Corruption, Gujarat style
Gujarat Chief Minister Narendra Modi is generally thought to run one of the most honest, corruption-free administrations in India. This is because he is not interested in making money, and is straight. I accept that. We could also say this for Prime Minister Manmohan Singh, whose personal honesty is accepted by his opponents.
But in Modi’s case, there is an additional belief — that he is so tough on corruption that Gujaratis face less of it than other Indians. This is not true, and those who have experience of Ahmedabad, Baroda and Surat will verify this. It is mainly the perception of Modi’s admirers outside Gujarat that he has created a corruption-free state. The truth is that the problems most Indians are troubled by are also faced by Gujaratis.
If one thinks that regular civic problems like petty bribing, encroachments and favour-based transactions can be stopped just because the man on top is honest and efficient, then one needs a cultural lesson on India. Gujarat has not suddenly become Singapore in the last 12 years.
And then there are, in fact, some specific sorts of corruption that damage Gujarat even more than other states. First let’s look at a sort that affects the government. It is related to the amount of untaxed money in real estate. Flats and property in Gujarat have an extraordinarily high component of cash, what we refer to as “black” or “do number ka”.
This is true of all Indian cities, but Gujarat’s real estate transactions usually have a break-up of payment with often only 40 per cent being paid by cheque or in “white”. Sometimes it is even more skewed against cheque payments because, as a mercantile state, it has lakhs of businessmen with ready cash and a very small professional middle class that can only pay “white”.
When a property is registered at low official value, the state loses registration charges, property tax, the broker’s service tax and so on.
This is important to mention because Gujarat is India’s most urban state (three of its cities — Ahmedabad, Surat and Baroda — are in the list of India’s 12 biggest cities). More transactions concerning real estate happen per capita in Gujarat than in other large states. The business-minded orientation of Gujaratis also means that the same property often changes hands, as speculation is more common.
Modi’s administration has not been able to change this behaviour or recover the loss. It would be wrong to blame him for what is a cultural issue which cannot be easily resolved. But it is equally wrong to assume that his presence has created some sort of ideal state that is very different from the rest of India.
The other unique aspect to Gujarat that encourages corruption is prohibition. Of all the major states, Gujarat is the only one to still have a ban on the sale of alcohol. The consumption of it by Gujaratis is, of course, at the same level as it is by other Indians. But prohibition means the entire distribution system is underground and the bootleggers must bribe the police at the smuggling, distribution and retail sales level.
The drinker at home is criminalised and must also bribe the police to stay out of trouble. This has become part of the police economy over time and corruption has become normalised.
As a dedicated swayamsevak of the RSS, Modi believes in prohibition and has made no effort to lift it.
This is an instance of his personal morality coming in the way of a cleaner state. And so while it is true that Modi’s incorruptibility means less corruption at the top, the citizen and the state suffer as much in Gujarat as in any other state of India, and in some ways more.
