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Chief economic advisor calls for change in corruption law

Posted on April 25, 2016 from Tamil nadu ι Report #82435

Chennai: If public servants are allowed more discretion on bad investments, instances like the Vijay Mallya case will be fewer, chief economic adviser Arvind Subramanian has said.

"We ought to amend the Prevention of Corruption Act. Under the current law, public servants, in particular investment bankers at PSUs, are being penalised even for a bad decision. All are human and prone to err. And people shouldn't be treated as criminals for a bad investment decision. We ought to amend the law, so that public sector employees have the freedom to write down loans," he said, delivering the fourth T Narasimhan memorial lecture on "Governance for Economic Development" organised by Chennai chapter of the Institute of Public Auditors of India.

 

It is common sense that Mallya's assets are a quarter of the value they once had, he said. "And yet why do they hesitate to write down loans? You will not find a single banker at PSU willing to write down a loan even by 1% because he fears the wrath of referee organisations. We must then ask if referee organisations are over-stretching themselves? While it is commendable that we have a strong public auditing and accounting system in India we should also make provisions so that public servants can exercise discretion on their investments without repercussions," said Subramanian.

The underprivileged sections are the worst affected by bad governance, he said. "As educated elite we have the option of exiting the public system. Corporation schools aren't good enough? We put our children in private schools. And it's the same with public hospitals or colleges. We choose to exit. But the poor can't. And they are the worst affected by bad governance," said the economist.

News Source: Times of India