"." Tenshops' Blog: Corruption in India

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Friday 5 October 2012

Corruption in India


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CORRUPTION IN INDIA                  

Causes, Effects and Statistics 



         Corruption is the abuse of entrusted 
power for private gain. It generally comprises illegal activities, which mainly come to light only through scandals, investigations or prosecutions. It is thus difficult to assess absolute levels of corruption in countries or territories on the basis of hard empirical data. Corruption in India is a consequence of the nexus between Bureaucracy, politics and criminals. Today in India, you can get everything  for a right 'pay-off '.  At one time, bribe was being paid for getting wrong things done but now bribe has to be paid even for getting right things done at the right time.
       Transparency International (TI) is a non-governmental organization that monitors and publicizes data about corruptioin in international development. It was founded in May 1993 through the initiative of Peter Eigen, a former regional director for the World Bank. Its headquarters are located in Berlin, Germany but it operates through more than 70 national chapters. Its declared policy clearly states that they are “politically non-partisan and place great importance on our independence”  meaning that no donor has any input into their policies.

1. Corruption Perception Index :   

       Since 1995, Transparency International (TI) publishes the Corruption Perception Index (CPI),  annually ranking countries based on how corrupt their public sector is perceived to be by expert assessments and opinion surveys. It is an aggregate indicator or a number based on the information about corruption collected from a variety of reputable institutions (see List below) that makes it possible to compare the corruption level in different countries. It should be noted that Corruption Perceptions Index is meant only to measure 'perception'' and not 'reality' of corruption; it is very difficult to quantify and measure actual corruption levels because of the innumerable parameters involved. A country's score indicates the perceived level of public sector corruption in that country on a scale of 0 - 10, where 0 means the country is perceived as 'highly corrupt' and a score of 10 means the country is 'very clean.'
           The computation of CPI is based on corruption-related data from 17 surveys that look at factors such as enforcement of anti-corruption laws, access to Information and conflicts of interes etc., collected  mainly from the following 12 independent and reputable institutions : 
  1. Bertelsmann Foundation 
  2. Country Risk Service and Country Forecast 
  3. Global Insight Country Risk Ratings 
  4. IMD World Competitiveness Yearbook 2010 
  5. IMD World Competitiveness Yearbook 2011
  6. Political and Economical Risk Consultancy Ltd., Hongkong
  7. Political Risk Services International Country Risk Guide 
  8. Transparency International Bribe Payers Survey 
  9. World Bank - Country Performance and Institutional Assessment 
  10. World Economic Forum Executive Opinion Survey (EOS) 2010 
  11. World Economic Forum Executive Opinion Survey (EOS) 2011 
  12. World Justice Project Rule of Law Index   
       India’s rank on Transparency International’s Corruption Perception Index (CPI) has declined from 87 out of 178 countries in 2010, to 95 out of 183 countries surveyed in 2011, indicating a serious corruption problem.  Perception about corruption in India seems to have increased primarily due to the ongoing movement for the enactment of an effective Lokpal and alleged corrupt practices in a series of scandals involving the sale of telecom licenses, preparations for the Commonwealth Games, a land scam involving high level military officers, and improper property loans made by state-owned financial institutions, and the WikiLeaks reports. This trend is confirmed by the various reports released recently by the Comptroller General of Accounts (CAG).
      As per Transparancy International's Report for 2010-2012, the Ten most corrupt and least corrupt countries in the world are listed as follows:

   Please note, if it is any solace, that India does not figure anywhere in both the lists i.e neither among the most corrupt nor the least corrupt countries of the world, with its CPI ranking  at 95 among 183 countries (CPI = 3.1). 

2. Corruption Barometer :

         Public views on corruption are of importance and members of the public must play an active role in stopping corruption and improving governance. For, it is they who suffer its direct and indirect consequences around the world. Transparency International’s Global Corruption Barometer is the only worldwide opinion survey on public views and experiences of corruption. As a poll of the general public, it gives an indication of how corruption is viewed at the national level and how efforts to curb corruption in the country are assessed by its own citizens. It provides a measure of people’s experience of corruption in the past year, in terms of frequency of bribery, reasons for paying a bribe and general public attitude towards  corruption. The following is the questionnaire that was presented and the general public response from of a survey in India during the Year 2010 -2011 :


Causes of Corruption

The causes of corruption are many and complex. Following are some of the causes of corruption in India:
 1. High Tax Rates
        In a 2011 report on Corruption in India, one of the world's largest audit firms KPMG notes that one major cause of corruption in India is its high taxes and excessive regulation . The power to search and question creates opportunities for corrupt public officials to extract bribes and the businessman decides that paying off the corrupt official is cheaper than paying the high taxes. The net result is that the corrupt officials collect bribes and the state fails to collect taxes for its own budget.  
 2. Lack of transparency
       The lack of transparent laws and processes allows room for manoeuvre for both the demanders and suppliers of corruption. Whenever objective standards and transparency are missing and subjective opinions of the regulators and opaque/hidden processes are present, these conditions encourage corruption. Similarly, complex laws and procedures can also deter common man from seeking legal help or measures. 
3. Lack of Education
          The presence of  a large uneducated class in our society is a blessing in disguise for the politicians. They can easily misguide and manipulate them to their own selfish advantage. Just making primary education a fundamental right for every child is not enough; adult education is equally important. Moreover, education does not mean just making them literate or just capable of signing their own name. Education should enable people to think maturely and independently.
 4. Unscrupulous Politicians
           At the time of  Elections, political corruption is at its peak. Big industrialists fund politicians to meet the high cost of elections and in return, seek personal favors. On the other hand, politicians bribe poor, illiterate people to buy their votes and get elected. This leads to emergence of interest-oriented rather than nation-oriented programmes and policies.
5Government Monopoly
           When the supply of certain goods and services are government controlled, there is ample scope for corruption.
6. Beurocracy
           In a highly inflationary economy, low salaries of government officials compel them to resort to corruption. Change in the value system and ethical qualities of men who administer as well as the general public leads to corruption. The old ideals of morality, service and honesty are now more conspicuous by their absence.
7. Lack of Penalties 
            Tolerance of people and the government towards corruption, complete lack of intense public outcry and a strong public forum to oppose corruption, together with the lack of  tough laws and anti-corruption measures, allow corruption to reign supreme. Thus, in the prevailing corrupt system, a corrupt official will somehow manage to go 'scot-free' even when he is caught red-handed.  

.      Effects of Corruption

         There is a strong correlation between a country's state of economy and corruption. Corruption leads to delays due to red tape and inefficiency adversely affecting the rate of economic growth.  According to a report by KPMG, if the corruption levels in India were reduced to levels in the developed countries like theUnited States, India's annual GDP growth rate could increase by another 4 to 5 percent. Instead of becoming an independent affluent nation, India is dependent on international loans, grants and favours due to the tremendous loss of wealth in corruption. As an example, the state of Gujarat has managed to achieve economic growth rates matching some of the fastest growing economic regions of China by merely reducing the red tape, bribes and governmental interference in private enterprise to minimal levels.  The major effects of corruption on national economy and progress are as follows :

  1) Loss of National wealth: Since independence, India has lost billions and billions dollars in various scams. An economist has estimated the loss to the Indian economy, in terms of investment, growth and jobs as over US$ 50 billion a year.
 2) Impediment in Development: Many developmental projects are taking unnecessary time for their completion due to corruption. Corrupt ministers and officials consider these projects as their special "hens that lay golden eggs".
 3) Sluggish Progress: Due to corruption, India has remained "backward" in almost every field from sports to infrastructure.
 4) Poverty: As of January 1, 2012 29.8 percents of the Indian population remains below the poverty line due to corruption. While the government announces from time to time various packages, reservations and compensations for the poor people, minorities and backward communities these benefits hardly reach the disadvantaged sections of the society, they are meant for.
 5) Misuse of Authority and Power: Corruption and misuse of authority go hand-in-hand. Due to this, the deserving and creative candidates are seldom selected for various important positions, whereas the ineligible and incapable ones manage to get the jobs. The resulting inefficiency shows up as deficiency in the system and management.
 6) Brain drain: Due to lack of good opportunities in India, many creative and talented Indians today are serving in the developed nations. This is a tremendous "double loss" for India because, the country has invested in bringing up and training these talented people whose capabilities and expertise are now being exploited by other countries. This is also a corruption of another kind.
  7) Crime and terrorism: Corruption in the police department generally leads to  increase in crime rate as criminals get a free hand to carry out their dubious business. It also leads sometimes to social injustice, when the aggrieved party takes up arms in sheer vengeance and turns to terrorism or such other anti-national activities.
  8) Increase in suicide rateOne of the major causes of suicide is injustice resulting from corruption, e.g. the recent spate of suicides by desperate farmers who fail to receive help packages announced by the government due to the corruption prevailing in the administration. Similarly, many an eligible candidate who is jobless and has failed to secure a decent job, despite possessing necessary qualifications and experience, ultimately resorts to suicide.
 9) Psychological Problems: Due to the prevailing corruption in judicial system and police administration, many victims of injustice have suffered from depression and/or serious mental derangement. 


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