CVC unveils three-point plan to fight corruption

By Our Staff Reporter

HYDERABAD, JUNE 23. Opining that the second generation reforms has some defects, the Chief Vigilance Commissioner, Mr. N. Vittal, has come out with a three-point new approach, the focus of which is on ``Zero tolerance of corruption,'' followed by tenfold increase in the velocity of Government operations, and focus on productivity to make investments yield promised benefits.

Mr. Vittal was speaking at a meet organised by the Federation of Andhra Pradesh Small Industries Associations (FAPSIA) on ``Simplified and Transparent Administration of different Central fiscal Acts like the Central Excise, and Income Tax.''

Frontal attack on corruption should be the first item in the second generation reforms, he said, adding that corruption was preventing India from becoming a super power. He pointed out that according to a 1999 UNDP report for South Asia, if India's corruption level goes down to that of Scandinavian countries, then its GDP will go up by 1.5 per cent and Foreign Direct Investment by 12 per cent. The EXIM Bank study also showed that corruption and procedural delays were really causing anywhere between 5 per cent and 25 per cent increase in the cost of Indian products and to that extent made them less competitive on the global front.

Corruption was an issue now being discussed by developed countries in the global agenda also, because of their ``New Geo- Political Strategy,'' in the context of globalisation, and its (corruption's) effects on the bottomlines (of foreign investments). In contrast, during the cold war between the US and USSR, corruption was tolerated by developed countries as part of their `Geo-political strategy.'' But the scenario had changed now.

For tackling corruption effectively in India, he made various suggestions. This includes a Zero exemption in Income Tax, and a flat rate of 20 per cent IT to be levied on income above Rs. 2 lakhs per annum. This would usher in greater transparency and in one stroke the level of corruption in the IT department can be brought down. Another suggestion was an ``Integrated approach,'' to rid the economy of black money, by offering ``amnesty'' to holders of black money and levy of a one-time 21 per cent IT for such disclosures.

The main source of black money was evasion of IT, Customs and Excise. The Customs and Excise Acts provide excellent opportunities for corruption because of the ambiguity and discretion at different levels on decision-making. He prescribed a `zero discretion' approach, by indicating precisely the rate that is applicable for a particular product or services.

If the Government wanted to implement reforms in the labour sector, they should announce immediately, by an administrative order that till the law is formally amended, any unit of 1,000 employees, on application will automatically get approval for closing down within a period of 48 hours. This would give the Indian industry a chance to adopt flexible labour policy and fine tune its management strategies, he felt.

Dr. Jayaprakash Narayan of Lok Satta said curbing corruption was not only a moral responsibility, but an economic necessity also. He congratulated the FAPSI for its fight against the Central Excise Department recently on issues of corruption. Mr. T.V.R. Murthy, president, FAPSIA, said its demand had been for an open, transparent and perceivable justice delivery system, where action and punishment against the corrupt is seen to be meted out.

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