POLITICAL CORRUPTION IN INDIA

Formulated By- Aditya Mathur

Enrollment No.- A1607110024
B.Tech- Electronics & Telecommunications (Amity Institute of Telecom Technology & Management)

Table of Contents

Overview................................................................................................................................................. 3 Political Corruption ................................................................................................................................. 5 Types of Political Corruption ................................................................................................................ 6 Bribery ............................................................................................................................................ 6 Trading in influence ......................................................................................................................... 7 Patronage ......................................................................................................................................... 8 Effects of Political Corruption............................................................................................................... 9 Effects on politics, administration, and institutions ........................................................................... 9 Economic effects.............................................................................................................................. 9 Major Corruption Cases in The Country ................................................................................................ 10 The 2G Spectrum Scam .................................................................................................................. 10 The Commonwealth Games-2010 Scam ......................................................................................... 12 The Fight against Corruption ................................................................................................................. 13 Anti corruption Police and Courts................................................................................................... 13 Anti Corruption Organisations ........................................................................................................ 13 Conclusion............................................................................................................................................. 15 Bibliography .......................................................................................................................................... 16 BooksandAuthors ........................................................................................................................ 16 Internet ......................................................................................................................................... 16

Overview

Political and bureaucratic corruption in India are major concerns. A 2005 study conducted by Transparency International in India found that more than 45% of Indians had first-hand experience of paying bribes or influence peddling to get jobs done in public offices successfully. Transparency International estimates that truckers pay US$5 billion in bribes annually. In 2010 India was ranked 87th out of 178 countries in Transparency International's Corruption Perceptions Index.

Although former Prime Minister and Congress party leader Indira Gandhi is quoted as saying that corruption is a misuse of power, she also publicly stated "nonchalantly" that "corruption was a global phenomenon" and her government was no different. Successive central governments and members of India's famous Nehru-Gandhi political dynasty have often been accused most of corruption and amassing illegal wealth among India's political class. The year 2011 has proved to be a watershed in the public tolerance of political corruption in India, with widespread public protests and movements led by social activists against corruption and for the return of illegal wealth stashed by politicians and businessmen in foreign banks over the six decades since independence. Criminalization is also a serious problem in contemporary Indian politics. In July 2008 The Washington Post reported that nearly a fourth of the 540 Indian Parliament members faced criminal charges, "including human trafficking, immigration

rackets, embezzlement, rape and even murder". India tops the list for black money in the entire world with almost US$1456 billion in Swiss banks (approximately USD 1.4 trillion) in the form of black money. According to the data provided by the Swiss Banking Association Report (2006), India has more black money than the rest of the world combined. To put things in perspective, Indian-owned Swiss bank account assets are worth 13 times the countrys national debt.

Independent reports published through 1991 to 2011 calculated the financial net worth of India's most powerful and traditionally ruling family (the Nehru-Gandhi political dynasty) to be anywhere between $9.41 billion (Rs 42,345 crore) to $18.66 billion (Rs 83,900 crore), most of it in the form of about illegal payments monies. to Rajiv

Harvard scholar YevgeniaAlbats cited KGB correspondence

Gandhiand his family, which had been arranged by Viktor Chebrikov, which shows that KGB chief Viktor Chebrikov sought in writing an "authorization to make payments in US dollars to the family members of Rajiv Gandhi, namely Sonia Gandhi, Rahul Gandhi and Paola Maino, mother of Sonia Gandhi" from the CPSU in December 1985. The recent scams involving unimaginably big amounts of money, such as the 2G spectrum scam, are well known. It is estimated that more than trillion dollars are stashed away in foreign havens, while 80% of Indians earn less than 2$ per day and every second child is malnourished. It seems as if only the honest people are poor in India and want to get rid of their poverty by education, emigration to cities, and immigration, whereas all the corrupt ones, like Hasan Ali Khan are getting rich through scams and crime. It seems as if India is a rich country filled with poor people", the organisers ofDandi March II in the United States said.

Political Corruption

Political corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by private persons or corporations not directly involved with the government. An illegal act by an officeholder constitutes political corruption only if the act is directly related to their official duties. Forms of corruption vary, but include bribery, extortion, cronyism, nepotism, patronage, graft, and embezzlement. While corruption may facilitate criminal enterprise such as drug trafficking, money laundering, and human trafficking, it is not restricted to these activities. The activities that constitute illegal corruption differ depending on the country or jurisdiction. For instance, certain political funding practices that are legal in one place may be illegal in another. In some cases, government officials have broad or poorly defined powers, which make it difficult to distinguish between legal and illegal actions. Worldwide, bribery alone is estimated to involve over 1 trillion US dollars annually. A state of unrestrained political corruption is known as a kleptocracy, literally meaning "rule by thieves".The public trust in democratic processes in India is seriously undermined by opaque financing of electoral processes, widespread bribery and other forms of corrupt practices. The 2007 Global Corruption Barometer reveals that political parties are perceived by Indian citizens as one of the sectors most affected by corruption in the country, with a score of 4.6 on a 5 point scale. Freedom House 2008 reports that the electoral system relies on black money obtained by dubious means, including tax evasion. Although politicians are regularly involved in major corruption scandals, investigations are rare and very few politicians and civil servants have been convicted. Circumstantial evidence confirms that practices such as buying votes with bribes or promises, conflicts of interest, or state capture are common in India. In December 2005, 11 members of parliaments were accused of accepting cash for raising specific questions in LokSabha sessions and subsequently forced to resign. More

recently, a Parliamentary Enquiry Committee was established to look into the alleged cashfor-votes scam during a trust vote that took place in July 2008.

Types of Political Corruption

Bribery A bribe is a payment given personally to a government official in exchange of his use of official powers. Bribery requires two

participants: one to give the bribe, and one to take it. Either may initiate the corrupt offering; for example, a customs official may demand bribes to let through allowed (or disallowed) goods, or a smuggler might offer bribes to gain passage. In some countries the culture of corruption extends to every aspect of public life, making it extremely difficult for individuals to stay in business without resorting to bribes. Bribes may be demanded in order for an official to do something he is already paid to do. They may also be demanded in order to bypass laws and regulations. In addition to using bribery for private financial gain, they are also used to intentionally and maliciously cause harm to another (i.e. no financial incentive). In some developing nations, up to half of the population has paid bribes during the past 12 months. In recent years, efforts have been made by the international community to encourage countries to dissociate and incriminate as separate offences, active and passive bribery. Active bribery can be defined for instance as the promising, offering or giving by any person, directly or indirectly, of any undue advantage [to any public official], for himself or herself or for anyone else, for him or her to act or refrain from acting in the exercise of his or her functions. (article 2 of the Criminal Law Convention on Corruption (ETS 173) of

the Council of Europe). Passive bribery can be defined as the request or receipt [by any public official], directly or indirectly, of any undue advantage, for himself or herself or for anyone else, or the acceptance of an offer or a promise of such an advantage, to act or refrain from acting in the exercise of his or her functions (article 3 of the Criminal Law Convention on Corruption (ETS 173)). The reason for this dissociation is to make the early steps (offering, promising, requesting an advantage) of a corrupt deal already an offence and, thus, to give a clear signal (from a criminal policy point of view) that bribery is not acceptable. Besides, such a dissociation makes the prosecution of bribery offences easier since it can be very difficult to prove that two parties (the bribe-giver and the bribe-taker) have formally agreed upon a corrupt deal. Besides, there is often no such formal deal but only a mutual understanding, for instance when it is common knowledge in a municipality that to obtain a building permit one has to pay a "fee" to the decision maker to obtain a favourable decision. A working definition of corruption is also provided as follows in article 3 of the Civil Law Convention on Corruption (ETS 174): For the purpose of this Convention, "corruption" means requesting, offering, giving or accepting, directly or indirectly, a bribe or any other undue advantage or prospect thereof, which distorts the proper performance of any duty or behavior required of the recipient of the bribe, the undue advantage or the prospect thereof.

Trading in influence Trading in influence, or influence peddling in certain countries, refers to the situation where a person is selling his/her influence over the decision process involving a third party (person or institution). The difference with bribery is that this is a tri-lateral relation. From a legal point of view, the role of the third party (who is the target of the influence) does not really matter although he/she can be an accessory in some instances. It can be difficult to make a distinction between this form of corruption and certain forms of extreme and poorly regulated lobbying where for instance law- or decision-makers can freely "sell" their vote, decision power or influence to those lobbyists who offer the highest retribution, including where for instance the latter act on behalf of powerful clients such as industrial groups who want to avoid the passing of certain environmental, social, or other regulations perceived as

too stringent, etc. Where lobbying is (sufficiently) regulated, it becomes possible to provide for a distinctive criteria and to consider that trading in influence involves the use of "improper influence", as in article 12 of the Criminal Law Convention on Corruption (ETS 173) of the Council of Europe.

Patronage Patronage refers to favoring supporters, for example with government employment. It is one of the majorly practiced method for corruption in India. This may be legitimate, as when a newly elected government changes the top officials in the administration in order to effectively implement its policy. It can be seen as corruption if this means that incompetent persons, as a payment for supporting the regime, are selected before more able ones. In no democracies many government officials are often selected for loyalty rather than ability. They may be almost exclusively selected from a particular group (for example, Sunni Arabs in Saddam Hussein's Iraq, the nomenclature in the Soviet Union, or the Junkers in Imperial Germany) that support the regime in return for such favors. A similar problem can also be seen in Eastern Europe, for example in Romania, where the government is often accused of patronage (when a new government comes to power it rapidly changes most of the officials in the public sector).

Effectsof Political Corruption

Effects on politics, administration, and institutions Corruption poses a serious development challenge. In the political realm, it undermines democracy and good governance by flouting or even subverting formal processes. Corruption in elections and in legislative bodies reduces accountability and distorts representation in policymaking; corruption in the judiciary compromises the rule of law; and corruption in public administration results in the inefficient provision of services. It violates a basic principle of republicanism regarding the centrality of civic virtue. More generally, corruption erodes the institutional capacity of government as procedures are disregarded, resources are siphoned off, and public offices are bought and sold. At the same time, corruption undermines the legitimacy of government and such democratic values as trust and tolerance. Economic effects Corruption undermines economic development by generating considerable distortions and inefficiency. In the private sector, corruption increases the cost of business through the price of illicit payments themselves, the management cost of negotiating with officials, and the risk of breached agreements or detection. Although some claim corruption reduces costs by cutting bureaucracy, the availability of bribes can also induce officials to contrive new rules and delays. Openly removing costly and lengthy regulations are better than covertly allowing them to be bypassed by using bribes. Where corruption inflates the cost of business, it also distorts the playing field, shielding firms with connections from competition and thereby sustaining inefficient firms. Corruption also generates economic distortions in the public sector by diverting public investment into capital projects where bribes and kickbacks are more plentiful. Officials may increase the technical complexity of public sector projects to conceal or pave the way for such dealings, thus further distorting investment. Corruption also lowers compliance with construction, environmental, or other regulations, reduces the quality of government services and infrastructure, and increases budgetary pressures on government.
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Major Corruption Cases in The Country

The 2G Spectrum Scam
2G Spectrum allocation scam of Rs. 170,000 Cr. (Rs. 1.7 trillion) in the Indian Telecom industry is considered as one of the largest scam in recent times. In 2008, Mr. A K Raja, who was telecom minister at that time, took the decision to allot the 2G licenses to new entrants in the telecom industry. The licences were allotted on the basis of First come First serve Method rather than through the process of auction as stipulated under the national telecom policy 1999. The ministry had also reduced the cut off time form October 1, 2007, to September 25, 2007 without consulting and informing other related ministries, even though when it is mandatory to have approval from the cabinet committee (economic affairs) in such important decisions. The Telecom Ministry informed those companies whom they wanted to allot license about the cut off date in advance while others were not informed and they were not able to arrange money in such a short span of time. At the time of scam, the Indian telecom industry was growing exponentially. The subscriber base had grown from 10 million subscribers in 2002 to 250 million in 2007, due to low tariffs and falling prices of handset. The wireless subscriber base had grown from 52.22 million in 2005 to 165.11 million in 2007 which further grew to 391.76 million in 2009. The growing demand of the wireless connections caught the attention of the companies who wanted to enter telecom sector. The companies who were allotted the 2G licenses did not have any experience in the telecom sector or the technology and thus sold their stake to foreign telecom companies at high prices. The 2G spectrum was allotted in 2008 at a price level of 2001. The 2G spectrum allocations resulted in a loss of approx. Rs. 170,000 Cr. to the exchequer, which is the biggest financial scam in the Indian history. Out of the 122 new licenses that were given out, 85 licenses were won by companies that did not meet the eligibility criteria. Some companies who did not have any telecom infrastructure, network, subscribers, knowledge or proven track record in the telecom business also got 2G licenses. Swan was awarded the license for Rs. 1537 crore to operate in 13 circles, while Unitech got the licenses for Rs. 1651 Cr. to operate in 22 cities and within
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short span of time both the companies sold their stake to foreign companies at Rs.9400 Cr. and Rs. 11,620 Cr respectively. Few days back, the Comptroller and Auditor General of India held Mr. A Raja as personally responsible for the scam.In his report, CAG informed the parliament that telecom minister ignored the advice of 2G allocation from PMO and other related ministries such as law and finance, and took the decisions to allot the 2G spectrum at throw away prices. Till now Government has not taken any action against Mr Raja. It seems that it has turned a blind eye to the fact that the scam of Rs. 170000 cr. which is approximately 3% of Indias GDP would have helped in the development of country or could have helped in reducing our deficits. The reason for this is the compulsions of coalition politics. As of now, the coalition partner of Congress, DMK is not willing to agree for the sacking of A.Raja as telecom minister. For the companies who have already been allotted licenses in the 2G scam such as Swan telecom, Unitech and Tata teleservices, no decision has yet been taken by the government. There are high chances that licenses of the companies like Swan and Unitech, who did not clear eligibility criteria at the time of 2G allotment, might be cancelled.

A.Raja Former Minister, Telecomm the person

behind the 2G spectrum scam.

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The Commonwealth Games-2010 Scam

Indian officials have found evidence of corruption in construction projects and illegal cash transfers for Delhi upcoming Commonwealth Games, news reports said Saturday. Officials of the Central Vigilance Commission (CVC), India's government watchdog agency told the Times of India that construction quality certificates scrutinized in 16 Games-related projects had turned out to be "fake or suspect". "It is a disturbing discovery. Fake certificates were routinely issued to pass substandard work and material," a CVC official told the newspaper."We have not yet been able to gauge the financial implication but it is certain to have led to very big gains for vendors and contractors," he said. The event, to be held through October 3-14 and involving 71 nations are the most expensive Commonwealth Games in history, with a budget of two billion dollars. Meanwhile, another corruption scandal about money being transferred from the Commonwealth Games account to a little-known film company based in London was reported by the Times Now newschannel on Saturday. Senior Indian diplomats in the mission in London had written to Indian sports ministry regarding the allegations of corruption about cash transfers of 247,469 pounds (388,142 dollars) to the AM Films company.Responding to the slew of corruption allegations, India's Sports Minister MS Gill said investigations were on and action would be taken against those found guilty.

Suresh Kalmadi

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The Fight against Corruption

Anti corruption Police and Courts
The income tax department of India, Central Vigilance Commission and Central Bureau of Investigation all deal with anti-corruption initiatives. There have been calls for the Indian government to create an anti-theft law enforcement agency that investigates and prosecutes corruption in government at national, state and local levels. Special courts that are more efficient than the traditional Indian courts with traveling judges and law enforcement agents are being proposed. The proposal has not yet been acted upon by the Indian government Certain states such as Andhra Pradesh (Andhra Pradesh Anti-corruption Bureau) and Karnataka (Lokayukta) have similar agencies and courts

Anti Corruption Organisations

A variety of organizations have been created in India to actively fight against corrupt government and business practices. Notable organizations include:


5th Pillar is most known for the creation of the zerorupee note, a valueless note designed to be given to corrupt officials when they request bribes.

India Against Corruption is a movement created by a citizens from a variety of professions and statuses to work against corruption in India. It is currently headed by Anna Hazare.

Jaago Re! One Billion Votes is an organization originally founded by Tata Tea and Janaagraha to increase youth voter registration. They have since expanded their work to include other social issues, including corruption.

Association for Social Transparency, Rights And Action (ASTRA) is an NGO focused on grass-roots work to fight corruption in Karnataka.

One organization, the LokSatta Movement, has transformed itself from a civil organization to a full-fledged political party, the LokSatta Party. The party has fielded candidates in Andrha Pradesh, Tamil Nadu, and Bangalore. In 2008, it obtained its first elected post,
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when Jayaprakash Narayan won the election for the Kukatpally Assembly Constituency in Andrha Pradesh.

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Conclusion

The billion dollar industry, Corruption has been bullish all through out the developing of the nation. The wide spread pest in the country has been a huge stumbling block in the development of the nations economy. Political corruption leads to the intrusion of all the players of the same team as that of the leader of elected, as a result of which, the benefit is eaten up by the team which had to go in the national treasure. A major example of this is the all so famous 2G scam lead by the telecomm minister A.Raja. The cheat sold the spectrum to his knowns so as to eat up the profit. The anti corruption movements occurring in the country seem to be a huge step in the invention of the Lokpal bill that would screw up all the people held corrupt, be him of any post/rank. Anti corruption organisations do take lead, but that happens when its already too late.

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Bibliography

Books and Authors

Indian Economic Development- Textbook for economics, class XI Introductory Macro Economics- C.B. Sachdeva

Internet www.google.com www.wikipedia.com www.indianeconomy.org www.economywatch.com/indianeconomy

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