Karnataka, the 40% state!

Karnataka took pride as the first state to make tendering compulsory under the Transparency of Public Procurement Act for any work above Rs 50,000
Last Updated 10 May 2022, 06:37 IST

Karnataka has now achieved the dubious distinction of being a “40 per cent state”. What is 100 per cent? An apocryphal story goes like this: CM-ji Yaloo Ladhav (name cleverly changed to protect identity) of Bihar (real name, though the state may be surreal), takes a delegation to California to invite investments, and Governor Arnie invites him for dinner at his ‘farmhouse’. Dazzled by its opulence, Yaloo wonders, “Governor-ji, this is unbelievable; but tell me, on your Governor’s salary of 2 lakh dollars a year, how did you build such a huge mansion in California?” The genial Arnie took him next morning to the Golden Gate Bridge and the four-level Stack Interchange in Los Angeles. Yaloo marvelled at them and asked Arnie how much they cost to build. “Billions, and 10 per cent,” Arnie winked. Yaloo understood how the Governor had built his mansion, thanked him, and invited him to visit his humble Bihar.

When Arnie visited Bihar the following year, Yaloo invited Arnie to his farmhouse. The Governor was dumbstruck. He asked, “Yaloo, this is stupendous. The salary of a Chief Minister is only $5,000 a month. How did you construct this palace?” “I will show you tomorrow,” said Yaloo. The next day, he took Arnie to the outskirts of Patna. “See that huge bridge across the Ganges to your left?” Arnie got out of the car and looked but there was no bridge. Then Yaloo said, “Now look to your right, the butterfly flyover exchange.” Arnie looked to his right but saw no flyover. Puzzled, he said, “Yaloo, I do not see any bridge or flyover.” Yaloo smiled and said, “100 per cent!”

So, Karnataka still has a long way to go from 40 per cent, but it is catching up. How did mild Karnataka go from a 5 per cent mamool to a whopping 40 per cent? Even in neighbouring Pakistan, where everything revolves around the 3As -- America, Army and Allah -- its former president, better known as Benazir Bhutto’s husband, Asif Ali Zardari, was known only as “Mr 10 Percent”.

The Karnataka Contractors’ Association is planning to wash dirty linen on Ambedkar Veedhi. They have complained to Prime Minister Narendra Modi that in Karnataka, five to six ministers regularly demand 10 per cent kickbacks in advance of awarding works and the balance after the work order is issued. Around 60 MLAs are in this loop, Rs 5,000 crore worth bills are pending, and one contractor ended his life as he could not withstand harassment and the minister concerned has been booked by the police for abetment to suicide. Another “reasonable” minister is charging a concessional rate of only 5 per cent before the work is awarded. In many cases, tenders are called only after the work is done. Sometimes, payment is made, deducting 40 per cent, even if no work is done.

Karnataka took pride as the first state to make tendering compulsory under the Transparency of Public Procurement Act for any work above Rs 50,000. This has been overcome by the simple method of dividing a work of, say, Rs 1 crore by creating 200 “piece-works” and awarding them in the names of 200 ‘contractors’, all of them being benami nominees of ministers’ followers, sometimes even their pet dogs and cats. One minister’s house was raided “by mistake” by the Anti-Corruption Bureau, who found a currency counting machine, normally used in banks. The minister’s explanation that it makes it easy to count large bundles of currency was accepted as being highly satisfactory by the ACB. Since then, most ministers and MLAs are alleged to have purchased the machines. Such is the great fall from grace of Karnataka, according to the Contractors’ Association.

Why is this happening in this state, once known for its discipline and efficient administration? The reason is, there is no strong Chief Minister who can control party MLAs. It works the other way round -- the CM depends on his faction to remain in power. So, the MLAs who are not made ministers or chairmen of boards and corporations, have to depend on commissions on contracts. They become the modern equivalent of the 19th century palegars, having control over public works in their constituencies.

While corruption is a common disease in all states, in states like Tamil Nadu, Kerala, Andhra Pradesh, Telangana, West Bengal or Maharashtra, the Chief Ministers are strong and not beholden to a party high command in Delhi to stay in power. They can drop a minister or refuse a favour to an MLA without much fear of retaliation. Not so in Karnataka. Whichever party is in power, from day one, disgruntled MLAs can always meet the high command in Delhi and shake the CM’s chair. The high commands also want their party Chief Ministers to remain weak and not become so strong as to be able to challenge the leaders in Delhi and they therefore encourage dissidence in the states. Kautilya and Machiavelli would blush when they find out how advanced ‘political science’ is in Karnataka.

About the maladies of Karnataka’s contractors: It was all a cosy existence when the ‘commission’ was within reasonable limits, starting from the pre-Independence 5 per cent mamool and as it climbed up to 15-20 per cent. But now, when it has reached 40 per cent, the pinch is painful. But Karnataka has not yet reached the standards of Bihar where, recently, a 500-tonne, 70-year-old iron bridge was ‘stolen’ clean and carted away overnight by skilled thieves. That does not happen even in African countries. Karnataka has still some more milestones to achieve to get there.

We may not be able to eliminate corruption completely. At least it can be kept under check and the state restored to its ‘5 per cent state’ days, if only the existing laws are implemented: Awarding contracts only on open all-India tenders, abolishing piece-works, passing bills only after an independent quality control agency approves it, payments made strictly in a queue system, which are all in the rule book already. But it requires leadership to enforce them.

(The writer is a former Additional Chief Secretary, Govt of Karnataka. He was Chairperson of the Task Force on Land-grabbing in 2010-11 and author of its report, Greed and Connivance)

(Published 09 May 2022, 17:26 IST)

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