The confessions by the global copier maker Xerox of duplicitous deals with the Indian government come as no surprise in this country, where economic liberalisation has brought newer opportunities for politicians and bureaucrats to make money.

On Saturday, the accounting firm of Price Waterhouse Coopers released its report to the Department of Company Affairs. It showed how Xerox Modi Limited (XML) — the Indian arm of the US firm — cooked its books to make fictitious payments ''apparently styled as commissions, discounts and handling charges''.

Searches carried out by the Income Tax Department at more than 20 locations in New Delhi and the eastern metropolis of Calcutta resulted in the recovery of unaccountable cash worth more than US$200,000 and tax evasion in excess of US$5 million over the past five years.

Xerox Corp, which holds 68 percent stakes in XML, declined comment on the raids, which followed the parent companies' admissions to the Securities and Exchange Commission (SEC) earlier this month that ''improper payments'' had indeed been paid to secure government contracts.

In April, the SEC alleged that Xerox Corp had resorted to accounting improprieties to increase its pre-tax profits by US$1.5 billion over a three-year period from 1997.

During a visit to India last week, Randal Quarles, US assistant secretary for international affairs, said his government was prepared to assist the Indian government with investigations into the illegal payments, but ruled out any joint investigation.

Greasing the government machinery

Either way, going by the widespread practice in this country of using ''grease'' to get government departments to move the right files at the right time, few expect anything substantial to come out of the present investigations.

Last year, the Delhi-based non-government organisation Centre for Media Studies (CMS) released the results of the first-ever survey on corruption in government offices in the six major cities of Delhi, Lucknow, Pune, Ahmedabad , Chennai and Hyderabad, which revealed a well-established parallel system of percentages in operation.

More than 60 percent of the 4,500 people interviewed by CMS said they had experienced corruption in government offices. Even government officials, who constituted a quarter of the interviewees, said they have had to pay bribes to get work done.

So entrenched has the system become that any attempt at reform is met with stiff resistance by politicians and bureaucrats fearful of losing the percentages they rake in, a good example being the current opposition to the privatisation of power supply in the national capital.

Blame on privatisation

On Monday, the Bharatiya Janata Party (BJP) — which rules the coalition that governs India's central government and sits in the opposition in the Delhi State Assembly — called a crippling, day-long strike in Delhi to protest the privatisation of power from the beginning of the month.

BJP leader and former chief minister of Delhi, Madan Lal Khurana, has blamed privatisation for a near collapse of power supplies in the capital and water shortages caused by lack of electricity to pump water.

''We are calling this strike to highlight the failures of the Congress party government. Anyway the whole question of privatisation is yet to be settled in the courts,'' Khurana said.

Privatisation was resorted to in Delhi after the government declared inability to control the more than 50 percent theft of power by industries and by people living in posh residential areas, with the open connivance of employees in the government utility Delhi Vidyut Board (DVB)..

Billing 'errors'

At one point, even those who paid their electricity bills honestly would still have to pay 'grease' money or get slapped with impossible and arbitrary bills.

That happened to Vibha Sagar Vaid, who lives in the middle class locality of Mayur Vihar but was served a bill for US$3,500.

Vaid, a homemaker, then approached Parivartan (Change), an NGO that successfully demanded that the DVB provide information on her case under the little-used right to information law, and the bill was quickly rectified.

Rajiv Arora, who founded Parivartan, said his NGO is busy attending to complaints of corruption at various government departments. ''We have 1,500 complaints of harassment by DVB staff alone and another 700 against income tax officials,'' he said.

But NGOs themselves are not immune to having to make grease payments.

Last week, the Intelligence Bureau, an arm of the interior ministry, indicted officials in the federal Tribal Affairs Ministry for extracting bribes from NGOs working with tribals in return for releasing government funds due to them.

Binny Yanga, who runs the Oju Welfare Association in north-eastern Arunachal Pradesh state, complained that she had to pay up nearly US$15,000 to facilitate the release of government grants totalling US$120,000 meant to help it in its work among orphans and destitute women.

Impact of liberalisation

These examples are but some signs of a larger trend — the opening up of India's economy in the early nineties resulted in dramatic rise in the number cases of bribery and graft involving trans-national corporations (TNCs) that were quick to learn the ways of the Indian bureaucracy and, in the case of the US energy giant Enron Corp, to 'educate' as well.

Rebecca Mark, former head of Enron, admitted to having spent US$20 million to 'educate' Indian officials to promote a 2,000 megawatt project, its biggest ever worldwide. Since then, the word 'educate' has begun to replace 'grease' as a euphemism for bribery in the country.

Says E A S Sarma, a retired bureaucrat with an impeccable record for honesty and a concern for the rising incidence of corruption: ''It will not be fair to attribute the increase in corruption to liberalisation, but in recent times some TNCs have been resorting to fraud and corruption to make short-term gains.''

Last year, Bangaru Laxman, party president of the BJP that came to power in 1998 promising to reverse the corruption under the Congress party, was forced to step down.

He was caught on web camera accepting wads of currency from reporters of a news portal, Tehelka.com, who were posing as agency for an arms manufacturer wishing to sell night-vision equipment to the Indian army.

The UN Development Project Report for South Asia in 1999 says that, if corruption were brought down to the levels of those in Scandinavian countries, India's GDP would automatically jump by 1.5 percent and foreign direct investment would grow by 12 percent. — IPS