Any amount of crusades against corruption without a fundamentally strong economic policy will not help bring down the root cause of corruption. Fighting the symptoms rather than the cause usually leads to a haphazard cure, which may not work in the long run.

A political party based on the plank of anti-corruption must first have a strong economic policy backing it. Any amount of crusades against corruption without a fundamentally strong economic policy will not help bring down the root cause of corruption. Fighting the symptoms rather than the cause usually leads to a haphazard cure, which may not work in the long run.

It is fine for Anna Hazare to campaign for a Lok Pal Bill, and all credits to him that it has been passed. It is also a great achievement for the Aam Aadmi party-just a year old-to assume power in Delhi. However, while decibel levels of anti-corruption slogans are high, there is no concerted move towards a crusade against corruption through sensible economic policies. The reason could be that the Aam Aadmi does not really understand the logic that right economic policies can root out corruption from the system.

Why are the right economic policies the strongest antidote to corruption? The reason is that the biggest cause of corruption is licensing system of the government and the budget deficit run by the government. The biggest scams in India in the last five years running into tens of thousands of crores are the 2G spectrum telecom scam and the coal block allocation scam.

Telecom spectrum and coal are assets of the government and are licensed out to private players. Given the sums involved, it is no wonder that everybody from the politician to the bureaucrat to the businessman were involved in the scams. How does the government prevent corruption in licensing out its resources without losing revenues?

The answer lies in the privatisation of the whole process. The government should sell the licences like a company does its shares on the stock exchanges. There is public scrutiny of its licensing process, there is enough number of participants willing to participate in the book building process and there is transparency in arriving at the right price for the licences.

The government should also do away with unwanted licenses. This will also help use resources efficiently and remove one of the root causes of corruption.

A country's budget deficit also is linked to the corrupt system that prevails there. The biggest cause of deficits of the government is the subsidy. In India, subsidy forms over 2% of GDP. Consistent deficits lead to interest costs of the government shooting up, leading to more deficits. This is a self fulfilling cycle that does not stop.

Subsidies are bills paid by the government on behalf of its people, who use the government's goods and services for free. Food, fuel and fertiliser subsidies are the three primary areas of subsidies in India. Food, fuel and fertiliser are causes of huge corruption at the distribution level and needless to say it does not benefit the people it is supposed to benefit.

Power subsidies cause losses to state electricity boards that in turn cause losses to banks that lend to them. Cost of power rises and there is increase in theft leading to high T&D losses, which further pushes up the cost of power. This is a cycle that can be plugged only by removing subsidies. Similar is the case for removing subsidies on usage of public resources, including public transport.

The Indian Railways and Air India would be able to run profitably with strong sense of user satisfaction if prices are rationalised and productivity of labour takes precedence over its employment generation capabilities.

The list can go on and on. It is high time political parties use economic planks to win elections rather than so called social planks.

Arjun Parthasarathy is founder Investors are Idiots.com and INRBONDS.com. Follow him on twitter @arjunparthasara