Corruption and the limits of our imagination of State-building

The spectre of corruption looms large in debates on the Indian State, particularly when it comes to the challenges of delivering welfare benefits to the poor. But, has the elusive quest to curb corruption limited our imagination of reforms in ways that diminish rather than enhance the State’s ability to be genuinely responsive to citizen needs?

Let me explain. Consider Direct Benefit Transfer (DBT). Powered by the Jan-Dhan, Aadhaar, Mobile trinity, the DBT scale-up is the poster child of India’s corruption-reducing, welfare-enabling reform effort, celebrated by the Prime Minister in his I-Day speech for “saving” Rs 2 lakh crore by preventing leakage. The DBT’s success has won India global accolades. Earlier this week, the IMF described DBT as a “logistical marvel” that brings efficiency, transparency and eliminates the intermediary body. Indeed, the numbers are staggering. Citing government data, the IMF said that over nine million DBT payments are processed daily.

But beyond the staggering headlines, the reality is complex. Using CMIE data, a recent World Bank study tracking receipt of food and cash transfers in 2020 reveals that while food (through the PDS) reached nearly 80% households in rural India, access to cash was far lower at 47 per cent. In urban India, access to cash dipped to 26%. Speaking at the CPR Dialogues 2022, the paper’s co-author Shrayana Bhattacharya made the crucial distinction between “payment leakage” and “enrolment leakage”. The DBT is designed to reduce payment leakage. In other words, it can weed out fake names and reduce siphoning off of payments. But it cannot identify who to pay.

Welfare schemes in India are “targeted” based on eligibility criteria laid down by the State. The onus lies on citizens to prove their eligibility by producing reams of documents, and on the State to “weed out” ineligible beneficiaries. And this is the real State failure. Access to cash was low, even at the peak of the pandemic, not because the predatory State was siphoning off funds but because it is simply too small and too incompetent to be responsive and identify ‘who to pay’ based on need.

Beneficiary identification is a non-trivial task. It requires officers to dialogue with beneficiaries and enable access to documentary proof, to negotiate disputes, and to mine beneficiary databases and build feedback loops that ensure barriers to entry are removed. This is about the brick-and-mortar of the State -- governance and human resource infrastructure. Countries like Brazil and Mexico invested in large cadres of social workers to do this. In India, the DBT was built to bypass the corrupt State rather than invest in its brick-and-mortar. This may come as a surprise to readers but contrary to popular imagination, India has the lowest proportion of government employees to population amongst the G-20 countries. No wonder finding ‘who to pay’ remains an onerous task.

Beyond DBT, our overwhelming preoccupation with corruption has legitimised a culture of surveillance-based accountability that reinforces the status quo rather than challenge it. This suits all actors of the State – politicians, bureaucrats and the errant frontline workers known for rarely showing up for work. The citizen be damned!

The most powerful illustration of the excesses of surveillance is in the findings of a study by economists Dhaliwal and Hanna on the impact of biometric attendance in government health centres in rural Karnataka. Biometric attendance-marking ensured that the attendance of some – nurses, lab technicians – improved. Remarkably, however, patients began to increasingly seek treatment in larger public and private hospitals in the area. While the staff did turn up regularly to mark attendance, they found and used new opportunities to profit by directing patients to doctors’ private practices. Surveillance, in this case, reinforced rather than reduced corruption!

But more importantly, it distracted attention from the real problem. Government doctors using their public clinics as referral centres and thus legitimising their absence is the price the Indian State has willingly paid to retain doctors in remote rural areas. It is the deal with the devil, so to speak. Increased surveillance is merely the thinly disguised veneer of accountability that allows the fundamental terms of the deal the State strikes with its workers to remain unchallenged.

Moreover, surveillance-based accountability quickly takes us down the path of centralised control. Biometric attendance, MIS systems, data dashboards tightly monitored by ‘command and control centres’ in state capitals make up our governance toolkit today. Legitimised in the name of reducing corruption and enhancing efficiency, these tools are premised on reducing the power, control and discretion of local governments. But there is a tradeoff. As government moves farther away from people, so do sites of accountability. Where does a citizen go to complain, protest, demand accountability when entitlements are denied? How can local governments respond to needs, if they do not have powers? Building State capacity is about striking this balance between efficiency gains through centralised control and responsiveness through decentralised, citizen-centric governance. But this nuance is lost in our loud and noisy debates on corruption.

None of this is to suggest that we should not be outraged by corruption. We should be. We must be. But the clamour for surveillance-based accountability and an approach to resolving the challenge of corruption by using technology to bypass the State risks allowing the modern State-building project to become a project for centralised surveillance and control. This may suit the politics of the contemporary moment, but as a society if the only path we can offer to curb corruption is one of bypassing the State through centralised technology and surveillance to induce officers to show up for work, we need to worry. Despite the marvels of technology, we must ask ourselves if the elusive quest to curb corruption has served to limit rather than free up our imagination? The project of State-building for a 21st century India must lead us to a path of empowerment, not dystopia.