Sucheta Dalal :Raise taxes but make officials accountable (4 February 2001)
Sucheta Dalal

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Raise taxes but make officials accountable (4 February 2001)  

PM must put in place measures to ensure that every rupee is used strictly for relief operations and not siphoned off by conscienceless politicians, traders and bureaucrats


Two per cent additional surcharge is not enough, keeping in view the magnitude of the devastation in Gujarat,” said Prime Minister Atal Behari Vajpayee on Friday as he hinted at a fresh dose of taxation to mop up additional resources for the reconstruction of Gujarat. Indians and people around the world, have already opened their hearts and their purse strings for the quake victims of Gujarat; and they are not likely to grudge the government’s demand for money.

The quake has thrown up an abundance of moving stories about ordinary people risking their lives and reaching out to help beyond their meagre means. Among these is the example of coolies at Ahmedabad railway station contributing a part of their daily earnings to run a community kitchen supplying free food to the quake survivors. Then there are the victims of the Orissa cyclone scrounging together their meagre resources for their brethren in Gujarat. At another end of the spectrum are the rich non-resident Gujaratis who are zapping their contacts across the world to raise huge funds for their home State. Indian corporate houses too have been at the forefront in providing staff, equipment and money for Gujarat.

We the people are more than willing to do our bit, but the Prime Minister too has to keep up his end by ensuring that the money raised from the people is not misused. Reckless taxation is not that answer, the PM must put in place measures to ensure that every rupee is used strictly for relief operations and not siphoned off by conscienceless politicians, traders and bureaucrats. Plenty of money has already come in from India and around the world; in addition, the government plans to seek concessional assistance from the World Bank.

Knowledgeable sources in Gujarat say that these funds are adequate to cover the immediate relief and rescue needs. Before embarking on the second phase of reconstruction work, the Government needs to step back and tot up the money raised and estimate that which is needed for reconstruction. The reconstruction should ideally be handled through a separate fund whose utilisation is disclosed to the public.

Already, there are reports about the misuse of aid and equipment in Gujarat. Foreign rescue teams are also expressing disgust at the rapacity of some officials and there is information about unscrupulous traders stealing and hoarding relief material meant for the victims. Anang Shah, an Ahmedabad-based writer and IT professional has dashed off a letter to the Chief Minister demanding the appointment of an international audit firm to prevent misuse and to make the government’s efforts more credible. He says that many potential donors are holding back aid because of fears that their money will be misused.

Newspapers and television stations have similar stories to tell. They are flooded with inquiries from people who want to contribute money but fear that it will be siphoned away. The media houses who have launched relief collections are themselves trying to locate genuine projects and organisations.

Sadly enough, India does rank among the most corrupt nations of the world and peoples’ worries are certainly warranted. This makes it imperative for the PM to set a positive precedent by making those who handle relief funds accountable and monitor the end use of money. Moreover, the track record of the Gujarat government is itself questionable. For instance, few people know that at the end of November the State had got the Governor to promulgate an ordinance by which all illegal properties would be legalised by the simple payment of an ‘impact fee’. This shocking ordinance is the exact equivalent of various black money regularisation schemes which have been launched by the government every three years during the past few decades. In effect, the government had planned to create a voluntary disclosure or pay-and-get-away scheme for the building industry too. The ordinance aimed to end disputes which were being heard by the Gujarat High Court pertaining to high-rise buildings which did not have proper municipal clearances.

These buildings had encroached on public property and roads, violated floor space regulations or ignored fire safety norms. Those who purchased the buildings complained of flooding during the rains and shoddy construction. The Gujarat High Court bench had ordered the demolition of such structures and instructed the Ahmedabad Electricity Company to disconnect power supply to nearly 70 of them. Soon after, the victims of the builders who were affected by the Court order, took to the streets and burnt buses in order to register their protest against government.

They claimed that the builders were responsible for the irregularities and the authorities had cleared the illegal structures so it was unfair to make them pay the price. It is natural to sympathise with the victims of illegal construction activity, but the shocking pay-and-get-away Ordinance would only set a bad precedent which would encourage rampant encroachment and violation of building norms in the future. We learn that the involvement of several leading politicians with the real estate business were responsible for the quick promulgation of such an Ordinance.

A tragic irony is that a recurring image of the Gujarat earthquake is that of nearly a hundred high-rise building caving in like a pack of cards. Shoddy construction was just one of the many problems with these building, a lack of insurance was another. There have been scores of reports of shattered victims trying to locate builders, who have predictably run away. But these builders will inevitably return and use their powerful political connections to re-establish themselves. It is imperative not to allow the Gujarat government to divert reconstruction money to bail out venal builders.

The controversial ordinance of Gujarat and the case of the illegal buildings is just one tiny example. There are many other sins of commission and omission which could be quietly covered up under the guise of reconstruction work.

The Prime Minister needs to remember that he plans to tax people at a time of great economic hardship; also, these taxes are in addition to money that has been voluntarily donated by individuals and business houses. It is only fair that measures to ensure transparency and accountability should precede any attempt to collect more taxes.

-- Sucheta Dalal