ASSIGNMENT NO. 1

HOW CORRUPTION HAS DAMAGED INDIAN ECONOMY IN RECENT PAST

INTRODUCTION: In the current era, Corruption is a global phenomenon and it is ubiquitous. Corruption has progressively increased and is now widespread in our society. Corruption is getting popular in India and becoming the main hindrance in the growth of country like other developing countries of the world. India is among 55 of the 106 countries where corruption is rampant, according to the Corruption Perception Index 2004 Report released by Transparency International India. In today’s competitive and global business environment, the modern and liberalized India has emerged as a hotspot for Foreign Direct Investment (FDI). The country’s economy is soaring towards a 9% Gross Domestic Product (GDP) and the workforce here is the biggest impetus that any nation would desire to make its mark on the global economic platform. While we are scoring good growth rates and are getting a positive international sentiment, the Indian financial system is still facing some significant challenges; the rise in the level of bribery and corruption cases have cast a dark cloud over the hard earned success achieved by the country over the last two decades. World Bank’s “Doing Business report 2010” estimates that 60–80% of building projects (construction) in developing economies are undertaken without adequate permits and approvals – this in itself is a big area of public corruption

DISCUSSIONS: Until a year ago, it was of common knowledge that corruption is deeply rooted in India. However, it was the scandalous year 2010 that established this perception into fact. All the major scams – be it Commonwealth games fiasco, 2G spectrum allocation scam or bribe for housing loan scandal – were unearthed during previous year.

CAUSES OF CORRUPTION: There are many causes behind the spread of corruption in the country as follows:

• Deterioration of the ethical qualities and moral values of people working as govt. administrators.
• Low salaries of government officials in such highly inflationary economy compel them to switch towards corruption.
• Complex laws and procedures alienate common people to ask for any help from government.
• The giant problems of poor economic infrastructure and illiteracy take the general public towards corrupted lifestyle.
• Last but not the least one is the tolerance of people towards corruption, there is lack of protest against corruption.

EFFECTS OF CORRUPTION:

ON POLITICS: As of December 2008, 120 of India's 522 parliament members were facing criminal charges. Many of the biggest scandals since 2010 have involved very high levels of government, including Cabinet Ministers and Chief Ministers, such as in the 2G spectrum scam, the 2010 Commonwealth Games scam and the Adarsh Housing Society scam.

ON JUDICIARY: According to Transparency International, judicial corruption in India is attributable to factors such as "delays in the disposal of cases, shortage of judges and complex procedures, all of which are exacerbated by a preponderance of new laws"

ON MEDICINE: In Government Hospitals, corruption is associated with non availability of medicines (or duplicate/fake medicines), getting admission, consultations with doctors and availing diagnostic services. There have been cases of diversion of medical supplies from government hospitals and clinics as well as supply and distribution of medicines of inferior quality

ON LAND AND PROPERTY: Officials often steal state property. In cities and villages throughout India, consisting 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.

Corporate perception of Bribery & Corruption in India: an insight through KPMG India survey
Keeping in view the significance to address and tackle the issue, KPMG conducted an extensive survey in 2011 among leading Indian corporates to gain an insight into the challenges faced by them due to corruption.
Here is a glance at some of the top findings of the KPMG 2011: Bribery and corruption survey. You can find this survey report on: www.in.kpmg.com

• 51% of the survey respondents fear that rising corruption will make India less attractive for foreign investment
• 68% of the survey respondents believe that India can achieve more than the projected 9 per cent GDP growth if corruption is controlled
• 68% of the respondents believe that in many cases corruption is induced by the private sector
• Majority of the respondents feel that the corruption level in India will remain at the same level irrespective of the legislation
• 84% of the respondents believe that Indian government has not been very effective in enforcing anti-bribery and corruption laws
• 90% of the respondents felt that corruption negatively impacts the performance of stock markets by increasing volatility and prevents institutional investors from making long term investments
• 99% of the respondents felt that the biggest impact of corruption on business was its tendency to skew the level playing field and attract organisations with lesser capability to execute projects
• Among the various measures taken by the government, the Right to Information Act emerged as the most effective in fighting corruption

CONCLUSION: While stringent compliance programs, upgraded controls and regular monitoring could help prevent corruption; social control like building an ethical culture in the organisation, is one of the best ways to prevent any form of unethical practice including bribery and corruption.

REFERANCE:

www.wikipedia.com

www.indiaonline.com

Submitted by:

Ravinder Singh