Monday musings: Rent seeking through Contractor-raj
Earlier this month, when Parivartan, a non-governmental organisation, released a report card on public representatives in Pune Municipal Corporation (PMC), an interesting fact came out: purchasing jute and cloth bags to distribute them to citizens in the past five years was the priority for most corporators in the city, besides focusing on drainage work.
Of the ₹90.90 crore funds utilised by the corporators, nearly ₹15.31 crore was spent on drainage cleaning during the past four years followed by ₹12.57 crore on distribution of these bags, according to report by Parivartan. The distribution began after the state government imposed a ban on plastic bags in 2017, opening another door of opportunity for public representatives to “serve” people in their own way.
For a civic body with an annual budget of ₹8,370 crore during 2021-22, spending ₹12.57 crore in four years may seem pittance. It, however, raises an important issue of misplaced priorities that PMC and many other civic bodies in the country are dealing with.
But there’s a bigger question people residing in bigger cities need to answer: How likely are they going to react to such spending, which indicates mis-governance? People living in major cities are apathetic to it as they are busy with their life, which may involve more important things even if they keep grumbling about outlays not getting translated into outcomes.
The assumption that the purpose of outlays is to produce outcomes may not necessarily translates into reality. “The purpose of the outlay is to create a broad justification for expanding the reach of the contracting state. The end is the awarding of the contract. But the nature of contracting is now producing systematic misalignments,” wrote Indian academician and former president at Centre for Policy Research, Pratap Bhanu Mehta in one of his articles.
In Pune, awarding contracts at discretion has currently become a bone of contention between the BJP members and Pune municipal commissioner Vikram Kumar. The municipal commissioner has been firm on his stand of cutting down ward level budget for elected members. These ward level works are often carried out by contractors selected by corporators.
As seen in the case of distribution of jute bags, most ward level work is either duplication or spending on unnecessary stuff at taxpayers’ expense. Whether distributing bags or building roads or reconstructing the fairly new footpaths, the main interest for corporators – not just of the BJP but for all parties - is in awarding the contracts.
These contracts, as we all know, have much to do with rent-seeking, which allow people in power to use their clouts to make money, which is another form of corruption.
No wonder when the standing committee chairman Nitin Landge, his PA and three other civic officers at Pimpri-Chinchwad Municipal Corporation were caught red-handed while accepting bribe, it raised no eyebrows. The bribe was for awarding contracts, said police officials. Yet the form of this level of corruption is so taken for granted, it did not generate any hullaballoo.
The state anti-corruption bureau (ACB) arrested them soon after a meeting of the civic standing committee in August. The three civic employees were allegedly caught while accepting ₹1.18 lakh from the contractor, who was initially asked to pay ₹10 lakh for a work order for installing advertising hoardings. The amount was later brought down to ₹6 lakh, according to the ACB.
It is because everyone loves contracts, big cities often see construction activity underway in one part or another, even as it may not add into city’s infrastructure neither it underlines social utility. Such contracts neither benefit cities or citizens, thus resulting in zero-sum game.
Yogesh Joshi can be contacted at firstname.lastname@example.org