Corruption and India are intricately intertwined. Studies, surveys, reports, and observations indicate that corruption permeates India’s social fabric. One scholar noted that while “India did not invent corruption, it seems to excel in it.”

The Corruption Perceptions Index published by Transparency International (TI) ranks India 95th out of 183 countries with a score of 3.1 out of 10 (0 being very corrupt and 10 being very clean). TI’s Global Corruption Barometer reports that over 50% of Indians reported paying a bribe in 2010 whereas only 19% of the people believe that the government’s anti-corruption efforts are effective. A report published by TI in December 2011, “Daily Lives and Corruption: Public Opinion in South Asia, reported that 74% of Indians believe that the level of corruption has increased in the last three years. The report further notes that Indians consider their police and political parties to be heavily corrupt, and most of the bribes were paid to the police, registry and permit services, and land services. The Global Integrity Report, which examines “transparency of the public procurement process, media freedom, asset disclosure requirements, conflicts of interest regulations, and more” rated India overall “weak” and its actual anti-corruption implementation efforts as “very weak.” Trace International’s “BRIBEline” report on India  reveals that 91% of bribe demands in India came from government officials. 77% of these bribe demands “were related to the avoidance of harm, including securing the timely delivery of a service to which the reporter was already entitled (such as clearing customs or having a telephone line installed) and receiving payment for services already rendered.” A report by Global Financial Integrity, The Drivers and Dynamics of Illicit Financial Flows from India: 1948-2008, states that as a result of “corruption, bribery and kickbacks, criminal activities, and efforts to shelter wealth from a country's tax authorities,” India “lost a total of $213 billion in illicit financial flows (or illegal capital flight).”

The government of India (as well as the state governments) has designed elaborate mechanisms intended to supposedly tackle this pervasive menace. At the central government level, this task falls to the Central Vigilance Commission (CVC). Established in 1964, CVC is India’s “apex vigilance institution” charged with monitoring and curbing corruption in the central government. An advisory body, CVC oversees Chief Vigilance Officers (CVO) in the various ministries and departments of the Indian government. The intentions concerning the establishment of the commission were idealistic; however, as a result of statutory limitations and a hostile political culture, CVC has not proved to be an effective counter-corruption measure.

India faced its first major corruption crisis in 1948, a mere year after gaining independence. The Jeep Scandal, as it came to be known, involved India’s then High Commissioner to Britain V.P. Krishna Menon ignoring procurement regulations to purchase 2,000 jeeps for a cost of Rs. 80 lakhs ($142,000 at current conversion rate; $1.4 million when adjusted for inflation) from a London-based firm. The money was paid in advance and only 155 jeeps arrived in India. An investigation into the issue was scuttled as Menon went on to join the Nehru cabinet. The Jeep scandal marked the beginning of what would turn out to be major problem in Indian politics. It is interesting to note in some of first major corruption cases no concrete actions were taken against individuals involved in or responsible for corruption. “Corruption charges in cases like Mudgal case (1951), Mundra deals (1957-58), Malaviya-Sirajuddin scandal (1963), and Pratap Singh Kairon case (1963) were levelled against ministers and chief ministers without repercussions for the prime minister.

The lack of action taken was not for lack of anti-corruption measures. As early as 1941, the Special Police Establishment (SPE) was set up to “investigate cases of bribery and corruption in transactions with the War & Supply Department.” After the end of World War II, the government decided to establish an anti-corruption agency responsible for the central government. For this purpose, the government approved the Delhi Special Police Establishment (SPE) Act in 1946. The next year, the Prevention of Corruption Act, 1947 was passed. The perceived lack of SPE’s effectiveness resulted in the creation of the Administrative Vigilance Division (AVD) in 1955. AVD’s mandate was to “direct and coordinate anti-corruption activities of all the Ministries in the Government of India.”  

Despite these measures, the public – and Parliamentary – perception was that there was still a long way to go before this problem could be tamed. Several Members of Parliament vented these feelings while debating the demands for the Ministry of Home Affairs in June 1962. In response to the debate, on June 6, 1962 Lal Bahadur Shastri, then Union Minister for Home Affairs, suggested setting up a high level committee to study corruption and recommend mitigation measures. As a result, the Committee on Prevention of Corruption was established. K. Santhanam headed it, and the committee subsequently was referred to as the Santhanam Committee.

The Santhanam Committee took a holistic view on corruption. It observed that

“there is widespread impression that failure of integrity is not uncommon among ministers and that some ministers, who have held office during the last 16 years have enriched themselves illegitimately, obtained good jobs for their sons and relations through nepotism and have reaped other advantages inconsistent with any notion of purity in public life.”

It further noted that:

“There is a general impression that it is difficult to get things done without resorting to corruption. Scope for corruption is great and the incentive to corrupt stronger at those points of the organization where substantive decisions are taken in matters like assessment and collection of taxes, determination of eligibility for obtaining licenses, grant of licenser, ensuring fair utilization of licenses and goods obtained thereunder, giving of contracts, approval of works and acceptance of supplies.”

The committee went on to identify the key causes of corruption: red tape and administrative delays; unnecessary regulation; scope of personal discretion; cumbersome procedures; scarcity of goods and services; and lack of transparency. It cited the overextension of government jurisdiction in economic affairs as a key factor in contributing to corruption: “The sudden extension of the economic activities of the Government with a large armory of regulations, controls, licenses, and permits provided new and large opportunities (for corruption).”

While the committee made numerous specific recommendations to address the problems, perhaps the most important one was the creation of a Central Vigilance Commission tasked with overseeing vigilance efforts in the central government. The committee envisioned that CVC would be “independent of [the] Government. It may not be answerable to any minister…” Further, the committee recommended that the commission deal with two major problems: “prevention of corruption and maintenance of integrity and ensuring just and fair exercise of administrative powers vested in various authorities by statutory rules or by non-statutory executive orders.” The government accepted this recommendation and established the Central Vigilance Commission in February 1964 through a Resolution vide No. 24/7/64.

The lack of active investigative and other powers effectively rendered the CVC inefficient in its first few decades of existence. One report observed that “from 1964 to 1993, for nearly three decades, the CVC rolled along without making any visible dent on the problem of corruption in the country.” A big step toward giving it some semblance of authority came in the aftermath of the 1993 Hawala Case.  The Hawala system, illegal in India, is an alternative money transfer system of “transferring money without actually moving money.” The case involved the Jain brothers transferring almost $20 million to politicians via the Hawala system. It was alleged that “the CBI and other agencies failed to investigate these [corruption allegations] properly and prosecute those who were involved in committing the offences and that this was done deliberately to protect persons who were influential and powerful.” CBI’s failure resulted in the Supreme Court deciding that the CVC could no longer exist with only an executive ruling and that it needed statutory status. After much delay and debate, the Central Vigilance Act, 2003 was passed, thereby giving the commission legal backing.

Headed by a Central Vigilance Officer, CVC has its own Secretariat, Chief Technical Examiners' Wing (CTE) and a wing of Commissioners for Departmental Inquiries (CDI). The commission itself consists of the Central Vigilance Commissioner and no more than two Vigilance Commissioners.

The main thrust of the CVC is the appointment of Chief Vigilance Officers in the various Indian government ministries and departments. The Chief Vigilance Officer is assisted by a General Manager (Vigilance), Deputy Chief Vigilance Officers (Investigation and Technical) and other staff.  In essence, Chief Vigilance Officers “act as an extended arm of the Commission.” These individuals look over activities and employees of their specific ministries and departments to detect corruption or corruption related activities. Serving as the bridge between CVC and the ministry/department, the vigilance activities of the Chief Vigilance Officer include:

• collecting intelligence about the corrupt practices committed, or likely to be committed by the employees of his organization;
• investigating or causing an investigation to be made into verifiable allegations reported to him;
• processing investigation reports  for further consideration of the disciplinary authority concerned;
• referring the matters to the commission for advice wherever necessary, taking steps to prevent commission of improper practices/misconduct.

The official duties of the commission, as spelled out the CVC Act, 2003 are as follows:

• exercise oversight over the activities of the Delhi SPE as it relates to the offenses committed under the Prevention of Corruption Act, 1988 or an offense by a public servant that may be charged under the Code of Criminal Procedure at the same trial
• exercise oversight over the activities of the vigilance efforts of various ministries, departments, and other central government related institutions
• To give directions to the DSPE for the purpose of discharging the responsibility of superintendence
• Inquire or cause an inquiry where a public servant or individuals falling under the CVC’s jurisdiction have been accused of committing an offense under the Prevention of Corruption Act, 1988
• Oversee and review the progress of applications and investigations
• Give vigilance related advice to the central government and associate bodies

The commission, as it pertains to vigilance cases, exercises jurisdiction over the following groups of people. It is important to note that given Lokpal Bill in the Rajya Sabha as well the Jan Lokpal Bill advocated by reformists, chances are highly likely that the jurisdiction of CVC may change.

• Group A officers
• Members of All India Service (only in certain specific circumstances)
• Executives holding top positions up to two levels below the Board-level in the public sector undertakings
• Officers in Scale-V and above in the public sector banks
• Officers of the rank of Assistant Manager and above in the insurance sector – this includes the Life Insurance Corporations and General Insurance Companies
• Officers drawing basic pay of Rs.8700 ($155 USD) and above (per month) in autonomous bodies/local authorities/societies etc.

It is important to note here that the commission functions in an advisory role. Upon receipt of monthly reports by Chief Vigilance Officers, and depending on the particular case, the commission can advise to do the following:

• initiate criminal action and/or regular departmental action against the perpetrators
• administrative actions against the perpetrators

The commission, however, cannot issue binding decisions. Ministries, departments, and other entities may or may not choose to act upon CVC’s advice or recommendations. Furthermore, despite having the power over the Chief Vigilance Officers, the commission does not have power over the departmental vigilance wings. Additionally, while CVC request can request the Central Bureau of Investigation (CBI) investigate, this request is not binding. In cases involving senior officials, CBI requires the permission of the particular department/ministry.

The commission advocates a proactive approach to fighting corruption, and to this extent has introduced two new strategies: Project Vigilance Eye (VIGEYE) and drafting a National Anti-Corruption Strategy (NACS). Project VIGEYE, launched in December 2010, is an information technology platform that enables citizens to register complaints via cell phones and the CVC website. Interested parties can download software that enables them to upload evidence of corruption to CVC authorities anonymously. It is an extension of the Anti-Bribery toll-free Helpline that allows citizens to register corruption complaints. While Project VIGEYE is aimed for punitive purposes, NACS is seen as “a concerted and coordinated approach to fight against corruption in India.” While for the most part the draft NACS is a regurgitation of basic anti-corruption principles aimed at the “demand-side” (the bribe takers), it does address the “supply-side” (bribe givers) of the corruption problem as well. “The strategy recognizes that corruption cannot be reduced by mere governmental action unless the citizens and private business entities refrain from indulging in corrupt practices.” One of the measures it advocates is the enactment of laws that would criminalize bribe offering in the hopes that this would serve as an adequate deterrence. NACS also recommends strengthening the independence of regulatory bodies and other punitive measures aimed at private entities.

In addition to these offensive measures, the commission also oversees a defensive measure aimed at protecting whistleblowers. In 2004, the Supreme Court of India had the central government “devise a suitable mechanism” to protect whistleblowers. The central government via the Public Interest Disclosure and Protection of Informers Resolution classified CVC as the “Designated Authority” to act on complaints originating via whistleblowers. Additionally, the resolution directed the commission to keep the complainant’s identity secret and to provide protection to whistleblowers.

The commission’s budget is allocated under the “Vigilance” section of the Ministry of Personnel, Public Grievances, and Pensions’ budget. No further breakdown is given. However, with a staff of around 250 and new technological initiatives, it can be safely assumed that personnel and operating costs and technology costs use up a dominant chunk of the budget.

PJ Thomas Nomination

In September 2010, Polanyi Joseph (PJ) Thomas, was appointed to head CVC as the Chief Vigilance Commissioner. The three-member High Powered Committee in charge of the appointments included Prime Minister Manmohan Singh, Union Minister for Home Affairs, P Chidambaram, and Senior BJP leader Sushma Swaraj. Swaraj opposed the appointment, while the other two favored it. The controversy stems from a 1992 corruption case. Thomas was one of the accused in a palm oil import corruption case while serving as Secretary, Food and Civil Supplies Department, Kerala. The case, during the time of the appointment 20 years later, was unresolved. Due to pending charges against him, the Center for Public Interest Litigation filed a public interest litigation and the case came under Supreme Court. In one of the most significant judgments delivered by any Indian court in recallable memory, the Court struck down Thomas’ appointment in March 2011. The court declared that Thomas’ appointment was “non-est in law and, consequently, the appointment of P J Thomas as chief vigilance commissioner is quashed.” Thomas petitioned the President of India, Ms. Pratibha Patil, regarding his concerns about the Supreme Court’s decision. This however was unsuccessful and he was replaced by Pradeep Kumar in July 2011.

P. J. Thomas Sworn in as CVC (by J.Balaji, The Hindu)

PJ Thomas First CVC Whose Appointment Quashed by SC (Economic Times)

Supreme Court Strikes Down Appointment of PJ Thomas as CVC (by Dhananjay Mahapatra, Times of India)

PJ Thomas Seeks Stay on New CVC's Appointment (NDTV)

Fresh Evidence against Chief Vigilance Commissioner PJ Thomas (by Sovi Vidyadharan, NDTV)

Amendment to the CVC Act, 2003

With changes made to the CVC’s jurisdiction in the government Lokpal Bill, a nonprofit group called the National Campaign for People’s Right to Information (NCPRI) suggested making these changes permanent and clearly discernible by amending the CVC Act, 2003. NCPRI generated these amendment proposals via one of its five draft notes that seek to bolster the Lokpal Bill. The bill extended the reach of the Lokpal to only Group A Officers of the Indian government. The Bill, however, did not “mention of how the remaining public servants (other than group A) would be covered.” NCPRI recommended amending the CVC Act, 2003 to include under CVC’s jurisdiction all public servants not covered by Lokpal. The impetus for this change came from the fact that CVC “currently receives nearly 15,000 complaints a year and investigates hardly any.”

In addition to the NCPRI, the Lok Satta Party, a political party established in 2006 by the Lok Satta organization, recommended two additional amendments to Section 8 of the CVC Act, 2003:

1. In order to prevent discrimination against whistle-blowers speaking out against corruption, the Party recommends inserting a clause [8(1)(i)] that ensures that “an independent authority monitors the procurement process.”
2. Corrupt tax officials demand a bribe in order to not levy a higher tax. In most cases citizens are forced to pay these bribes as the alternative process, an appeal to higher authorities, is tedious and expensive. The Party recommends inserting a clause [8(1)(j)] that requires “the percentage of appeals upheld by appropriate appellate authorities” to be included in the Annual Performance Appraisal Report in hopes of reducing this type of corruption.

NCPRI Puts Five Draft Notes on Lokpal (by Mahiti Adhikar Manch, Civil Society News)

NCPRI Discussion note on CVC Act 2003 Amendment (National Campaign for People’s Right to Information)

Amendment to the Central Vigilance Commission Act, 2003 (Lok Satta Party)

Should CVC Merge with Lokpal?

In August 2010, the United Progressive Alliance (UPA) drafted a Lokpal Bill, 2010 to establish a Lokpal (institutionalized ombudsman) to curb political corruption. The establishment of such an institution has been debated since the early 1960s. Numerous Lokpal bills have been introduced in the Indian parliament over the decades, each failing to create anything substantial. In response the 2010 bill, civil society activists drafted their own, more-stringent Lokpal bill, called the Jan Lokpal Bill (People’s Lokpal Bill). In April 2011, to protest what he saw as a weak government Lokpal bill and to force the government to accept the Jan Lokpal Bill, social activist Anna Hazare started a hunger strike. The government ultimately agreed to create a joint committee to re-draft the Lokpal Bill in conjunction with the social activists.

While numerous compromises were made, there was still no agreement on the role, function, and autonomy of CVC. The government supports keeping the CVC autonomous, whiles civil society activists propose merging the commission with the Lokpal.

CVC should not be Merged with Lokpal

This position is espoused by the government of India and CVC and was reflected in the version of the Lokpal Bill debated in the Rajya Sabha. The Rajya Sabha recommends that Lokpal, CVC, and the anti-corruption branch of the CBI should be kept separate and distinct. CVC maintains the following position:

• it should remain the Premier Integrity Institution to address corruption
• Lokpal and CVC should work in close cooperation; however CVC should not be merged with Lokpal
• CVC should be strengthened by being given prosecutorial powers as well as more autonomy

The Lokpal Bill in the Rajya Sabha recommended that “for those persons not covered by the Lokpal, the CVC would retain jurisdiction.” This could effectively be translated as a recommendation to not merge CVC with Lokpal. The government hoped that this “would also obviate the current criticism of both the Lokpal Bill and the Jan Lokpal Bill which appear to fuse investigation, prosecution, superintendence and departmental recommendation into one body, though the Jan Lokpal Bill does it to a far higher and unacceptable degree than the Lokpal Bill.”

The Rajya Sabha Lokpal Report, which makes this recommendation, touts that one of the advantages of such a move is that it would render unnecessary to make CBI or CVC a member of the Lokpal. This structure “reasonably harmonizes and creates the necessary equilibrium for the independence and harmonised functioning of the so-called Trinity viz. Lokpal, CBI and CVC, with neither obliterating, superseding or weakening the other.”

Forty Eighty Report on The Lokpal Bill, 2011 (Rajya Sabha, Parliament of India)

Hegde Pitches For Strong Lokpal Bill (Times of India)

CVC should be Merged with Lokpal

This position was espoused by those supporting the Jan Lokpal Bill. The fundamental point of this side was that for all its jurisdiction and responsibilities, the CVC is a “toothless tiger,” a mere advisory body without prosecution powers. They point out the following flaws of the CVC:

• Lacks adequate resources to thoroughly monitor corruption activities. For over 1,500 ministries, departments, agencies, and other entities, CVC has around 200-250 staff strength. This renders is useless against some of the biggest entities and makes the commission dependent on departmental vigilance organizations, which are controlled by department bureaucrats.
• An advisory body without the ability to make binding decisions or recommendations
• CVC’s advice is often discarded as there are no potential fallouts
• Does not exercise power over politicians or departmental vigilance wings

These observations of the Jan Lokpal Bill supporters are corroborated by India’s 2011 Scorecard in the Global Integrity Report. India received

• A score of 25/100 for the statement: “In practice, the ombudsman is protected from political interference.”
• A score of 50/100 for the statement: “In practice, when necessary, the national ombudsman (or equivalent agency or agencies) initiates investigations.”
• A score of 0/100 for the statement: “In practice, when necessary, the national ombudsman (or equivalent agency or agencies) imposes penalties on offenders.
• A score of 50/100 for the statement: “In practice, the government acts on the findings of the ombudsman agency (or agencies).”
• A score of 25/100 for the statement: “In practice, the ombudsman agency (or agencies) acts on citizen complaints within a reasonable time period.”
• A score of 0/100 for the statement: “In practice, the anti-corruption agency (or agencies) is protected from political interference.

For these reasons, the Jan Lokpal Bill proposed that the “Anti-corruption branch of CBI, CVC and departmental vigilance wings should be merged into Lokpal” to create a single anti-corruption agency. Furthermore, the agency would not be an advisory body. Rather, it would have powers to start investigation or prosecution in any case.

Should All Existing Anti-Corruption Agencies Be Merged Into Lokpal/Lokayukta? (India Against Corruption)

Deficiencies in the Present Anti-Corruption Systems at the Central Government Level (India Against Corruption)

Global Integrity Report Scorecard 2011: India (Global Integrity Report)

PJ Thomas

Polayil Joseph (PJ) Thomas served as the CVC Commissioner from September 2010 until March 2011, when his appointment was quashed by the Supreme Court over pending charges stemming from a 1992 corruption case. Thomas is a 1973 batch IAS officer of the Kerala cadre. In Kerala, he headed several departments - Finance, Industry, Agriculture, Law and Justice, and Human Resources Development - before he became the Kerala Chief Secretary in 2007. His stint in the central government includes Secretary, Ministry of Parliamentary Affairs, and Secretary, Telecommunications.

Charges against Thomas are pending in a 1992 corruption case arising from the import of palm oil during his time as Secretary, Food and Civil Supplies Department, Kerala. The Comptroller and Auditor General (CAG) reports that the sale cost the exchequer Rs. 2.8 crore ($497,000 USD).

In his address to Indian CEO’s in December 2011, the Central Vigilance Commissioner, head of the Central Vigilance Commission (CVC), remarked:

“There is no denying the fact that there is widespread corruption in India. Petty corruption which affects the basic rights and services of the common man is highly rampant besides the grand corruption scandals which break out every now and then... Corruption is a serious economic issue as it adversely affects the country’s economic development and achievement of developmental goals. It promotes inefficiencies in utilization of resources, distorts the markets, compromises quality, destroys the environment and of late has become a serious threat to national security. It adds to the deprivation of the poor and weaker sections of the economy.”