July 30, 2018 @ 2:00 am

30 JULY 2018

Layers of protection

Protecting honest public servants is important; so are anti-corruption efforts

The amendments to the Prevention of Corruption Act, 1988, adopted recently by both Houses of Parliament, are a mixed bag. Moves to make changes in this law, aimed at combating corruption in government, were initiated during the UPA’s second term in office and largely centred on the misuse of one provision – Section 13 (1)d. Former Prime Minister Manmohan Singh had criticised this section, under which public servants are culpable for securing a pecuniary advantage for another “without any public interest”, for ignoring a foundational principle of criminal law: mens rea. This resulted in many honest officials being prosecuted even when they gained nothing and merely exercised their power or discretion in favour of someone. Insofar as it had a chilling effect on governance and deterred bold decision-making, the amended form may have a liberating effect on honest officials. Besides, it is more concise and restricts criminal misconduct to two offences: misappropriating or converting to one’s own use property entrusted to a public servant or is in his control, and amassing unexplained wealth. There was concern initially with the wording, “intentionally enriches himself illicitly during the period of his office”, as it raised a doubt whether the ‘intention’ to amass wealth would also have to be proved. Now an explanation has been added that a person “shall be presumed to have intentionally enriched himself” if he cannot account for his assets through known sources of income.

By making citizens liable for offering a bribe to a public servant, the anti-corruption law has been brought in line with the UN Convention Against CorruptionThe only exception to this rule is when one is forced to give a bribe. This exception kicks in only when the fact that one was forced to pay a bribe is reported to a law enforcement authority within seven days. The penal provision can empower people by allowing them to cite it to refuse to pay a bribe. At the same time, what happens when the police or any other agency refuses to register a complaint? People may be left in the lurch with no redress. Further, it may render them vulnerable to threats from unscrupulous public servants who collect money to speed up public services but do not deliverThe most unacceptable change is the introduction of a prior approval norm to start an investigation. When a prior sanction requirement exists in law for prosecution, it is incomprehensible that the legislature should create another layer of protection in the initial stage of a probe. Public servants need to be protected against unfair prosecution, but a genuine drive against corruption needs a package of legislative measures. These should contain penal provisions, create an ombudsman in the form of a Lokpal or Lokayukta, as well as assure citizens of time-bound services and whistle-blower protection. Laws to fulfil these objectives are either not operational or are yet to materialise.

Now to compete 

The ground has shifted since they agreed to merge, and Vodafone Idea has its task cut out

A week is a long time in politics. In business, especially one as rapidly evolving as mobile telecommunications, a year can be an eternity. So for the Vodafone Group’s Indian unit and Idea Cellular Ltd., which had in March 2017 announced an agreement to merge, last week’s approval of the proposed union by the Department of Telecommunications came not a day too soon. The changes in the industry landscape over the intervening 16 months have been dramatic. The market has contracted marginally in terms of overall subscriber numbers – from 1.17 billion on March 31, 2017, to 1.13 billion at the end of May this year. But the number of competing service providers is set to shrink from double digits to just three privately run large rivals plus state-owned BSNL and MTNL. This consolidation, from the wave of mergers and acquisitions over the last couple of years, was the gain the companies left standing were hoping for. From more wholesome slices of the customer pie to more bang for the buck in a highly capital-intensive business, the merged entities including Vodafone Idea Ltd. – as the new business will be called – ought to be happy with the way things have panned out. But the situation on the ground is far from ideal.

The intensity of competition has steadily increased since the entry of Reliance Jio, founded by the deep-pocketed billionaire Mukesh Ambani. This has left the incumbents battling furiously to protect their turf with tariff reductions to match the newcomer’s ‘no prisoners’ approach to pricing of its voice and data services. The telecom regulator’s September decision to more than halve the fee that operators pay on cross-network calls has only added to their woes, resulting in a steep and continuing erosion in average revenues per user and margins. The managements of Vodafone and Idea have repeatedly underscored the competitive challenges facing them, with both operators losing customers and the latter awash in red ink. With about 430 million subscribers, Vodafone Idea would vault past Bharti Airtel’s current India customer base of about 345 million to the top of the heap. But this scale that they gain would ultimately count for little if the combine fails to staunch customer losses, and do that without compromising on the business’s viability. The cost of bidding for fresh wireless spectrum is escalating steadily and mobile number portability has made it easier for customers to switch networks in case of dissatisfaction with service quality levels or pricing. The combine will therefore need more than just a few smart ‘ideas’, as Idea Cellular’s erstwhile marketing campaign used to stress, to make a fist of their merger.

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