Often businessmen who have contacts get the contracts, and there is usually a commission to be paid in some way | Photo Credit: Ok Sotnykova

Government makes huge purchases and announces various projects in India. However, the effective competition for such projects tends to be quite limited. Often businessmen who have contacts get the contracts, and there is usually a commission to be paid in some way. This is the contacts, contracts and commission (CCC) model. What is the nature of the problem, its consequences, and the possible solution?

It may be argued that after announcing projects, tenders or other such notices are issued, and almost anyone can participate. But this is not quite true. Why? Often there is a tedious and time-consuming bureaucratic and even political process involved in various clearances. At the very least, there is often significant speed money in whatever way to reduce the delays. There can also be harassment in a variety of ways at various stages.

Given the difficulties, very few businessmen participate in the first place if at all they do get aware of, or can get information on, the projects announced by the government. The participants are usually people with the right contacts and the needed temperament. Finally, there can be silence on the part of some well-informed government officials for understandable reasons. Effectively the competition for government contracts is limited.

Given the limited competition in the CCC model, one may have thought that the Competition Commission of India could help but this is not the case at all. Also, the media is not an effective check on the CCC model; it has its own difficulties. And, it is usually not credible to threaten court intervention in India if one is facing some difficulty. Finally, social activists are usually quite occupied; they cannot be everywhere. So, the CCC model stays on.

Quite pervasive

The CCC model is an old one, and is somewhat pervasive. It happens, by and large, under the central government, the state governments, and the local bodies. Commissions are paid by businessmen to politicians or bureaucrats though there are many exceptions. The commissions under the CCC model can be paid in black money or even in white money. In the latter case it is just a legal donation to political parties, or non-governmental organisations (NGOs) of different kinds.

Also, there can be quid pro quo without the involvement of any money. And, this can be between not only a businessman and a public authority, it can be even between one public authority and another public authority for “co-operation”. Broadly speaking, one participant does it, given that the other does it. It is more or less a given problem; the form and the degree can, of course, differ from case to case.

The consequences and implications of the CCC model are far-reaching. The practices affect the quality and costs of projects, the atmosphere in public offices and in society, the equality of opportunity, and even the growth of the economy. The model often excludes participation of groups like dalits, women, “the IIT and the IIM types”, and so on from the competition. There is minimal innovation. Many honest people retreat in a variety of ways and to different degrees within the government and away from the government; some even leave the country.

Hopeless situation?

What is the solution? It may be argued that this is a hopeless situation and nothing can be done about the CCC model — “we are like that only”! But let us recall that we have come a very long way since the time of Independence in 1947. There have been major changes in public policy that are in public interest. Examples include the setting up of institutions like the IITs, the Green Revolution, the economic liberalisation around the year 1991, and major expansion of the infrastructure in recent years. All this is besides the gradual ongoing improvements in policies in various ways. This suggests that we can phase out the CCC model as well.

More specifically but briefly and selectively, the publicity about the government contracts needs to be credibly increased. The bureaucratic clearances need to be simultaneous and not sequential to the extent possible. Politicians across political parties need to arrive at a credible consensus that they will all stick to the broad policy direction, and not clearance of specific projects. The audits and the checks on auditors need to be improved. The domain of the Competition Commission of India needs to be widened. Finally, the judiciary needs to be expanded and improved.

It may be argued that there are vested interests in the CCC model which can come in the way of a clean-up. However, many “beneficiaries” themselves are unhappy about the CCC model; it is demeaning and risky. Also, the commissions are not necessarily for the enrichment of the people involved. They are often used for meeting the election expenses and for maintaining the status and the position so that they can get some work done, when needed. There is discomfort in the families of the participants involved. The point here is that the story of vested interests is not simple and straightforward.

Finally, the issue here is not just about vested interests. It is also about the mindset. The CCC model is mainly a matter of rules and regulations, procedures, laws, recruitment and promotions in the government, audits, the election process, the judiciary, and the media. It is more about governance, administration, politics and even culture by now. It is actually relatively less about economics or at least the economics that receives more attention.

In 1991, the License Raj was dismantled in the manufacturing sector in India and so the related corruption was reduced substantially. However, corruption elsewhere has continued. An important reason lies in public spending; the government makes huge purchases and announces various projects. This is where the CCC model comes in. It is imperative that this model is confronted as a separate issue though in a broader perspective. The silver lining is that though not easy, it is very much possible to phase out the CCC model.

The writer is an independent economist. He taught at Ashoka University, ISI (Delhi) and JNU

Published on June 16, 2026