Tuesday, February 23, 2010

Zero Rupee Note and the 5th Pillar

One of my favorite quote from an "Indian" movie roughly translates like this "In every other country people usually bribe to get a job done better but only here in this country we need to bride just to get the job done." The situation has become so deplorable that nobody even bothers about it anymore and the symbiosis has become so worse that its not even a symbiosis any more but more like a fish in a water.The author and business consultant Gurcharan Das once said without a hit of Irony, "India grows while its government sleep".

Having seen this myself for so many years, I had given up hope. Only occasional solace for those hyper active
mirror neurons is watching the robinhoods of Indian movies fight corruption on the silver screen. No wonder, I was more than thrilled to read about 5th Pillar. The Indian emblem is made up of four lions atop the Ashoka pillar (people call Ashoka one of the greatest emperors but I think he is one of the greatest human ever). My guess is the number and pillar for name of this organization was deduced from the emblem. The basic concept of zero rupee note is:

"
According to Anand, the idea was first conceived by an Indian physics professor at the University of Maryland, who, in his travels around India, realized how widespread bribery was and wanted to do something about it. He came up with the idea of printing zero-denomination notes and handing them out to officials whenever he was asked for kickbacks as a way to show his resistance. Anand took this idea further: to print them en masse, widely publicize them, and give them out to the Indian people. He thought these notes would be a way to get people to show their disapproval of public service delivery dependent on bribes. The notes did just that. The first batch of 25,000 notes were met with such demand that 5th Pillar has ended up distributing one million zero-rupee notes to date since it began this initiative. Along the way, the organization has collected many stories from people using them to successfully resist engaging in bribery.

One such story was our earlier case about the old lady and her troubles with the Revenue Department official over a land title. Fed up with requests for bribes and equipped with a zero rupee note, the old lady handed the note to the official. He was stunned. Remarkably, the official stood up from his seat, offered her a chair, offered her tea and gave her the title she had been seeking for the last year and a half to obtain without success. Had the zero rupee note reached the old lady sooner, her granddaughter could have started college on schedule and avoided the consequence of delaying her education for two years. In another experience, a corrupt official in a district in Tamil Nadu was so frightened on seeing the zero rupee note that he returned all the bribe money he had collected for establishing a new electricity connection back to the no longer compliant citizen."


No one is naive to imagine this can eradicate corruption from India. With over a billion people, its quixotic even to think that way. But India is a country of paradoxes. For decades the truism was that the huge population was India's achilles heel but ironically it turned out be the catalyst of Indian economic miracle. So can how can a corrupt bureaucracy be beneficial for a better future? I think it can.

When people get weary of something this nauseating, it propels them to innovate and be more creative. Indians have already adapted to live with out any assistance and expect zilch from the government. When India becomes a developed country in a couple of decades they wouldn't expect much from government and the "wealth effect on consumption" leading to humungous government expenditure (to satisfy people's in-satiatable appetite) which is currently making USA run nightmarish deficits might never happen in India. Instead we might see a genesis of Adam Smith's second invisible hand to embrace the underprivileged (not the free riders) which capitalism eschews. A libertarian's dream come true.

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