurely adjustment which is possible only in societies where change is gradual. Thus, there has come about a certain amount of weakening of the old system of values without its being replaced by an effective system of new values. The relative fixity of ways and aspirations of former times and the operation of a moral code tending towards austerity, frugality and simplicity of life, pro-foundly influenced the mechanism of social control and social responses. In the emerging Indian society with its emphasis on purposively initiated process of urbanisation, alongside of the weakening of the social mores of the simpler society, signs are visible of materialism, growing impersonalism, importance of status resulting from possession of money and economic power, group loyalties, intensification of parochial affinities, unwillingness or inability to deal with deviations from the highest standards of political, economic and social ethics, profession of faith in the rule of law and disregard thereof where adherence thereto is not convenient.

The Government of the country assumed the new responsibilities at a time when the administrative machinery had been considerably weakened by (a) war-time neglect, and b) the departure of a large number of experienced officers, which necessitated rapid promotions including those of some unproven men and recruitment of a large number of officers in various grades which inevitably caused a dilution of experience and ability. The rapid expansion of Governmental activities in new fields involving expenditure of the order of 1,000 crores of rupees a year afforded to the unscrupulous elements in the public service and public life unprecedented opportunities for acquiring wealth by dubious methods. To this must be added the unfortunate decline of the real incomes of various sections of the community, and particularly that a large part of which is found in Government employment. Though efforts have been made by the two Pay Commissions to revise the pay scales, it has to be conceded that some classes of Government servants have had to face an appreciable fall in the standard of living. Though this cannot be pleaded in extenuation of the fall in the standard of integrity, the fact remains that economic necessity has, at least in some cases, encouraged those who had the opportunities to succumb to temptations.

The assumption of new responsibilities by the Government has resulted in the multiplication of the administrative processes. As the Law Commission pointed out in its fourteenth report there is a vast field of administrative action in which administrative authority may act out-side the strict scope of law and propriety without the injured citizen being in a position to obtain effective redress. Administrative power and discretion are vested at different levels of the executive, all the members of which are not endowed with the same level of understanding and strength of character. Where there is power and discretion, there is always the possibility of abuse, more so when the power and discretion have to be exercised in the context of scarcity and controls and pressure to spend public money. The absence of a machinery for appeals other than inside the hierarchy and of a machinery for redress of grievances contributed to the growth of an impression of arbitrariness on the part of the executive. Consequently, there has been a phenomenal increase in the number of peddlers of influence.
It is believed that the procedures and practices in the working of Government offices are cumbersome arid dilatory. The anxiety to avoid delay has encouraged the growth of dishonest practices like the system of speed money. ‘Speed money’ is reported to have become a fairly common type of corrupt practice particularly in matters relating to grant of licences, permits, etc. Generally the bribe giver does not wish, in these cases, to get anything done unlawfully, but wants to speed up the process of the movement of files and communications relating to decisions. Certain sections of the staff concerned are reported to have got into the habit of not doing anything in the matter till they are suitably persuaded. It was stated by a Secretary that even after an order had been passed the fact of the passing or’ such order is communicated to the person concerned, and the order itself is kept back till the unfortunate applicant has paid appropriate gratification to the subordinate concerned. Besides being a most objectionable corrupt practice, this custom of speed money has become one of the most serious causes of delay and inefficiency.

It was distressing to hear heads of departments confess that, even where they were morally convinced that one of the officials working under them was corrupt, they were unable to do anything because of the difficulties in obtaining formal proof, finding or conviction. They could not even make an adverse entry in the confidential roll without their being required to justify such an entry with prod when it was challenged after its communication to the Government servant concerned. Article 311 of the Constitution as interpreted by our courts has made it very difficult to deal effectively with corrupt public servants. When the question of amendment of article 311 came up before Parliament the issue of corruption was altogether ignored and overwhelming stress was laid upon protection of the individual Government servant. This is an important issue which deserves to be urgently reconsidered by Parliament.

The advance of technological and scientific development is contributing to the emergence of ‘mass society’, with a large rank a d file and a small controlling elite, encouraging the growth of monopolies, the rise of a managerial class and intricate institutional mechanisms. Strict adherence to a high standard of ethical behavior is necessary for the even and honest functioning of the new social, political and economic processes. The inability of all sections of Society to appreciate in full this need results in the emergence and growth of white-collar and economic crimes, renders enforcement of the laws, themselves not sufficiently deterrent, more difficult. This type of crime is more dangerous not only because the financial stakes are higher but also because they cause irreparable damage to public morals. Tax-evasion and avoidance, share-pusing, malpractices in the share market and administration of companies, monopolistic controls, usury, under-invoicing or over-invoicing, hoarding, profiteering, sub-standard performance of contracts of constructions and supply, evasion of economic laws, bribery and corruption, election offences and malpractices are some examples of white-collar crime.

Corruption can exist only if there is someone willing to corrupt and capable of corrupting. We regret to say that both this willingness and capacity to corrupt is found in a large measure in the industrial and commercial classes. The ranks of these classes haw been swelled by the speculators and adventurers of the war period. To these, corruption is not only an easy method to secure large unearned profits but also the necessary means to enable them to be in a position to pursue their vocations or retain their position among their own competitors. It is these persons who indulge in evasion and avoidance of taxes, accumulate large amounts of unaccounted money by various methods such as obtaining licenses in the names of bogus firms and individuals, trafficking in licenses, suppressing profits by manipulation of accounts to avoid taxes and other legitimate claims on profits, accepting money for transactions put through without accounting for it in bills and accounts (on-money) and under-valuation of transactions in immovable property. It is they who have control over large funds and are in a position to spend considerable sums of money in entertainment. It is they who maintain an army of liaison men and contact men, some of whom live, spend and entertain ostentatiously. We are unable to believe that so much money is being spent only for the purpose of getting things done quickly. It is said that, as a large majority of the high officials are incorruptible and are likely to react strongly against any direct attempt to subvert their integrity, the liaison and contact men make a careful study of the character, tastes and weaknesses of officials with whom they may have to deal and that these weaknesses are, then, exploited. Contractor and suppliers who have perfected the art of getting business by under-cutting, of making good the loss by passing off sub-standard works and goods generally spare no pains or expenditure in creating a favourable atmosphere. Possession of large amount of unaccounted money by various persons including those belonging to the industrial and commercial classes is a major impediment in the purification of public life. If anti-corruption activities are to be successful, it must be recognised that it is as important to fight these unscrupulous agencies of corruption as to eliminate corruption in the public services. In fact they go together, We have to point out, with regret, that while a number of Trade associations and State Chambers of Commerce readily accepted our invitation to help us with their views and advice, the Federation of Indian Chambers of Commerce which could have given powerful support to the fight against corruption would not even accept our invitation to meet us.

The tendency to subvert integrity in the public services instead of being isolated and aberrative is growing into an organised, well-planned racket. We recognise that while considerable success had been achieved in putting anti-corruption measures on a firm footing, there is much that remains to be done. It is a matter of profound concern that in the past there has been a certain amount of complacency in dealing with the situation.
It was represented to us that corruption has increased to such an extent that people have started losing faith in the integrity of public administration. We heard from all sides that corruption has, in recent years, spread even to those levels of administration from which it was conspicuously absent in the past. We wish we could confidently and without reservation assert that at the political level, Ministers, Legislators, party officials were free from this malady. The general impressions are unfair and exaggerated. But the very fact that such impressions are there causes damage to the social fabric. That such impressions should have come into existence in so short a lime after the people of this country had given themselves a Constitution of their own is all the more distressing if it is remembered that the struggle for freedom in India was fought on a particularly high moral plane and was led by Mahatma Gandhi who personified integrity. The people of India rightly expected that, when the governance of the country passed into the hands of the disciples of the Father of the Nation who were in their own individual ,capacities known for high character and ability, Governments in India, at the Centre and the States would set up and achieve a standard of integrity, second to none in the world, both in the political and administrative aspects. It has to be frankly admitted that this hope has not been realized in full measure. But it has to be noted that a good percentage of our public servants, even those who have opportunities, maintain and function in accordance with, strict standards of integrity. We have to base the efforts for a thorough Cleansing of our public life, on this solid and hard core of honest public servants. It will be our endeavour in this report to strengthen their hands, to deal drastically with all those who have come to believe that they can corrupt and be corrupt with impunity. Before we can do this, we must face frankly all factors which have tended to corrupt our public life