(Written August 11 for the September issue of Seminar magazine)
IN a commentary published on the editorial page of a leading daily newspaper (The Hindu, 30 June 2011), Anil Divan, a senior advocate who has done much to institute a credible regime of accountability in governance processes, argued the case for including the prime minister under the jurisdiction of a tough new law to curb corruption. As a preface to the main argument, Divan set out the basis for heightened public anxiety over corruption: inflation had pared off the equivalent of Rs 2,30,000 crore in value from household expenditures over the last year. Though considerably greater, this was of the same order of magnitude as the Rs 1,22,000 crore estimated to have been the loss to the public exchequer from the gross irregularities in the allocation of radio frequency spectrum slots for the second generation of telecom services (the ‘2G spectrum scam’ in media shorthand).
The direct link drawn between the distress caused by inflation and the money lost to illicit acts by those in authority is arresting, but would seem on closer examination, to be of doubtful validity. First, the estimate of the loss caused to the personal consumption of the Indian population refers to a period of time already past, while the putative losses from sale of the spectrum below its true worth are spread over a period of time stretching into the future. Second, the earnings from the sale of spectrum would not go into personal consumption, but the whole complex of expenditure commitments that the state undertakes, only a small fraction of which would ‘trickle down’ into the personal consumption basket. And third, even if revenue foregone leads, through deficit financing, to a spike in inflation, the precise impact is rather difficult to estimate.
Yet, the analogy bears further examination for what it reveals about the current mood of public anger and anxiety. Transparency in governance has been a hard-fought goal of public campaigns over the last decade and more, an object that seemed within grasp when the right to information (RTI) became law in 2005. The multiplying scale of corruption since then has shown that this was rather too optimistic an expectation. Economic policy was acquiring by this time new dimensions which evaded the scrutiny of even the most vigilant and public-spirited citizen. The financial sector had meanwhile become an ever widening domain involving players with strange and unrecognizable names and instruments that taxed the most robust commonsense. Its customary opacity was compounded several times over by the accelerated adoption of ‘global’ practices.
Information matters for the economy and for public welfare. But information does not offer itself spontaneously to all who seek answers to the questions that vex their daily existence. Not to the job-seeker under the national employment guarantee act, nor to the random individual seeking as a conscientious and civic-minded citizen, to understand – beyond the din of political partisanship – the criteria on which 2G spectrum was allocated.
There are certain quarters that are most unwilling to yield the information they secrete. There is moreover, no pristine source from which information would emanate in a manner that would register in the comprehension of ordinary citizens. Each source has its uniqueness, as too the channels through which the information is conveyed. Several of the big-ticket corruption items that have come to light in recent times, have originated in quarters where public scrutiny has not yet reached. In many cases they involved a nexus with other domains – such as the stockmarket or offshore banking entitities – which are not yet subject to the full rigours of information transparency.
Purely fortuitously, the 24-hour news channel has become an indispensable part of the social dialogue in the years since the RTI took effect. Competition between the media platforms that have emerged over recent boom years, has ensured that there is furious public commentary whenever the slightest hint of malfeasance is detected in the governance process. But the fervour dissipates rather fast in the festival of name-calling that is today called ‘prime-time’ news. And once the cordial insults conclude, there is no occasion to take stock and institute remedies, since the principals have moved on from one cutely-labelled ‘scam’ to another.
The media has not been particularly keen on using RTI to uncover facts that may be of public interest. The reasons really are not mysterious. A broadly invested right is of little interest to the media, which flourishes on privileged access to information. The basic rule of the media universe today is competition. And in the heat of competition, open sources of information – where all have (putatively) equal rights of access – are of little consequence. It is the exclusive that matters, drawn from a jealously protected source. Competitive advantage lies in securing privileged information, rather than using humdrum procedures established by law, to bring information into the public dialogue.
The seeming consensus that today’s government is the most corrupt of all time rests on a subjective judgment and is fostered in part by the media. Even without any credible, objective measure of corruption that reflects the damage it causes to ordinary lives, there is no denying that more acts of official malfeasance are now emerging into the public gaze than ever before.
Two competing narratives within civil society have in turn cropped up on the origins of the problem. One holds that corruption is an evil embedded in the system of politics as practised today, which can only be rooted out by investing an agency with transcendental powers, beyond all that mundane politics can conceive. The other looks at corruption as part of a broader matrix of economic policy, complex in its origins but invariably working in its most baleful effects, to the disadvantage of those at the bottom of the scale of income and wealth.
The former view has gained greater traction within the media, simply because simplicity is always a tempting prospect. For the media to invest in unravelling complexity would be contrary to its basic ethos. To tarry over the riddle of a scam today may come in the way of uncovering another tomorrow. And that would be competitive advantage lost, since in the media universe, every momentary concession to reflection is money squandered.
Brief spans of attention are a feature of the mass media everywhere. The issues that feature on media priorities between these attention lapses though are still of importance. And this is where the unique features of the Indian media need to be taken into account. Much of the fervour that is on display over corruption possibly originates in the nature of the beast that is the media, its commercial calculus and, in particular, the sources of its growth in recent years.
Media growth has obviously been linked with broader economic realities through the last two decades of liberalisation. There is fairly widespread agreement that the Indian economy moved onto a new growth path in the first decade of the millennium. The rebound from the devastatingly poor year of 2002, when the country went through a crippling drought, would in earlier years have been put down as just that – a rebound. But in the imagination of the media and the partisans of economic liberalisation, it was rendered as evidence of India having moved onto a new growth path. Media fortunes began looking up from around then and the figures here speak for themselves.
If the trajectory of the Indian media through the two decades of liberalisation were to be plotted: till upto the midway point and just beyond, the story is of significant developments in the entertainment sector, though not in news and current affairs. Ironically, though the number of satellite channels was rapidly increasing, not one among them had formal authority to broadcast from Indian soil. The first approval for a private broadcaster based in India was granted in fact in early-1998 and this was a venture launched under the deliberately obfuscatory title of an ‘election channel’, the outcome of assiduous lobbying by Rupert Murdoch, the world’s least favourite media baron today, but once considered the man who could make and unmake national governments.
Once granted Murdoch’s Star TV, there was no credible basis for denying other broadcast companies – especially those owned by Indian nationals – the right to uplink from Indian soil. Yet, it took another whole year for uplinking guidelines to be worked out. Incidentally, the number of broadcast channels that sought uplinking rights was, to begin with, rather modest. It took till 2004 and later, when the Indian economy seemed firmly embarked upon a new growth path, for the media as we know it today, to begin taking shape.
The figures say it all: in 2004 according to official data of the Ministry for Information and Broadcasting, there were a total of 130 channels registered in India. By 2011, the figure had increased almost five-fold, to 626. Half of these were registered for news broadcast and a large number of them (though this figure is not precisely known) were exclusive news and current affairs channels.
Before one leaps to the inference that this quantitative explosion led to an improvement in the quality of the public discourse, it is necessary to work out certain linkages. And this requires an understanding of the sources of media revenue. It is no breaking news that the main source of revenue for the Indian media is the advertiser. And in a reflection of the extra stimulus to growth, total advertising spending in the Indian economy (excluding the small, classified ads in the print media) is estimated to have doubled between 2003 and 2008.
Advertising spend figures have always been rather hard to come by, but clearly the record of growth through this five-year interval was a window of opportunity for the Indian media never seen before. A rarity till half-a-decade back, the 24 hours news channel in this time acquired a pervasive presence across all regions. And arguably, among these, the English channel assumed an influence disproportionate to its actual viewership for reasons of audience demographics. Since the English-language audience simply has more purchasing power, that was where all the advertising money tended to flow. And because it embodies the vanities, ambitions and anxieties of India’s globalising middle class, the English language media acquired a pronounced sway over matters of policy and public affairs.
Further light would be cast by a disaggregation of the nature of India’s recent growth process. The principal impetus to economic growth in the new millennium has come from an increase in capital formation rates. Total consumption expenditure as a proportion of GDP has fallen, but while the government’s contribution here has stayed at a relatively high level, the share of the household sector has shown important compositional shifts. The traditional staples of subsistence – food, clothing and shelter – have cumulatively shown a sharp fall in relation to the total. The growing segments of private final consumption have indeed been those of special interest to the upper and middle strata, such as transportation equipment (read automobiles), communication, health care and recreational, cultural and educational services.
Another notable change in the country’s economic profile in this period was the growing interest of foreign investors. After a decade-and-a-half of fairly indifferent or only sporadic interest in the Indian market – as a destination for both direct and portfolio investment – foreign capital began flowing into the Indian stockmarkets in significant magnitudes from about 2003-04. As interesting as the Indian growth story since then has been the huge appreciation in asset prices. Taking just one indicator: market capitalisation on the Bombay Stock Exchange, i.e., the total value of shares listed on this most active of India’s bourses, went up from just over 23% of GDP in 2002-03 to over 100% in 2007-08. Anecdotally, there is more than ample evidence of similar forces at play in the real estate market.
The years since 2003 were a period of easy credit availability, low interest rates and high liquidity in the economy. Conditions that could have resulted in galloping commodity prices, contributed instead, to an asset price inflation. This rise in asset prices beyond what the ‘fundamentals’ warranted, could have contributed in the short-term to the high rate of economic growth, by providing a stimulus to personal consumption by asset holders. This so-called ‘wealth effect’ has been a relatively under-researched aspect of the Indian growth story, but there is a credible case to be made that it has been a factor.
There was always the inherent danger that this growth story could implode. And as with the unhappy ending that most such growth stories suffer, inflation proved the villain. Prior to 2004, the unstated strategy of combating inflation was to impose a severe variety of fiscal austerity on those at the lower end of the scale of income and wealth. There was an enormous accretion to food stocks in the 1990s, despite a steep decline in the growth rate of agriculture. For those who chose not to be beguiled by neo-liberal babble about the Indian consumer diversifying her daily food intake as she ascended the income scale, the seeming embarrassment of riches in food supply, was clearly seen to be the consequence of suppressing demand for food amongst the poor. The low-inflation experience of the first half of the two decades of liberalization, in other words, was about the economic disenfranchisement of a vast part of the country through the ostensibly neutral and fair working of the market.
Add to this the increase in inequality through the two decades of economic liberalization, on which there is by now a fairly solid scholarly consensus, and we have all the ingredients of a pattern of disequalising growth. Media growth is a sub-plot within this broader story, propelled as it is by advertising expenditure which, as is almost invariably the case, outgrew increases in corporate profitability, but tended to mirror the underlying patterns of consumption of the middle and upper strata.
For evident reasons, the media discourse on corruption would reflect the unique universe of concerns of the middle and upper strata. In 2004 though, just as the Indian economy seemed to be launching itself onto a new growth path, a rather severe political inconvenience cropped up. The party that had run an election campaign on the ‘shining India’ plan came a cropper in nation-wide elections, leading to much muttered acknowledgment amongst the pundits of the media, that the growth momentum had left behind too many of India’s people in its onward rush. Yet, when the newly elected government in 2005 brought in an employment guarantee act to ensure that the poor did not continue being left out, there were dire predictions by media pundits about a fiscal catastrophe to come. The flood-tide of populism, they darkly warned, would sweep all before it, leaving in ruins the hard-fought structure of fiscal discipline erected over a decade-and-a-half of economic reforms.
It did not take long for inflation to reemerge, inducing a policy response of tightening interest rates and threatening the entire illusion of newly acquired middle class wealth. Media commentary has highlighted middle class anxieties over rapidly rising monthly instalments on housing and vehicle loan repayments. But at the two decade mark of the launch of the economic liberalisation programme that was in a sense, the moment of rebirth for the Indian middle class, media commentary was strangely subdued. The anchor of the global economy, the U.S. dollar, was threatened by the prospect of a U.S. government default on interest payments. And the pursuit of an alternate mooring in the Euro-zone was being formidably deterred by the mounting evidence of debt meltdown in some of its most significant economies.
The media chooses then to turn away from complexity and focus on visceral sentiment. The market had isolated an entire strata of the Indian population and made them distant observers of the economy with no power to influence its course. But politics had brought them right back as fully enfranchised participants in the economy with a guaranteed right to employment. A settled course of economic progress had been rudely disturbed as a consequence. It is entirely in character in the context for the media – and indeed for the classes that speak through it – to question the very process of democratic governance, which all too often sacrifices economic optimality for political expediency.
Stepping back from the fevered media commentary on the matter and taking a relatively detached view, ‘corruption’ would seem precisely the process through which established relations of power conspire to render economic justice a vacuous slogan. India has a formal system of law that guarantees the rights and entitlements of all. But this has been erected on a substratum of rampant inequalities, where a dynamic is at work to preserve, perpetuate and magnify these inequalities.
An elaborate apparatus of governance seemingly gives life to the formal system of law but in the real world, the formal system of law is constantly being subverted by processes that could broadly be characterised as ‘corruption’. These are processes that reflect the real power dynamics of a highly unequal society and remain for the most part unremarked. It is only when consensus breaks down within the dominant power groups and the sharing of the spoils becomes contentious, that a public din over corruption ensues. And the media does little to enlighten in the context, since it still sees little reward in seeking to outgrow its self-assigned role as the echo-chamber for elite perceptions.
August 11 2011