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Submitted by MG Chandrakanth on
while delivering a lecture to our participants in WTO issues, I learnt from a participant that any new institution in general leads to increased corruption. Thus institutional innovations in India are adding to increased rent seeking and leakage of developmental programs and are not reaching the poor to the extent desired. For instance the Agricultural Produce Market Committees (APMCs) are to ensure fair marketing of farmers' produce through middlemen. When farmers bring their produce to the APMC, the wholesaler to whom the produce is brought for sale should not charge any commission from the farmer. But instead should collect the charge of 1.5 percent prescribed from the buyer. Instead the wholesaler collects the same from the farmer and also from the buyer and pockets the same right in the eyes of the Market officials. In addition, since the wholesaler has to pay the commission/tax to the APMC, he underreports the volume of sale. For instance if he handles 100 quintals of a produce, he will report 50 quintals or even less for which he will pay the APMC tax and will not report the remaining 50quintals, for which the APMC or the Government will not get the tax revenue. This is done in connivance with APMC officials who also get a share of this kitty. While these are not transparent, one can easily get this information through participant observation. So E governance is the only panacea. Every truck which enters the APMC yard should automatically be camera clicked by remote camera and weighed as the truck passes through electronic weigh bridge. This provision should be made in all APMCs. At least the total weight of each truck can be compared with the total volume of transactions of all wholesalers / commission agents at the end of the day or the week or the month, in order to find the degree of compliance.