Bureaucracy Versus Democracy

By Prabhakar Kulkarni

Bureaucracy has let down PM Modi every time he came with ideas of national interest

In Indian democracy the bureaucracy is a British legacy. Bureaucrats at all levels seem have self-esteem and they behave in a manner that does not suit to any democracy. The bureaucracy was so far blamed for delay and corruption in all government and semi-government departments. But the demonetization has added the banking bureaucracy in the list.

Common citizens in India are facing post-demonetization crisis. The new currency notes required for distribution are not duly supplied through banking network. Or alternatively banking bureaucracy has failed to act in a manner expected by both the RBI and the respective director boards. A senior retired bureaucrat Madhav Godbole has commented that the bureaucracy has let down the Prime Minister Modi who has introduced the new system in national interest. Why and how the Indian bureaucracy has failed to deliver the results?

The banking bureaucracy sidetracked the guidelines and diverted new currency notes to help those who have black money or those who are related to officials and employees. Raids in various parts of the country have disclosed large quantum of new currency notes in lakhs and crores while common consumers are waiting in queues only for Rs. 2 thousands. Money to be inserted in ATMs was also diverted and creditors who have credit balance could not withdraw any amount through most of the ATMs. As the bulk amounts are exchanged on commission basis, the banking bureaucracy is added in the list of the systemic corruption.

The unity of officials and bank employees who come on roads and declared strikes periodically is keeping ‘mum’ on this systemic corruption. Two office bearers of banks’ employees and  national unions were asked by email to comment on following points raised in a financial daily’s editorial-

One way to do the transaction would be for the middleman to exchange all the old cash for new. Since new cash is in short supply and official withdrawals are capped by fiat, we are forced to conclude that bank officials are colluding in alternate market for personal gain. Next, once bulk new cash comes into the alternative system, the parallel banker is free to lend it out at a premium after covering his conversion cost and the 6-8 percent premium he has promised the original ‘lender’ and carry on business for a whole year, after which the loop can be closed. On November 8, this seemed impossible, but a month and a half later, the improbable has been proved to be true.’

But the two did not reply.

The nationalized and private banks are equally blamed for the chaos. These banks were so far considered fool-proof and ideal. One officer of the Sarswat co-operative bank has once said that they are striving so hard that their bank would soon achieve the status of a nationalized bank indicating high status of the nationalized banks. But waiving off defaulters’ big loans has already been a matter of criticism against these banks. Under what rule the RBI has authorized these banks to waive off loans needs to be clarified. Because for farmers’ loan waiver the demand needs to be sanctioned by the Union government and banks are not waiving their loans despite the critical conditions farmers face due to drought and other difficulties.

Demonetization aims at eradication of corruption. But the corrupt in the bureaucracy have not yielded to the new means and methods. They have found a way out by demanding money in new currency and in the form of gold. The anti-corruption raids in various parts have disclosed the new ‘modus operandi.’ Both the urban and rural areas are hard-pressed by the systemic corruption. Digitization and e-governance have not eradicated the normal corruption. On the contrary, the corruption cost is increased.

For instance, if formerly hand-written land record document (better known as 7/12 document) was getting for Rs 10 only, now the digitalized printed document costs Rs 50. More money has to be paid if something wrong is committed in the document by revenue employees and the correction is needed.  

When asked about this situation Lok Sabha lawmaker Raju Shetty, who is elected on banner of his organization ‘Swabhimani Shetakari Sanghatana,’ confirmed about the chain of corruption in revenue department with demand to keep strict vigilance by higher authorities in the bureaucracy to break the chain and provide clean governance in rural areas. 

The banking bureaucracy is not responding to the Union and state government schemes which are meant for the jobless and needy small entrepreneurs. The Mudra scheme introduced by the Modi government is safely sidetracked by banks by forming their own rules which are quite contrary to the very spirit and word of the declared scheme. For instance the Mudra scheme clearly says that individual banks could ask for required and other documents as needed. The Banks are not supposed to take any processing fee and are not supposed to ask for any collateral. The repayment period is also extended to 5 years. But it is also made clear that the applicant should not be a defaulter to any Bank or financial institution. But banks are asking for collateral security and guarantors.

 Neither the RBI nor the Union and state governments have any systemic vigilance to check the autocratic style of the banking bureaucracy. Jobless youths and budding entrepreneurs have periodically pointed out in both the electronic and print media about the banking bureaucracy’s delay and denial to provide credit facilities as per the government schemes.

 Why bureaucrats are considered to be more autocratic than democratic? The recent case of a bureaucrat who sent a development scheme directly to the Union government without showing it to the respective MLA and his press conference in opposition to the said MLA has created a stir in the Maharashtra Assembly and the said bureaucrat was indicted with punishment. Bureaucrats in democracy are expected to work in co-operation with the elected representatives. But the scene is different at various levels and in municipal councils and corporations as also in district Zilla Parishads the top IAS bureaucrats are periodically seen to be at loggerheads with the elected representatives.

If some wrong is being forced by the elected representatives, the bureaucratic opposition is appreciated. In such cases the bureaucrats are treated in high esteem and people around come forward to protect such bureaucrats by coming out on roads and preventing any action against such bureaucrats.  But even in normal circumstances and routine cases of development schemes or injustice to common citizens non-cooperation or negligence of those who are elected need not be tolerated.  The assumed conception that the IAS officers know all and everything under the sun should be first removed and they should be humble enough to refer to the experts in various fields before using their discretionary power.

Indian bureaucracy working in democracy should now think of the current situation in the country and resort to a sort of introspection and find out a new legal restriction system which alone would alone solve the present crisis.