Impact of corruption on rural development can be much higher than is commonly believed


Recently I was in a very remote village to inquire about the impact made by of a very well-intentioned housing scheme of the government. There is no doubt that this is a very good scheme with very noble intentions. What is more, the noble intentions appear to be matched in this case by adequate allocations as well as in the case of the various villages I visited several households had actually benefited from this scheme and so it was clear that funds had been available.

In most remote villages that I visit several houses belonging to the poorest people are often seen to be in very poor condition, requiring urgent repairs to such an extent that otherwise these may fall down, particularly in conditions of heavy rain. Several houses or huts are in such a pathetic state that these can hardly provide proper shelter. The rural housing scheme is meant precisely for these households and provides them a housing grant in installments.

However at the implementation level it appeared in the villages that I visited that the well-intentioned scheme is badly marred by corruption.  Some well-informed persons said that the going rate is around Rs. 25,000 or so. While one felt sad about this, one hoped still that at least the remaining amount reaches the poorest households who badly need better housing.  However when I mentioned this, people pointed out that when corruption becomes a pre-condition, the chances of the poorest people  getting selected for the scheme are automatically reduced as it is very difficult for them to pay this money or a part of it to start with. If they pay corruption money, it also becomes difficult to complete a certain amount of construction which is needed for receiving the next installment. On the other hand those who are already in good economic condition (at least relatively) can pay the bribe and adding their own money, also quickly carry out the initial construction for the second installment to be released.

Is there a way out for the poor household who really and desperately needs government help for a shelter? Some of the poor ‘beneficiaries’ said they had to take loans at a very high interest rate; however in the process the basic purpose of the well-intentioned scheme appears to be at least partially defeated.

So in such a case it is clear that it is not just a part of the grant that goes down the drain of corruption, instead to a significant extent extent because of corruption the scheme slips out of the grip of several of the poorest households for whom it is meant.

Let’s see such impacts on development at various levels. If Rs. 50 crore  ( 500 million)  is allocated for spending on an irrigation project and Rs. 10 crore is snatched up by corruption at various levels, then what is the amount that remains for actual development work?

The most obvious answer would be Rs. 40 crore, but more often than not this is likely to be wrong. The loss is likely to be much higher. The reason is that the powerful persons including key decision makers involved are likely to be so involved in siphoning off the corruption money that the quality of the construction work gets much less importance. As long as the official is getting his money, he may be much less caring for the quality of the work. Regardless of the required proper location of the work, both the contractor and the officials may be interested in pushing it towards a place of less visibility. They are likely to avoid all efforts at improving transparency and participation of people, and thereby the most important means of ensuring good quality and cost effectiveness is lost. The official may be in a hurry to give a completion certificate to the contractor so that both can quickly collect their booty, and for this reason important aspects of proper work completion may be missed. Hence due to all these factors, the actual public loss is much greater than the commission or corruption money taken by the official.

Now let us take another example of a much bigger project that costs Rs. 20000 crore or Rs. 200 billlion. Assuming that corruption of around 20 per cent is also involved here, Rs. 4000 crore will go away directly but will the remaining  Rs. 16000 crore  be spent for the benefit of people? Very unlikely, as all that was stated earlier is valid here also. Additionally, as in such a cases the amounts involved are much bigger and are shared at much higher levels a situation is created by powerful persons that this project must go on, come what may. If it is revealed in studies, or on the basis of the experience of some very well-informed persons, that this project may turn out to be harmful, then this possibility is simply brushed aside and such voices are silenced in various ways. In this way undesirable and unsafe projects also come up. So in such a case the strange math of corruption may say that Rs. 200 billion minus Rs. 40 billion is not Rs. 160 billion at all; in fact it may even turn out to be a negative figure as the project turns out to be harmful to people. Hence the strange math of corruption may say, for example, that Rs. 200 billion minus Rs. 40 billion (in the case of such a project) leads to a minus figure, perhaps equals minus Rs 100 billion!

Now consider another situation in which most farmers already have access to some irrigation and all that is needed is to allocate the available budget  equally among all farmers so that they can take up some repair work as well as water  conservation work on their farmland. But this option has least room for corruption so the official ignores this best option and anyway decides to use the entire budget for a new project not really needed. Again the real benefit may be extremely low or a minus figure.

Or take an example where an official has enough money for improving paths of 100 villages by equally dividing budget among them. But the corruption possibility is either very low , or too many people are involved which may also lead to exposure. So he devotes this entire money for awarding a single big contract to his favored contractor for widening of a big city approach road which is not really needed. Widening leads to cutting many big trees which creates opportunities of more earnings for him. Again there may be minus benefit and the village paths remain in bad shape.

Let us take a situation where several schools have satisfactory buildings but there is need for devoting more attention at several levels for improving education. However there is no money to be made in this. So an official somehow finds a justification to build a new hall in all schools which actually reduces the already limited playing space for children, while the real educational work also suffers.

Due to high impact of corruption a situation can arise where those aspects of development which involve payment of commission are prioritized and speeded up, while those very important aspects which have no room for this get neglected.

Hence corruption can be much more damaging for proper development needs than what is indicated by the amount of stolen money. High levels of corruption have a much more harmful and damaging systemic influence much beyond this and therefore a much tougher stand against corruption is needed.

In the case of several highway widening projects people of nearby villages have told me that heavy economic and high ecological costs could have been avoided easily but these projects awarded to big contractors were imposed on their region due to considerations relating to corruption.

What is happening is that certain very important kinds of development is being neglected while certain undesirable kinds of development is being favored due to consideration linked to corruption. Hence the actual costs of corruption in terms of what we lose, what the entire society loses are very high indeed.

Bharat Dogra is a journalist who was involved with public hearings and campaigns for transparency. He was the first convener of the National Campaign for People’s Right to Information and he has written several books and booklets in this issue in English and Hindi.

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