Fighting India’s Graft

Experts estimate that corruption in India indirectly kills more than 8,000 people a day by diverting money from food programs into the pockets of crooked officials. Now the government hopes to reduce graft with a new approach: instead of specifying how much money will be spent on welfare programs, it will use laws guaranteeing employment, education, and food to set out the exact services that each government agency must deliver.

THE IDEA: The centerpiece of the movement is the National Rural Employment Guarantee Act (NREGA), passed in 2005, which guarantees 100 days of paid work to every rural household and forces the government to fork over the money again if the original funds are stolen. "This is one reason why the government is showing an unprecedented concern with corruption in public-works programs," says economist Jean Dreze, who was instrumental in setting up the act.

THE EVIDENCE: It's not encouraging. The government is indeed putting more muscle behind efforts to eliminate corruption, such as creating bank accounts for welfare beneficiaries and transferring funds to them directly, and using Webcams and smart cards to prevent officials from inventing fictitious recipients. Yet corruption remains rampant. A recent investigation revealed that 40 percent of -NREGA funds were stolen in key districts, and hundreds of complaints have been pending since 2007. Most discouraging of all, the audit found that elected officials at the village level pocketed a huge chunk of the funds—dashing hopes that decentralization would ensure better oversight.

The report gives the impression that somebody is looking into the problem. But according to Parshuram Ray, who filed suit against the central government and 26 state governments, almost none of the required audits to monitor the law's implementation have been conducted. Complaints are bogged down by "an ineffective and long drawn [out] procedure," Ray's suit says, and "prosecution of guilty officials in such complaints are few and far between."

THE CONCLUSION: Ray's dismal findings suggest that Prime Minister Manmohan Singh's rights-based laws will remain part of India's failed bureaucracy until the country succeeds in the most important reform of all: creating a court system that is not only just but also prompt in enforcing the laws it enshrines.