Achieving Digital India

How can the government’s vision of a Digital India be achieved? This column provides a possible set of priorities and an implicit action plan.

The obvious foundation of Digital India is the requisite infrastructure, but the government’s conception of infrastructure is somewhat lopsided—too broad in some aspects, while not emphasising others enough. The first step has to be to create a robust and extensive fibre optic network, and to make more spectrum available for wireless connectivity. The latter, in particular, with the use of smartphones and smaller tablets, will make expensive projects such as Common Service Centres almost unnecessary. Privately-run kiosks, or desktop computers in post offices, might be an adequate supplement to personal access devices (which can also be shared).

A nationwide digital network will require robust software, especially for security. The continued instances of security breaches in developed countries with supposedly advanced digital infrastructure reinforce the view that security is a paramount concern for a potential new digital infrastructure. But cyber-security seems to be peripheral in the conceptualisation of infrastructure. The role of digital infrastructure in supporting Indian business firms also needs attention.

After digital infrastructure, the second priority has to be training. Developing and installing software for a national digital infrastructure can be done with relatively little labour, but maintenance, repair and technical support for the hardware and software of digital infrastructure are skills which are already in short supply, even without extensive coverage. It is not clear that the government’s vision fully realises this need, even within the “pillar” of “IT for jobs”, but implementing Digital India will require both public and private effort for this dimension of skilling.

A related aspect of training is imparting skills in using various kinds of application software, including more generic examples such as word processing, spreadsheets and presentations, but also more specialised software for accounting, website design, graphic design and more. The government’s own documents speak of skilling in the context of the IT or ITeS, but they do not seem to realise the potential scope of IT for all aspects of the economy: Even a cloth merchant can use accounting software. When one thinks about applications in particular, the issue of language becomes central. The need for availability of software in multiple Indian languages does not seem to be recognised in the government’s vision of Digital India.

Educational content also needs to be available in major Indian languages. Health applications, information for farmers and financial services, to be truly accessible to the masses, ought to have local language versions. One can think of this as an aspect of infrastructure, something that does not matter for a country like the US, but is taken for granted across Europe, where each country uses its own language.

The final aspect of implementing a vision of Digital India should be digitising the internal workings of government, not just at the national and state levels, but all the way down to local governments. This is obviously a huge undertaking, when even basic aspects of operations such as accrual accounting are absent from sub-national tiers of government. It is not clear that the existing vision acknowledges the enormity of the implementation task, blithely listing a wide range of government services to be provided by digital means. As in the case of cyber-security, the experience of developed countries is a reminder of the potential difficulties of building IT systems.

If Digital India is to be achieved, there needs to be a clear prioritisation of goals. The most fundamental goal should be to create a robust and secure infrastructure. The second priority is to make sure that there is enough expertise to maintain this infrastructure. Third, basic software applications and educational content should be made available in multiple Indian languages. These three goals are not specific to the workings of government. The fourth implementation goal should be to digitise the internal operations of government at all levels. This task alone is an enormous one, even before citizen-facing IT-enabled government services can be provided.

Many of the specific activities and services listed in Digital India documents are miscellaneous in nature, and of secondary importance. They illustrate the laundry-list approach to government, which spreads attention and effort in ways that can prevent almost anything specific or substantial being accomplished. For example, progress on the national fibre optic network has been pitifully slow. The entire Digital India vision as publicised is very government-centric, rather than focusing on the wider potential importance of IT in India’s economy. A truly Digital India will need to be developed in a manner that is quite different from what is implicit in the government’s current vision. It is not too late to rethink the vision and create a sensible action plan for implementation.
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IAS2015GSPRE by samveg ias dehradun

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No export of democracy

Democracies celebrate Magna Carta, not war victory. Such actions only encourage Bonaparteism and, in no way, strengthen the people's say. I was dismayed to see a full-page advertisement in newspapers to commemorate the victory in the 1965 war against Pakistan. The advertisement said: "The Indo-Pak War of 1965, which began on August 5 and ended on September 23, is one of the biggest tank battles since World War II. Pakistan launched troops inside Kashmir under Operation Gibraltar in early August 1965.

"Further operations were stalled when Indian Army captured the strategic Haji Pir Pass on August 28, 1965. Pakistan then launched operation Grand Slam in Akhnoor sector, but India opened the Western Front to counter the same. Pakistan's 1 Armoured Division was badly mauled in the Battle of Asal Uttar with nearly 100 tanks destroyed. Other major battles were fought at Poonch, Phillora, Barki and Dograi."

True, India had an upper hand but it was at best 55 per cent against 45 per cent. Lahore was the yardstick. We could not take it and had to bypass it. General J N Chaudhuri, who was the Chief of Army Staff at that time, told me subsequently in an interview that he had never planned to occupy Lahore. It would have unnecessarily pinned down a large number of troops and we would have suffered heavy casualties. Pakistan, he said, would have defended the city with all it resources and fought us in every house, every street.

This may well be a valid explanation. Yet, the general impression is that India failed to take Lahore. A small contingent which reached the Ravi Bridge, bypassing Lahore, was severely crushed. General Chaudhuri's defence was that the march to the Ravi Bridge was neither authorised, nor did it figure in his scheme of things. This must be true. But the thinking of an average person is different. He believed that India lacked strength to occupy Lahore.

General Chaudhuri said that their main purpose was to destroy Pakistan's armour, particularly the Patton tank which America had given them. The Ichhogil Canal in the area came in handy. Indian troops breached it to let the water spread. The tanks got stuck in the water. The question which remains unanswered is: Who was responsible for the 1965 war? General Mohammad Ayub Khan, who was then Pakistan's Marshal Law Administrator, and Commander-in-Chief told me that it was 'Bhutto's war'. Bhutto sent infiltrators into Kashmir, without talking him into confidence. In fact, General Ayub's son, Gohar Ayub, apart from confirming about what his father had said, went public with part of the information.

Gohar used to live in a palatial house in the suburbs of Islamabad. This was where he hosted a lunch for me. Mushahid Husain, then the editor of 'Muslim', had arranged it. I remember the day distinctly because I heard about the assassination of Indira Gandhi at Gohar's house. He spoke about her only for a while and that too cursorily. In fact, Gohar was keen to tell me something which was not complimentary to our armed forces. His story was that our armour had chinks. I was sure it had. But I was taken aback when he said that a copy of topmost secret papers from India's military headquarters would be "with us before they reached Nehru's table".

Those days you could walk through South Block corridors from one end to the other in New Delhi. Security requirements had not yet blocked the passage. Nor had gates been built within gates. How could a paper conceivably reach Pakistan intelligence agencies before a messenger covered a few yards to deliver it at Nehru's office?

At that time Gohar did not give the example of an Indian brigadier parting with the 1965 war plan for a sum of Rs 20,000. However, he did remark that his father was "contemptuous of Indian officers selling their country for a few thousand rupees". I did not join issue with him because it was the first time I was hearing of any such thing. But I told Gohar about a remark his father had made against the Kashmiris when I met him in Islamabad in 1972. I had gone there to interview Zulfikar Ali Bhutto who was briefly the president after Pakistan's debacle at Dhaka.

'Bhutto's mujahideen'

Ayub said Bhutto had assured him that the Kashmiris would rise in revolt once they knew the Pakistan army was in their midst. Ayub referred to the infiltrators as 'Bhutto's mujahideen'. According to Ayub, he told Bhutto that if he knew anything about Kashmiris, they would never raise the gun.

Gohar was wrong in saying that the reports on Kashmir reaching his father were 'doctored'. His father had himself told me that Bhutto never took him into confidence on the scale of infiltration. (Ironically, that's exactly what Nawaz Sharif, in exile at Jeddah, told me about Pakistan's misadventure at Kargil). Pakistan's attack in '65 began with hundreds of infiltrators - mujahids (liberators), as Bhutto, then Pakistan's foreign minister, hailed them - stealing into Kashmir.

The report of the intrusion first appeared in the Indian press on August 9, 1965, along with Ayub's assurance to Kewal Singh, while accepting his credentials as India's high commissioner at Rawalpindi, that Pakistan would reciprocate every move from India for better cooperation. He argued that infiltration into Kashmir was not the same thing as infiltration into India. The 'uprising' that Pakistan expected to foment failed because local Kashmiris did not help the infiltrators. And when I interviewed Bhutto, he did not deny Ayub's allegation that the 1965 war was his doing. However, he said that he has "learnt a lesson and wouldn't repeat it."

If at all New Delhi was keen to talk about the 1965 war victory, however limited, it should have dwelt more into the benefits of being a democratic state instead of violence and weapons. India's advantage is that sovereignty remains with the people. In Pakistan, the interest of the armed forces comes first. New Delhi cannot export democracy, but it should help Pakistan get back the rule where the people have the final say.

Rank & Pension

The nation is presently in the grip of OROP (One Rank One Pension) fever. Several army veterans are fasting unto death; passions are ignited while invectives fly thick and fast. Emotion is being invoked much more than logic and facts, often misleading the people. Ex-Servicemen complain of inadequate pension due to truncated service and limited job opportunities after compulsory early retirement. No one doubts the truth of any of these grievances, but the issue is more deep-seated. The conjecture on the impact of OROP varies from the extremely conservative to the wildly fanciful, while skirting the precise nature and magnitude of the problem.

OROP implies uniform pension to persons retiring in the same rank with the same length of service irrespective of their dates of retirement. It implies bridging the gap between the rates of pension of current and past pensioners, and also their equalisation in respect of future enhancements in the rates of pension. One should dispel the myth that OROP is an army-specific problem. All paramilitary forces and 99 per cent of the civilian government employees are victims of an unjust system of pension. Barring a handful that has the privilege of retiring at a fixed scale, normally at the top, whether in the army or in the civil administration, all employees suffer from this discrimination.

Pension drawn by any government servant including defence personnel consists of two elements: a basic pension which is fixed at the time of retirement and a relief thereon as and when successive DA instalments are released by the Government based on the consumer price index and the rate of inflation. Central Pay Commissions (CPC) are constituted every 10 years. With every CPC award, enhancement in pay-scales and revised rates of pension are automatically passed on to the past pensioners whose basic salaries at the time of retirement are revised and re-fixed in the new scale of pay and new pension determined accordingly. While some benefits of revision are passed on to retired employees, the problem arises due to the bunching of several old pay-scales into a smaller number of scales in the new pay structure. There would be no disparity in pension if the number of pay-scales and their intermediate stages remained the same. This was the case with the pay-scales of defence forces, which were different from those of civil servants, till the Second Central Pay Commission (CPC) awards (1966-76).

The armed forces enjoyed the OROP till 1976, i.e. before the third CPC (1976-86) took an ex parte decision against the scheme and applied the civilian pension rules to the armed forces pensioners as well. This was the genesis of discrimination between the past and present pensioners. The Third CPC compressed 36 running pay-scales prevalent in government service to only 19 by merging several previous scales into single running scales in the revised pay structure. When a number of pay-scales are merged into a single running pay band, pensions drawn by all “pre-existing pensioners”, who had retired at the old scales, are fixed at the lowest of the pay band into which these old scales are merged. This is where the problem arises and disparity kicks in between the past and the present pensioners. An officer who is scheduled to retire shortly will obviously draw a higher pay than the same-rank official who had retired 10 years ago.

With the Fourth and Fifth CPC awards, the number of pay-scales again proliferated to 34, but the problem was really aggravated when the 6th CPC (2006-16) reduced it drastically to only nine running pay-bands (PB) by introducing a number of fixed grade-pays within each band; these grade pays did not affect the pension. For example, 26 pay-scales were converted into four PBs, accommodating within a single pay-band (PB-4) a scale of Rs 37,400 - Rs 67,000 of all officers from the level of Lt. Colonel to Major General, making all of them, irrespective of their years of retirement or rank, draw the same basic pension of Rs 18,700 fixed at the lowest of PB-4, and hence less than anyone retiring presently at a higher level within this PB with higher or lower rank. This anomaly also applies to the civilian employees. All past retirees would therefore stand to suffer monetary losses which will amplify with every successive CPC awards, with ever-widening disparity between present and past pensioners.

The resentment of defence forces on the ground of unequal pension is thus understandable, but there is another reason for their sensitivity to this. For armed forces, equality in service has two components, rank and length of service. Rank signifies command, control and responsibility. A soldier is attached to his rank and is allowed to retain it even after retirement. Differential pensions to soldiers retiring in the same rank with equal years of service also create social inequality between them, apart from financial inequality. Nearly 85 per cent of the armed forces personnel retire below the age of 40; this is necessary to keep our fighting forces young. Even officers retire between 52 and 54 depending on their rank, while all civilian employees retire at the age of 60. A larger service-span allows the civilians more time to rise in the hierarchy and receive higher pension. Such advantages are denied to the armed forces. Though jobs are reserved for ex-servicemen, opportunities are limited. Given the hardships and peculiarities of service conditions of the armed forces, they obviously cannot be equated with civil servants.

For the armed forces personnel, OROP is imperative. Which is why all political parties and five Prime Ministers have been in favour of it, but the demand still remains unaddressed, due primarily to bureaucratic apathy if not disinclination. Bureaucrats, who have to decide on such matters, do not stand to lose; almost every bureaucrat reaches the fixed apex scale of Rs 80,000 at which there is cent per cent equalisation of pension, whereas only the army commanders and the Vice-Chiefs of defence forces draw the apex scale. The fact that multiplicities of committees have had to address the issue is in itself a testimony to the inherent difficulties.

On the government’s side, the major impediment is, of course, financial. In 2011, the Controller General of Defence Accounts had estimated the additional annual liability on this account at Rs 3000 crore. Today it is estimated to be about Rs 8300 crore annually which may increase to Rs 10000 crore, if the impending Seventh CPC awards are factored in, taking the base year of 2011 for fixing pension, and rolling it out from January 2015. Both points have been contested by army veterans, who want a continuous ‘rolling’ adjustment of all past pensions with present values which is unrealistic. Given that 60,000 soldiers retire every year, it will be an administrative nightmare to adjust the pensions of some 30 lakh existing defence pensioners on a running basis. Instead, the government’s proposal of adjustment once every five years in place of once in every ten years for civilians appears reasonable. The financial implication is probably being exaggerated by bureaucrats and ministry mandarins.

The Central government’s total pension expenditure during 2012-13 was Rs 69,479 crore, of which defence pension was Rs 43,368 crore and civil pension Rs 26,111 crore. Both have increased almost equally during the last five years. Factoring in the likely impact of the Seventh CPC, the total pension liability may increase to Rs 88,000 crore. Compare this with the Union Government’s subsidy expenditure of Rs 257,179 crore in 2012-13, of which food subsidy was Rs 85,000 crore, fertiliser subsidy Rs 65,808 crore and petroleum subsidy Rs 96,880 crore. Given the falling price of petroleum in the global market, there is some cushion to absorb the excess expenditure of Rs 18,000 crore that OROP is likely to impose, provided the Government curtails subsidy, disinvests its PSUs and implements economic reforms with urgency. If the fiscal deficit of Rs 4.95 lakh crore in 2012-13 did not throw the economy out of gear; the additional burden imposed by OROP will not unsettle it either. The nation should not be seen haggling with veterans who have sacrificed their lives to secure our borders.
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Eleven states in India have 'special category' status. This extra-Constitutional status, introduced for the first time in 1969, was granted by the National Development Council, composed of the prime minister, Union ministers, chief ministers and members of the erstwhile Planning Commission. These 11 have hilly and difficult terrain, lowpopulation density, a sizeable share of the population as tribals, strategic location along the borders, economic and infrastructural backwardness, and a non-viable nature of state finances.

Bihar does not satisfy all the criteria. Yet, Chief MinisterNitish Kumar has been demanding the status for a while. The story is similar to "reservation", introduced constitutionally, initially for 10 years, and only forScheduled Tribes (ST) and Scheduled Castes (SC). The demand for the extension of special category status to other states is similar to the demands for the extension of reservation to groups other than SC and ST.

Special category states enjoy a number of benefits such as excise and income tax concessions, an earmarked 30 per cent of the normal central Plan assistance and 90 per cent of such assistance as grants (compared to only 30 per cent for other states). Given that 11 per cent of normal central plan assistance was allocated to Bihar during the Eleventh Plan according to the Gadgil-Mukherjee formula, it is difficult to see how Bihar can be declared to be special category without augmenting the earmarked 30 per cent of normal central Plan assistance.

At a public rally in Arrah on August 18, Prime Minister Narendra Modi announced a Rs 1.25-lakh-crore special package for Bihar for building infrastructure. Bihar badly needs such infrastructure as roads, railways, airport, refinery and power plants. Bihar Vidhan Sabha elections are due before year-end, and the opposition ascribes electoral motives behind the announcement. Leaving the politics aside, it brings the question of regional disparities in India into sharp relief.

In terms of regional disparities, India in a way is a mini-Asia, but with less accentuated differences. In Asia, in 2012, according to the Asian Development Bank (ADB), smaller countries such as Singapore, Hong Kong, Brunei Darussalam, South Korea and Taiwan had per capita gross national income between $21,620 and $54,040. These high-flyers had per capita income more than 20-50 times that of the Asian countries at the bottom of the ladder. At the bottom were Afghanistan, Nepal, Cambodia, Tajikistan and Bangladesh with per capita income between $690 and $1,010. Furthermore, economic performance of conflict-affected countries, such as Afghanistan, was poor. Though Chhattisgarh, Jharkhand and Manipur, for example, are not Afghanistan, the law and order problems in these states nevertheless appear to be taking its toll on economic performance.

In India, among all the states or Union territories, smaller ones like Goa, Delhi, Sikkim, Chandigarh and Puducherry are at the top, with per capita net state domestic product (NSDP) at factor cost at current prices between Rs 1,43,677 and Rs 2,24,138 in 2013-14, more than 1.9 times the all-India per capita net domestic product (NDP) of Rs 75,420. In the same year, Bihar, Uttar Pradesh, Manipur, Assam and Jharkhand, at the bottom of the ladder, had per capita NSDP between Rs 31,199 and Rs 46,131, less than 61 per cent of the all-India NDP.

Of course, disparities across countries can be expected to be more than across regions within a country. Within a country, generally, with free mobility across regions, people can be expected to migrate from poorer to richer areas and reduce disparities in the process. Furthermore, countries in a continent may emulate each other's policies to some extent, but unlike states within a country, do not operate under the same central policy regime. Yet, there are lessons to be learnt from the regional disparities across countries in Asia.

Since 1973, ADB has been focusing on its relatively backward member countries with the Asian Development Fund (ADF). To the poorest of ADB member countries, to "bridge the development gap", the ADF provides grants, as well as loans for 32 years with a grace period of eight years and interest of 1 per cent and 1.5 per cent during the grace and amortisation period, respectively. ADF-recipient status in Asia and special category status in India appear to be somewhat similar.

Prima facie, there is no overwhelming evidence that grant of the special category status has delivered accelerated development in these 11 states. Similarly, the relatively poorer ADF countries are growing slower than the rest in Asia and falling further behind the non-ADF countries. Seven economies - China, India, Indonesia, Japan, Republic of Korea, Thailand and Malaysia - continue to lead Asia's march to prosperity.

There are three lessons from the ADF that appear relevant for addressing regional disparities in India. First, law and order and conflict resolution constitute priority number one for growth. The extremely low project success rate in Afghanistan has been a frustrating experience for development practitioners. Peace-building and state-building are preconditions for better development outcomes. Little can be expected in a state where the government is unable to perform its basic functions effectively.

Second, interventions for promoting regional integration often provide very high returns. A case in point is the Greater Mekong Subregion (GMS) Cooperation Program. Increasing connectivity through physical infrastructure and the transforming of transport corridors into economic corridors across borders; and improving competitiveness through efficient facilitation of cross-border movement of people and goods and the integration of markets, production processes, and value chains provide rich returns for poor countries. Lao PDR and Cambodia in GMS are good examples. It appears that often moving people to jobs in a planned way is easier than moving jobs to people.

Third, successful implementation requires the local authority's buy-in into policies and ownership of projects. Throwing money without a home-grown conviction about the need, for example, for a road, school or hospital, does not deliver the appropriate outcomes. There is need to help the relatively backward states or countries, but only in the appropriate way.

Number of trees halved to 3 trillion in the world

There are just 3.04 trillion trees in the world, data from the first spatially continuous map of forest tree density suggests. The estimate of the ratio of trees per person is 422:1.

Though 3.04 trillion trees is an “order of magnitude higher” than previous estimate, the number of trees cut down each year is a staggering 15.3 billion and the global forest cover loss is approximately 192,000 sq. km per year. As a result, the global number of trees has reduced by as much as 46 per cent since the start of human civilisation. These are some of the results of a study published today in the journalNature.

As per the study, a tree is defined as a “plant with woody stems larger than 10 cm diameter at breast height.”

Of the 3.04 trillion trees in the world, the tropical and subtropical forests have the highest number of trees at approximately 1.39 trillion (nearly 43 per cent), followed by boreal regions (0.74 trillion trees accounting for 24.2 per cent) and finally the temperate regions at 0.61 trillion trees (21.8 per cent). While the tropical forests have the highest number of trees, they have also witnessed the highest rate of tree loss.

Though the tropical forests have the highest number of trees, the tree density is highest in the forested regions of the Boreal and Tundra regions, the study notes. In the northern latitudes the deficient moisture and low temperatures allow only the stress-tolerant coniferous tree species to establish. The coniferous tree species, by default, reach highest densities.

Till date, scientists have relied on satellite images to provide estimates of global forest area. As a result, it was not possible to know the number of trees. For this study, T. W. Crowther, the first author from Yale University, Connecticut, U.S. and others used nearly 4,30,000 ground-sourced measurements of tree density from all the continents except Antarctica to generate a global map of forest trees.

Forested areas were found even in regions that are generally regarded as being bereft of them — deserts, tundra and grasslands.

Though warmth and water availability led to an increase in tree density, a negative relationship was found in many regions. For instance, in the case of flooded grasslands and tropical dry forests, the benefits of water availability did not result in increased tree density. This was because the forested land was put to agricultural use.

“The negative relationships between tree density and anthropogenic land use exemplify how humans contend directly with natural forest ecosystems for space,” they write. “Although the rates of forest loss are currently highest in tropical regions, the scale and consistency of this effect across all forested ecosystems highlight how historical land-use decisions have shaped natural ecosystems on a global scale.”

A dense forest greatly influences a vast array of biotic and abiotic processes, and the current data helps in providing insights into ecological dynamics. The data is also critical in guiding local, national and global reforestation/afforestation measures.

Chasing black money, with UN help

Provisions in the UN Convention Against Corruption can help immensely in the recovery of black money. The convention should be of great value to countries where natural wealth has been plundered and whose governments need these resources to reconstruct their societies

The promise made by the Bharatiya Janata Party-led National Democratic Alliance in the run-up to the general election in 2014, that if it won it would bring back all Indian black money, estimated in billions of dollars and stashed in foreign banks, has remained unfulfilled. The explanation is that the matter is complicated and embroiled in the domestic laws of several countries.

After the party and the coalition won, the move to create a special investigative team of former judges and current regulators to find the concealed assets, estimated to be as much as $2 trillion, and the revelation of some names of Indian offenders have not led to much. Neither the details of the efforts made nor the responses of the countries concerned are in the public domain. The names, which have been revealed in bits and pieces, are mostly of relatively unknown people, who in turn have denied that their money is black. The reason for this impasse is that the holding countries are extremely reluctant to part with black money and they have used every conceivable argument to block its release. Even the countries requesting for information should share a part of the blame because they have not been transparent in their efforts for political reasons.

A convention of value

All this reminds me of the tough negotiations on the subject in Vienna, Austria, in 2003 as a vital part of the United Nations Convention Against Corruption (UNCAC), and which were very revealing. The outcome was not very satisfactory from the point of view of the countries, mostly the developing ones, which had sought a framework to locate and return these assets to their legitimate owners. But there exists a body of provisions in the convention, extracted through hard negotiations, which can be applied to recover black money. If implemented in good faith, the convention should be of immense value to countries where corrupt high officials have plundered natural wealth, and where new governments badly need these resources to reconstruct and rehabilitate their societies. The then Secretary General of the UN, Kofi A. Annan, expressed the hope that “it makes a major breakthrough by requiring Member States to return assets obtained through corruption to the country from which they were stolen.”

The rich countries hit upon the idea of UNCAC to castigate the developing countries for misusing aid money through corrupt practices. [UNCAC complements another instrument, the United Nations Convention against Transnational Organized Crime, and introduces a comprehensive set of standards, measures and rules that all countries can apply in order to strengthen their legal and regulatory regimes to fight corruption.] They wanted to introduce conditionalities of good governance to block aid to certain countries and to limit aid to others. In a strong reaction, the issue of black money being held by certain developed countries was brought in to show that the keepers of black money were as guilty as those who had deposited it abroad. When a debate on the issue became inevitable, Austria, for instance, sought to chair the related working group on assets held abroad and this was conceded. But the working group made no progress as Austria and Switzerland stuck to the position that their internal laws were supreme. Finally, India, as the Chairman of the Preparatory Committee, was asked to chair the group and a breakthrough was achieved after days of tough negotiations.

Principle of asset recovery

As the chairman of the working group, I was confronted with the issue of reconciling the legitimate interests of the countries (which demanded the return of their assets illegally amassed abroad by their citizens) with the legal and procedural safeguards of the countries that had a vested interest in retaining the assets in their banks. While the first group of countries clearly argued that the assets should be returned as soon as their ownership was established, the second group of countries had concerns about protecting the rights of the depositors and the assurances of secrecy given.

The first breakthrough came when the group established asset recovery as a “fundamental principle” of the convention. Then it was only a matter of laying a framework, in both civil and criminal law, for tracing, freezing, forfeiting and returning funds obtained through corrupt activities. The provisions finally accepted were for supporting the efforts of the countries to recover the assets and for sending out a message to corrupt officials that they would not have a safe haven where they could stash away the fruits of their corrupt practices.

What the convention accomplished — and the credit for this goes to both sides — was that legal obstacles should be tackled with international cooperation rather than by domestic laws. Though the two sides took extreme positions initially, the need for compromise and cooperation became clear in the spirit of the whole convention, which was designed to end corruption around the globe. Both sides realised, as we plodded on, that without the clauses on assets recovery, the entire convention would fall.

An important sticking point was the insistence of the assets holding countries that it was not enough for the countries making claims to establish that the assets belonged to them. They had to establish also that the assets were illegally obtained before they were transferred to a foreign country. These countries said that it would be difficult to obtain ironclad evidence to prove this because of the very nature of the accretion of assets by people in power. For instance, most of them were dictators who did not leave any trace of evidence of the methods they had used. The eventual compromise was that the assets could be transferred back if the receiving country was the legitimate owner of property acquired through or involved in the commission of offences established in accordance with the convention.

Some of the relevant provisions of the convention are crucial to the question of recovery of assets. It provides that each state party shall take such measures as may be necessary to permit its competent authorities to give effect to an order of confiscation issued by a court of another state party. It also provides for the provisional freezing or seizing of property where there are sufficient grounds for taking such actions in advance of a formal request being received.

The countries that hold assets have been given special responsibilities such as enhanced scrutiny of accounts deposited by those entrusted with prominent public functions to detect suspicious transactions. They are also required to share information with the competent authorities of another state, when necessary, to investigate, claim and recover proceeds of offences.

The UN, through its Office on Drugs and Crime, which leads the fight against illicit drugs and international crime, has been given the responsibility to implement the convention, particularly its assets recovery provisions. But how effective UN assistance is in legal battles in which the holding countries have a vested interest is uncertain. The negotiations showed that they would not part with these assets easily and that they would fight tooth and nail legally before any assets were returned.

Many legal treatises have been written on the provisions of the convention, but the convention was made possible by a political compromise wherein the developed countries obtained a strong convention against corruption in return for conceding that illegally obtained wealth deposited abroad would be returned to its legal owners. In fact, many developing countries signed and ratified UNCAC because of its assets recovery provisions.

Refining India’s approach

In the case of India, difficulties may have arisen not in establishing that the sums amassed abroad belong to India, but in proving that the assets were illegally obtained. Our authorities may do well to use the records of the debate in Vienna to prove the strength of the argument by many countries that proof of illegality of acquisition should not be insisted upon. Strictly speaking, this had no relevance to the issue of the return of assets as long as it was evident that they belonged to the countries claiming them. This condition was accepted only because of the insistence that banking regulations in many countries would not permit the return of assets without this.

The actual recovery since the adoption of the convention has fallen far short of expectations. Only $276.3 million of assets were recovered in 2006-2009 and $147.2 million in 2010-2012 as against the estimated $20 billion to $40 billion stolen every year. In view of this, the parties to the convention have set up a working group to assist in the implementation of the assets recovery provisions of the convention. A working paper prepared for its next meeting in early September this year has listed a large number of legal issues, which need to be addressed. These include the domestic management and disposal of seized and confiscated assets and the management of the return and disposal of assets recovered in the context of international corruption cases. These are the same issues which remained ambivalent at the time of the negotiations.

But the unspoken truth is that the countries making the requests are not inclined to expose the depositors by revealing the modalities of corrupt practices and the countries that have been requested have a vested interest in not returning the assets to their rightful owners. A disconnect persists between national commitments and the actual behaviour of countries at the international level.

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