Corruption in India is an issue that affects the economy of central, state, and local government agencies. Corruption is blamed for stunting the
economy of India
The economy of India is a Developing country, developing mixed economy with a notable public sector in strategic sectors.
*
*
*
* It is the world's fourth-largest economy by gross domestic product, nominal GDP and the third-largest by purch ...
.
A study conducted by
Transparency International
Transparency International e.V. (TI) is a German registered association founded in 1993 by former employees of the World Bank. Based in Berlin, its nonprofit and non-governmental purpose is to take action to combat global corruption with civil s ...
in 2005 recorded that more than 62% of Indians had at some point or another paid a
bribe
Bribery is the corrupt solicitation, payment, or acceptance of a private favor (a bribe) in exchange for official action. The purpose of a bribe is to influence the actions of the recipient, a person in charge of an official duty, to act contrar ...
to a public official to get a job done.
In 2008, another report showed that about 50% of Indians had first-hand experience of paying bribes or using contacts to get services performed by public offices. In Transparency International's 2024
Corruption Perceptions Index
The Corruption Perceptions Index (CPI) is an index that scores and ranks countries by their perceived levels of public sector corruption, as assessed by experts and business executives. The CPI generally defines corruption as an "abuse of entr ...
, which scored 180 countries on a scale from 0 ("highly corrupt") to 100 ("very clean"), India scored 38. When ranked by score, India ranked 96th among the 180 countries in the Index, where the country ranked first is perceived to have the most honest
public sector
The public sector, also called the state sector, is the part of the economy composed of both public services and public enterprises. Public sectors include the public goods and governmental services such as the military, law enforcement, pu ...
. For comparison with regional scores, the best score among the countries of the Asia Pacific region was 84, the average score was 44 and the worst score was 16. For comparison with worldwide scores, the average score was 43, the best score was 90 (ranked 1), and the worst score was 8 (ranked 180).
Various factors contribute to corruption, including officials siphoning money from government social welfare schemes. Examples include the
Mahatma Gandhi National Rural Employment Guarantee Act and the
National Rural Health Mission
The National Health Mission (NHM) was launched by the government of India in 2013 subsuming the National Rural Health Mission and National Urban Health Mission. It was further extended in March 2018, to continue until March 2020. It is headed b ...
.
Other areas of corruption include India's trucking industry, which is forced to pay billions of rupees in bribes annually to numerous regulatory and police stops on interstate highways.
The news media has widely published allegations of corrupt Indian citizens stashing millions of rupees in
Swiss banks. Swiss authorities denied these allegations, which were later proven in 2015–2016. In July 2021, India's
Central Board of Direct Taxes (CBDT) replied to
Right To Information (RTI) requests stating undeclared assets of Rs 20,078 crore identified by them in India and abroad following the investigation till June 2021.
[
The causes of corruption in India include excessive regulations, complicated tax and licensing systems, numerous government departments with opaque ]bureaucracy
Bureaucracy ( ) is a system of organization where laws or regulatory authority are implemented by civil servants or non-elected officials (most of the time). Historically, a bureaucracy was a government administration managed by departments ...
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 India.
]
Politics
Corruption in India is a problem that has serious implications for protecting the rule of law and ensuring access to justice. , 120 of India's 542 parliament members were accused of various crimes, under India's First Information Report procedure wherein anyone can allege another to have committed a crime.
Many of the biggest scandals have involved high-level government officials, including Cabinet Ministers and Chief Ministers, such as the 2010 Commonwealth Games scam (), the Adarsh Housing Society scam, the Mining Scandal in Karnataka, and the Cash for Vote scams along with the Electoral Bond scam. There have also been decades of numerous state and local level scams, for example the Saradha group financial scandal, the Narada sting operation, the Rose Valley financial scandal,the West Bengal teacher recruitment scam, the 2024 Sandeshkhali violence, the NEET 2024 scam and the 2024 Pune Porsche car crash.
Lack of accountability
Since the anti-corruption departments in India exist as defunct outfits, the corrupt bureaucrats and politicians keep committing acts of corruption with impunity. This fact is also stated in its annual country report released in April 2022 by the U.S. Department of State.
In an exclusive section, ''"Corruption and Lack of Transparency in Government"'', the report asserts that the law provides criminal penalties for corruption by officials at all levels of government in India. However, officials frequently engaged in corrupt practices with impunity while there were numerous reports of government corruption during the year.
The U.S. report further reveals that a lack of accountability for official misconduct persisted at all levels of government in India, contributing to widespread impunity. While investigations and prosecutions of individual cases took place, lax enforcement, a shortage of trained police officers, and an overburdened and under-resourced court system contributed to a low number of convictions, the report said.
The U.S. report adds that corruption in India happens at different levels including the payment of bribes
Bribery is the corrupt solicitation, payment, or acceptance of a private favor (a bribe) in exchange for official action. The purpose of a bribe is to influence the actions of the recipient, a person in charge of an official duty, to act contrar ...
to expedite services such as police protection, school admission, water supply, and government assistance.
Bureaucracy

Bribery
A 2005 study done by Transparency International
Transparency International e.V. (TI) is a German registered association founded in 1993 by former employees of the World Bank. Based in Berlin, its nonprofit and non-governmental purpose is to take action to combat global corruption with civil s ...
in India found that more than 62% of the people had firsthand experience of paying bribes or peddling influence to get services performed in a public office. Taxes and bribes are common between state borders; Transparency International estimates that truckers annually pay in bribes.[
Both government regulators and police share in bribe money, to the tune of 43% and 45% each, respectively. The route stoppages at checkpoints and entry points can take up to 11 hours per day. About 60% of these (forced) stoppages on roads by concerned authorities such as government regulators, police, forest, sales and excise, octroi and weighing and measuring departments are for extorting money. The loss in productivity due to these stoppages is an important national concern; the number of truck trips could increase by 40%, if forced delays are avoided. According to a 2007 World Bank published report, the travel time for a Delhi-Mumbai trip could be reduced by about 2 days per trip if the corruption and associated regulatory stoppages to extract bribes were eliminated.]
A 2009 survey of the leading economies of Asia, revealed Indian bureaucracy is not only the least efficient among 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.
Land and property
Officials are alleged to be stealing state property. In cities and villages throughout India, groups 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.[K.R. Gupta and J.R. Gupta, ''Indian Economy, Vol #2'', Atlantic Publishers & Distributors, 2008, . Snippet: ''... the land market already stands subverted and an active land mafia has already been created ...''] Such officials and politicians are very well protected by the immense power and influence they possess. Apart from this, slum-dwellers who are allotted houses under several housing schemes such as Pradhan Mantri Gramin Awaas Yojana, Rajiv Awas Yojna, Pradhan Mantri Awas Yojna, etc., rent out these houses to others, to earn money due to severe unemployment and lack of a steady source of income.
Tendering processes and awarding contracts
A 2006 report claimed that state-funded construction
Construction are processes involved in delivering buildings, infrastructure, industrial facilities, and associated activities through to the end of their life. It typically starts with planning, financing, and design that continues until the a ...
activities in Uttar Pradesh
Uttar Pradesh ( ; UP) is a States and union territories of India, state in North India, northern India. With over 241 million inhabitants, it is the List of states and union territories of India by population, most populated state in In ...
, such as road building
A road is a thoroughfare used primarily for movement of traffic. Roads differ from streets, whose primary use is local access. They also differ from stroads, which combine the features of streets and roads. Most modern roads are paved.
The ...
, were dominated by construction mafias, consisting of cabals of corrupt public works officials, materials suppliers, politicians and construction contractors.[ Snippet: ''... The road sector has always been the main source of income for the mafia. They either ask their men directly to grab the contracts or allow an outsider to take the contract after accepting a hefty commission'']
Problems caused by corruption in government-funded projects are not limited to the state of Uttar Pradesh. The World Bank study finds that public distribution programs and social spending contracts have proven to be a waste due to corruption.
For example, the government implemented the '' Mahatma Gandhi National Rural Employment Guarantee Act'' (MGNREGA) on 25 August 2005. The Central government outlay for this welfare scheme is in FY 2010–2011. After 5 years of implementation, in 2011, the programme was widely criticised as no more effective than other poverty reduction programmes 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 effect on poverty.
Science and technology
CSIR, the Council of Scientific and Industrial Research
The Council of Scientific and Industrial Research (CSIR; IAST: ''vaigyanik tathā audyogik anusandhāna pariṣada'') is a research and development (R&D) organisation in India to promote scientific, industrial and economic growth. Headquarter ...
, has been flagged in ongoing efforts to root out corruption in India. Established with the directive to do translational research and create real technologies, CSIR has been accused of transforming into a ritualistic, overly-bureaucratic organisation that does little more than churn out papers.
There are many issues facing Indian scientists, with some calling for transparency, a meritocratic
Meritocracy (''merit'', from Latin , and ''-cracy'', from Ancient Greek 'strength, power') is the notion of a political system in which economic goods or political power are vested in individual people based on ability and talent, rather than ...
system, and an overhaul of the bureaucratic agencies that oversee science and technology. Sumit Bhaduri stated, "The challenges of turning Indian science into part of an innovation
Innovation is the practical implementation of ideas that result in the introduction of new goods or service (economics), services or improvement in offering goods or services. ISO TC 279 in the standard ISO 56000:2020 defines innovation as "a n ...
process are many. Many competent Indian scientists aspire to be ineffectual administrators (due to administrative power and political patronage), rather than do the kind of science that makes a difference". Prime minister Manmohan Singh
Manmohan Singh (26 September 1932 – 26 December 2024) was an Indian economist, bureaucrat, academician, and statesman, who served as the prime minister of India from 2004 to 2014. He was the fourth longest-serving prime minister after Jaw ...
spoke at the 99th Indian Science Congress and commented on the state of the sciences in India, after an advisory council informed him there were problems with "the overall environment for innovation and creative work" and a "war-like" approach was needed.
Preferential award of mineral resources
In August 2011, an iron ore mining scandal became a media focus in India. In September 2011, an elected member of Karnataka's legislative assembly Janardhana Reddy, was arrested on charges of corruption and illegal mining of iron ore in his home state. It was alleged that his company received a preferential allotment of resources, organised and exported billions of dollars worth of iron ore to Chinese companies in recent years without paying any royalty to the state government exchequer of Karnataka or the central government of India, and that these Chinese companies made payment to shell companies registered in the Caribbean and north Atlantic tax havens controlled by Reddy.
It was also alleged that corrupt government officials cooperated with Reddy, starting from government officials in charge of regulating mining to government officials in charge of regulating port facilities and shipping. These officials received monthly bribes in exchange for enabling the illegal export of illegally mined iron ore to China. Such scandals have led to a demand in India for a consensually driven action plan to eradicate the piracy of India's mineral resources by an illegal, politically corrupt government officials-business nexus, removal of incentives for illegal mining, and the creation of incentives for legal mining and domestic use of iron ore and steel manufacturing.
Driver licensing
A study conducted between 2004 and 2005 found that India's driver licensing procedure was a hugely distorted bureaucratic process and allows drivers to be licensed despite their low driving ability through promoting the usage of agents. Individuals with the willingness to pay make a significant payment above the official fee and most of these extra payments are made to agents, who act as an intermediary between bureaucrats and applicants.
The average licensee paid Rs 1,080, approximately 2.5 times the official fee of Rs 450, in order to obtain a licence. On average, those who hired agents had a lower driving ability, with agents helping unqualified drivers obtain licences and bypass the legally required driving examination. Among the surveyed individuals, approximately 60% of the licence holders did not even take the licensing exam and 54% of those licence holders failed an independent driving test.
Agents are the channels of corruption in this bureaucratic driver licensing system, facilitating access to licences among those who are unqualified to drive. Some of the failures of this licensing system are caused by corrupt bureaucrats who collaborate with agents by creating additional barriers within the system against those who did not hire agents.
Trends
Professor Bibek Debroy and Laveesh Bhandari claim in their book ''Corruption in India: The DNA and RNA'' that public officials in India may be cornering as much as , or 1.26 per cent of the GDP, through corruption. The book claims most bribery is in government-delivered services and the transport and real estate industries.
Bribery and corruption are pervasive, but some areas tend to have more issues than others. A 2013 EY (Ernst & Young) Study reports the industries perceived to be the most vulnerable to corruption as: Infrastructure and Real Estate, Metals and Mining, Aerospace and Defence, and Power and Utilities. There is a range of specific factors that make a sector more susceptible to bribery and corruption risks than others. High use of middlemen, large value contracts, liaisoning activities, etc. drive the depth, volume, and frequency of corrupt practices in vulnerable sectors.
A 2011 KPMG
KPMG is a multinational professional services network, based in London, United Kingdom. As one of the Big Four accounting firms, along with Ernst & Young (EY), Deloitte, and PwC. KPMG is a network of firms in 145 countries with 275,288 emplo ...
study reports India's real estate, telecommunications, and government-run social development projects as the three top sectors plagued by corruption. The study found India's defence, information technology, and energy sectors to be the most competitive and least corruption-prone sectors.[
CMS India claims in its 2010 India Corruption Study report that socio-economically weaker sections of Indian society are the most adversely affected by government corruption. These include the rural and urban poor, although the study claims that nationwide perception of corruption decreased between 2005 and 2010. Over the 5-year period, a significantly greater number of people surveyed from the middle and poorest classes in all parts of India claimed government corruption had dropped over time, and that they had fewer direct experiences with bribery demands.
The table below compares the perceived anti-corruption efforts across some of the major states in India.][ A rising index implies higher anti-corruption efforts and falling corruption. According to this table, the states of ]Bihar
Bihar ( ) is a states and union territories of India, state in Eastern India. It is the list of states and union territories of India by population, second largest state by population, the List of states and union territories of India by are ...
and Gujarat
Gujarat () is a States of India, state along the Western India, western coast of India. Its coastline of about is the longest in the country, most of which lies on the Kathiawar peninsula. Gujarat is the List of states and union territories ...
have experienced significant improvements in their anti-corruption efforts, while conditions have worsened in the states of Assam
Assam (, , ) is a state in Northeast India, northeastern India, south of the eastern Himalayas along the Brahmaputra Valley, Brahmaputra and Barak River valleys. Assam covers an area of . It is the second largest state in Northeast India, nor ...
and West Bengal
West Bengal (; Bengali language, Bengali: , , abbr. WB) is a States and union territories of India, state in the East India, eastern portion of India. It is situated along the Bay of Bengal, along with a population of over 91 million inhabi ...
. Consistent with the results in this table, in 2012 a BBC News report claimed the state of Bihar has transformed in recent years to become the least corrupt state in India.
Black money
Black money refers to money that is not fully or legitimately the property of the 'owner' such as money that is not reported to the government in the attempt of tax evasion, or other forms of black money including money from illegal activities such as drug dealing. A government white paper on black money in India suggests two possible sources of black money in India; the first includes activities not permitted by the law, such as crime, drug trade, terrorism, and corruption, all of which are illegal in India and secondly, wealth that may have been generated through lawful activity but accumulated by failure to declare income and pay taxes. Some of this black money ends up in illicit financial flows across international borders, such as deposits in tax haven countries.
A November 2010 report from the Washington-based Global Financial Integrity estimates that over a 60-year period, India lost US$213 billion in illicit financial flows beginning in 1948; adjusted for inflation, this is estimated to be $462 billion in 2010, or about $8 billion per year ($7 per capita per year). The report also estimated the size of India's underground economy at approximately US$640 billion at the end of 2008 or roughly 50% of the nation's GDP.
India was ranked 38th by money held by its citizens in Swiss banks in 2004 but then improved its ranking by slipping to 61st position in 2015 and further improved its position by slipping to 75th position in 2016.
According to a 2010 The Hindu
''The Hindu'' is an Indian English-language daily newspaper owned by The Hindu Group, headquartered in Chennai, Tamil Nadu. It was founded as a weekly publication in 1878 by the Triplicane Six, becoming a daily in 1889. It is one of the India ...
article, unofficial estimates indicate that Indians had over US$1,456 billion in black money stored in Swiss banks (approximately US$1.4 trillion). While some news reports claimed that data provided by the Swiss Banking Association Report (2006) showed India has more black money than the rest of the world combined, a more recent report quoted the SBA's Head of International Communications as saying that no such official Swiss Banking Association statistics exist.
Another report said that Indian-owned Swiss bank account assets are worth 13 times the country's national debt. These allegations have been denied by the Swiss Bankers Association. James Nason of the Swiss Bankers Association in an interview about alleged black money from India, holds that "The (black money) figures were rapidly picked up in the Indian media and in Indian opposition circles, and circulated as gospel truth. However, this story was a complete fabrication. The Swiss Bankers Association never published such a report. Anyone claiming to have such figures (for India) should be forced to identify their source and explain the methodology used to produce them."
In a separate study, Dev Kar of Global Financial Integrity concludes, "Media reports circulating in India that Indian nationals held around US$1.4 trillion in illicit external assets are widely off the mark compared to the estimates found by his study." Kar claims the amounts are significantly smaller, only about 1.5% of India's GDP on average per annum basis, between 1948 and 2008. This includes corruption, bribery and kickbacks, criminal activities, trade mispricing, and efforts to shelter wealth by Indians from India's tax authorities.[
According to a third report, published in May 2012, the Swiss National Bank estimates that the total amount of deposits in all Swiss banks, at the end of 2010, by citizens of India was CHF 1.95 billion (). The Swiss Ministry of External Affairs has confirmed these figures upon request for information by the Indian Ministry of External Affairs. This amount is about 700-fold less than the alleged $1.4 trillion in some media reports.][ The report also provided a comparison of the deposits held by Indians and by citizens of other nations in Swiss banks. Total deposits held by citizens of India constitute only 0.13 per cent of the total bank deposits of citizens of all countries. Further, the share of Indians in the total bank deposits of citizens of all countries in Swiss banks has reduced from 0.29 per cent in 2006 to 0.13 per cent in 2010.
]
Stock market scams
The Indian stock exchanges
A stock exchange, securities exchange, or bourse is an Exchange (organized market), exchange where stockbrokers and stock trader, traders can buy and sell security (finance), securities, such as share (finance), shares of stock, Bond (finance) ...
, the Bombay Stock Exchange
BSE Limited, also known as the Bombay Stock Exchange (BSE), is an Indian stock exchange based in Mumbai. It is the 6th largest stock exchange in the world by total market capitalization, exceeding $5 trillion in May 2024.
Established with t ...
and the National Stock Exchange of India
National Stock Exchange of India Limited, also known as the National Stock Exchange (NSE), is an Indian stock exchange based in Mumbai. It is the List of stock exchanges, 5th largest stock exchange in the world by total market capitalization, ...
, have been rocked by several high-profile corruption scandals. At times, the Securities and Exchange Board of India
The Securities and Exchange Board of India (SEBI) is the Regulatory agency, regulatory body for securities and commodity market in India under the administrative domain of Ministry of Finance (India), Ministry of Finance within the Government ...
(SEBI) has barred various individuals and entities from trading on the exchanges for stock manipulation
In economics and finance, market manipulation occurs when someone intentionally alters the supply or demand of a security to influence its price. This can involve spreading misleading information, executing misleading trades, or manipulating ...
, especially in illiquid small-cap
A small cap company is a company whose market capitalization ( shares x value of each share) is considered small. In the United States, this includes market caps from $250 million to $2 billion (as of 2022).
Overview
A small cap company typicall ...
and penny stocks.
Judiciary
According to Transparency International
Transparency International e.V. (TI) is a German registered association founded in 1993 by former employees of the World Bank. Based in Berlin, its nonprofit and non-governmental purpose is to take action to combat global corruption with civil s ...
, 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". Over the years there have been numerous allegations against judges, and in 2011 Soumitra Sen, a former judge at the Calcutta High Court became the first judge in India to be impeached by the Rajya Sabha
Rajya Sabha (Council of States) is the upper house of the Parliament of India and functions as the institutional representation of India’s federal units — the states and union territories.https://rajyasabha.nic.in/ It is a key component o ...
, (Upper House of the Indian Parliament) for misappropriation of funds.
Anti-corruption initiatives
Right to Information Act
The 2005 Right to Information Act
Rights are legal, social, or ethical principles of freedom or entitlement; that is, rights are the fundamental normative rules about what is allowed of people or owed to people according to some legal system, social convention, or ethical theor ...
required government officials to provide the information requested by citizens or face punitive action, as well as the computerisation of services and the establishment of vigilance commissions. This has considerably reduced corruption and opened up avenues to redress grievances.
Right to Public Services laws
Right to Public Services legislation, which has been enacted in 19 states of India, guarantees time-bound delivery of services for various public services
A public service or service of general (economic) interest is any service (economics), service intended to address the needs of aggregate members of a community, whether provided directly by a public sector agency, via public financing availab ...
rendered by the government to citizens and provides mechanisms for punishing the errant public servant
The civil service is a collective term for a sector of government composed mainly of career civil service personnel hired rather than elected, whose institutional tenure typically survives transitions of political leadership. A civil service offic ...
who is deficient in providing the service stipulated under the statute. Right to Service legislation is meant to reduce corruption among government officials and to increase transparency and public accountability.
Anti-corruption laws in India
Public servants in India can be imprisoned for several years and penalised for corruption under the:
* Indian Penal Code, 1860
* Prosecution section of Income Tax Act, 1961
* The Prevention of Corruption Act, 1988
* The Benami Transactions (Prohibition) Act, 1988 to prohibit benami transactions.
* Prevention of Money Laundering Act, 2002
Punishment for bribery in India can range from six months to seven years of imprisonment.
India is also a signatory to the United Nations Convention against Corruption
The United Nations Convention Against Corruption (UNCAC) is the only legally binding international anti-corruption multilateral treaty. Negotiated by UN member states, member states of the United Nations (UN) it was adopted by the UN General Ass ...
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
The Lokpal and Lokayuktas Act, 2013, commonly known as The Lokpal Act, is an anti-corruption Act of Parliament, Act of Indian Parliament in India which "seeks to provide for the establishment of the institution of Lokpal to inquire into alleg ...
which came into force from 16 January 2014, seeks to provide for the establishment of the institution of Lokpal
A Lokpal ( ''lokapāla'', "defender of people" or "People's Friend") is an anti-corruption authority or body of ombudsman who represents the public interest in the Republic of India. The current Chairperson of Lokpal is Ajay Manikrao Khanwilkar. ...
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, has received the assent of the President of India
The president of India (ISO 15919, ISO: ) is the head of state of the Republic of India. The president is the nominal head of the executive, the first citizen of the country, and the commander-in-chief, supreme commander of the Indian Armed ...
on 9 May 2014, and (as of 2 August) is pending for notification by the Central Government.
At present 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.
The Prevention of Money Laundering Act, 2002 provides that the properties of corrupt public servants shall be confiscated. However, the Government is considering incorporating provisions for confiscation or forfeiture of the property of corrupt public servants into the Prevention of Corruption Act, 1988 to make it more self-contained and comprehensive.
A committee headed by the Chairman of Central Board of Direct Taxes (CBDT), has been constituted to examine ways to strengthen laws to curb generation of black money in India, its illegal transfer abroad, and its recovery. "The Committee shall examine the existing legal and administrative framework to deal with the menace of generation of black money through illegal means including inter-alia the following: 1. Declaring wealth generated illegally as national asset; 2. Enacting/amending laws to confiscate and recover such assets; and 3. Providing for exemplary punishment against its perpetrators." (Source
2013 EY report on Bribery & Corruption
)
The Companies Act, 2013, contains certain provisions to regulate frauds by corporations including increased penalties for frauds, giving more powers to the Serious Fraud Investigation Office, mandatory responsibility of auditors to reveal frauds, and increased responsibilities of independent directors. The Companies Act, 2013 also provides for mandatory vigil mechanisms which allow directors and employees to report concerns and whistleblower protection mechanism for every listed company and any other companies which accepts deposits from public or has taken loans more than 50 crore rupees from banks and financial institutions. This intended to avoid accounting scandals
Accounting scandals are business scandals that arise from intentional manipulation of financial statements with the disclosure of financial misdeeds by trusted executives of corporations or governments. Such misdeeds typically involve complex ...
such as the Satyam scandal which have plagued India. It replaces The Companies Act, 1956 which was proven outmoded in terms of handling 21st century problems.
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.
Anti-corruption police and courts
The Directorate General of Income Tax Investigation, Central Vigilance Commission and Central Bureau of Investigation
The Central Bureau of Investigation (CBI) is the domestic crime investigating agency of India. It operates under the jurisdiction of the Ministry of Personnel, Public Grievances and Pensions. Originally set up to investigate bribery and gover ...
all deal with anti-corruption initiatives. Certain states such as Andhra Pradesh ( Anti-Corruption Bureau, Andhra Pradesh) Kerala ( Vigilance & Anti-corruption Bureau, Kerala) and Karnataka ( Lokayukta) also have their own anti-corruption agencies and courts.
Andhra Pradesh's Anti Corruption Bureau ( ACB) has launched a large scale investigation in the "cash-for-bail" scam.
CBI court judge Talluri Pattabhirama Rao was arrested on 19 June 2012 for taking a bribe to grant bail to former Karnataka Minister Gali Janardhan Reddy.
A case has also been opened against seven other individuals under the Indian Penal Code and the Prevention of Corruption Act.
Civic anti-corruption organisations
A variety of organisations have been created in India to actively fight against corrupt government and business practices. Notable organisations include:
* Bharat Swabhiman Trust, established by Ramdev
Ramdev (born Ram Kisan Yadav between 1965 and 1975), also known by the prefix Baba, is an Indian Modern yoga gurus, yoga guru and businessman. He is primarily known for being a proponent of yoga and ayurveda in India. Ramdev has been organizin ...
, has campaigned against black money and corruption for a decade.
* 5th Pillar is most known for the creation of the zero-rupee note, a valueless note designed to be given to corrupt officials when they request bribes.
* India Against Corruption was a popular movement active during 2011–12 that received much media attention. Among its prominent public faces were Arvind Kejriwal
Arvind Kejriwal (; born 16 August 1968) is an Indian politician, activist and former bureaucrat, who served as the 7th Chief Minister of Delhi. He was the chief minister from 2013 to 2014 and from 2015 to 2024. He is also the national conve ...
, Kiran Bedi and Anna Hazare. Kejriwal went on to form the Aam Aadmi Party
The Aam Aadmi Party (AAP, ) is a List of political parties in India, political party in India. It was founded on 26 November 2012 by Arvind Kejriwal and his then-companions, following the 2011 Indian anti-corruption movement against then gover ...
and Hazare established Jan Tantra Morcha.
* Jaago Re! One Billion Votes was an organisation founded by Tata Tea and Janaagraha to increase youth voter registration. They have since expanded their work to include other social issues, including corruption.
*The Lok Satta Movement, has transformed itself from a civil organisation to a full-fledged political party, the Lok Satta Party. The party has fielded candidates in Andhra Pradesh, Tamil Nadu, and Bangalore. In 2009, it obtained its first elected post, when Jayaprakash Narayan
Jayaprakash Narayan Srivastava (; 11 October 1902 – 8 October 1979), also known as JP and ''Lok Nayak'' (Hindi for "People's leader"), was an Indian politician, theorist and Indian independence activist, independence activist. He is mai ...
won the election for the Kukatpally Assembly Constituency in Andhra Pradesh.
*Right to Recall Party founded by Rahul Chimanbhai Mehta
Rahul is a popular male name in India and has a variety of meanings. The earliest meaning found in the Upanishads is "conqueror of all miseries." Later use of the word is attributed to the Buddha, who named his son '' Rahula'' as he felt that f ...
is among parties contesting elections on the agenda of decreasing corruption through their right to recall drafts.
Electoral reforms
A number of ideas have been in discussion to improve the efficiency and effectiveness of electoral processes in India.
Factors contributing to corruption in India
In a 2004 report on Corruption in India, one of the world's largest audit and compliance firms KPMG
KPMG is a multinational professional services network, based in London, United Kingdom. As one of the Big Four accounting firms, along with Ernst & Young (EY), Deloitte, and PwC. KPMG is a network of firms in 145 countries with 275,288 emplo ...
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.
This power of Indian authorities to search and question individuals creates opportunities for corrupt public officials 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. In the real estate industry, the high capital gains tax in India encourages large-scale corruption. The KPMG report claims that the correlation between high real estate taxes and corruption is high in India, as it is in other countries, including the developed economies; this correlation has been true in modern times as well as throughout centuries of human history in various cultures.
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.
In addition to tax rates and regulatory burdens, the KPMG report claims corruption results from opaque process and paperwork on the part of the government. Lack of transparency allows room for manoeuvre for both demanders and suppliers of corruption. Whenever objective standards and transparent processes are missing, and subjective opinion driven regulators and opaque/hidden processes are present, conditions are ripe for corruption.[
Vito Tanzi in an ]International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...
study suggests that in India, like other countries in the world, corruption is caused by excessive regulations and authorisation requirements, complicated taxes and licensing systems, mandated spending programmes, lack of competitive free markets, monopolisation of certain goods and service providers by government controlled institutions, bureaucracy, lack of penalties for corrupt public officials and lack of transparent laws and processes. A Harvard University study finds these to be some of the causes of corruption and underground economy in India.
Impact of corruption
Loss of credibility
In a study on bribery and corruption in India conducted in 2013 by global professional services firm Ernst & Young
EY, previously known as Ernst & Young, is a multinational corporation, multinational professional services partnership, network based in London, United Kingdom. Along with Deloitte, KPMG and PwC, it is one of the Big Four accounting firms, Big F ...
(EY), 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 credibility and tseconomic boom".
Economic losses
Corruption may lead to further bureaucratic delay and inefficiency if corrupt 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
In economics and in particular neoclassical economics, the marginal product or marginal physical productivity of an input (factor of production) is the change in output resulting from employing one more unit of a particular input (for instance, t ...
of capital and investment rate. Levine and Renelt showed that investment rate is a robust determinant of economic growth.
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.
Quality of education
Notes
See also
* Political funding in India
* Right to Information Act, 2005
Rights are legal, social, or ethical principles of freedom or entitlement; that is, rights are the fundamental normative rules about what is allowed of people or owed to people according to some legal system, social convention, or ethical ...
* Crime in India
* Economic history of India
Around 500 BC, the Mahajanapadas minted punch-marked silver coins. The period was marked by intensive trade activity and urban development. By 300 BC, the Maurya Empire had united most of the Indian subcontinent except Tamilakam, allowing fo ...
* List of scandals in India
* Licence Raj
* Mafia Raj
* Uprising 2011, Indians Against Corruption
* Debt bondage in India
Anti-corruption:
* 2012 Indian anti-corruption movement
* 2011 Indian anti-corruption movement
* Jan Lokpal Bill
* Right to Public Services legislation
* Lok Ayukta
General:
* Corruption Perceptions Index
The Corruption Perceptions Index (CPI) is an index that scores and ranks countries by their perceived levels of public sector corruption, as assessed by experts and business executives. The CPI generally defines corruption as an "abuse of entr ...
* Rent seeking
Rent-seeking is the act of growing one's existing wealth by manipulating the social or political environment without creating new wealth.
Rent-seeking activities have negative effects on the rest of society. They result in reduced economic effic ...
* Socio-economic issues in India
A social issue is a problem that affects many people within a society. It is a group of common problems in present-day society that many people strive to solve. It is often the consequence of factors extending beyond an individual's control. Soc ...
* International Anti-Corruption Academy
* Group of States Against Corruption
* International Anti-Corruption Day
International Anti-Corruption Day has been list of minor secular observances#December, observed annually on 9 December since the passage of the United Nations Convention Against Corruption on 31 October 2003 to raise public awareness for anti- ...
* ISO 37001 Anti-bribery management systems
* United Nations Convention against Corruption
The United Nations Convention Against Corruption (UNCAC) is the only legally binding international anti-corruption multilateral treaty. Negotiated by UN member states, member states of the United Nations (UN) it was adopted by the UN General Ass ...
* OECD Anti-Bribery Convention
* Transparency International
Transparency International e.V. (TI) is a German registered association founded in 1993 by former employees of the World Bank. Based in Berlin, its nonprofit and non-governmental purpose is to take action to combat global corruption with civil s ...
References
Further reading
* Khatri, Naresh. 2013. Anatomy of Indian Brand of Crony Capitalism.
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* Krishna K. Tummala (2006) Regime Corruption in India, Asian Journal of Political Science, 14:1, 1-22,
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* Sharma, Vivek Swaroop. "Give Corruption a Chance" in ''The National Interest'' 128, November/December 2013: 38–45. Full text available at: https://www.researchgate.net/publication/279587155_Give_Corruption_a_Chance.
* Arun Shourie (1992). These lethal, inexorable laws: Rajiv, his men and his regime. Delhi: South Asia Books.
* Bhattacharyya, Dilip K., and Susmita Ghose. “Corruption in India and the Hidden Economy.” Economic and Political Weekly
The ''Economic and Political Weekly'' (EPW) is a weekly peer-reviewed academic journal covering all social sciences, and is published by the Sameeksha Trust. In January 2018, academic Gopal Guru was named the new Editor of the journal. Guru will be ...
33, no. 44 (1998): 2795–99. .
* Mattoni, Alice, and Anwesha Chakraborty. “Visual Memory in Grassroots Mobilizations: The Case of the Anti-Corruption Movement of 2011 in India.” In The Visual Memory of Protest, edited by Ann Rigney and Thomas Smits, 159–80. Amsterdam University Press, 2023. .
* JENKINS, MATTHEW. “Anna Hazare, Liberalisation and the Careers of Corruption in Modern India: 1974-2011.” Economic and Political Weekly 49, no. 33 (2014): 41–49. .
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* Ganeshaiah, K. N. “Has the Behaviour of the Stock Market Been Affected by the Scam? — A Statistical Analysis.” Current Science, vol. 63, no. 7, 1992, pp. 345–47. . Accessed 13 Feb. 2024.
* Rahman, Kaunain. “Overview of Corruption and Anti-Corruption Developments in India.” Transparency International
Transparency International e.V. (TI) is a German registered association founded in 1993 by former employees of the World Bank. Based in Berlin, its nonprofit and non-governmental purpose is to take action to combat global corruption with civil s ...
, 2022..
* BOROOAH, VANI K. “Corruption in India: A Quantitative Analysis.” Economic and Political Weekly
The ''Economic and Political Weekly'' (EPW) is a weekly peer-reviewed academic journal covering all social sciences, and is published by the Sameeksha Trust. In January 2018, academic Gopal Guru was named the new Editor of the journal. Guru will be ...
47, no. 28 (2012): 23–24. .
* Mathur, R. S. (2011). Corruption in India—Extent, Dimension and Response. Indian Journal of Public Administration, 57(3), 464-471.
* Dutta, Nabamita, Saibal Kar, and Adam Stivers. “Does Economic Freedom Moderate Perceived Corruption for Firms in India?” IZA Institute of Labor Economics, 2023. .
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* Balasubramanian, Bala N., Captured Boards and Fractured Governance in a World of Cronyism - The Case of India (October 1, 2017). Available at or
* Shaurav, K., Deheri, A. and Rath, B.N. (2024), "Understanding corruption in India: determinants, nonlinear dynamics and policy implications", International Journal of Emerging Markets, Vol. ahead-of-print No. ahead-of-print.
* Varma, A., Hu, B., Bloomquist, L. (2016). Family Oligarchies and Crony Capitalism in India. In: Khatri, N., Ojha, A.K. (eds) Crony Capitalism in India. Palgrave Studies in Indian Management. Palgrave Macmillan
Palgrave Macmillan is a British academic and trade publishing company headquartered in the London Borough of Camden. Its programme includes textbooks, journals, monographs, professional and reference works in print and online. It maintains offi ...
, London.
* Hager, L. M. (1973). Bureaucratic Corruption in India: Legal Control of Maladministration. Comparative Political Studies, 6(2), 197-219.
* Krishna K. Tummala (2002) Corruption in India: Control measures and consequences, Asian Journal of Political Science, 10:2, 43-69,
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* Jon S.T. Quah (2008) Curbing Corruption in India: An Impossible Dream?, Asian Journal of Political Science, 16:3, 240-259,
* GUPTA A. Changing Forms of Corruption in India. Modern Asian Studies. 2017;51(6):1862-1890.
External links
CIC
– The Central Information Commission is charged with interpreting the Right to Information Act, 2005.
DoPT
– The Department of Personnel and Training, Ministry of Personnel, Public Grievances, and Pensions, is charged with being the nodal agency for the Right to Information Act, 2005. It has the powers to make rules regarding appeals, fees, etc.
{{DEFAULTSORT:Corruption in India
India
India, officially the Republic of India, is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area; the List of countries by population (United Nations), most populous country since ...
India
India, officially the Republic of India, is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area; the List of countries by population (United Nations), most populous country since ...
Crime in India
Law of India
Economy of India
Government of India
Politics of India
Society of India