"I am very happy to be amidst you. The last time I addressed a similar conference was in 1994, when I was the Finance Minister and let me at the outset congratulate all those who have after meritorious services been awarded badges of honour.

As I said, I attach great importance to the work you are all charged with. The question of good governance, of honesty and transparency have been at the center of our political discourse for a long time. However, what has changed is the level of tolerance of the people for corruption. The very legitimacy of the State and its various institutions is being increasingly questioned due to the excesses of those in positions of power and authority. In helping the Government deal with this cancer from within, you, ladies and gentlemen, have a vital role to play and I commend the good work that all of you are engaged in.

The problem of corruption in public life is a source of great concern for all those who are interested in building a new India, an inclusive society, progressive society and a dynamic economy and a compassionate polity. In my Independence Day Address, I said that while the question of ethics in public life has repeatedly agitated our people. We have tried over a period of time, to find Constitutional, legislative and administrative devices to deal with the challenge posed by growth of corruption to our body-politic. I said in my address that the time has come for us to evolve consensually a code of conduct for all political parties, a code of ethics for all individuals in public life, and a code of best practices for the Government at all levels. I repeated that in the brief intervention that I have made in both Houses of Parliament yesterday.

There are many ways of viewing the issue of corruption. One can take a moral view of it, and address the problem in ethical terms; or, one can take a practical view of it, and address it in terms of rules and procedures. When Mahatma Gandhi’s attention was drawn by someone to the problem of corruption in public life, he was reported to have said, and I quote:

"I have been told that all these things are inevitable when a nation is rising from stupor. No doubt there is some truth in this. When people were thoroughly apathetic and only a few men were interested in running elections and running associations, impurities remained underground. Now that a large body of people are taking part in these public matters, the impurities which were hidden are coming into surface… The impurities are not artificial, but they are in the whole body itself. I should hope that things are not so bad and that the body is sound ….. without purity in public life, Swaraj is an impossibility."

In these days, this may be regarded as far too high-minded a view of the problem. Dr B R Ambedkar took a more political view of corruption during the proceedings of the Constituent Assembly. In response to a member’s request that there should be a provision in the Constitution to check corruption in high places, Dr Ambedkar expressed the hope that public opinion in the country would come in the way of corruption.

Admittedly both these views of our Founding Fathers see the real battle against corruption being fought in the minds of individuals. They imposed their trust in individual morality and its collective expression in public life. To an extent this view is correct. The ethical values we imbibe from childhood do play a role as built-in correctives against temptation. In this sense, the role of education and particularly education at the most formative stages in a child’s career can be a very important influence. At the same time, the pressure of public opinion, the opinion of our family and friends, the community we live in also play a very important role in checking corruption.

However, a Government cannot depend purely on individual ethics and morality or public opinion to deal with the cancer of corruption. It must design institutional checks, create incentive and dis-incentive structures and put in place reward and punishment systems. That is where your work assumes great importance and it is vital for an efficient and effective functioning of Government. Let us always remember Mahatma Gandhiji’s words that "the progress of the nation will be hindered to the extent to which corruption seeps in".

The last time I addressed your Conference, in 1994 as finance minister, I had acknowledged the fact that moral suasion and the élan of the civil services had to a great extent succeeded in ensuring that members of the elite civil services and managements of public enterprises carried out their onerous responsibilities and exercised their discretionary powers in the best interests of the country. However, on that occasion I also emphasised that the misuse of power and authority, of bribery, nepotism and corruption and the flouting of norms had been on the increase. Some of this had begun to eat into the very vitals of our body politic and, what is more, had begun to hurt our processes of economic development as well as political stability.

It was partly in response to such concerns that we initiated far-reaching economic reforms in the country. The aim of those reforms was to make government less intrusive and discretionary and more transparent. We drew inspiration from Mahatma Gandhiji’s trust in the innate goodness of our people. Many of these reforms had an added beneficial effect of ending the hypocrisy that had come to characterize some of our industrial policies, where we said one thing on paper and allowed another in reality. Rational policies, transparent procedures, simple rules do have the positive externality of reducing the scope for corruption.

However, even as old problems are solved new ones present themselves. Following the liberalization of the economy, there has been a spurt in economic offences such as financial frauds, bank and stock market scams, money laundering and cyber crimes. A strong link has developed between economic offences and the anti-social and terrorist organizations. The criminal today can hide from law anywhere in the world. You have to develop the ability not to let the criminal rest, to keep him always on the run and, to nab him before he can inflict more harm on our society. To check these enemies of the civilized society, it is necessary for the investigating and crime-fighting agencies to develop a high degree of professionalism and technical skills, as well as heightened commitment to their mission. To combat crime and corruption, you have to become alert to their nuances, methods and their reach.

A good test of the effectiveness of any investigating body lies in the speed of the disposal of cases. Your investigation should be speedy and sound, which will ensure success when the matter is taken to law courts. A high degree of conviction in anti-corruption cases can be a great advertisement for the anti-corruption agencies.

I share the concern of Mishraji about the piling number of arrears in the courts. I think we must find a practical way to deal with this problem just as justice delayed is often justice denied. I wish however to sound a word of caution; though it is the duty of any anti-corruption agency to detect, and prevent crime, it is also its duty to ensure the protection of the honest and the innocent. Injustices done to the innocent can cause serious setback to the fight against corruption. It is sometimes complained that the investigating agencies, when it registers a Preliminary Enquiry, attempts to include in the charge as many persons as it can. Very often, after the investigation is over and a Case is registered, many out of that original list are found not to have even a remote connection with the case. One can only imagine what mental torture those people would have gone through, in the interim period between the Preliminary Enquiry and the lodging of the case. While you shall be justified in instilling fear in the minds of the corrupt, any harm done to the innocent compromises our image. You may consider engaging the services of psychologists, behavioural science trainers and counsellors at the CBI’s training institutions for developing positive personality traits amongst the investigating officers. It is equally important that law enforcement agencies should be insulated from any extraneous pressure and allowed to work with total freedom and autonomy.

The Government has taken several measures towards providing healthy and clean governance in our country. One such is the Central Vigilance Act, which is an important step in the direction of giving to the people, a clean administration. This Act gives to the institution of the CVC, statutory status because the Government feels that the CVC has a key role to play in the fight against corruption and is expected to provide leadership to the nation’s vigilance set-up. Protection to Whistle Blowers has also been provided under a resolution by which the CVC has been designated as an authority to whom complaints can be made.

The reform of the government and of governance, however, is an important area of policy focus for our Government. We are committed to making the Freedom of Information Act more progressive, participatory and meaningful so that there is greater transparency, accountability and probity in the entire system of governance. An improved model Right to Information Draft Bill has just been received from the National Advisory Council and the Government is actively examining it.

With regard to the public sector management, I have also written to my colleagues in the Union Council of ministers who deal with these enterprises that in that in the management of the public sector units, they should not ignore the ground rules of good corporate governance and conduct. We must correct the perception that PSEs are profligate and also that the administrative Ministries tend to treat them as their fiefdoms. The ministries in charge of PSEs are custodians of the resources of our country and it is their bounden duty to lead them by their example of efficiency, rectitude and austerity. While granting full operational autonomy to the PSEs to enable them to compete and succeed in the global market, the Ministries concerned have a responsibility for ensuring accountability of PSE executives for their performance in conformity with established norms of conduct.

Having said this, Ladies and Gentleman, I must also caution you against adopting methods and procedures in the course of your investigations that may kill managerial initiative, that may stunt individual enterprise and risk-taking. Management is an art, not a science. It requires individual initiative and creativity, a willingness to take risks in the larger interests of the enterprise. I am all for rules and regulations and procedures that punish the wrongdoers, but in doing so we should not hold back the truly enterprising people with initiative and dynamism and enthusiasm. Bureaucratic systems are particularly insensitive to such nuances, but we must find ways by which we reward the good even as we punish the bad.

Action taken in response to the wrongdoings of a few should not be allowed to constraint the initiative and enterprise of all the others. I should also like to say that in judging individual cases, one must not lose sight that very often in public life particularly in economic and social affairs, one is dealing with a world of great uncertainty. The future is not predetermined. Therefore, honest mistakes can be made and every effort should be made to distinguish between honest mistake, mistakes made in the conduct of one’s activities and willful defiance of the rules of law. When I was a student some 50 years ago, in England, Sir Paul Chambers who was then the Chairman of the Imperial Chemical Industry came and gave us a lecture as to who may be considered as a good manager in a world where there is great uncertainty. And he said, if out of 10 decisions, that I take, five of ex-poste turn out to be right, that would be considered a satisfactory performance in a world characterised by great uncertainty. If out of 10 decisions that I take, 7 turn out to be correct ex-poste, that would be considered a very good performance. But we have a system which says you may be right in 9 out of 10 case, but in 1 case your judgement was not right and you can be hanged, I think a system of that sort can become a major barrier to taking timely, bold decisions in a world in which we live in, a world characterised by great uncertainties. Therefore, investigating agencies must not lose sight the role of uncertainty and the need to distinguish very clearly. Errors which are honest errors of judgement because the future is not predetermined, because the future is uncertain and mistakes which are not mistakes but willful defiance of rules and procedures.

I also believe that for all these reasons there should be greater emphasis on preventive measures rather than post-facto investigations. Thus wherever we can minimize the scope for misuse or arbitrary use of powers we should look at our administrative systems and procedures and make these more rational and transparent. In this regard, we do not have to re-invent the wheel all the time. There is much that we can learn from global best practices. Issues relating to efficiency, transparency and integrity in public administration have been widely discussed all over the world. In this context, we must ask ourselves as to why a perception has gained ground that in India corruption is more debilitating than in some other Asian countries. Is this the reality, or is it that our corrective systems are not so modern and efficient as they should be. I hope that you will be grappling with questions of this sort in your deliberations.

At the end I once again extend my hearty congratulations to all those who have been awarded the President’s Police Medals for their distinguished services and the CBI Gold Medal for being adjudged the Best Investigating Officer."