10 Facts about Corruption in IndiaIndia remains high on the list of countries across the globe with perceived government corruption. Yet with recent elections, changes in governance, emerging anti-corruption groups and legislative actions, hope for India’s government exists. There are many strides for progress as seen in these 10 facts about corruption in India.

10 Facts About Corruption in India

  1. Corruption Index: According to the Transparency International’s corruption perceptions index (2018), India has remained at a score of 41 on a scale of 0 (highly corrupt) to 100 (very clean) over past years, ranking 78 out of 180 countries in perceived corruption. The index ranks countries by their perceived level of public sector corruption according to experts and qualified business people. The corruption index, in accordance with these 10 facts about corruption in India, reveals that despite some progress, the continued failure of most countries to control corruption has only furthered the crisis in democracy around the world.
  2. Elections:  As India’s election polls closed May 23, 2019, candidates spent a total 600 billion rupees ($8.7 billion) on publicity, logistics and, in some cases, distribution of cash for votes. Yet, the Election Commission ordered that each candidate not exceed 7 million rupees. N Bhaskara Rao, chairman of Centre for Media Studies, says, “Mother of all corruption lies in the spiraling election expenditure.” Rao estimated that expenditures in the 2024 general election could exceed 1 trillion rupees.
  3. The Prevention of Corruption Act: The Prevention of Corruption Act, an attempted anti-corruption regulation, was originally passed by Parliament in 1988. The Act has been brought before the Supreme Court for amendment twice since 1997 for regulation failures, most recently in 2018. PCA 2018 brought about significant changes, including making bribery a specific offense inducing corporate criminal liability, a fixed two-year timeline for the conclusion of a trial and stricter punishments for bribery offenses. However, a new provision now requires government approval before any inquiry or investigation can be conducted by Central Bureau Investigation into the public officials in question. The single directive bars investigative protocols and extends previous legislation (Central Vigilance Act of 2003) to protect officials of all ranks from corruption investigations. The single directive provision has been challenged in the Supreme Court of India and awaits judgment.
  4. The Companies Act 2013: The Companies Act of 2013 provides provisions to prevent corruption and fraud in the corporate sector. This includes requiring statutory auditors to disclose any instances of fraud, corruption or bribery committed by company employees, increasing penalties for fraud offenses, vesting increased powers to arrest with the Serious Fraud Investigation Office (SFIO), establishing vigilance mechanisms and audit committees and increased responsibilities for independent directors. The Act was amended in 2017, modifying the existing penalty provisions for corporate fraud to tailor penalties to the seriousness and monetary value of the offense.
  5. The Lokpal and Lokayukta Act 2013: This Act accords powers to the nodal ombudsman, independent and impartial officials, to investigate corruption cases in the public sector in the central and state governments, Lokpal and Lokayukta respectively. The Act also applies to the whole of India by granting powers to the Lokpal, an anti-corruption ombudsman authority, to investigate and prosecute PCA offenses by a foreign company doing business in India. The Act was amended in 2016 to require public servants to report their liabilities and assets, as well as those of their spouses and dependents to relevant authorities.
  6. The Whistleblowers Protection Act 2011: This Act protects whistleblowers in regards to the disclosure of corruption acts, willful misuse of power or of the commission of a criminal offense by a public servant. However, although the Act has been passed it has not yet been brought into effect by the government, awaiting further amendment, according to the Ministry of Personnel, Public Grievances and Pensions. One such amendment introduced was the 2015 Bill, aiming to prohibit reporting of corruption-related disclosures by a whistleblower unless it meets specific criteria denoted by the Central Vigilance Commission (CVC).
  7. The Commonwealth Games Fraud: In 2010 allegations emerged against the Commonwealth Games. The Central Vigilance Commission cited a $1.8 billion misappropriation of funds, costing almost 18 times the Commonwealth Games’ budget. It was estimated that only half the allotted amount was spent on the Indian sportspersons the funds were dedicated to. Suresh Kalmadi, chairman of the Commonwealth Games’ organizing committee, and other officials were charged with criminal conspiracy, cheating, forgery for the purpose of cheating and were charged under sections of the PCA. The scam led to the resignation of multiple government officials.
  8. 2G Spectrum Telecom Scam: Later in 2010, a massive telecom scam implicating former Telecom minister Andimuthu Raja along with 14 others, ranked as the world’s second-largest abuse of executive power by the Time magazine. According to the Comptroller and Auditor General of India, the scam cost a loss of an estimated $39 billion to the Indian national exchequer. The scam was a combination of three cases, two registered by the CBI and one filed by Enforcement Directorate, in which 2G, second-generation licensure for mobile networks, was giving throwaway prices instead of carrying free and fair auctions. Raja denied all charges and was arrested on charges of cheating, forgery and conspiracy.
  9. “Coalgate” Scandal: The coal scam of 2012 followed a report made by the Comptroller and Auditor General of India which showed the inefficient and potentially illegal allocation of coal blocks between 2004 and 2009. The coal blocks were to be allocated via competitive bidding. However, the former UPA-2 regime did not abide and accusations ranged from malicious avenues in securing allocation, overstating net worth, nondisclosure of prior allocation and hoarding rather than the development of allocated resources. Former Jharkhand Chief Minister Madhu Koda, former secretary H.C. Gupta, former joint secretary in Coal Ministry K.S. Kropha and former director of Coal Ministry K.C. Samaria were found guilty. They were sentenced under the PCA and Indian Penal Code. A dozen companies were also cited in the CVC investigation. An estimated $34 billion was lost.
  10. CVC, SFIO and the Supreme Court: Recently, the CVC has taken action to advise all central government departments on quicker disposal of pending corruption cases. The authority has created an online complaint management system where individuals can file complaints in this regard. The SFIO has also taken proactive action in increasing the pace of its investigations, completing 87 investigations during 2016 and 2017, as compared to only 225 investigations completed in previous years since its formation in 2003. The Supreme Court has worked to expand the breadth of the definition of ‘public servant,’ defined in the PCA of 1988, to further include all officials of private banks, bringing them under the scope of anti-corruption laws.

These 10 facts about corruption in India are indicative of progress and further efforts needed for anti-corruption efforts in India. In a landslide victory, the 2019 general election reinstated incumbent Prime Minister Narendra Modi, who touts an anti-corruption platform focusing on good governance and economic growth. Since 2011, a number of anticorruption parties have emerged following the introduction of the India Against Corruption movement, including the Aam Aadmi Party led by activist Arvin Kejriwal. These efforts, in combination with the actions and guidance of anti-corruption entities, can help curb corrupt governance in India.

Julia Kemner
Photo: Flickr

No Over the Counter Aspirin in Delhi Spotlights Government Action

The Delhi government has banned the sale of nonsteroidal anti-inflammatory drugs (NSAIDs) without a prescription. The restriction is set to last from August 15 until November 30, which is peak dengue fever season. For patients with dengue fever, NSAIDs can increase the risk of hemorrhage or death. Other precautions taken include increasing the number of beds available and keeping extra NS1 Antigen detection kits, blood and supplies in hospitals.

Additionally, all government buildings, including hospitals, have been asked to procure the National Center for Disease designed mosquito-proof air coolers (MPCs). Mosquito nets will also be provided to sentinel surveillance hospitals. The government has also made moves to reward or penalize those areas where breeding is or is not found, respectively. New warnings are expected to be drafted featuring more correct and simplified information so that the public can be better informed of the change and why it is being implemented.

Because dengue fever plagues nearly the entire developing world, it can be considered a developing country disease. The people that are most affected rely on correct information and government action to protect themselves. The cooperation of the Delhi government in response to an impending potential for a health crisis showcases how both health officials and government officials can work together to bring about a more efficient action. The ban will likely be successful in decreasing dengue-related deaths and could perhaps serve as a model for other places where dengue fever claims the lives of many. The emphasis on encouraging correct public knowledge of risks and preventing the spread of misinformation is a huge step towards public transparency and again can serve as a model.

The cross-sectional cooperation and move to enact such a ban before peak dengue season is also noteworthy, as the government was able to act quickly enough that they should see drastic results with the ban in regards to dengue-related deaths. Cooperation and a prevention-based movement are both good indicators of the success of a public health initiative. Results pending, the Delhi restriction can serve as a model prevention program for not only other countries plagued with dengue fever but for other illnesses with known risky associations.

Emma Dowd

Sources: Financial Express, India Times, Merinews
Photo: One Healthcare Worldwide

A $100 million credit agreement, signed by the World Bank and the Indian Government, will help low-income Indian families access a loan to purchase, build, or upgrade their dwellings.

The National Housing Bank (NHB) will implement the Low Income housing Finance Project, which will support the government’s agenda for financial inclusion on two counts. First, it will enable low-income households in urban areas to access housing finance, and second will strengthen the capacity of financial institutions that target these groups.

India faces a crippling housing shortage; as its urban population continues to rapidly expand, the urban housing shortage is estimated to be 19 million (as of 2012). Low-income families bear the brunt of the problem; they are faced with an estimated 90% of the shortage.

The housing sector is vulnerable to challenges because current land use policies and building norms restrict the availability of housing. Since the majority of the low-income population works in the informal sector, they lack documentation of income and therefore require customized lending products; as a result, developers are reluctant to enter the low-income market due to the perceived risks associated with these buyers.

As the Indian government strives to achieve financial inclusion for the whole population, the project will let the NHB innovate and provide financial solutions for improving low-income access to housing.

R.V. Verma, chairman and managing director of National Housing Bank said, “The program, which will explore sustainable housing finance models for low income households, has been conceived imaginatively and is consistent with the vision and charter of the NHB.”

Michael Haney, operations advisor at the World Bank, explained how the influx of 10 million Indians to towns and cities each year run into trouble finding loans to build or buy themselves houses. “They are forced to use unregulated, informal sources of finance at much higher rates of interest,” he explained.

The new initiative will help families move from informal sources of finance to longer-term, official sources for their housing needs; risk management, market infrastructure and new products will be implemented in order to achieve this goal.

Initially, the project will launch pilot programs to test the sustainability of these lending guidelines and products, and the long-term goal will be to preserve affordability for low-income families by finding alternative forms of collateral to reduce credit risk and keep interest rates at manageable levels.

– Chloe Isacke

Sources: World Bank, Economic Times
Photo: Kootation

Finance Minister Proposes Women's Bank in IndiaIn a provocative move by India’s current Minister of Finance Shri Palaniappan Chidambaran, government finance officials have proposed the transformation of their underutilized Indian Post Offices into the first-ever women’s bank in India.

The women’s bank in the country will receive an initial start-up investment of 4, 909 crore in order to help modernize the antiquated Indian Post Offices, including the refurbishment of facilities and the implementation of ATMs and electronic devices necessary for banking. The hope is that the newly created banks will inspire more competition in the Indian banking industry, adding both greater market segmentation and opportunities for growth, especially amongst women entrepreneurs.

The women’s bank in India will be run primarily by women bankers and loan officers, with each branch receiving 1,000 crore for loans and local investment. Furthermore, the banks overall goal will be to lend to women business owners, promoting greater empowerment and social mobility through local financing of projects led by women. When asked about a women’s bank in India, Bank of India CMD VR Lyer stated that, “Women in rural areas will be comfortable going to an all-women branch. It will accelerate inclusive growth and recognize women’s power in society.”

– Brian Turner

Source Economic Times
Photo Beyond Brics

Indian TREAD Program Empowers WomenThe government of India introduced the Trade Related Entrepreneurship and Assistance Development (TREAD) plan to help women in rural areas of the country. The intent is for greater economic empowerment of such women through financing, training, information and counseling activities, all related to the trade of products and services within the marketplace.

Their research has shown that one of the main barriers for supporting women out of poverty is that distribution and access to credit are next to impossible without an intermediary. So the TREAD plan will work with community NGOs to make sure funds are actually placed in the hands of women. Then, additional infrastructure will be provided for counseling, training, and assistance in selling goods in the market.

Obviously, impoverished women do not have the collateral needed to secure a loan through traditional lending institutions, so this project, with the support of the government, takes down that barrier. Government grants will fund 30% of a project within TREAD, and the rest will be loaned from banks that are participating.

Additionally, NGOs can receive state government grants for undertaking activities aimed at the empowerment of women, such as field surveys, research studies, evaluation studies, designing of training modules, and more. TREAD is a holistic approach to development, identifying what is needed, what works, using real-world solutions to implement change, offering support, and bringing together various institutions to work together.

– Mary Purcell

Source: DCMSME
Photo: ecouterre