Excerpt | 'Policymakers' Journal': In former CEA Kaushik Basu's new book, a rare peek into Indian policymaking - and politics

The prime minister’s office calls when I am bathing. On the way to the airport to catch the Mumbai flight, I call back. I am told the prime minister is coming on the line to speak to me. The roar of traffic outside is deafening. I tell my driver, Manbir, to roll up the window. The prime minister quickly gets to the point. He says while India’s black money problem is serious, most people, including politicians, misunderstand what creates black money and the hazards and challenges of controlling black money. It needs to be curbed but done wrong can backfire and hurt ordinary people. He rightly anticipated that I would agree with this and so decided to call me. He asked me (casually, I think) if I could write up something that he can use in parliament should the opportunity arise. He thanked me for my letter to him from the previous week—the letter that I sent him with some inputs for
the president’s speech to the parliament at the start of the budget
session later this month.

After having joined the Indian government and given that corruption scandals have erupted every now and then, I had been giving it a lot of thought. People get angry about corruption, as they indeed should, but what they often fail to realize is that corruption control needs both passion and determination, on the one hand, and intellect and analysis, on the other. In an economy, corruption flourishes side by side with legitimate activity. To use too blunt an instrument to control corruption can end up damaging legitimate business and exchange. This can damage the economy and exacerbate human suffering. So the existence of corruption is not a sign that the political leaders do not want to banish corruption. Many may not, but many may. The fact that corruption exists does not give you an answer.

There are three kinds of politicians. Those who take money for themselves, those who take money as karma, for the sake of their political party, and those who do not take. While I have never seen an incidence of bribery in my presence in the government I am of course aware that it happens; and for the politicians with whom I interact, I feel I can guess which of the three categories each of them belongs to. I have utter disrespect and disdain for
the first group: those who are corrupt and take bribes to enrich themselves, their family and friends. I have huge respect for the last group. And though I have distaste for the ones who take money for their party and to compete in elections, there is a problem in morally categorizing them. If they want their party to win with genuine good intentions for the welfare of the masses and money is essential to run election campaigns, what choice do they have? It is a systemic problem instead of a problem of individual moral
failing. How one views such persons depends on whether one is a moral consequentialist or a believer in deontological ethics. I usually consider myself to be a consequentialist but in recent times have had some dilemma.

There is another genuine problem with corruption control, especially in countries where corruption is pervasive. Many a political leader comes to power genuinely wanting to curb corruption. On getting elected they soon realize that corruption being widespread, they have an embarrassment of choices. Who should they arrest, since they cannot arrest all? Political instinct tells a leader that it is better to pick up those who oppose him instead of his friends. Soon corruption control becomes an instrument of political oppression, to harass opponents and media personalities who criticize him. This has happened time and again in the world. We have to put our minds to thinking about how to change this.

Sitting in the airport lounge I mull over these matters and what I may write up for the PM, when some people recognize me and come up to talk to me. As I reluctantly put aside my papers and turn to them, I get a lucky break. Mithun Chakraborty walks into the lounge, all bluster and style, probably to catch the same flight to Mumbai, and I am summarily abandoned by all.

Excerpted from Policymaker’s Journal by Kaushik Basu, with permission from Simon & Schuster India.