The venality of corruption and the seamier side of Indian public life that it exposes is far more objectionable than its attendant economic implications. Evidence indicates that high levels of corruption alone have little to do with the pace of economic development. South Korea, Indonesia, Japan and Taiwan are all successful economies with huge corruption scandals: Britain, often celebrated as a model of probity in public life, is not. Indices of corruption rank Indonesia, Taiwan and Vietnam as more corrupt than India. The total black income and wealth can be reasonably taken to represent the volume of illegal and malfeasant activity in India. The black economy in India is more than 40 per cent of total legal national income, one of the highest percentages in the world. Yet, my own research suggests that corruption accounts for no more than between 9 and 15 per cent of total black income. In that sense, illegal private activities are far more damaging to the economic health of the nation than the malfeasance of those holding public office.

One may think that the real damage from corruption comes from the substandard outcomes that result from corrupt decisions, as seems to be the case in the Telecom affair. Again, this need not be so. It is common knowledge that defence procurement involves kickbacks worldwide (remember Bofors?). However, these kickbacks are part of the deal, typically, irrespective of the firm that secures the contract, and all firms with products of more or less equal quality offer more or less the same kickback.

It is when corruption becomes the reason for attaining public office—rather than a possibly lucrative externality of holding office—that it becomes damaging. In India, we have witnessed a drift to precisely this state of affairs over the last 20 years: corruption is now unquestionably a manifestation of the ideological bankruptcy of the present institutional structure.

It is tempting but illogical, given the evidence on the black economy, to imagine that it is only public institutions that have suffered from this degradation. The problem is not confined to "those dirty politicians and selfish bureaucrats". For every bribe taken, there must be a willing giver, and that giver must be one of us. And every giver must benefit from the giving of a bribe. So, logically all—or some—of us, the elite, are as much beneficiaries of the process of corruption as are those who visibly benefit from its proceeds. One must have in order to give. So, as is so often the case, corruption is revolting to the very elites who are the beneficiaries of its existence and accessories to the process. I used to work as an investment banker in a multinational bank in the late 1980s and I once asked my boss: "Is there anything we do except make money for the bank?" "Of course not," he said. "What else should we be doing?" (I copped out and became a phoren academic, of course). It was common practice in the bank to obtain insider information through side-payments to those in the know (brokers, city journalists, middlemen etc), a practice which culminated in its implication in the biggest stock-market ‘scam’ that India has ever seen.(Harshad Mehta was our biggest broker!) These practices were acceptable to the very people who complained about "those bloody money-making bureaucrats and politicians" and bemoaned the decline of a "merit-oriented" society.

Merit is an abstract noun. Its definition is subjective and context-specific. The assumption underlying a meritocracy is that people can be ranked according to some criterion of performance (education, professional competence) and rewarded on the basis of their rank. However, opportunities to achieve a given rank differ in all countries. In India, a nation of inequalities, economic and social backgrounds vary sharply and so, therefore, does one’s capacity to compete. In a society where this is the case, social conscience—the recognition by those who benefit from the system that there are those who lack the opportunity to compete on equal terms—is critical. When these are the rules of the game, then positions of high office are positions of trust. When the rules of the game change and positions of high office are used for personal gain, political strain is inevitable. Corruption gets up people’s noses because it breaks the rules of the game—the problem, however, is that the rules of the game are in themselves horribly unfair, and one’s very appropriate indignation at corruption should also extend to the unfair nature of the rules.

A common cartoon image of the corrupt is that of the paan-chewing, ‘dhotiwalla’ politician as a symbol of corruption. Today, the people next door are as likely to be corrupt and nepotistic as the ‘dhotiwalla’. The Vohra Committee report on the criminalisation of politics made this point with force, pointing out that it was public life as a whole that was tainted today—and that taint is a result of a nexus between those in high office in both the private and public spheres. L’affaire Sukh Ram should not blind us to this fact. n

(The author is a political economist at the School of Oriental and African Studies, University of London)