Corruption in India

CORRUPTION IN INDIA

What is corruption ?

We define corruption as the abuse of entrusted power for private gain. Corruption erodes trust, weakens democracy, hampers economic development and further exacerbates inequality, poverty, social division and the environmental crisis.

Corruption can take many forms, and can include behaviours like:

public servants demanding or taking money or favours in exchange for services,
politicians misusing public money or granting public jobs or contracts to their sponsors, friends and families,
corporations bribing officials to get lucrative deals

Corruption can happen anywhere: in business, government, the courts, the media, and in civil society, as well as across all sectors from health and education to infrastructure and sports.

Corruption can involve anyone: politicians, government officials, public servants, business people or members of the public.

Corruption happens in the shadows, often with the help of professional enablers such as bankers, lawyers, accountants and real estate agents, opaque financial systems and anonymous shell companies that allow corruption schemes to flourish and the corrupt to launder and hide their illicit wealth.

Corruption adapts to different contexts and changing circumstances. It can evolve in response to changes in rules, legislation and even technology.

Corruption in India

It is an issue which affects economy of central, state and local government agencies in many ways. Corruption is blamed for stunting the economy of india. A study conducted by Transparency International. in 2005 recorded that more than 62% of Indians had at some point or another paid a bribe to a public official to get a job done. In 2008, another report showed that about 50% of Indians had first hand experience of paying bribes or using contacts to get services performed by public offices. In 2021 their Corruption Perceptions Index ranked the country in 85th place out of 180, on a scale where the lowest-ranked countries are perceived to have the most honest public sector. Various factors contribute to corruption, including officials siphoning money from government social welfare schemes . Examples include the Mahatma Gandhi National Rural Employment Guarantee Act and the National Rural Health Mission. Other areas of corruption include India's trucking industry which is forced to pay billions of rupees in bribes annually to numerous regulatory and police stops on interstate highways.

Corruption in various places

Politics

Corruption in India is a problem that has serious implications for protecting the rule of law and ensuring access to justice. As of December 2009, 120 of India's 542 parliament members were accused of various crimes, under India's First Information Report procedure wherein anyone can allege another to have committed a crime.

Many of the biggest scandals since 2010 have involved high level government officials, including Cabinet Ministers and Chief Ministers, such as the 2010 Commonwealth Games scam (₹70,000 crore (US$9.2 billion)), the Adarsh Housing Society scam, the Coal Mining Scam (₹1.86 lakh crore (US$24 billion)), the Mining Scandal in Karnataka and the Cash for Vote scams.

Bureaucracy

Bribery

A 2005 study done by the Transparency International in India found that more than 92% of the people had firsthand experience of paying bribes or peddling influence to get services performed in a public office. Taxes and bribes are common between state borders; Transparency International estimates that truckers annually pay ₹222 crore (US$29 million) in bribes.

Both government regulators and police share in bribe money, to the tune of 43% and 45% each, respectively. The en route stoppages at checkpoints and entry-points can take up to 11 hours per day. About 60% of these (forced) stoppages on roads by concerned authorities such as government regulators, police, forest, sales and excise, octroi, and weighing and measuring departments are for extorting money. The loss in productivity due to these stoppages is an important national concern; the number of truck trips could increase by 40%, if forced delays are avoided. According to a 2007 World Bank published report, the travel time for a Delhi-Mumbai trip could be reduced by about 2 days per trip if the corruption and associated regulatory stoppages to extract bribes were eliminated.

Land and property

Officials are alleged to steal state property. In cities and villages throughout India, groups of municipal and other government officials, elected politicians, judicial officers, real estate developers and law enforcement officials, acquire, develop and sell land in illegal ways. Such officials and politicians are very well protected by the immense power and influence they possess. Apart from this, slum-dwellers who are allotted houses under several housing schemes such as Pradhan Mantri Gramin Awaas Yojana, Rajiv Awas Yojna, Pradhan Mantri Awas Yojna etc., rent out these houses to others, to earn money due to severe unemployment and lack of a steady source of income.

Tendering processes and awarding contracts

A 2006 report claimed state-funded construction activities in Uttar Pradesh, such as road building were dominated by construction mafias, consisting of cabals of corrupt public works officials, materials suppliers, politicians and construction contractors.

Problems caused by corruption in government funded projects are not limited to the state of Uttar Pradesh. The World Bank study finds that the public distribution programmes and social spending contracts have proven to be a waste due to corruption.

For example, the government implemented the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) on 25 August 2005. The Central government outlay for this welfare scheme is ₹400 crore (US$52 million) in FY 2010–2011. After 5 years of implementation, in 2011, the programme was widely criticized as no more effective than other poverty reduction programmes in India. Despite its best intentions, MGNREGA faces the challenges of corrupt officials reportedly pocketing money on behalf of fake rural employees, poor quality of the programme infrastructure, and unintended destructive effect on poverty.

Hospitals and health care

In government hospitals, corruption is associated with non-availability/duplication of medicines, obtaining admission, consultations with doctors and receiving diagnostic services.

National Rural Health Mission is another health care-related government programme that has been subject to large scale corruption allegations. This social spending and entitlement programme hoped to improve health care delivery across rural India. Managed since 2005 by the Ministry of Health, the Indian government mandated a spending of ₹2.77 lakh crore (US$36 billion) in 2004–2005, and increased it annually to be about 1% of India's gross domestic product. The National Rural Health Mission programme has been clouded by a large-scale corruption scandal in which high-level government appointed officials were arrested, several of whom died under mysterious circumstances including one in prison. Corruption, waste and fraud-related losses from this government programme has been alleged to be ₹1 lakh crore (US$13 billion).

Income tax department

There have been several cases of collusion involving officials of the Income Tax Department of India for preferential tax treatment and relaxed prosecutions in exchange for bribes

Driver licensing

A study conducted between 2004 and 2005 found that India's driver licensing procedure was a hugely distorted bureaucratic process and allows drivers to be licensed despite their low driving ability through promoting the usage of agents. Individuals with the willingness to pay make a significant payment above the official fee and most of these extra payments are made to agents, who act as an intermediary between bureaucrats and applicants

The average licensee paid Rs 1,080, approximately 2.5 times the official fee of Rs 450, in order to obtain a license. On average, those who hired agents had a lower driving ability, with agents helping unqualified drivers obtain licenses and bypass the legally required driving examination. Among the surveyed individuals, approximately 60% of the license holders did not even take the licensing exam and 54% of those license holders failed an independent driving test.

Agents are the channels of corruption in this bureaucratic driver licensing system, facilitating access to licenses among those who are unqualified to drive. Some of the failures of this licensing system are caused by corrupt bureaucrats who collaborate with agents by creating additional barriers within the system against those who did not hire agents.

Corruption rate in every part of country

Rate of corruption
State	1990–95	1996–00	2001–05	2006–10
Bihar	0.41	0.30	0.43	0.88
Gujarat	0.48	0.57	0.64	0.69
Andhra Pradesh	0.53	0.73	0.55	0.61
Punjab	0.32	0.46	0.46	0.60
Jammu & Kashmir	0.13	0.32	0.17	0.40
Haryana	0.33	0.60	0.31	0.37
Himachal Pradesh	0.26	0.14	0.23	0.35
Tamil Nadu	0.19	0.20	0.24	0.29
Madhya Pradesh	0.23	0.22	0.31	0.29
Karnataka	0.24	0.19	0.20	0.29
Rajasthan	0.27	0.23	0.26	0.27
Kerala	0.16	0.20	0.22	0.27
Maharashtra	0.45	0.29	0.27	0.26
Uttar Pradesh	0.11	0.11	0.16	0.21
Odisha	0.22	0.16	0.15	0.19
Assam	0.21	0.02	0.14	0.17
West Bengal	0.11	0.08	0.03	0.01

Impact of corruption

Loss of credibility

In a study on bribery and corruption in India conducted in 2013 by global professional services firm Ernst & Young (EY), a majority of the survey respondents from PE firms said that a company operating in a sector which is perceived as highly corrupt may lose ground when it comes to fair valuation of its business, as investors bargain hard and factor in the cost of corruption at the time of transaction.

According to a report by KPMG, "high-level corruption and scams are now threatening to derail the country's its credibility and [its] economic boom"

Economic losses

Corruption may lead to further bureaucratic delay and inefficiency if corrupted bureaucrats introduce red tape in order to extort more bribes. Such inadequacies in institutional efficiency could affect growth indirectly by lowering the private marginal product of capital and investment rate. Levine and Renelt showed that investment rate is a robust determinant of economic growth

Bureaucratic inefficiency also affects growth directly through misallocation of investments in the economy Additionally, corruption results in lower economic growth for a given level of income.

Lower corruption, higher growth rates

If corruption levels in India were decreased to levels in developed economies such as Singapore or the United Kingdom, India's GDP growth rate could increase at a higher rate annually. C. K. Prahalad estimates the lost opportunity caused by corruption in terms of investment, growth and jobs for India is over US$50 billion a year.

Anti-corruption initiatives

Right to Information Act

The 2005 Right to Information Act required government officials to provide information requested by citizens or face punitive action, as well as the computerization of services and the establishment of vigilance commissions. This has considerably reduced corruption and opened up avenues to redress grievances.

Right to Public Services laws

Right to Public Services legislation, which has been enacted in 19 states of India, guarantee time bound delivery of services for various public services rendered by the government to citizen and provides mechanisms for punishing the errant public servant who is deficient in providing the service stipulated under the statute. Right to Service legislation is meant to reduce corruption among the government officials and to increase transparency and public accountability.

Anti-corruption laws in India

Public servants in India can be imprisoned for several years and penalized for corruption under the:

· Indian Penal Code, 1860

· Prosecution section of Income Tax Act, 1961

· The Prevention of Corruption Act, 1988

· The Benami Transactions (Prohibition) Act, 1988 to prohibit benami transactions.

· Prevention of Money Laundering Act, 2002

Punishment for bribery in India can range from six months to seven years of imprisonment.