Ed. Note-today we begin a two-part series by our colleague, Mary Shaddock Jones on corruption in India.

Current Intelligence Magazine published a story on September 15th written by Eric Randolph entitled “Delhi’s Battle Against Bribery”.   The article succinctly described a situation found in many places in the world- the demand for small payments by low level governmental officials for services routinely requested by citizens in the state.

Mr. Randolph reports on a man named Arjun who lives in Delhi.  According to the article “When Arjun, a Delhi-based photographer, was attempting to relocate his family overseas earlier this year, he found himself breaking a cardinal rule he had set for himself. He had never paid a bribe in his life, but now he needed a ‘Letter of Good Conduct’ from the police that would allow him to apply for residency abroad, and it quickly became clear that this would not happen without money changing hands. “I’ve always refused to pay bribes in the past,” he said. “But every time I went to the police station, they would tell me that it would take a few more days. “We needed the letter in a hurry. There was no choice. In the end, I handed over 2,500 rupees (USD $52.54) before they would give me the letter.”

Mr. Randolph continued by stating that “this sort of low-level corruption is a ubiquitous part of daily life across India. Buying a house, getting a phone connection, applying for a passport – almost anything which involves a government office invariably requires a palm to be greased.”

The state government of Delhi enacted a law designed to bring about changes to the pervasive corruption in India by addressing the demand side of the equation.  According to an article published in the Times of India newspaper by Ambika Pandit, the law named the “Right of Citizen to Time Bound Delivery of Services Act, 2011.  Delhittes are “now empowered to get compensation for delays in services rendered by 32 city departments and agencies.

The new law sets limits such as 7 days for issuing a birth or death certificate, 21 days to register a vehicle, or 55 days to issue a restaurant license. An e-monitoring system has also been installed that will allow members of the public to monitor the progress of their applications. Officials will pay Rs.10 (USD $0 .21) per day when they exceed the limit, and repeat offenders will face disciplinary action.

According to the Times of India article, “The Act provides for on-the-spot compensation to be paid to citizens who have suffered delay in service. The erring official will be served a notice within 15 days. The official will be expected to either deposit the cost of delay within a week or submit a representation to the officer concerned on why the delay took place.  If the reason for delay is found valid, the competent officer can issue notices to other defaulting officials, if any. The aggrieved official will also have the right to appeal to an appellate authority.”

The Act calls for “appropriate administrative action” against officials who have more than 25 defaults in a year and an adverse entry in their service records. Efficient employees may get cash incentive not exceeding Rs 5,000. (USD $105.88)

Perhaps what is more interesting are the comments posted online in response to the Times of India article.  Here are a couple of the comments.  The names associated with each comment have been withheld for privacy purposes.

  1. Wow., never thought such a day would come ..wonder if this is to stay and properly implemented !! However, good job Delhi !!
  2. 55 days to give license to eating house? 21 for registration, 10 rupees a day!! They would have wasted money hiring more officials to manage this process! Worst thing is that Delhi & other states will look at this and INCREASE the average delay up to the “maximum”, in Karnataka, TN etc. it takes much less time.
  3. Common People now have to pay double bribes. Instead of Terminating Corrupt Government Employee, they are asking for fines. That means Government is supporting Corruptions to increase their income! These Fines will be Recover from Common People. Common People have to pay for their Salary Cut. If Common People don’t pay their Fine then they will not Deliver their Service in Time. More harassment will increase. Termination of Service is the best Solution; otherwise Common People are in Great Danger.

According to both articles, the reforms occurred as a result of the actions of Anna Hazare.  “ Hazare, a Gandhian by belief, outlook and practice, has become the face of India’s fight against corruption. During his fast over the Lokpal Bill, Hazare, a quintessential traditional Indian by looks and mannerism, managed to inspire and mobilize the support of even the ultra-modern Indians – Indians for whom the word “social” only means having a profile on social networking sites. The “Anna Hazare fast” can be described as the first real “social networking movement” in India.

In my next post, I will provide you a short history of the Lokpal Bill and then analyze the comments reported above in light of the original intent behind Anna Hazare’s fast. Stay tuned.

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Mary Shaddock Jones, Attorney at Law and former Assistant General Counsel and Director of Compliance at Global Industries, Ltd. can be reached via email at  msjones@msjllc.com or via phone at 337-515-8527 .

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Please join Mike Volkov, Stephen Martin, Jim Feltman and myself on Oct. 6 in NYC for a presentation on ” The Gathering Storm: Anti-Corruption Compliance for Private Equity and Hedge Funds”. The presentation is hosted by World Check and Ethisphere and the event is complimentary. More information and registration details can be found at http://ethisphere.site-ym.com/events/event_details.asp?id=179863. If you are in the NYC area I hope you can attend.

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This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. 

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