Anna’s protest is naive, simplistic: Nandan Nilekani

Mangalore Today / CNN IBN

CNN- IBN : Sagarika Ghose Interview with Nandan Nilekani

Sagarika Ghose: Hello and welcome to this CNN-IBN special. Can Anna Hazare’s anti-corruption movement and the Jan Lokpal Bill in its present form end corruption in India?

Joining us is Nandan Nilekani, co-founder of Infosys and chairman of the Unique Identification Authority of India, which aims to provide identity cards to the poorest of the poor to eliminate corruption from the delivery of services to them.

Nandan Nilekani, thanks for joining us. The Anna Hazare anti-corruption movement and the Jan Lokpal Bill is the big news at the moment. Two questions. What do you make of this movement? And do you think that Jan Lokpal Bill is the best way to fight corruption in India?

Nandan Nilekani: No, I think there is no doubt that all of us want to do things to eliminate corruption in our society and I fully sympathise with that motive and the frustration that people feel about corruption. But I think if you really want to do it, it has to be done in a much more holistic and strategic manner. Because there is a part of corruption that is big ticket corruption, there is a part of it that is retail corruption, and what we are finding in the Aadhar project, the UIAI project, is that we have basically given people an identity so that they are not denied something because they don’t have an ID. We have to give them services in the villages so they can get their money automatically. We have to make sure that their PDS is portable so that they can go to any ration shop. These are basic, fundamental things which will help in making sure that the people have a much more hassle-free relationship with the State. And so I think if you are going to do something about corruption, we have to do it in a much broader manner, where this Bill just becomes one of many things.

Sagarika Ghose: But you don’t think that the Jan Lokpal Bill on its own is a magic wand that can solve corruption problems.

Nandan Nilekani: Absolutely not, I mean, I don’t know who is drinking this Koolaid. You know, I find this simplistic notion that you pass some magical Bill and some corruption is going to go away, I find that... frankly... certainly not the way you should be thinking about the issue.

Sagarika Ghose: So do you think that at the moment we have enough laws, the laws that we have, the IPC, the Prevention of Corruption Act, we have enough laws those are enough...

Nandan Nilekani: No I’m not saying that we don’t need a Lokpal Bill..

Sagarika Ghose: We need to improve the delivery system.

Nandan Nilekani: I’m just saying that a Bill where you create a whole police infrastructure that will eliminate corruption without looking at the whole broad set of issues and fundamentally changing the way we deliver the public services - in a way that is much more convenient and hassle-free for the common man - is I think focusing on a very small part of the overall problem. So I’m very much for removing corruption, but I think the statement that this is the only way to do it to the exclusion of all other things is... I mean, I find that very very impractical.

Sagarika Ghose: So you are basically saying that the way to fight is through service delivery, to streamline service delivery, not bring back what many are calling an ‘inspector raj’.

Nandan Nilekani: Yes, I mean, I am not saying that we don’t need a Lokpal Bill. That is for the Parliament to decide - what should be the frame of that bill. I’m just saying that for millions of people corruption is at the point of interaction. When they are trying to get their PDS, when their are trying to get their pension, when they are trying to get their bank account open, when they move from a village to a city and nobody is willing to recognise them. That is where corruption is. And that is where the things we are doing like giving an Aadhar ID for every person, especially those who have no ID, (comes in). Getting them bank accounts by an automatic KYC, getting them a business correspondent network so that they can withdraw money from anywhere. Giving then the portability of the PDS so that if one PDS outlet is not giving them service they can go to somebody else. That’s where, you know, millions of interactions the people have with the system, you need to fix that. And that is really a process, transformation, you know, technology kind of a solution, it is not about the law.

Sagarika Ghose: How do we assess this middle-class anger; is it assertive, is it anarchist or is it constructive?

Nandan Nilekani: No I think there is a revolution of rising expectation and a part of that expectation is a much better, much more streamlined, level playing field kind of a society, which I think all of us will agree. I don’t think that the aspiration or frustration is something that... you know, I fully empathise and sympathise with that. My point is both the solution and the means being adopted - that is where I think I have a difference (in viewpoint). All the people who are against corruption should have a much broader agenda, which covers at least 10 to 15 things. One of which is whatever Bill they have in mind.

Sagarika Ghose: There is a feeling in this country and a growing feeling in this country that corruption is increasing with liberalisation and economic reforms and one of the champions of the Jan Lokpal Bill Prashant Bhushan has actually said that. What do you make of that argument? Do you believe that liberalisation is creating big ticket corruption and that the avenues for making illegitimate money are increasing because of liberalisation?

Nandan Nilekani: No I think in fact we need more reforms to rectify these issues because there are parts of Indian economy that don’t deal with the state much. You know, you have the IT industry, the BPO industry, the FMGC industry, the manufacturing industry, the auto industry, the financial industry which are very competitive open market kind of situations. The challenge happens when there is some huge role of government, whether the government is a regulator or the government is a provider of some resource which is scarce or the government is a buyer or whatever. And that interface is where all these issues are, so we need to make that much more transparent, open and deregulated. I mean we need liberalisation very much because finally we are going to have millions of Indians coming into the workforce. And the jobs for those young Indians are going to be created by entrepreneurs. So we need to create a culture where we encourage ethical entrepreneurship.

Sagarika Ghose: So the battle against corruption should not lead to stopping of reforms, should actually incentivise more reforms?

Nandan Nilekani: Absolutely. You need more reforms, not less.

Sagarika Ghose: So you simply eliminate the government functionary?

Nandan Nilekani: No, you streamline things, you automate things and you create choice. I think choice is very important. See the difference between you and me and somebody in a village is that if you don’t like the service in one shop you can go to another shop. So you have a choice, if you get bad service you can go somewhere else. If you don’t like this bank you can go to some other bank. You don’t like this ATM you go that ATM. So the choice is what empowers you. If you are a person who is a part of the PDS, your name is assigned to only one shop. You can’t go anywhere else. So if that particular shop is shut down or is not able to give you service or whatever, you are out of luck. So you have become hostage to that one entity. The moment you make it portable where I can go to either shop A or shop B to get my things suddenly you’ve empowered me. That you do through a system, you can’t do it another way.

Sagarika Ghose: From land acquisition to spectrum to mining, it’s always the discretionary power of the government where the corruption comes from. But is it going to be that easy to do away with discretionary powers of the government because the government has to after all make decisions.

Nandan Nilekani: I’m just saying that for the common man the corruption is at the point where they have to open a bank account, get their pension, get their rice and wheat - whether those points of interaction can be streamlined - which I think can absolutely be done. That’s how we are going to tackle it for the majority of the people.

Sagarika Ghose: But what you are talking about is the corruption that is affecting the common man on a day to day basis. Now what about big ticket corruption, big scams, the 2G scam, the CWG scam - don’t you need a Lokpal there for example to tackle big ticket corruption?

Nandan Nilekani: No, I’m not saying don’t have a Lokpal, I’m just saying that Lokpal is just one out of 10 or 15 initiatives that we need to take, so we should see these things in the context of that. That’s all I’m saying. Of course we need a Lokpal bill and whatever version, I’m not an authority on that. But please look at it as a strategic, holistic, transformational challenge that cuts across large ticket items, retail items procurement, elections, whatever. And look at this in a strategic manner - don’t focus on one out of 15 things. And act as if that is a magical bullet that will solve everything - that is completely inane.

Sagarika Ghose: It’s simply not enough. It is inane and not enough.

Nandan Nilekani: I mean I really don’t know why this has reached this level. I mean I have been trying to do this system stuff for many years and I am convinced that you have to look at it strategically.

Sagarika Ghose: Do you believe that this protest which is taking place while the Bill is before the Parliamentary process is justified?

Nandan Nilekani: I don’t think it is justified. You know we have a Bill for the UID authority, which went to Parliament and was placed before the standing committee on Finance, which is chaired by Mr Yashwant Sinha. And I have had the occasion to, you know, make a presentation on more than one occasion to the standing committee. Now the proceedings of this are confidential, but let me tell you they do an extraordinarily thorough job. I’m very very impressed with the quality of questions, the homework, the due diligence, the seriousness that they view these things with. And it’s very bipartisan, you can’t make out who is from which party because they all ask (questions) on the issue. So when you have such an excellent system of law-making...and you know they have asked us so many thing to clarify, they have called so many experts, they have called people who are against what we are doing to the committee. So it’s a very comprehensive approach to law-making. So when this law is in front of the appropriate standing committee, why do we need an agitation? It escapes me why this is going on.

Sagarika Ghose: So you believe that the agitation is actually a violation of Parliamentary principles.

Nandan Nilekani: No, I’m saying when a very serious Parliamentary body called the standing committee has taken this law for consideration, why are we not working through that system?

Sagarika Ghose: And we should not disrespect the Parliamentary standing committee?

Nandan Nilekani: Absolutely. I mean, look I have visited the UK Parliament, I have gone to the French Parliament, I have been to the US House of Representatives. I have met top leaders across the world in all walks of life and let me tell you the standing committee procedures are second to none. Let us respect that, let us give them the opportunity to call all the experts for and against and let them come out with something. They are the appropriate people, they are our representatives.

Sagarika Ghose: Are you placing too much faith in technology. Because IT systems can clean up the system, you can computerise your birth certificates and death certificates, but at the same time you do also have to monitor credit card payment, you do have to monitor retail purchase. So a certain of degree of monitoring is required even if you provide IT service in transactions.

Nandan Nilekani: The way you do that Sagarika is that you have millions of transactions happening every day. You can’t have millions of people roaming around looking at transactions - that is not a scalable model of doing things. The way you do it is that you build analytical tools where you look at a large number of transactions, look for suspicious behaviour and focus on those transactions that look suspicious. There is a science called fraud analytics to do these kinds of things. Why would you use nineteenth century methods to solve problems today?

Sagarika Ghose: Many are calling it a national catharsis on corruption. Why do you think corruption thrives in our country? What is the reason according to you why corruption is endemic in our country?

Nandan Nilekani: No, I think there are different aspects to this corruption. Right, there is the large ticket kind of corruption which happens typically where the state interfaces with business for large resources and land. There the solutions are different, there it is about having a better land market or auctioning of resources or better procurement policies. Then there is the small ticket or retail corruption where millions of people interact with the state, there is a rent-seeking transaction that happens, that is about systems, automation and the stuff I talked about. Then there is the tax issue which is ... again a lot of taxes are about having better systems to reduce things by having matching of invoices or having common entity registrations so that everybody uses the same IDs. Now you obviously need surveillance or inspection, I am not saying you don’t need that. But that is a layer you put on top of a well-functioning, streamlined system. Surveillance and an audit cannot be a substitute for that and that is one of the conceptual problems I have with many of these proposals – which is that nobody is talking about how do we fix the underlying thing. But we create one more army of people who are going to inspect something which is already not working - that is not the way to fix things, go and fix it where it should be working. My point is simply that let’s not get carried away by the idea that one magic bullet is going to solve it. And let us respect that when there is a Parliament, when there is a standing committee which is looking into this matter, let them do their job.

Sagarika Ghose: Are you pessimistic or are you optimistic? Often from the Anna Hazare camp we hear slogans like sab neta chor hai, the system is entirely corrupt, politicians are all corrupt, we should not have trust in the system. Do you buy into such pessimism or do you feel we’re winning the war on corruption?

Nandan Nilekani: I think it is a very unfair statement. You know I have been two years in public life and my respect for politicians has gone up. I think they are extremely hard-working, they’re juggling with a dozen balls, they’re very understanding of issues, you know, there’s enormous diversity they have to deal with. If the argument is that some politicians are corrupt we can say that about every walk of life. There are businessmen who are corrupt, there are media houses which are corrupt, and there are NGO which are known to be corrupt, why are we tarring just one constituency with this brush. I think we should respect our politicians and across the board I have tremendous respect for politicians.

Courtesy: CNN- IBN