Wednesday, May 11, 2016

Cutting out the Middleman

A few years ago, Janagraha, a Bangalore-based NGO, started a website called "I Paid a Bribe". It was a hugely popular initiative with thousands of people logging in to report the bribes they had to pay to get work done at government offices across India.

Thanks to this initiative, finally some real data was being generated on how speed money was changing hands. However, limited awareness of the existence of such a portal, and, limited faith in its ability to curb the menace gives us a picture that may not reflect ground realities. For instance, it is difficult to believe that an overwhelming cases of bribery happen in Bangalore city (8300 cases; 10%), and that it is rare in North Indian cities.

A recent op-ed in the Indian Express by Philip Oldenberg has brought out an aspect which is overlooked in the hitherto black-and-white narratives of bribery and corruption. According to Oldenberg, even if an official is honest, all it takes is a the perception of fallibility, for middlemeen to makes piles of money.

Oldenberg gives the example of semi-literate villages who need to get their land valued by government officials. In the face of paperwork that looks formidable, they turn to the friendly neighborhood "dalal" (middleman) who  offered the farmer knowledge, access, and the willingness to dirty his hands, all for a modest commission, with a money-back guarantee.

"...When the officers of the land consolidation department come on their visits, the dalals would approach them in a semi-public way (with farmers watching), whispering perhaps some innocuous something, to give the impression of having a close relationship."

Then, after taking his "processing fees" from the farmers, he would just run the applications through the normal procedures and get the work done. So even when an honest official does not take bribes, the middleman walks away with all the money, reinforcing the public impression that nothing gets done unless you pay bribes!

Which is the most efficient way to cut the middleman out of the system, and prevent him from muddying the waters?

Perhaps it is worth replicating the models followed by MEA's Passport Offices and the Motor Licensing Offices in Delhi. In 1994, when I submitted my first application for a passport to the Regional Passport Office (RPO) at Bhikaji Cama Place, the whole building was teeming with middlemen. At every step, you would be urged to hire "facilitation services" for speeding your application through the red-tape. And sure enough, those who did not pay up would have their applications rejected for the flimsiest excuses. The cost of not paying a bribe would be widely offset by the time and money spent on making multiple trips to the RPO.

Then, in 2006, MEA brought in Tata Consultancy Services (TCS) to revamp the entire RPO system. And what a transformation it turned out to be! Now TCS manages more than 77 passport centres, and has created an efficient online system that handles 40,000+ applications everyday, and has already issued more than 13 million passports to citizens who never encountered either a venal passport official, or the hazards of dealing with a middleman.

What does it take to build similar, transparent systems for all citizen-state transactions?


* Oldenberg, Philip (2016): Why the AgustaWestland bribery scandal reminds me of Miss Marple, Indian Express, 9May16 -

* TCS Transforms India's Passport Offices -

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