FTI Draft Policies on Jan Lokpal and Electoral Reforms

Dear All: I am posting below 2 recent draft policies by Freedom Team of India for discussion and comment. The first one if on the Jan Lokpal Bill and the second on Electoral Reforms. Pl do read, share and comment. Thanks.

The position of the Freedom Team of India on the Jan Lokpal Bill

FTI has agreed to the following draft position on the Lokpal Bill (all FTI documents are draft documents, subject to ongoing improvement).

1. What is the Freedom Team of India?

The Freedom Team of India (FTI) is a team of leaders who will, with due preparation, contest elections on a platform of world’s best policies to increase the liberty and prosperity of Indian citizens. FTI’s ideas are based on the philosophy of classical liberalism (which is the polar opposite of socialism). Classical liberalism insists on equal liberty for all, while ensuring accountability. We encourage you to consider FTI’s policy principles at: http://fti.sabhlokcity.com/draft-policies.

FTI’s members maintain and are required to always maintain the highest standards of integrity in public life. Through its code of conduct and other processes FTI guarantees the quality and integrity of its members.India can confidently entrust its future to FTI members, who are always ready to be held to account. FTI membership is seal of quality in public life.

2. FTI stand on the Jan Lokpal institution

FTI applauds Anna Hazare, Baba Ramdev and Arvind Kejriwal, among others, for their fight against deeply entrenched political and bureaucratic corruption in India.

For such effort to be effective, however, careful understanding of the causes of corruption is necessary. For instance, a question is sometimes asked: Why doesn’t FTI make its own draft Jan Lokpal Bill and share it online?

That is because FTI does not believe that (under the current system of socialist governance) a Lokpal offers a genuine solution to India’s rampant corruption. Therefore FTI does not wish to offer a draft Bill that will not meet the objective.

Instead, FTI offers more: a package of reforms which is guaranteed to achieve integrity in public life and increase India’s opportunities for prosperity.

This will be explained below.

3. India’s many problems have a common source: socialism

Before a doctor can successfully treat a disease, he must diagnose it correctly. He must understand its cause.

Team Anna believes that corruption arises because too many Indians are bad. If this is right, then the solution should be to punish bad Indians. FTI accepts that there are a large number of corrupt Indians who must be punished through an effective system of rule of law. FTI’s diagnosis, however, is focused on underlying causes, and therefore, in building a lasting solution.

FTI believes that corruption arises from poorly designed governance systems, based on the philosophy of socialism. FTI believes that no Indian is born corrupt but badly designed systems motivate them to become corrupt. The same Indians who are corrupt and incompetent in India often do wonderfully well (and honestly) in the West. A bad system can make a genius look like an idiot. On the other hand, through a good system, even “ordinary” people can perform great deeds.

Since the past six decades, all public policy in India is based on the socialist model, which empowers governments to directly operate businesses as well as to interfere with the free interactions of citizens. This creates strong incentives for politicians to sell favours (rent seeking) and thus become corrupt.

Socialist hypocrisy also permeates India’s electoral system, in which everyone knows that political parties spend tens of crores of rupees in each parliamentary election, but all candidates declare falsely that they spend less than Rs.25 lakhs.

In brief, it is the philosophy of socialism leads to hypocrisy, dishonesty, and corruption. Without removing this dreaded philosophy fromIndia, corruption can never be removed. Witch-hunts to identify “corrupt” individuals won’t solve the problem of corruption.

4. FTI’s solution to the problem of corruption

Under today’s socialistic dispensation, no political party can survive without corruption. Politicians need huge sums of money for elections which they have to raise through corrupt means. They also need the support of corrupt officials.

While an effective Lokpal can reduce corruption, this can only happen when systemic corruption has been first addressed. Systemic reform essentially involves two key steps:

a) Reduce the need for corruption by having an electoral system with a low barrier of entry for honest people, and a system that pays candidates a certain amount per valid vote cast; and

b) Reduce the opportunity for corruption by having policies that prevent governments from unnecessarily directing and interfering in citizens’ lives. FTI’s recommended set of policies are aimed at systemic reform, not piecemeal patchwork band-aids. Corruption will reduce very significantly should such systemic reforms be undertaken.

Numerous countries have low levels of corruption without any Lokpal or similar body. Examples of policies that reduce corruption (without a Lokpal) include:

state funding of elections (e.g. Rs.15 per valid vote polled) to reduce the need to raise funds through corruption;
high salaries for politicians to motivate competent people to enter politics;
contractual appointments of senior bureaucrats (so they can be terminated if they fail to deliver integrity and high quality outcomes).

India should not vest excessive authority in unelected officials. Such authority can undermine democracy without necessarily improving governance. It is important to build systems that work, not systems that punish.

5. What will happen if we implement a Lokpal without eliminating the socialist policies?

a) Reality: A Lokpal can’t stop the generation of corruption India’s socialist policies put excessive power and discretion in the hands of decision-makers. Each law that allows a politician or bureaucrat to interfere in economic activity creates an opportunity for corruption. The Lokpal does not change such policies, nor reform the electoral system to reduce the need for corrupt money during elections. Therefore, the Lokpal cannot prevent the continuous generation of corruption. It will be far more effective if we change socialist policies.

b) Reality: The Lokpal can’t catch even a fraction of the corrupt A Lokpal will become viable and effective if only one per cent (or less) of India’s politicians and bureaucrats are corrupt. But when 99 percent of them are corrupt, then catching a few corrupt people here or there will hardly make a difference. The cancer must be addressed at the source.

c) Reality: Corruption “charges” will increase because of the Lokpal Because the corrupt will now have to factor in the (presumably slightly) higher probability of being caught, the “rate” they demand for their “services” will increase.

d) Reality: Corruption will be driven even more underground The Lokpal, under the current system, will merely drive corruption more underground – into more hidden methods. Greater outflows of corrupt money from India will occur to Switzerland or other tax havens. In this “game” of corruption, it is best to stop corruption in the first place, not to waste precious time and resources in chasing corrupt people across the world.

e) Reality: The big fish will escape Under the current system, big fish can easily access various sophisticated methods of corruption. They can also hire expensive lawyers to exploit loopholes in the legal system to delay and subvert justice, should any case be launched against them. In general, the big fish will escape scrutiny (or punishment) and the Lokpal will be forced to focus on small fry.

f) Reality: Government inefficiency will increase The Indian Constitution provides extraordinary protections to public servants. There is therefore virtually no way available for governments to punish public servants who do not perform their work properly. If their opportunities for corruption are reduced then public servants are likely to even further slow down their work, leading to total paralysis of governance. The Lokpal (if it becomes even slightly effective, and therefore reduces corruption) will end up putting a severe brake on India’s economic growth.

h) Reality: Lokpal could itself become corrupt Corrupt politicians and government servants have plenty of money to bribe investigative agencies – and judges. Under the current dispensation there is very significant corruption both in the government and judiciary. It is not difficult to see a situation, particularly with lowly paid Lokpal employees, when the Lokpal officials start accepting bribes.

i) Reality: Lokpal can’t deliver results because of India’s court system The Lokpal cannot deliver results because it does not control the courts. As Swami Aiyar has pointed out:

Even if the Lokpal controls the CBI, it will have no control over the courts. These seem incapable of convicting any resourceful person beyond appeals within his or her lifetime. Little will be achieved if the Lokpal initiates a thousand cases that then drag on for decades, with the accused out on bail.

FTI does not recommend scrapping the principles of natural justice for those charged with corruption. We need systemic reforms that include the policies outlined earlier, as well as a strong justice system to quickly and effectively punish the corrupt.

6. Other questions people have regarding the Lokpal

a) What are the mechanisms apart from Lokpal to stop corruption? Alternative mechanisms to reducing corruption have been outlined above. These are far more effective and involve two key changes:

(i) Reduce the need for corruption: ensure electoral reforms that motivate good people to enter politics, and pay a certain amount per valid vote cast to candidates; and

(ii) Reduce the opportunity for corruption: remove socialist policies so that people can undertake economic activity without unnecessary government regulation.

Currently, no political party offers such systemic reforms in India. Without political leadership, however, such reforms cannot be implemented. FTI is a platform for those who understand such reforms to step forward and contest elections. Only then will such systemic reforms be introduced, bringing an end to corruption.

b) Why does FTI not support the Lokpal, given that Hong Kong has a Lokpal-like model? Hong Kong is highly ranked on Transparency International rankings (currently No. 12, below countries like Australia and New Zealand which do not have any Lokpal).

Not very long ago, Hong Kong was a very corrupt country. Its reforms, do not include just an Independent Commission Against Corruption (ICAC, which started in 1974), but a wide range of policy initiatives such as good governance, world-best economic policy and high quality education. The existence of ICAC should not be seen in isolation from these broader reforms. Indonesia has tried to copy the Hong Kong model and has failed, because it has not adopted the free market economic model of Hong Kong.

As Offstumped has pointed out:

“Indonesia’s corruption eradication commission, one message screams out —Indiadoes not need to makeIndonesia’s mistakes with the proposed Lokpal Bill. It has been nearly 10 years since the KPK was established by law inIndonesia. Ten years on, no surprises: Corruption has not been eradicated fromIndonesia. Far from eliminating corruption, KPK continues to be at the centre of political intrigue inIndonesia.”

A Lokpal cannot succeed in removing corruption without a host of far more basic reforms. FTI believes that there is a place for Lokpal in India’s governance, but not today. Only in due course, as part of an entire suite of governance and economic reforms.

c) Won’t a Lokpal help create new government jobs? Indeed, the Lokpal will create new jobs but creating government cannot be a valid reason to have a Lokpal. Economic growth & prosperity is never created through government jobs. India needs policies of liberty that will create opportunities for millions to earn their livelihood.

d) Since the poor have to constantly interface with the state, won’t the Lokpal provide a check to corruption at lower level of bureaucracy? Unless economic policies and the system of governance is changed, villagers in India will not be able to escape from chronic corruption (such as corrupt tahsildars and other land records staff). Villagers, being illiterate, do not have the capacity or resources to lodge (and pursue) complaints with the Lokpal.

Villagers have not been able to utilise existing institutions like state vigilance bodies and police because of inability or fea. The Lokpal’s rules and procedures will preclude the possibility of justice for villagers. The corrupt will go scot free even if complaints are lodged against them, due to the sheer numbers involved.

Far better to build systems that preclude corruption in the first place. Trying to fix the problem of corruption after it has established itself is a far more difficult (even impossible) task.

e) What is FTI’s view on the level of corruption that can a Lokpal can reduce? The jury is out on this important question. However, for reasons given above, FTI believes that Lokpal will not reduce corruption, and will probably increase it and drive it underground.

f) How much will the Lokpal cost the taxpayer? This will depend on the nature and design of the Lokpal. But it will not be cheap. Unfortunately, there will be almost no social gain from this institution. So taxpayers will spend money on the Lokpal, even as the corrupt officials and politicians ofIndia continue their loot.


All Indians all angry with our corrupt politicians and bureaucrats. However, we should use our head, not our emotions.

FTI agrees with and supports, in principle, IAC people’s movement against corruption. But FTI believes that (at this stage – i.e., without changing the policies of socialism, and ensuring that good people are able to contest elections) the Lokpal will make no difference to the lives of Indians, and could even make things worse in a number of ways.

FTI therefore asks the Indian people to seek solutions that will actually work.

The people of India have awakened due to the IAC movement. But it is important to understand that the solution does not lie in a Lokpal, but in a package of reforms that will essentially abolish socialism and make Indians free.

FTI invites you to support the team to provide India with modern, effective governance.

It is hard to remove the socialistic mindset of Indian politicians who think that voters want such policies. It is up to the educated class to show voters that demanding subsidies and handouts from politicians is not the right way to eliminate poverty. They voter must demand good governance, good education, not charity.

The poor will become prosperous through freedom. On this journey, a social minimum (which includes high quality private school education for all children and a guaranteed top-up to eliminate poverty) will support those who falter on this journey towards freedom, integrity, and prosperity.

In simple language, let’s drain the swamp so that mosquitoes don’t breed. It is not a sensible idea to kill the mosquitoes, one at a time.

Electoral reforms for a corruption-free India

FTI demands that the Indian Government implement the electoral reforms detailed below to enable good people to contest elections

Please join FTI in demanding the following electoral reforms for dramatically better governance in India.

1. What is the Freedom Team of India?
The Freedom Team of India(FTI) is a team of leaders who will, after due preparation, contest elections to defend the life and liberty of Indian citizens, and to lead them to prosperity. FTI is a classical liberal group (being fundamentally opposed to socialism). Classical liberalism insists on equal liberty for all, with accountability.We encourage you to consider FTI’s policy principles at:http://fti.sabhlokcity.com/draft-policies and policy framework:http://fti.sabhlokcity.com/content/ftis-policy-framework-analytical-structure-to-design-policies.FTI’s members are required to maintain the highest standards of integrity in public life. Through its Code of Conduct and disciplinary processes FTI guarantees the quality and integrity of its members. India can confidently entrust its future to members of the Freedom Team, who are always ready to be held to account by the people of India. FTI membership is seal of quality in public life – the only seal of quality that India needs.

2. The purpose of Electoral reforms for a corruption-free India
When India became independent and declared itself a democratic republic, there was hope that India would make unprecedented progress in every field. It was the time of a Tryst with Destiny. No one anticipated that India’s democracy would decay to the level it has today, where corrupt and criminals are elected to Parliament, and good people shun politics as if it were worse than leprosy. The people of India are rapidly losing confidence in democracy.
But the Freedom Team of India believes that India’s Westminster system of democracy (along with First Past The Post election mechanism) is a responsive and effective system to provide representative democracy. That it has not worked well in India is not due to any inherent shortcomings in the Westminster model but due to the way Indian socialists (starting with Nehru) have totally distorted its functioning.
Once these distortions are set right, India’s Westminster system can (and will) perform as well as it has in the UK for more than 500 years. A very similar system works quite well in Australia, as well. Where it works well, parliamentarians are well paid. In addition, state funding of elections (as with Australia) enhances the quality of candidates.The purpose of democracy will be defeated if we fail to design a system in which good candidates are willing to come forward as candidates. The first task before us is to cleanse the Westminster system of the socialist dross that has destroyed its vitality and prevents good people from contesting elections.

3. High priority electoral Reforms
Three simple electoral reforms can fix most of the defects in India’s democracy:
a) State funding of elections
b) Audit of electoral expenses
c) Fast Track courts against elected MP’s with corruption or criminal charges

3a) State funding of elections
India’s electoral laws should – instead of favouring the corrupt (who bring crores of rupees of black money into play during elections – give good honest people a fair chance to get elected. FTI acknowledges that electoral expenditures are not the only determinant of electoral success. However, it is true that without being able to spend sufficient money, it is not possible to communicate one’s message to the voter. Good people who – by definition – do not have access to black money, are therefore defeated even before they start, being out-spent by candidates who use black money. We should not handicap our honest candidates in this way, thus allowing only corrupt ones to contest. FTI therefore proposes that all candidates be reimbursed Rs.15 per valid vote cast up to a ceiling of Rs. 40 lakhs (being the electoral expense limit). With about 16 lakh voters per constituency, of which about 60 per cent generally vote, this would mean that a candidate who secures half the valid votes would get the maximum entitlement (Rs. 40 lakhs). This reimbursement system would allow good candidates to borrow funds to contest, in the hope of recovering at least part of their expense through reimbursement. Even though corrupt candidates will outspend them, at least good candidates won’t end up losing huge amounts of money if they lose the election. Over time, the proportion of good candidates elected will increase, thereby setting up a positive cycle, compared with the current vicious cycle. Such a system is very successfully followed in Australia and allows competent candidates to contest, thereby significantly improving the quality and integrity of leadership in parliament. This system will also be easy to implement in India, and although the cost to the taxpayer of organising elections will increase, the value of getting good, honest leaders in parliament will significantly outweigh this cost.

3b) Stringent audit of electoral expenses
Although it is not desirable, in principle, to limit electoral expenses, it is important that if the country imposes such limits, that these are strictly monitored. FTI recommends stringent audit of electoral funding and vigorous punishment of those who break electoral funding limits. If corrupt politicians can’t gain an electoral advantage through use of huge amounts of black money (which is what the established, big political parties use), then barriers against good candidates will further reduce.

3c) Fast track courts to deal with corruption or criminal charges against MPs
While criminals and the corrupt should be punished, FTI believes that someone not yet convicted of a major crime should not be prevented from entering parliament. India must abide by the principles of natural justice.

In any event, if we try to block entry to Parliament of those with criminal cases against them, it is quite likely that such people will set up dummy candidates (spouse, child) instead. It is not possible to solve complex problems through simplistic solutions.

Therefore, FTI believes that the Election Commission should be charged with fast-tracking criminal cases. Cases against elected MPs should be be given top priority and heard without break until completed. While the Commission has no power to prosecute anyone for non-election related criminal offences, it has a responsibility to ensure that India does not get heinous criminals as its MPs. The Commission has enormous constitutional powers, and in collaboration with the Supreme Court can overcome all obstacles to early delivery of justice for MPs with criminal cases.

The Commission should liaise with the Supreme Court and report monthly to Parliament on such matters. It should should be empowered to apply extra resources where needed (through the court system), enforce tight timelines, and punish those officials (e.g. police officials) who deliberately delay the justice process. A small budget of Rs. 20 crores for the Election Commission could go a long way to rid criminals from India’s Parliament.

4. Additional reforms
In addition, the following reforms will further improve India’s governance.

4a) Political Representative Incentives Commission
FTI believes that “if you pay peanuts, you will get monkeys”. Chanakya, who helped unite India over 2000 years ago into the largest empire it has seen (Mauryan) knew this very well.Arthashastra specifies that the highest salary paid by a king should be 800 times that given to the lowest functionary. This was done so as to attract the best talent of the country to the higher positions, which require greater knowledge and judgement.

Socialist Nehru, innocent of the basics of economics, started paying MPs low salaries (which the MPs have circumvented through perquisites and corruption). The immediate result was that good people refused to join politics, preferring to earn a respectable living through other affairs. This has contributed to the inexorable decline in quality of India’s political leaders. Either we get the corrupt or we get demagogues. Honest talented Indians have fled politics. This socialist approach to our leaders, which is completely contrary to basic common sense and also directly violates the wisdom of India’s greatest economist: Chanakya, has to be overturned immediately.

To address this serious problem of inappropriate compensation to our leaders, FTI recommends the creation of an independent Political Representative Incentives Commission. The commission should be charged with research on, and making recommendations on a compensation mechanism for peoples’ representatives that will eliminate all reasonably foreseeable incentives for corruption, or will otherwise promote the freedom of citizens.

In doing so a suitable law could be enacted that creates a system of performance bonuses for all MPs and MLAs, such that (for instance):

For every 1 per cent increase in per capita GDP growth beyond 5 per cent per annum, all our representatives will get a one-off 5 per cent bonus.
For every 1 per cent permanent reduction – defined as a reduction sustained for two years – in the number of people below the poverty line, MPs and MLAs will get a permanent 1 per cent increase in their base salary. Once the negative income tax system (to eliminate poverty) is established, the entire reduction in poverty can be incorporated permanently into the base salary.
For every ten ranks that India rises on a sustained basis of two years in Transparency International rankings, there will be a 5 per cent one-off bonus.
There will be a permanent 20 per cent increase on base salary upon India’s becoming the world’s least corrupt country for two years in a row.

The sum of these bonuses will be limited to a total of 50 per cent of the base salary in any given year. This will allow performance orientation to flow into the compensation of elected representatives.

4b) Performance reporting against Election Manifestos by Election Commission
FTI recommends that the Election Commission should also be charged with reporting on the performance of elected political parties against their election manifesto commitments.Almost all political parties make promises about things like poverty, infrastructure, etc. in their manifestos. However, India doesn’t have any system to report on the performance of parties against their promises. While the press, the opposition, and citizens in general do monitor some of these promises, there is no done systematic process.

FTI recommends that the Election Commission produce such performance reports on an annual basis. It should require all parties to lodge their manifestos with it, and require manifestos to specify performance measures for each commitment. The Election Commission would not suggest what should be included in the manifesto, but whatever is included should have key performance indicators. Such a mechanism will significantly enhance the performance of India’s democracy.

It is quite possible that the Election Commission won’t need parliamentary authorisation to implement such reporting process. It could perhaps undertake such reporting right now. At a minimum – given possible resource constraints – the Commission could direct political parties to report on such performance on their own websites as part of their annual financial reports.

5. Join FTI in demanding these reforms
Eliminating corruption from India and improving its governance requires fixing the top of the system. All corruption in India starts at the top: through its Parliament. The laws of India are designed today to preclude the possibility of good people joining politics. Only the corrupt are allowed to contest elections.

We need a system where honest and capable people are able to contest for seats in the Parliament. We also need to make it difficult for people with criminal and corrupt background to reach Parliament.

Please join FTI in demanding these key electoral reforms which will pave the way for cleansing the corrupt people from India’s Parliament, and allow other crucial governance reforms to be implemented.


Also read: Are you serious about removing corruption? and A draft policy framework for tomorrow’s India