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Corruption in India | My views My Drishti

Venezuela is passing through worst crises in its history. Remember it is a oil rich country. Oil reserves of this country constitute one of the major oil fields in the World. One bread is costing few lakhs of local currency; its citizens are fighting over a loaf of bread and are fleeing the country. Venezuela which should have been one of the richest country in the world, its people are fighting over a morsel of grain. One of the major reasons is its corruption at all walks and at the top of political life. While news are getting filtered to judge the illicit money in US dollars in billions and trillions held by Venezuelan President and his two daughters while its people are shooting and killing each other to snatch few pieces of bread.

Is India a far different since that situation did not come therefore we are happy and have already put our head in sand in a characteristic ostrich manner. The Corruption can be defined as the misuse of public power by elected politician or appointed civil servant for private gain. Corruption can also be defined as the misuse of entrusted power by heritage, education, marriage, election, appointment or whatever else for private gain.

The corruption may be in various forms like in cash or in kind or some other favor enjoyed by politician or Civil Servant. The undue favor given to a political party in the name of contribution or subscription is also a type of indirect corruption.

It is an issue that adversely affects India’s economy of central, state and local government agencies. Not only has it held the economy back from reaching new heights, but rampant corruption has stunted the country’s development. As per study conducted by Transparency International in 2005, recorded that more than 92% of Indians had at some point or another paid a bribe to a public official to get a job done. Transparency International‘s 2017 Corruption Perception Index ranks the country 81st place out of 180 countries.

The largest contributors to corruption in India are entitlement programs and social spending schemes enacted by the Indian government. Examples include the Mahatma Gandhi National Rural Employment Guarantee Act and the National Rural Health Mission. . After 5 years of implementation, in 2011, the program me was criticized as no more effective than other poverty reduction programmers 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 program infrastructure, and unintended destructive effects.

A report was published in 2006 which claimed that 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 only limited to the state of Uttar Pradesh. According to the World Bank reports, aid programs are beset by corruption, bad administration and under-payments. As an example, the report cites that only 40% of grain handed out for the poor reaches its intended target. The World Bank study finds that the public distribution programs and social spending contracts have proven to be a waste due to corruption.

A 2009 survey of the leading economies of Asia, revealed much hallowed Indian bureaucracy to be not only the least efficient out of Singapore, Hong Kong, Thailand, South Korea, Japan, Malaysia, Taiwan, Vietnam, China, Philippines and Indonesia, but that working with India’s civil servants was a “slow and painful” process.[

The Indian media has widely published allegations of corrupt Indian citizens and specially politicians stashing millions of rupees in Swiss banks. Swiss authorities denied these allegations, which were later proven in 2015–2016. The Indian media is largely controlled by extremely corrupt politicians and industrialists who play a major role by misleading the public with incorrect information and use the media for mud-slinging at political and business opponents.

The causes of corruption in India include excessive regulations, complicated tax and licensing systems, numerous government departments with opaque bureaucracy and discretionary powers, monopoly of government controlled institutions on certain goods and services delivery, and the lack of transparent laws and processes. There are significant variations in the level of corruption and in the government’s efforts to reduce corruption across different areas of India.

As far as Anti-corruption laws in India are concerned for public servants; there are 5-6 laws which dictate a punishment of imprisonment from six months to seven years. India is also a signatory to the United Nations Convention against Corruption since 2005 (ratified 2011). The Convention covers a wide range of acts of corruption and also proposes certain preventive policies.

The Lokpal and Lokayuktas Act, 2013 which came into force from 16 January 2014, seeks to provide for the establishment of the institution of Lokpal to inquire into allegations of corruption against certain public functionaries in India. Whistle Blowers Protection Act, 2011, which provides a mechanism to investigate alleged corruption and misuse of power by public servants and also protect anyone who exposes alleged wrongdoing in government bodies, projects and offices.

While there are plenty provision against public servant, there are no legal provisions to check graft in the private sector in India. Government has proposed amendments in existing acts and certain new bills for checking corruption in private sector. Big-ticket corruption is mainly witnessed in the operations of large commercial or corporate entities. In order to prevent bribery on supply side, it is proposed that key managerial personnel of companies’ and also the company shall be held liable for offering bribes to gain undue benefits.

In 2015, Parliament passed the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Bill, 2015 to curb and impose penalties on black money hoarded abroad. The Act has received the assent of the President of India on 26 May 2015. It came into effect from 1 July 2015.

India Against Corruption was a popular movement active during 2011–12 that received much media attention. Among its prominent public faces were Arvind KejriwalKiran Bedi and Anna Hazare. Kejriwal went on to form the Aam Aadmi Party and Hazare established Jan Tantra Morcha. But unfortunately, the later developments proved that these fonts against corruption were made as tools to acquire political power.

In a 2004 report on Corruption in India, by  KPMG notes several issues that encourage corruption in India. The report suggests high taxes and excessive regulation bureaucracy as a major cause; India has high marginal tax rates and numerous regulatory bodies with the power to stop any citizen or business from going about their daily affairs.

The power of Indian authorities to search and question individuals creates opportunities  to extract bribes each individual or business decides if the effort required for due process and the cost of delay is worth paying the bribe demanded. In cases of high taxes, paying off the corrupt official is cheaper than the tax. This, according to the report, is one major cause of corruption in India and 150 other countries across the world.

The desire to pay lower taxes than those demanded by the state explains the demand side of corruption. The net result is that the corrupt officials collect bribes, the government fails to collect taxes for its own budget, and corruption grows. The report suggests regulatory reforms, process simplification and lower taxes as means to increase tax receipts and reduce causes of corruption.

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 economic boom”

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. 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.

So far we discussed was a corruption by Government machinery which may be about 80% in sheer numbers but valuing about 20% of total corruption value in India. Interestingly in India, a Pereto principle applies viz, Government machinery as explained above but Modern Politicians cater for 20 % in numbers but valuing about 80%. Is there any check and balance system for prevention of corruption for Indian Politicians, sadly No. Whatever enquiries are set up, these are totally on political considerations. The enquiries are set up or closed on which side of fence, a politician is sitting and such time is decided when he supports ruling party or withdraws his party support from ruling party or coalition. Such type of action, clouds the intention and sincerity of ruling party. These comes under serious doubts when a Major watchdog of corruption I.e. Central Beuro  of Investigation (CBI) itself comes under cloud. What little moral authority does the CBI has when its top brass are charged for corruption. Any person or any organization can control anything till it has its moral authority. The example of Mahatma Gandhi, Sardar Patel, Lal Bahadur Shastri are a few cases where they could draw immense support based on their moral authority alone. Corruption hits at moral fiber of any nation. This moral fiber plays a great role in the unity of any Nation.

Few people argue that Corruption in India is grease to development; i.e. Corruption is a essential condition for development and growth. It is expected that this statement is because of sheer desperation that nothing moves without bribery. The responsibility on Babu’s is not to deliver or to decide but the responsibility of showing himself as an honest is immense. After all nobody can force a Babu to take a decision therefore best option seems to a businessman to grease the palm and take a favorable decision.

In majority of cases the Contracts are either for works or for supply. In a competitive tendering process, where cut throat competition is a trend, the profit margin is very meager. From this margin he has to adjust the bribery amount also and any reader may think naively that the Contractor or supplier will   be satisfied with almost nil or very meager profit component. Certainly not he shall dig to the contract deep to maximize his profit at the cost of contract itself.

Essentially there are four corruption models generally applied;

  1. Make provision of Higher Quantity either in underground items (Invisible items) not amenable to easy measurement or execute the extra quantity not required at all.
  2. To keep the higher rates than actual and get it approved with connivance.
  3. To lower down the quality and earn the profit on quality front.
  4. Or a Combination of all above or some of the above.

In Model C there are bright chances of getting caught therefore off late Model B is a much preferred mode. Which one is better for society is a debatable point, certainly Model C may result into disaster therefore this model is loosing favour to some extent keeping in view the fact that specified strength is much lower than naturally available strength.

Why the corruption could not and cannot make inroads into large masses of India, the credit goes to value system specially in Hinduism where still the stories of Harish Chandra are told to the children. In a country where large masses who are worried about their two meals and could not get into cycle of consumerism, corruption and greed, Grass root Corruption in Modern Venezuela style shall take much time.

If these figures as given above are true and scary, still remains fact is that Corruption is totally individual oriented phenomena, it can never be mass phenomenon. To be corrupt or to be honest is an individual decision only if you want to be  honest, nobody can force corruption on you and if you want to be corrupt, the chances of turning honest are very bleak.

In India if corruption levels were reduced 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.

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