Corruption in India, public and private affairs

1. ABHIJIT ROY
ALOK KUMAR
ARIF ALI BISWAS
DEBOPRIYA BHATTACHARYA
KRISHNADAS MAITI
PAROMIK DAS
PRESENTED BY

2. INTRODUCTION
 Corruption in India is a major issue and adversely affects its economy.A study
conducted by Transparency International in year 2005 found that more than 62%
of Indians had firsthand experience of paying bribes or influence peddling to get
jobs done in public offices successfully. In its study conducted in year 2008,
Transparency International reports about 40% of Indians had first hand
experience of paying bribes or using a contact to get a job done in public office
 In 2012 India has ranked 94th out of 176 countries in Transparency
International‘s corruption perception index, tied with Benin, Colombia,
Djibouti, Greece, Moldova, Mongolia, and Senegal
 Most of the largest sources of corruption in India are entitlement programmes
and social spending schemes enacted by the Indian government. Examples
include Mahatma Gandhi National Rural Employment Guarantee Act and
National Rural Health Mission. Other daily sources of corruption include India's
trucking industry which is forced to pay billions in bribes annually to numerous
regulatory and police stops on its interstate highways

3. MAJOR CORRUPTION IN INDIA, PUBLIC
AND PRIVATE AFFAIRS

4. INDIAN COAL ALLOCATION SCAM
 Coal allocation scam or Coalgate, as referred by the media, is a
political scandal concerning the Indian government's allocation of the
nation's coal deposits to public sector entities (PSEs) and private
companies by Prime Minister Manmohan Singh. In a draft report
issued in March 2012, the Comptroller And Auditor General Of
India(CAG) office accused the Government Of India of allocating coal
blocks in an inefficient manner during the period 2004–2009
 The essence of the CAG's argument is that the Government had the
authority to allocate coal blocks by a process of competitive bidding,
but chose not to. As a result both public sector enterprises (PSEs) and
private firms paid less than they might have otherwise. In its draft
report in March the CAG estimated that the "windfall gain" to the
allocates was {INR|10,67,303|c}.The CAG Final Report tabled in
Parliament put the figure at {INR|1,85,591|c}On 27 August 2012 Indian
prime minister Manmohan Singh read a statement in Parliament
rebutting the CAG's report both in its reading of the law and the
alleged cost of the government's policies.

5. 2G Spectrum Scam
 We have had a number of scams in India; but none
bigger than the scam involving the process of
allocating unified access service licenses. At the heart
of this Rs.1.76-lakh crore worth of scam is the former
Telecom minister A Raja – who according to the CAG,
has evaded norms at every level as he carried out the
dubious 2G license awards in 2008 at a throw-away
price which were pegged at 2001 prices

6. Commonwealth Games Scam
 Another feather in the cap of Indian scandal list is
Commonwealth Games Loot. Yes, literally a loot! Even
before the long awaited sporting bonanza could see the day
of light, the grand event was soaked in the allegations of
corruption. It is estimated that out of Rs. 70000 crore spent
on the Games, only half the said amount was spent on
Indian sportspersons.
 The Central Vigilance Commission, involved in probing the
alleged corruption in various Commonwealth Games-
related projects, has found discrepancies in tenders – like
payment to non-existent parties, will-full delays in
execution of contracts, over-inflated price and bungling in
purchase of equipment through tendering – and
misappropriation of funds

7. Uttar Pradesh NRHM scam
 Uttar Pradesh NRHM Scam is an alleged corruption scandal in the Indian
state of Utter Pradesh , in which top politicians and bureaucrats are alleged to
have siphoned off a massive sum estimated at 100 billion (US$1.5 billion) from
the National Rural Health Mission, a central government program meant to
improve health Care Delivery in rural areas. At least five people are said to have
been murdered in an attempt to cover up large-scale irregularities. Several
former ministers of then ruling party, Bahujan Samaj Party are being
investigated by the CBI
 The NRHM scam came to the limelight after two Chief Medical Officer (the top
health functionary of the district) were successively murdered in posh localities
of the state capital, Lucknow. Dr. Vinod Arya (Oct 2010) and Dr. B. P. Singh
(April 2011) were shot dead in broad daylight outside their houses, by
motorcycle-riding killers, using the same weapon. Deputy-CMO Y.S. Sachan,
who is thought to have had a role in the murders, was arrested, but died
mysteriously in prison. Subsequently, three other functionaries who were
under investigation have also been murdered or died under suspicious
circumstances

8. Satyam Scam
 The Scam At Satyam Computer Centre is something
that will shatter the peace and tranquillity of Indian
investors and shareholder community beyond repair.
Satyam is the biggest fraud in the corporate
history to the tune of Rs. 14000 crore.
 The company’s disgraced former chairman Ramalinga
Raju kept everyone in the dark for a decade by fudging
the books of accounts for several years and inflating
revenues and profit figures of Satyam. Finally, the
company was taken over by the Tech Mahindra which
has done wonderfully well to revive the brand Satyam.

9. SARADHA GROUP FINANCIAL SCANDAL
The Saradha Group financial scandal is a financial scam that
was caused by the collapse of a Ponzi Scheme run by Saradha
Group, a consortium of Indian companies that was believed to be
running a wide variety of collective investment schemes
(popularly but incorrectly referred to as Chit Fund) in Eastern
India. The group collapsed in April 2013, causing an estimated
loss of INR 200–300 billion (US$4–6 billion) to over 1.7 million
depositors. In the aftermath of the scandal, the State
Government Of West Bengal set up an inquiry commission to
investigate the collapse and also set up a fund of INR 5 billion
(92 million USD) to ensure that low-income investors are not
bankrupted.The Union Government through the Income Tax
Department also launched a multi-agency probe along with the
CBI to investigate the Saradha scam, as well as other similar
Ponzi schemes

10. IPL scam
 Sharad Pawar and his immediate family held over 16% equity in one of
the bidders for an IPL cricket team. The Pawars own 33.6 lakh shares
(out of 2.07 crore shares) in City Corporation, a Pune-based
construction company which bid Rs 1,176 crore for a franchise in
March. The Pawar family's shares are held through two companies, Lap
Finance and Consultancy Pvt Ltd and Namratta Film Enterprises Pvt
Ltd, which are 100% owned by the NCP supremo and Union agriculture
minister, his wife Pratibha and daughter Supriya Sule.
 IPL Commissioner Lalit Modi revealed that Tharoor's friend (later his
wife) Sunanda Pushkar had equity stakes in Rendezvous Sports World
(RSW), heading the consortium that owns the Kochi team. It was later
disclosed that Pushkar got sweat equity of the value of Rs 70 crore.
Shashi Tharoor maintained that the amount had nothing to do with his
active campaigning and mentoring for the Kochi team. This was less
convincing as he had specifically mentioned that he had no specific
gains from RSW winning Kochi Franchisee.

11. The Fodder Scam
 If you haven’t heard of Bihar’s fodder scam of 1996, you
might still be able to recognize it by the name of
“Chara Ghotala,” as it is popularly known in the
vernacular language
 In this corruption scandal worth Rs.900 crore, an
unholy nexus was traced involved in fabrication of
“vast herds of fictitious livestock” for which fodder,
medicine and animal husbandry equipment was
supposedly procured

12. BOFORS SCAM
 The Bofors Scandal is known as the hallmark of Indian
corruption. The Bofors scam was a major corruption scandal in
India in the 1980s; when the then PM Rajiv Gandhi and several
others including a powerful NRI family named the Hindujas,
were accused of receiving kickbacks from Bofors AB for winning
a bid to supply India’s 155 mm field howitzer
 The Swedish State Radio had broadcast a startling report about
an undercover operation carried out by Bofors, Sweden’s biggest
arms manufacturer, whereby $16 million were allegedly paid to
members of PM Rajiv Gandhi’s Congress
 Most of all, the Bofors scam had a strong emotional appeal
because it was a scam related to the defence services and India’s
security interests.

13. Impact of Corruption on Indian Businesses
IMPACT OF CORRUPTION ON GDP
SOURCES:- KPMG INDIA

14.  Almost 68% people attribute corruption to be induced by
the private sector; even as wide majority of us put the
blame on the government enterprises
 India has seen stupendous growth in mergers and
acquisitions. But, here could be a small hump in the tale.
Nearly 37% of respondents felt that corruption could
impact the valuation of a company thereby denying
shareholders a fair price
 Needless to say, real-estate industry has remained as the
most corrupt industry, as told by 32% respondents, which
is highest quantification going industry-wise.

15. Impact of corruption on business
SOURCES:- KPMG INDIA

16.  Half of those surveyed felt that India corruption may hit the
investment sentiment and render India less attractive
destination for foreign investment
 Respondents to the extent of whopping 90% felt that corruption
would also translate into increased stock market volatility and
prevent institutional investors from making long-term
commitments
 99% of respondents opined that the biggest impact of corruption
on business is its tendency to skew level playing field and attract
organizations with lesser capability to execute projects. This
could create inefficiencies in the system and hence increase the
cost of operations.

17. Perception of most corrupt industries
SOURCES:- KPMG INDIA

18.  its telecommunications sector – especially, after recent
2G spectrum allocation scam, 17% of those surveyed
felt this sector is fraught with corruption issues
 Most significantly, when it comes to anti-corruption
measures, a majority 84% of those surveyed opined
that Indian government failed to effectively enforce
anti-bribery and corruption laws

19. How will corruption scenario in India change in
the next 2 years?
SOURCES:- KPMG INDIA

20.  Interestingly, when asked as to how will corruption
scenario in India change in the next 2 years – 46% felt
that corruption is here to stay in the system, while 15%
opined that corruption shall continue to thrive and
increase irrespective of the legislation

21. Top Corrupt Countries in Asia

22.  The report released by Transparency international, which
is based on input from 13 different experts and business
surveys, further indicates that the global financial crisis
took a toll on people’s views of corruption in government
 Notable among decliners over the past one year are some of
the countries most affected by the financial crisis
precipitated by transparency and integrity deficits. The
survey highlighted the fact that few of the improvers were
from the Organization for Economic Cooperation and
Development (OECD)

23. India 87th on corruption list – Will
we ever improve?
 The corruption will most likely find its roots dug deep into the system. It is
literally under every stone you turn. And, by now, most of us in India have
learned to live with corruption as a part and parcel of our life
 In India, the tentacles of corruption are spread far and wide in all horizons of
life and not just limited to government organizations. Recent instances of IPL
scam and the Commonwealth Games underscores as to how a big moolah can
attract corruption even in a Gentleman’s game
 Moreover, corruption is not just limited to India. It is a massive phenomena
and a real cancer destroying the benefits of globalization in many poor
countries
 The 2010 Corruption Perception indexs hows that three quarters of the 178
countries in the index have fared miserably in terms of corruption problem.

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