Politician-contractor nexus pocketing money for roads never built: study

An unholy alliance between politicians and contractors is sabotaging the country's ambitious rural road scheme by pocketing public money for stretches that were never built, a new study has said.

Researchers at Princeton University and Paris School of Economics have found that almost 500 all-weather roads listed in the Pradhan Mantri Gram Sadak Yojana (PMGSY) as having been completed and paid for were never built, directly harming 8.57 lakh villagers for whom the missing roads were meant to serve.

The study "Building Connections: Political Corruption and Road Construction in India", published in Journal of Development Economics, claimed contractors with connections to local MLAs getting the project has increased from 4% to 7%.

The results were surprising because  the PMGSY  was started in 2000 with an aim to connect three lakh villages which otherwise have no access to outside world and was designed with strong controls to prevent corruption.

Seeking evidence for corruption, the researchers  analysed  the degree to which road-building contracts were given to contractors who shared the MLA's surname. "Because Indian surnames are closely linked to caste, religion and geographic provenance, surnames serve as a proxy for the politicians' social networks. After a close election, the share of contractors whose surname matched that of the political winner rose more than 75%, from about 4% to about 7%," it said.

"We found that road contracts allocated to politically connected contractors were significantly more likely never to be constructed. While the programme as a whole appears to have been extremely efficient, political influence clearly led to lower-quality execution," lead author Jacob N Shapiro of Princeton's Woodrow Wilson School of Public and International Affairs said.

The researchers believe that the MLAs manage to "game the system" through their social networks, which also include regional bureaucracy that awards these contracts.

"When the highest-ranking district official overseeing the PMGSY also shared the winning politician's surname,  favouritism  in the awarding of contracts was more likely. On the other hand, when bureaucrats were up for promotion and thus facing heightened scrutiny, corruption was less likely," it said.

To tackle political corruption, the researchers suggest that MLAs should be given a formal role. "Voters who believe MLAs have no role in the road-building process won't punish these local politicians at the polls for missing roads, delays and cost overruns. If voters held their politicians responsible for the services delivered under the PMGSY, the MLAs would have an incentive to limit corruption," Shapiro said.