Corruption

Manuhaar Dhamija
Manuhaar DhamijaSummer Intern em HDFC
Corruption
Authority
                     +
CORRUPTION   =    Monopoly
                     -

      Transparency
What is Corruption ?
 In broad terms, corruption is the misuse of public
 office for private gain (World Bank, 1997).
 Corruption arises in both political and
 bureaucratic offices.
 Degrees of corruption vary greatly, from minor
 uses of influence and patronage to do and return
 favours, to institutionalised bribery and beyond.
 The end-point of political corruption
 is kleptocracy, literally rule by thieves, where
 even the external pretence of honesty is
Types of Corruption
BRIBERY
An offer of money or favors to influence a public
official.
TRADING INFLUENCE / INFLUENCE
PEDDLING
Its the situation where a person is selling his/her
influence over the decision process involving a
third party.
GRAFT
It refers to favouring supporters, for example with government
employment.

NEPOTISM AND CRONYISM
Favouring relatives (nepotism) or personal friends (cronyism) of
an official is a form of illegitimate private gain.

EMBEZZLEMENT
It is outright theft of entrusted funds.

KICKBACKS
It is an official's share of misappropriated funds allocated from
his or her organization to an organization involved in
corrupt bidding.

UNHOLY ALLIANCE
It is a coalition among seemingly antagonistic groups.
Causes of corruption
 Emergence of political elite

 Artificial scarcity

 Change in the value system and ethical

 qualities
 Absence of strong public forum

 Over- population and widespread illiteracy
Corruption and India
 As with many developing nations, corruption is
 widespread in India. It has taken the role of a
 persistent aspect of Indian politics and
 administration.
Reasons:
 socialist-inspired policies
 extensive regulation, protectionism, and public
  ownership
 license raj

The first case of corruption in India was the
TRANSPARENCY INTERNATIONAL
SURVEY REPORT     Most corrupt states
                     Bihar and J&K

                     Highly corrupt states
                     M.P., U.P.,Karnataka, Ta
                     mil
                     Nadu, Rajasthan, Chhat
                     tisgarh, Delhi, Gujarat,
                     Jharkhand, Kerala, Oris
                     sa

                     Moderately corrupt
                     states Andhra
                     Pradesh, Haryana, H.P.,
Statistics
     CORRUPTION PERCEPTION INDEX
On the ranking based on the scale from 0
(perceived to be highly corrupt) to 10 (low level
of corruption), India scored 3.3 to grab 87th
position in 2010.
India has slipped three places in global
rankings of most corrupt countries, from 84 in
2009 to 87.
The outgoing Central Vigilance Commissioner
has said that almost one out of three Indians
6 Major Corruption Scams in
              India
 SPORTS : IPL LALIT MODI SCAM



 HEALTH : CORRUPTION IN BANK
 FUNDED PROJECTS FOR HIV AIDS &
 MALARIA (PROBED BY BRETTON
 WOODS)


 DEFENCE :THE BOFOR CASE
 JUDICIARY :
 MISUSE OF COURT TREASURY CASE
 (GHAZIABAD)


 POLITICS :
 MADHU KODA CORRUPTION SCAM




 CORPORATE :
 SATYAM COMPUTERS SCANDAL
Corruption : Is there a way
          out?
Corruption is a cancer, which every Indian
must strive to cure.
There are two approaches here to tackle
corruption:

1) What as an individual we can contribute
to stop or curtail this menace

2) The other is what can government do to
ensure the machinery is less corrupt or
remove corruption all together.
Community Participation
  It is the community members are the people
 who benefit from a successful program;
 therefore, they would have stronger
 incentives to monitor corruption at the local
 level.

The Right to Information Act 2005
  This Act enables the common man to seek
 information about and closely monitor the
 functioning of all the departments under the
 purview of either the Central or State
Autonomous bodies for
         monitoring corruption
 Lokayukta
 It is an anti-corruption ombudsman organization in the
 Indian states for the redressal of citizens'
 grievances against the politicians and officers in
 the government service involving corruption.
 CVC
 It was setup by the Government to advise and guide
 Central Government agencies in the areas of
 vigilance. Its jurisdiction extends to all Central
 Government Departments, Central Government
Zero Rupee Note
          Next time someone
          asks you for a
          bribe, just take your
          country’s zero
          currency note and
          hand it to them.
          This will let the
          other person know
          that you refuse to
          give or take any
          money in order to
          perform services
          required by law or
2G Spectrum Scam
 What happened ?

CHEAP TELECOM LICENSES GIVEN
-Entry fee for spectrum licenses in 2008 pegged at 2001 prices
-Mobile subscriber base had shot up to 350 million in 2008 from 4 million in 2001

NO PROCEDURES FOLLOWED
-Rules changed after the game had begun
-Cut-off date for applications advanced by a week
-No proper auction process followed, no bids invited
-Advice of TRAI, Law Ministry, Finance Ministry ignored

FAVOURITISM
-Unitech, Swan Telecom without any prior telecom experience got licenses
  illegally
-Reliance Telecom was allocated spectrum ahead of the others

 Total loss - Rs. 1.76 lakh crore
 Main accused – then Telecom Minister A Raja
Commonwealth Games
               Scam
 What happened?

– financial irregularities in Queen's baton in UK.
– allowing CWG budget in other activities
– over-inflated price and bungling in purchase of equipment
– awarding overpriced contracts to companies like Omega
– approval to release 146 thousands pounds for AM films without checking
    all the facts
–   embezzlement of Rs 1.5 crore in the purchase of HOVA Courts for
    Badminton stadium
–   malpractices in the tender for kitchen equipment installation
–   misappropriation in video board tenders
–   payment to non-existent parties
–   will-ful delays in execution of contracts

 Total loss- about Rs 8,000 crore
1 de 17

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Corruption

  • 2. Authority + CORRUPTION = Monopoly - Transparency
  • 3. What is Corruption ?  In broad terms, corruption is the misuse of public office for private gain (World Bank, 1997).  Corruption arises in both political and bureaucratic offices.  Degrees of corruption vary greatly, from minor uses of influence and patronage to do and return favours, to institutionalised bribery and beyond.  The end-point of political corruption is kleptocracy, literally rule by thieves, where even the external pretence of honesty is
  • 4. Types of Corruption BRIBERY An offer of money or favors to influence a public official. TRADING INFLUENCE / INFLUENCE PEDDLING Its the situation where a person is selling his/her influence over the decision process involving a third party. GRAFT
  • 5. It refers to favouring supporters, for example with government employment. NEPOTISM AND CRONYISM Favouring relatives (nepotism) or personal friends (cronyism) of an official is a form of illegitimate private gain. EMBEZZLEMENT It is outright theft of entrusted funds. KICKBACKS It is an official's share of misappropriated funds allocated from his or her organization to an organization involved in corrupt bidding. UNHOLY ALLIANCE It is a coalition among seemingly antagonistic groups.
  • 6. Causes of corruption  Emergence of political elite  Artificial scarcity  Change in the value system and ethical qualities  Absence of strong public forum  Over- population and widespread illiteracy
  • 7. Corruption and India As with many developing nations, corruption is widespread in India. It has taken the role of a persistent aspect of Indian politics and administration. Reasons:  socialist-inspired policies  extensive regulation, protectionism, and public ownership  license raj The first case of corruption in India was the
  • 8. TRANSPARENCY INTERNATIONAL SURVEY REPORT Most corrupt states Bihar and J&K Highly corrupt states M.P., U.P.,Karnataka, Ta mil Nadu, Rajasthan, Chhat tisgarh, Delhi, Gujarat, Jharkhand, Kerala, Oris sa Moderately corrupt states Andhra Pradesh, Haryana, H.P.,
  • 9. Statistics CORRUPTION PERCEPTION INDEX On the ranking based on the scale from 0 (perceived to be highly corrupt) to 10 (low level of corruption), India scored 3.3 to grab 87th position in 2010. India has slipped three places in global rankings of most corrupt countries, from 84 in 2009 to 87. The outgoing Central Vigilance Commissioner has said that almost one out of three Indians
  • 10. 6 Major Corruption Scams in India  SPORTS : IPL LALIT MODI SCAM  HEALTH : CORRUPTION IN BANK FUNDED PROJECTS FOR HIV AIDS & MALARIA (PROBED BY BRETTON WOODS)  DEFENCE :THE BOFOR CASE
  • 11.  JUDICIARY : MISUSE OF COURT TREASURY CASE (GHAZIABAD)  POLITICS : MADHU KODA CORRUPTION SCAM  CORPORATE : SATYAM COMPUTERS SCANDAL
  • 12. Corruption : Is there a way out? Corruption is a cancer, which every Indian must strive to cure. There are two approaches here to tackle corruption: 1) What as an individual we can contribute to stop or curtail this menace 2) The other is what can government do to ensure the machinery is less corrupt or remove corruption all together.
  • 13. Community Participation It is the community members are the people who benefit from a successful program; therefore, they would have stronger incentives to monitor corruption at the local level. The Right to Information Act 2005 This Act enables the common man to seek information about and closely monitor the functioning of all the departments under the purview of either the Central or State
  • 14. Autonomous bodies for monitoring corruption  Lokayukta It is an anti-corruption ombudsman organization in the Indian states for the redressal of citizens' grievances against the politicians and officers in the government service involving corruption.  CVC It was setup by the Government to advise and guide Central Government agencies in the areas of vigilance. Its jurisdiction extends to all Central Government Departments, Central Government
  • 15. Zero Rupee Note Next time someone asks you for a bribe, just take your country’s zero currency note and hand it to them. This will let the other person know that you refuse to give or take any money in order to perform services required by law or
  • 16. 2G Spectrum Scam  What happened ? CHEAP TELECOM LICENSES GIVEN -Entry fee for spectrum licenses in 2008 pegged at 2001 prices -Mobile subscriber base had shot up to 350 million in 2008 from 4 million in 2001 NO PROCEDURES FOLLOWED -Rules changed after the game had begun -Cut-off date for applications advanced by a week -No proper auction process followed, no bids invited -Advice of TRAI, Law Ministry, Finance Ministry ignored FAVOURITISM -Unitech, Swan Telecom without any prior telecom experience got licenses illegally -Reliance Telecom was allocated spectrum ahead of the others  Total loss - Rs. 1.76 lakh crore  Main accused – then Telecom Minister A Raja
  • 17. Commonwealth Games Scam  What happened? – financial irregularities in Queen's baton in UK. – allowing CWG budget in other activities – over-inflated price and bungling in purchase of equipment – awarding overpriced contracts to companies like Omega – approval to release 146 thousands pounds for AM films without checking all the facts – embezzlement of Rs 1.5 crore in the purchase of HOVA Courts for Badminton stadium – malpractices in the tender for kitchen equipment installation – misappropriation in video board tenders – payment to non-existent parties – will-ful delays in execution of contracts  Total loss- about Rs 8,000 crore