Types of Corruption in the Health Sector

As with most other sectors, corruption in the health sector can be classified into two categories, petty corruption and grand corruption. In addition, there could be another category, namely, the widespread prevalence of unethical and abusive practices. Each is described below.

Petty corruption refers to relatively small amounts paid in order to get services that are either free, or subsidised. While these amounts might be individually small, they amount to a big burden because they are usually demanded of poor people.

The typical petty corruption related to the health sector that people experience are as follows:

  • Bribes to gain access (to wards, to enter restricted areas such as labour wards)
  • Bribes to jump queues, (out-patient department, laboratory sampling)
  • Bribes to get free services (for X-ray, medicines, diet supplements)
  • Bribes to get admission or discharge from the hospital, or to release bodies from the mortuary.
  • Bribes to obtain certificates on medical condition, such as fitness certificates, disability certificates etc., which are required for various purposes such as foreign travel, professional recruitments etc.

Such bribes are usually picked up by the staff in medical institutions and doctors might not be directly involved (except in the case of the issue of medical certificates). However, the passing on of cuts to doctors might not be ruled out. 

Grand Corruption relates to large volume corruption, often involving a team of officials, doctors, private sector agents and politicians. Instances of grand corruption in the health sector are:

  • Procurement corruption (to win tenders for supply of pharmaceuticals, medical equipment and hospital supplies, civil construction or repair contracts). This can result in over-invoicing, supply of substandard equipment, supplies etc., sometimes having shorter life span or shelf life in case of medicines, over-supply of some items in excess of requirements. This might also result in excessive preference shown for one of the other brand of a drug, when cheaper generic (and equally effective) products are available.
  • Corruption for postings and transfers of doctors and other staff to ‘lucrative’ positions, (where they have access to better private practice, more openings for diversion of medicines, or cultivation of influence).
  • Corruption in certification of facilities and the provision of mandatory recognition of departments and medical colleges, following inspection.
  • Corruption in admissions, examination marking and passing students in medical colleges, particularly in respect of specialty and super-specialty post-graduation courses.

An even more serious phenomenon is when grand corruption snowballs into increased petty corruption, because of artificial shortages, or more expensive medicines and other supplies, leading to a more bribes being paid for these at the customer interface level. Grand Corruption can also be integrated with petty corruption. Typically, this happens when profits from bribes taken at lower levels is shared up the ladder, through ‘pre-paid’ arrangements – a lump sum payment to secure a lucrative posting and regular monthly payments, collected from below, channelised upwards with a cut for everybody involved.

Other Unethical and Abusive practices:

Apart from the usually adopted classification of corruption into petty and Grand corruption, there is another category of corruption prevalent, which is in the nature of corrupt practices arising from the breach of the very same internal code of ethics that give doctors their credibility and status. I once held discussions a few years back with experts having a high moral foundation from a well-reputed health care institution in Bangalore. From this educative discussion, one pieced together some of these practices that are typically seen:

  • Accepting percentages or gifts from other doctors, hospitals, laboratories, imaging centres, pharmacies, pharmaceutical companies and medical equipment companies for referring patients to them or using their products. Known as ‘cut’ practice, this is a widespread phenomenon, with both doctors and those who give them such gifts or percentage, not considering these to be bribery in any form.
  • Suggesting unnecessary laboratory tests.
  • Undertaking unnecessary treatments, such as Caesarians, when normal deliveries are possible.

Amongst doctors, there is very little understanding of the distinction between unethical and (corrupt) practices. There is a significant prevalence of unethical practices, with most doctors who indulge in these believing that these are not wrong at all. There is a group of doctors (probably a majority) who actually believe that there is nothing wrong with earning from kickbacks and cuts.

Unethical and monopolistic practices in the pharmaceutical business:

The pharmaceutical profession generates a large portion of the grand corruption seen in the health sector, largely because of extortionate and disproportional pricing of medicines beyond the raw material and production cost, in the name of covering R&D costs and IP protection and bribes in cash and kind paid to doctors for prescribing medicines.

Yet, in conclusion, it must be emphasised that many of these practices are certainly not considered to be ‘corruption’ within the strict framework of the law. For example, high prices by pharmaceutical companies are perfectly legal, even though one may call it a way to obtain windfall profits, through seductive advertising, cartelisation and ‘persuasion’ of doctors to prescribe such drugs. Furthermore, it is not as if all doctors are corrupt, if the strict definition of corruption to be an unacceptable act performed by a public servant is taken into consideration. Yet, there is a natural and moral understanding of the meaning of the word, ‘corruption’. Plenty of professional acts in the private sector, in the view of a reasonable man or woman, would certainly be considered as corruption.

In my next blog, I look at how such ‘grey areas’ of corruption may be tackled. I continue with my case study of the health sector.

This blog is part of a series. The first blog can be found here.

श्रृंगार से बढ़कर स्वच्छता

कहते हैं कि जब इंसान किसी चीज को एक बार करने की ठान लेता है तो फिर कोई चीज उसे वह हासिल करने से नहीं रोक सकती|

एक ऐसी ही वास्तविक कहानी बिहार के वैशाली जिला में स्वयं सहायता समूह की एक दीदी की है जिसने स्वच्छता के अर्थ को समझा और उसे हासिल किया|

दीदी के अनुसार उसने खुले में शौच जाने का वहिष्कार ऐसी स्थिति में किया जब एक तरफ उसका विकलांग पति तथा ऊपर से गरीबी इस कदर थी कि अपने परिवार के लिए दो वक्त की रोटी जुटाने के लिए भी संघर्ष करना पड़ता था| दीदी ने स्वयं सहायता समूह से जुड़कर बचत का काम शुरू किया था| जब वह स्वच्छता के महत्व को समझ गई तो उसने मन में यह ठान लिया कि चाहे अब कुछ भी हो लेकिन अब वह भी शौचालय का निर्माण करायेगी|

स्वच्छ भारत अभियान के तहत शौचालय निर्माण हेतु सहयोग राशि के रूप में प्रत्येक परिवार को 12000/ रुपये देने का प्रावधान है| दीदी का कहना है कि इसके लिए उसने हर तरह का प्रयास किया, सरकारी दफ्तर के चक्कर लगाये, अपने पंचायत के मुखिया से अनुरोध किया और अंत में अपने परिवार वाले से सहयोग माँगा| काफी लोगों ने उसे पूर्वजों का उदाहरण दिया कि पूर्वज मल त्याग के लिए खेत खलिहान में खुले में शौच के लिए जाते थे|

दीदी बताती हैं कि उसे अपने विवाह में कुछ गहने/जेवर मिले थे, जिन्हें उसने संभालकर रखा था ताकि जरुरत आने पर वह उनका इस्तेमाल कर सके| दीदी के अनुसार, उसने सरकार की तरफ से मिलने वाली राशि का कुछ दिनों तक इंतजार किया परन्तु सरकार की तरफ से स्वच्छता दूत के माध्यम से शौचालय निर्माण के लिए कितनी सामग्री की जरूरत होगी, यह दीदी को पता था| अंत में जाकर उसने पति और परिवार से चुपके अपने गहने/जेवर बेच डाले और उन पैसों से शौचालय का निर्माण के लिए आवश्यक सामग्री खरीद डाली|

स्वयं दिन-रात मेहनत कर गढ्ढा खोदा और शौचालय का निर्माण करवाया| फिर क्या दीदी समाज के लिए एक उदाहरण बन गयी| दीदी बताती हैं कि अब उसे तथा उसके पति को घर से बाहर खुले में शौच के लिए नहीं जाना पड़ता| इस तरह दीदी ने अपने शौक की वस्तु को त्याग कर स्वच्छता को अपना लिया| दीदी समूह से जुड़े होने की वजह से दूसरों को प्रेरित करने में सक्षम हैं|

दीदी बताती है कि अब उन्हें सरकार से मिलने वाली 12000 रुपये की राशि भी प्राप्त हो चुकी है| देरी हुई लेकिन मिल गयी| अपने गहने जेवरात बेचे जाने को लेकर दीदी बोलती हैं कि श्रृंगार से कहीं बढ़कर ही तो स्वच्छता है|

अतः इस प्रेरणादायक कहानी से एक चीज़ समझ में आती है कि यदि हमें सामाजिक कुरीतियों के खिलाफ़ लड़ना है तो स्वयं भी जागरूक होना जरुरी है तथा दूसरों को भी उसके प्रति प्रेरित करना होगा| यह अवश्य ध्यान में रखना होगा कि सरकार ने यदि किसी योजना के तहत जो भी मानक तय किये हैं, उनका अवश्य अनुसरण करते हुए योजना का लाभ उठाना चाहिए|

Going Beyond Foundational Learning is a Need

“By 2025, every student in Grade 5 and beyond has achieved foundational literacy and numeracy”

The above quoted objective is the crux of National Education Policy Draft’s chapter on Foundational Literacy and Numeracy, which begins with an acknowledgment of the learning crisis that has been plaguing the Indian education system for years. In making this argument, it seconds ASER documents and World Bank reports, wherein they point out alarming data on how more than 50 % of India’s population is unable to adequately read, write or engage with numbers. The draft concedes the immediacy of this crisis as it wastes no time in establishing the ways in which it hopes the government would tackle this problem. Despite this recognition and a well-intended objective, one observes that the draft is vague in its proposed solutions, alongside certain factors that propagate the learning crisis.

In order to get to these issues, one will have to first understand their proposed solutions.

In this draft, the K Kasturirangan Committee set about resolving the problem by claiming that a major cause for the crisis is the “lack of school preparedness” or the lack of early childhood care. They lay out a framework for parents and anganwadis in the draft’s previous chapter to account for this care and preparedness. A school preparation module will be introduced for the first 3 months of grade 1 to ensure that students are equipped with the necessary cognitive tools to start their syllabus. The draft also argues for an increased focus on foundational skills in these early grades as they plan to redesign classroom material, hold language/mathematics weeks and melas etc (59). This will be accompanied by the National Tutors programme, wherein senior students with good academic records will tutor their junior counterparts.

The committee has also recognised the importance of nutrition and health in a child’s education. It puts forth an expanded mid-day meal programme to ensure that the classroom is more productive than usual (58). In this context, they have had much wider perspective on trying to understand what factors affect education.

They propose “a mission-mode dedication to remediation” for all students who are already in school, having fallen behind their expected level. They hope to achieve this through the “Remedial Instructions Aides Programme,” a temporary project of 10 years that will draw instructors from local communities to hold special remediation classes, during and after school hours (60).  While the idea in itself is necessary, it is not expanded on in the draft and therein lies the vagueness of this chapter. The programme is meant to help students “who have fallen behind” but there is no clarity on whether the help is restricted to foundational education. Does this mean that the programme will help a 7th grader in reading or writing but will not be equipped to help them reach their grade level? In such a situation, the learning crisis will not be resolved as the transition from foundational to their required level of academics will not take place.

There is a mention of “second chance education programmes” in the following chapter on dropouts. Dropouts who are of the age 15 and above will be enrolled in adult education schemes to attain foundational literacy. However, they could also follow this up with vocational training programmes and an elaboration on how transition can take place to ensure the student is able to stay on his/her required level (70). The draft is lacking in a discussion on transition from foundational basics.

Educationist Anita Rampal, in her comments on the draft would point out that while the draft accepts the problems of rote learning in primary education, it does not address the fact that this mechanical mode of pedagogy looms over the Indian education system in general. This is important as it highlights the fact that even if one assumes that the proposed solutions will produce students with strong foundational skills, they will still have to enter a system in their secondary school wherein the focus is on lecture based rote learning. Therefore, it is not just dropouts who would struggle with transitioning to their level of academic expectation. The students coming up might also face the same set of issues as this point calls for the need to address pedagogy across the system to minimise the significance of rote learning. The issue of transition is not just in terms of content, it could also be in the context of teaching methods.

In conclusion, the point being made is that our nation’s learning crisis is not limited to attaining foundational literacy. While it is of the utmost importance and the draft has put thought into tackling that issue, it is incomplete without a plan to help students transition to their existing levels.

Gokulnath is a Research Associate with the Centre for Policy Research.

Perspective is of the author and does not represent an institutional stand.

Why ‘Non-Teaching’ Work should be Clearly Defined in the New Education Policy

In my previous blog I discussed the burden of non-teaching tasks that teachers routinely engage in and findings from a self-reported time use study and perception survey we conducted with government teachers in Delhi (link to the report here). The study involved 200 teachers from two of the largest education departments in Delhi i.e. the Municipal Corporation of Delhi (MCD) and Directorate of Education (DoE).

Here I will address how the new National Education Policy draft addresses the question of non-teaching tasks and what changes it proposes in this regard.                                                             

Election and survey duties remain

The draft NEP retains teachers’ role in election and survey duties. Election duty, particularly BLO (Booth Level Officer) duty, has been a longstanding sore point for teachers because it involves going to door-to-door updating the electoral roll. In our perception survey, female teachers in particular often raised issues of personal safety, having to travel to far-off localities and working well into the night for election duties. While some states have banned the involvement of teachers in BLO work outright, others continue to engage teachers in the same. Recently, NITI Aayog recommended stopping the deployment of teachers as BLOs, however the Election Commission stated this was ‘unwarranted’.1

The involvement of teachers in official surveys has been a contentious issue for similar reasons. In Delhi, we found that MCD school teachers in particular were more occupied with surveys, reportedly spending 14 days on average on the same. Teachers were mostly involved in conducting the Child Census, as well as an unofficial door-to-door survey around admissions season to increase enrolment in their school’s locality. At times, teachers also reported being pulled into surveys that were removed from the sphere of education entirely, such as a survey of functional streetlights in the locality.

The MDM burden doubled

While the NEP clearly specifies teachers are not to be involved in cooking mid-day meals (MDM), it fails to account for the time teachers spend on managing MDM every day. Time use data from Delhi, showed that MDM routinely exceeded the allotted 20 minutes, with teachers spending upwards of half an hour on average on the task. This was due to the time taken to queue up the class, assist children in washing their hands, taste and distribute food, wash their tiffins and help clean up afterwards. Furthermore, teachers are then required to record and upload MDM data online. The time required for this daily activity remains underestimated and could potentially be doubled with the introduction of breakfast in schools, as proposed in the draft NEP.

School complexes – a boon or bane?

The draft proposes the creation of school complexes, which will include one secondary school along with other schools offering lower classes within the same neighbourhood. Among other things, the school complex will be an organisational unit allowing for the sharing of resources across schools in the complex. However, the responsibility for managing the complex, and handling its administrative, financial and academic affairs has been handed to the principal of the secondary school, who will also be the head of the complex. The effects of the burden placed on one school, will inevitably trickle down to its teachers who could potentially be pulled into additional school complex management related charges, for instance maintaining records of resources and staff shared across the complex. Our study found that teachers who were given heavy ‘additional charges’ generally ended up delegating the work among other teachers, therefore affecting multiple teachers’ teaching time and leading to a collective feeling of being overwhelmed with administrative work.

The responsibility of recordkeeping and data management

Findings from our perception survey showed that 93% of teachers felt paperwork took up a lot of time. This was due to data duplication, records being maintained in both hardcopy and softcopy, as well as lack of or poor quality of clerical and IT staff. Overall recordkeeping reportedly occupied 9% and 11% of time in MCD and DoE schools respectively.

The NEP draft proposes support staff to handle general administration and “any non-teaching tasks”. While this is a welcome move, particularly in schools where there is presently no administrative staff, it should be noted that having support staff alone may not suffice. Our teacher time use study in Delhi, found that despite having clerical and IT staff for instance, teachers in DoE schools remained heavily involved in recordkeeping and data management. Clerks in DoE schools often willfully stayed away from maintaining and managing school records and data, instead limiting themselves to handling salary records. It is crucial therefore, to clearly define non-teaching tasks to include work such as recordkeeping and data management, and simultaneously expand the role of clerical staff to incorporate the same.

Arriving at a definition of “non-teaching” work

Findings from our perception survey, highlighted confusion among teachers regarding the exact range of their roles and responsibilities. This was particularly the case for work that was neither directly teaching-learning related nor entirely clerical and far removed from their core job as teachers, but fell somewhere between the two extremes. This included for example, teachers’ involvement in MDM, health check-ups and responding to official mails and circulars.

A reason for this confusion is the RTE Act itself. While Section 27 of the RTE states that teachers are prohibited from being deployed for “non-educational purposes other than the decennial population census, disaster relief and election duties”, Section 24 lists the duties of a teacher and vaguely states that teachers must “perform such other duties as may be prescribed.” Meanwhile, the NEP draft only uses the term “non-teaching work”, and vaguely defines this as “any time-consuming administrative assignments”. This leaves enough wiggle room and does not help in moving towards a clearer definition of the work teachers should and should not be doing.

In order to make its proposal of removing teachers from all non-teaching work actionable, the NEP should first consider clearly defining what the terms ‘non-teaching’ and ‘non-educational’ work entail. Additionally, in its proposed comprehensive review of the RTE Act, the drafting committee should consider including this definition and addressing the issue of RTE exempt duties like election and survey work, so as to further emphasise its commitment to freeing teachers from non-academic tasks and allowing them to focus squarely on their core role of enabling teaching-learning.

Also read our second piece on NEP: Going Beyond Foundational Learning 

 

References

  1. Kalra, A. (2019, May 8). In Elections, Teachers are like Malko from ‘Newton’, Supportive and Unsung. The Wire. Retrieved from https://thewire.in/

The Grey Area of Professional Corruption

In my blog of 14 June, I referred to the phenomenon of private sector corruption and listed four categories of such corruption. One of the important areas of private sector corruption is the corruption engaged in by those in professional occupations in the private sector.

It is difficult to define Professional Corruption with any degree of precision, for two reasons. First, as private sector corruption is not criminalised, there is no definition of the kinds of corruption that is engaged in by professionals in the private sector. Second, many of those who carry on occupations of professionals holding a position of a fiduciary nature in the private sector, do not even think that what they engage in constitutes corruption. They at worst, think of what they do as a business sharp practice, never corruption.

What exactly do I mean by those who are in fiduciary positions? By this, I refer to doctors, media persons, chartered accountants, lawyers, company secretaries and such like. These professions are governed by strict codes of conduct; indeed, these can be considered as codes of honour, to which professionals who practice these are to strictly comply. These professionals are also governed by voluntary associations of themselves, such as the Institute of Chartered Accountants, the Bar Councils, the Indian Medical Council and the Press Council. These professional bodies lay down the yardsticks to define integrity with reference to their respective areas of professional skill. Violation of these codes of conduct can lead to various degrees of punishment, which depend upon the extent to which unethical and corrupt acts of those belonging to the guild constitute unacceptable behaviour.

In the case of lawyers, for example, a transgressor of the do’s and don’ts of conduct laid down by the Bar Council, can be punished through censuring, or in the most grave of cases, with deregistration and the withdrawal of permission to practice in various courts. In the case of doctors too, there can be a withdrawal of registration, which results in those de-registered not being able to carry out their practice as doctors.

Are these effective?

Not by a long shot, even though the extent of compliance can vary from one profession to another. Two examples will suffice to show the patterns of compliance or lack of it, in selected professional guilds.

The first case study is of corruption in the health sector, and in particular, that which is prevalent amongst doctors, both as individuals and as part of an institution.

The health sector has been identified in many countries as being relatively more prone to corruption. In developing countries, this is often attributed to the fact that health services are in great demand, while the resources to provide adequate services are often inadequate, leading to a premium on their availability. This can also be attributed to the relative concentration of medical services in urban areas in such countries, which drives rural people to come to urban areas for treatment, where they are more vulnerable to fall prey to demands for bribes.

Extent of Corruption in the Health Sector:

According to the India Corruption Study 2007 undertaken by Transparency International and the Centre for Media Studies, Health stands at the seventh position in terms of most corrupt services, out of 11 studied. (Above health comes, Police, Land Records/Registration, Housing, Water Supply Service, NREGS, Forest and Electricity. Health ranks worse than PDS, Banking and School Education). The corruption in the sector is mostly to do with non-availability of medicines, getting admission into hospitals, consultation with doctors and availing of diagnostic services. In particular, the survey revealed the following particulars (Box 1):

More about health sector-related corruption in my next blog.

This blog is part of a series. The first blog can be found here.

Relooking ‘Non-Teaching’ Roles of Government School Teachers

“We have to be counsellors, teachers, government servants, surveyors, mothers and clerks, all at once.”

This statement by a primary school teacher in Delhi, encapsulates the various roles teachers fulfill, many of which are far removed from their core role of enabling teaching-learning. The teacher in question described feeling guilty and frustrated about not being able to spend enough time with her students, and instead having to divert more time towards administrative and other non-academic tasks.

This sentiment is a common one and as a result, recent years have seen an increased focus on understanding the non-teaching tasks teachers do and how this impacts the classroom.

Teachers across the country are found to be engaged in a range of non-teaching work such as election duties, vaccination campaigns, cattle census, government surveys, as well as Aadhaar or ration card verification. Last year, a study by the National Institute of Educational Planning and Administration (NIEPA), found that teachers spend only 19% of their time on teaching and teaching-related activities. Meanwhile the rest of their time is spent on non-teaching core activities (over 42%), as well as school management and other education department related work (38%). 

The newly released draft National Education Policy (NEP), acknowledges non-teaching work as one of the biggest problems facing teachers and attempts to address the issue, stating:

“…aside from the minimal Supreme Court directives related to election duty and conducting surveys, teachers will not be requested nor allowed to participate in any non-teaching activities during school hours that affect their capacities as teachers.”

The draft goes on to cite some specific examples of non-teaching work teachers will be removed from, including: “Cooking midday meals, participating in vaccination campaigns, procuring school supplies”, which is a start, particularly in light of NIEPA’s findings. However, it fails to go into sufficient detail about the range of non-teaching work teachers are engaged in, vaguely including “any other time-consuming administrative assignments.” The NEP does not specify a benchmark for what is considered ‘time-consuming’ in the average teaching day.

Findings from Delhi

In order to understand how teachers spend their time in school, Accountability Initiative conducted a time use study with 200 teachers from both Municipal Council of Delhi (MCD) and Department of Education (DoE) schools across all 13 education districts of Delhi (the report can be found here). The study included a self-reported time use component which measured the time teachers spent on various activities during a school day, and a perception survey to understand how teachers view their roles and responsibilities, their professional identity and workload, as well as their overall experience of working in Delhi’s government schools. Using purposive sampling, teachers who were identified as the ‘busiest’ by their Head of School and colleagues, were selected. This was done in order to capture just how high teachers’ workload can get.

The perception survey showed that 66% of teachers identified non-academic work as the biggest hurdle they face in school. Majority of teachers identified administrative tasks not directly related to teaching-learning as ‘clerical’ and felt they should not be doing them. For example, 87% and 89% of respondents felt they should not have any role in seeding student Aadhaar cards and the opening or closing of student bank accounts, respectively.

Meanwhile, the time-use data showed that teachers were only able to teach for less than half their time in school. MCD and DoE teachers spent 49% and 52% of time in school, on academic activities (ref. figure below), respectively. However, if other academic tasks like sports, classroom management and teaching-learning supporting activities are excluded, the data shows that teaching alone comprised only 41% of time in MCD schools and 39% of time in DoE schoolsSchool management tasks meanwhile took up 39% and 36% of time in MCD and DoE schools respectively.

 

 

Teachers regularly faced disruptions while teaching and this was found to be largely due to routine, essential school management work such as marking and uploading student attendance and mid-day meal (MDM) data. Since MCD schools are only for primary classes, this also included activities like safely handing over students to the parents at the end of the day or staying back after school with students whose parents were late to collect them. In the case of DoE schools, start-of-day classroom management, timetabling and absentee teacher arrangements, as well as checking and responding to mails and circulars, made up the bulk of school management time.

Teachers were also found to be engaged in recordkeeping and data management work, which was often needlessly time consuming due to student data being maintained in multiple formats, as well infrastructure and resource constraints.

Finally, school management tasks often spilled beyond official school hours. Of the 39 hours DoE teachers reported working beyond school timings, 51% time was spent on finishing school management tasks. In the case of MCD schools which reported 49 hours of teachers working beyond school timings, school management work constituted a whopping 94%. Furthermore, instances were found of teachers being sent out of school during school hours, to run errands at the local market, bank and in the case of MCD schools, to the tax office to file income tax returns for all school staff.

The scope of non-teaching work is broad, and there is variation in the types of non-teaching tasks teachers are pulled into, from state to state. In part two of this blog, I look at what the draft NEP proposes to change, and why there is a need for determining exactly what constitute ‘non-teaching’ tasks.

Anupriya Singh is a Research Associate at Accountability Initiative.

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References

  1. Puppala, A. (2018, September 22). Teachers spend only 19.1 per cent time teaching. Deccan Chronicle, Retrieved from http://www.deccanchronicle.com NIEPA

A Crackdown on Corruption?

This month, the Union Government of India compulsorily retired nearly 30 officers of the Indian Revenue Service, on charges ranging from corruption to sexual harassment. The media termed this as a crackdown on corruption and the beginning of a war to reduce corruption.

The question is whether such a conclusion has any substance.

I believe that it is too early to say.

Crackdowns on corruption, if they are indeed crackdowns, comprise many more tectonic shifts apart from the sacking of a few officers. Yet, even though the action of the government is not unprecedented – Rule 56 of the General Financial Rules of the Government, which has provided for compulsory retirement of officials has been used often by past governments too – the number of officers currently retired is a large one and worthy of being specially noticed.

One of the salient features of the current round of compulsory retirements is that it targets one department, the Revenue Service. While the Service may suffer disquiet because of this focus on it – there are many honest officers in the Taxation system and they may feel a loss of morale – it also has to be recognised that Tax departments are especially corruption prone. Therefore, the choice of the department as the focus of a group sacking of officers is a good one. The government proposes to widen the net and identify corrupt and inefficient officers in other departments too. That is indeed something that will send the right signal to the bureaucracy.

Experience shows that crackdowns on the corrupt have to be sustained and must deliver a shock. A celebrated and oft quoted instance of mass action on the corrupt is that led by Hong Kong’s then governor, Sir Murray MacLehose. Hong Kong underwent an explosion of corruption in the 1960s and 1970s, fueled by vibrant economic growth and lax rules. The police and public works department were seriously affected by the malaise, so much so that new recruits were openly invited to join in the loot. ‘Either board the bus, or walk alongside, but don’t stand in front of it’, they were advised, in a thinly veiled warning.

Bribes, known as ‘tea money’, were openly collected and channelised through a well organised network with its internal rules on sharing; who got how much, when, where and in what form. MacLehose hit high, wide and hard. The former police chief superintendent Peter Fitzroy Godber, who had transferred his ill-gotten wealth to bank accounts across the world used his special pass to bypass customs and left the country. He was extradited from his home in London, tried, convicted and sentenced to a jail term. The initial focus of MacLehose was on the police and its entrenched system of hafta collection in police stations. The system was so open that each police station has a dedicated room for a ‘collector’ who advised clients to buy bank drafts through which they could send their bribes to overseas bank accounts. In the Yau Ma Tei fruit market case, a heroin racket in West Kowloon in 1976, so many officers were arrested that the local police station was nearly empty.

The police hit back, resenting the dramatic drop in their incomes. In 1977, police officers stormed Hong Kong’s Independent Commission Against Corruption and attacked staff. This led to MacLehose resorting to a bold and unconventional move. He offered a partial amnesty to officers involved in corruption prior to 1977, while still pursuing serious cases. The police felt they were given a second chance and they began to transform themselves. The ICAC turned to systems reforms that reduced discretion, increased transparency and ensured stricter control over corruption prone transactions in the government. This was a highly effective strategy and corruption was choked and diminished.

Experience shows that crackdowns on the corrupt have to be sustained and must deliver a shock.

Considering the tortuous steps taken in other countries to reduce corruption, we need to be a little careful, if not downright skeptical about mass actions such as the recent spate of compulsory retirements. One needs to remember that the government is full of intrigue, concealed and not so concealed antagonisms and rivalries. Honest officers will rile others and those thwarted from corruption will bide their time and seek revenge. It is not beyond the realm of possibility, indeed it is inevitable, that the very same tools of crackdowns could be misapplied to target honest officers. When the situation escalates to hyper corruption even honest officers don’t remain safe. That was a worry and continues to be one even now. Furthermore, if the agencies that catch the corrupt are themselves dishonest, then the solution could be worse than the disease.

Compulsory retirement ought not to become a way to divert attention from the original offence of the official concerned. Many officers who have been compulsorily retired are accused of serious offences ranging from corruption to sexual harassment. Is the compulsory retirement the end of the story? If that is the case, then they are getting off lightly. The substantive charges must be pursued.

There is another important point to be kept in mind when judging mass actions against corruption. There is always the lurking danger that strictness is applied unevenly. When policy corruption and state capture happens at a high level, then smart politicians can actually reduce petty corruption that impacts citizens directly and earn a good name, even as corruption continues in a centralised fashion. This affects the citizen indirectly but the citizen does not know. Out of sight is out of mind. Citizens can labour under a false impression that corruption has been eliminated when it happens at a higher level, and they face the effects indirectly and over time.

We need to be vigilant that the current ‘war’ against corruption does not suffer from these infirmities.

This blog is part of a series. The first blog can be found here.

Towards ‘Cooperative’ Social Policy Financing in India

A unique feature in India’s federal architecture is the pivotal role played by the Union government in financing and monitoring social welfare programmes, and in ensuring that all states have adequate resources and are held accountable for meeting social policy goals. During 2000-2018, the Government of India (GoI) spent over Rs 14 lakh crores on social services.[i] A significant proportion of this expenditure is met through Centrally Sponsored Schemes (CSSs) – a specific purpose transfer from the Union to states, usually in the form of schemes.

While the practice of using specific purpose transfers dates to the pre-Independence era, over time, CSSs have emerged as the primary vehicle through which the GoI finances and directs state expenditure towards national priorities. Their dominance can be seen in their sheer numbers and the quantum of money flowing through them. During the 11th Five Year Plan (2007-2011), there were 147 scheme specific transfers accounting for over 40% of total central transfers to states.[ii] This increased signifcantly in the 12th Plan period. Of the total Rs 8.61 lakh crore transferred by the Union government to states between 2012 and 2015, Rs 5.88 lakh crore (68%) was released as assistance under CSSs.[iii]

The importance of CSSs as a fiscal instrument lies in the fact that they are the primary source of non-wage, uncommitted funds available to states. With a majority of states’ own resources tied to wages, pensions and other committed liabilities (sometimes over 80-90%[iv]), CSSs were designed as a top-up to augment state expenditure, allowing them to address infrastructure and human development deficits.

In principle, the rationale for CSSs is sound and in keeping with first principles: fiscal equalization to ensure that minimum standards of public services are provided to all citizens. Over time, however, the design and proliferation of CSSs have undermined this very rationale. Richer states with better administrative capacities have been able to capture a larger share of CSS funds, resulting in a significant misallocation of resources. Analysis by the Economic Survey 2016-17 of the six top CSSs – Pradhan Mantri Awaas Yojana (PMAY), Sarva Shiksha Abhiyan (SSA), Mid-Day Meal (MDM), Pradhan Mantri Gram Sadak Yojana (PMGSY), Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and Swachh Bharat Mission (SBM) – found that under no scheme did the poorest district receive even 40% of the total resources. In fact, for the MDM and SBM, the share was under 25%.[v] Other studies of the SSA and National Health Mission (NHM) found similar results – that is, states with poorer health indicators did not necessarily get larger per capita transfers.[vi]

Moreover, the centralized nature of CSSs often makes them an inefficient tool to address state-specific needs and has undermined the autonomy of states to undertake expenditure decisions based on their local needs.

Recognizing these limitations, numerous attempts have been made to restructure schemes and restore them to their rightful place – the states. The last major impetus came with the adoption of the recommendations of the 14th Finance Commission, which increased state governments’ share in tax devolution by 10 percentage points. The resultant decrease in the fiscal space available with the GoI reiterated the need to significantly decrease and restructure CSSs. This led to the constitution of a committee of chief ministers under the aegis of the NITI Aayog. The committee made several recommendations including scheme rationalization, determination of a transparent criterion for interstate allocation, and greater flexibility in and creation of an institutional mechanism for Centre-state negotiation.

The changes that followed were minimal. While schemes were reordered under ‘umbrella’ programmes, within each umbrella programme, sub-schemes continued as before. As per the Union Budget 2016-17, even after the creation of 28 umbrella programmes, there were 950 Central Sector and CSS sub-schemes accounting for about 5% of the GDP and 9% of the total GoI expenditure.[vii] Three years later, in the interim budget for 2019-20, Central Sector Schemes constituted 12% of GoI expenditure, up from 9% in 2016-17; CSSs accounted for another 9%.[viii]

More importantly, there was no real change in the design or implementation of the schemes. Meetings for the planning of of education and health programmes continued as before, and the notification to allocate 25% as flexible, discretionary funds was not reflected in many of the scheme planning documents. Instead, the disbandment of the Planning Commission has resulted in an institutional vacuum with respect to planning. CSSs now fall under the domain of central ministries, leading to further centralization of social policy financing.

A call for rationalizing CSSs, however, has again gained momentum. The GoI recently committed to evaluating all CSSs before fresh appraisals are made and making scheme approval coterminus with the Finance Commission cycle. Accordingly, the Development Monitoring and Evaluation Office (DMEO) under the NITI Aayog has invited proposals to evaluate 28 umbrella CSSs under 10 sectors. Real change in social sector financing, however, will only be visible if the current design of CSSs is completely overhauled, in addition to scheme rationalization being carried out.

Before I offer some indicative steps on how this can be achieved, it is useful to highlight some of the main inefficiencies in the current design of CSSs. Broadly, these can be classified into four interrelated areas: planning failures, implementation failures, fiscal inefficiencies and administrative red tape. Each of these is described below.

Planning Design Failures

Budgets for CSSs are determined based on incremental plans prepared by the respective state governments and approved by a committee at the central level. This has given individual ministries significant discretion in determining scheme design and approving state-specific plans and budgets. There is often an inherent tension between central government priorities and states’ perceived needs. However, since the Centre controls the purse strings, central priorities dominate. To illustrate: in 2010, the Bihar chief minister had launched several state entitlement schemes for education, such as cycles, uniforms, etc. In its SSA budget, thus, the state proposed a low allocation for entitlement. However, the GoI’s own prioritization of entitlements meant that despite no demand, Bihar’s entitlement budget under SSA was enhanced by over 200%. In another example, in 2013–14, one state government wanted to use the SSA budget to provide vehicles for block-level officials to improve school-level monitoring. The approval board at the Centre, however, denied this request as purchase of vehicles was not permitted under SSA rules.[ix]

Implementation Failures

CSSs are typically designed by the central government but implementation rests with the state and local governments. Most CSSs come with rigid guidelines for execution which privilege a top-down, ‘one size fits all’ model with fixed norms and unit costs. For the NHM, for instance, the guidelines lay down fixed population norms to set up health facilities. These, however, underestimate requirements in states such as Rajasthan and Madhya Pradesh which have a population density lower than the national average.

More importantly, even granular implementation details such as hiring processes, training modules and schedules, communication strategies, etc. are laid down by the Centre. Consequently, states and local governments have very little flexibility in adapting implementation based on their specific jurisdiction. The problem is even more acute at the point of service delivery. In education, for instance, if a school wants to spend more money on buying teaching material rather than painting walls, the norms simply don’t allow it. Similarly, a survey conducted by Accountability Initiative in 2013 found that the pressure to meet RTE infrastructure requirements resulted in money for boundary walls being sent to all schools in Himachal Pradesh even though construction couldn’t be undertaken due to land unavailability.[x]

Fiscal Inefficiencies

Most CSSs are designed as a cost-sharing programme between the Union and the states. With the division of CSSs into ‘core’, ‘core of the core’ and ‘optional’, states are expected to contribute 50-60% of the total approved budgets from their own plan funds.[xi]

Within a scheme, however, the matching ratio is uniform across states irrespective of their fiscal capability. Release of funds by the GoI is contingent on states releasing their own share and meeting other conditionalities such as the submission of Utilisation Certificates (UCs). This has three important consequences with respect to distribution of resources. First, the uniform fund-sharing ratio often makes it difficult for the low-income states to put in their requisite share. As subsequent fund release is contingent on states submitting their share, this has an effect on the total quantum of money received by fiscally weaker states. Thus, while Karnataka may perform better than Bihar on most development indicators, it may also be able to avail of the CSS grant by making its matching contribution, while Bihar may find it difficult to put in its share. Second, the presence of conditionalities for fund release means that there is a considerable difference between the approved allocation and actual grants. In 2016-17, for instance, only 85% of total NHM approved budgets were released. These differences are amplified at the state level. Thus, while Bihar (one of the poorest states) received 79%, Gujarat and Haryana (fiscally stronger states) received over 100%.[xii] This creates uncertainty in implementing schemes and invariably states with greater shortfall in services levels suffer the most. Finally, the fixed fund-sharing ratios also creates perverse incentives for states which may not need the additional CSS fund to try and get it.

Layered Bureaucracy and Administrative Red Tape

Finally, detailed and rigid guidelines, complex paperwork and numerous conditionalities for fund release under CSSs have also created considerable administrative red tape, resulting in inefficiencies in approvals and fund flows. The situation is exacerbated by the fact that for some CSSs, the central government has set up parallel institutional structures responsible for CSS implementation in states, thereby creating a new stakeholder in the implementation process. Under the SSA and NHM, for instance, scheme planning and implementation rests with autonomous bodies known as State Implementation Societies.[xiii] The multiplicity of roles means that even simple tasks require approval and technical sanctions from different authorities. A study of the NHM in Uttar Pradesh conducted by Accountability Initiative found that it took a minimum of 22 desks through which the file had to pass for the release of funds from Treasury to the State Health Society (SHS). Other studies have found that the figures for Bihar and Maharashtra stood at 32 desks and 25 desks, respectively.[xiv] Possibly as a consequence, release of funds from the SHS to the Treasury took as long as five months in Maharashtra and over three months in Bihar and Uttar Pradesh.[xv] Delays at one level have a knock-on effect and often funds reach the last mile in the last quarter of the financial year.

Five-step Process in Reforming the CSS Design

These challenges highlight the need to move away from past reform efforts (which have focused on minor tweaks in CSSs) towards the first principles of the rationale behind specific purpose transfers. This will require a five-step process.

Moving from a Schematic to a Sectoral Approach

The first step is to limit the number of schemes. One way of doing this is to link finances to ‘national goals’. The committee of CMs on restructuring CSSs laid out nine key areas as part of the National Development Agenda for Vision 2022. It recommended that instead of the previous government’s strategy of bundling schemes under 22 umbrella programmes, funds could be released specifically for priority areas rather than multiple sub-schemes. This would give states the flexibility to plan activities within each priority area as per their own development needs. Steps in this direction have already been taken. The recently launched Samagra Shiksha – an overarching programme for school education extending from pre-school to class 12 – merged three previously independent CSSs. In theory the scheme allows states to prioritize interventions and sectors as per their need. Preliminary analysis of the scheme budget shows that indeed states are making decisions in keeping with their specific needs (albeit still guided by the GoI). Thus, while Uttar Pradesh and Bihar – which continue to lag behind in elementary education – allocated over 80% of their Samagra Shiksha budget for elementary education, states such as Haryana and Himachal Pradesh have focused on secondary education, allocating over 40% to the same. Similar steps should be taken in other sectors.[xvi]

Moving towards Block Grants

Having identified priority areas, the next step would be to ensure states have enough resources to fund these areas. Instead of allocations being linked to detailed and cumbersome planning and budgeting processes with restrictive, centralized guidelines, block grants could be given to states. This would allow for prioritization of different inputs and secure greater ownership by state governments. An example of this can already be seen in the Rashtriya Krishi Vikas Yojana (RKVY), a CSS established in 2007 to rejuvenate falling agricultural growth rates. Unlike most other CSSs, RKVY offers the flexibility to a state to choose activities under the scheme that most suit its requirements. Projects are prepared by the departments concerned and then scrutinized by a committee under the the state government’s Agricultural Production Commissioner. Most importantly, approval of the project is not done by the GoI but by the State Level Sanctioning Committee (SLSC), chaired by the Chief Secretary and with representatives from the Ministry of Agriculture and NITI Aayog as members.

Ensuring Equitable Interstate Distribution

Third, interstate distribution of the normative block grant portion of funding amongst states can be based on a formula that takes into account aspects like population, area and proportion of difficult areas, along with sector-specific needs. Differential cost-sharing norms that take note of the shortfall in service levels could further assist in ensuring that the distribution of funds fulfils the criteria of need and equality. Moreover, the formulaic nature of the grants will ensure predictability of fund flows and allow for better planning.

Reforming the Public Finance Management System

The fourth step is streamlining inefficiencies in the approval and fund flow process. This can be done by building a just-in-time Expenditure Information Network (EIN) which brings all expenditure units under one system. The first step in this process was undertaken in 2017, when the GoI mandated all CSS expenditure to be routed through the Public Finance Management System (PFMS). The system envisages each implementation unit to be under one system, thereby allowing the Centre and states to monitor funds at different levels. The problem, however, is that the system still functions as a push system, with funds being routed through multiple levels requiring approvals at every stage. By moving towards a pull system, each implementing unit could have the ability to automatically withdraw funds as needed. A defined resource envelope and appropriate access codes would ensure that funds are not misused.

Augmenting Capacity of the Evaluation Office

Finally, instead of focusing on monitoring the nuts and bolts of implementation, the GoI must build its capacity to develop a credible database on monitoring outcome indicators on a real-time basis. Currently, an inherent weakness in the CSS design is its focus on inputs. This creates perverse incentives for the entire administrative machinery to focus on ensuring adequate inputs, or at best, meeting output targets. Here, the DMEO’s role could be expanded by investing in systems to generate regular, credible and granular data on various outcome indicators and to conduct concurrent evaluations of key programmes. Over time, performance on outcomes could be linked to additional financial incentives available to states.

This piece was originally published on the Centre for Policy Research website as part of the ‘Policy Challenges 2019-2024’ series. 


[i] ‘Reserve Bank of India Handbook of Statistics on the Indian Economy’, Public Finance Statistics, https://dbie.rbi.org.in/BOE/OpenDocument/1608101727/OpenDocument/opendoc/openDocument.faces?logonSuccessful=true&shareId=0.

[ii] B.K Chaturvedi, ‘Report of the Committee on Restructuring of Centrally Sponsored Schemes (CSS)’ (New Delhi: Planning Commission, Government of India, 2011).

[iii] NITI Aayog, ‘Report of the Sub Group of Chief Ministers on Rationalisation of Centrally

Sponsored Schemes’ (New Delhi: NITI Aayog, 2015), http://niti.gov.in/writereaddata/files/ Final20Report20of20the20Sub-Group20submitter20to%20PM.pdf.

[iv] See, for instance, Y. Aiyar and A. Kapur, ‘The Centralization Vs Decentralization Tug of War and the Emerging Narrative of Fiscal Federalism for Social Policy in India’, Journal of Regional and Federal Studies 29(2) (2018): 187-217.

[v] Ministry of Finance, ‘Universal Basic Income: A Conversation With and Within the Mahatma’, Economic Survey 2016-17, Chapter 9, https://www.indiabudget.gov.in/es2016-17/echapter.pdf.

[vi] M.G. Rao, ‘Central Transfers to States in India: Rewarding Performance While Ensuring Equity’ (New Delhi: NITI Aayog, 2017).

[vii] Ministry of Finance, ‘Universal Basic Income’.

[viii] Rathin Roy, ‘Changing Fiscal Dynamics’, Seminar Magazine 717 (2019)

[ix] Aiyar, et al. ‘Rules versus Responsiveness: Towards Building an Outcome-Focussed Approach to Governing Elementary Education Finances in India’, Accountability Initiative Working Paper (New Delhi: Centre for Policy Research, 2015).

[x] Accountability Initiative, ‘District Report Cards, 2014’ (New Delhi: Centre for Policy Research, 2014).

[xi] For the North East and Himalayan states the Centre usually provides 90%.

[xii] Accountability Initiative, ‘National Health Mission, 2017-18’, Budget Briefs (New Delhi: Centre for Policy Research, 2018).

[xiii] In NHM it is known as State Health Society.

[xiv] See, for instance, M. Choudhury and R.K Mohanty, ‘Utilisation, Fund Flows and Public Financial Management under the National Health Mission’, NIPFP Working Paper Series (New Delhi: National Institute of Public Finance and Policy, 2018), https://www.nipfp.org.in/media/medialibrary/2018/05/WP_2018_227.pdf.

[xv] Accountability Initiative, ‘National Health Mission’.

[xvi] Accountability Initiative, ‘Interim Budget 2019-20’, Samagrah Shiksha Budget Briefs (New Delhi: Centre for Policy Research, 2019).

The Increasing Problem of Private Sector Corruption

The suggestions I mentioned in my last blog on how to reduce corruption in the Registration Department, which registers deeds and documents relating to transactions in land and other immovable property, were based on a simple application of the Klitgaard formula. This was: Corruption equals Monopoly plus Discretion, minus Accountability.

However, I also said that even if our suggestions were implemented, they would not have worked. This is because the crowdsourced reports that we read, revealed that the techniques followed by corrupt departments had become more sophisticated and less easy to detect and prove.

In earlier, simpler times, catching the corrupt when they were engrossed in the act, were spectacular and entertaining events. The anti-corruption squad would visit a corruption prone office unannounced and hell would break loose. Officers and staff would be caught red faced, with their pockets and desk drawers filled with bank notes. Things that would fit straight into an uproarious comedy movie would ensue; officers desperate not to be caught with their loot, have been known to flush money down the toilet or throw them out of the windows. However, today, if surprise raids were to be held, the chances of catching the corrupt with ill gotten money is remote.

Corruption has found a new partner; people in the private sector. And they are not going to be caught, if the law continues to be what it is now.

Let me give an example of what I mean by a public private partnership in corruption. Let’s get back to the problem of house registration. It is an open secret that when a builder sells a flat, he also ‘arranges’ for a smooth registration of the property. A ‘facilitation fee’ is charged; often by another name, such as ‘legal drafting charges’ or ‘lawyers fees’, for services such as drafting a sale deed for the property. The buyer is intimated formally to make payment, which she may do through cheque or an online transaction, with the builder. On the appointed day, the buyer goes to the sub-Registrar’s office and the sale transaction is done promptly, by polite and courteous staff. All of this looks squeaky clean and the conscientious buyer may even be satisfied that no bribes have been paid for the sale.

But here is the catch. It is the builder who picks up the bribe, on behalf of the officers. Payments are then channelised to the officers, or their agents, or to the ultimate, often political, mastermind of the operation.

Woe betide the buyer who wants to outsmart such arrangements. Some of them, quite canny, have refused to pay the facilitation fee and attempted to have the property registered on their own. Builders try to discourage them, and if they fail, they comply with the request of buyers to register the property sullenly. On a couple of cases where I intervened on behalf of property owners who refused to step into the trap laid down for them by builders, it was seen that the latter not only were uncooperative, but even resorted to threats and misleading predictions that the buyer would run into serious trouble if he did not pay the ‘facilitation fee’.

Similar arrangements of private sector players acting as bribe collection agents for public servants, exist across a wide range of government services. Car dealers act on behalf of officials of the transport department, electricity civil contractors on behalf of the power utility, and so on.

How can such a thing happen? The root cause is that as it stands today, private sector corruption is not entirely criminalised. The Prevention of Corruption Act, even after recent amendments to it, largely applies to corruption by public servants. This is in sharp contrast to anti-corruption laws in many other countries, which criminalises corruption by the private sector.

Let us look at what one would consider to be within a commonsensical definition of corruption, in the private sector. I reckon that there are four kinds of private sector corruption. The first category comprises corruption within corporates and private sector entities, such as departments within private organisations demanding and accepting bribes. Examples are of employees that cheat on their travel bills paying a cut to the accounts department to clear their false bills, or new recruits paying the HR department for their appointment letters.

The second category of private sector corruption happens between corporates. For example, a kickback may be paid to procurement officials by a vendor. The third category of private sector corruption is the phenomenon of professional corruption, for example, unethical and corrupt practices by lawyers, chartered accountants and medical practitioners. The fourth category is the corruption that happens between corporates and governments, of the kind that one explained earlier, which happens in the Registration Department.

In India, recent amendments to section 9 of the Prevention of Corruption Act has criminalised private sector bribing of public servants. Section 9 states that if any person associated with a commercial organisation gives or promises to give any undue advantage to a public servant to obtain or retain business or an advantage in conduct of business, he commits the act of corruption.

While this is indeed a welcome amendment, it is not sufficient to counter the rising threat of private sector corruption.

This blog is part of a series. The first blog can be found here.