Semester – IV

Business Ethics and Corporate Social Responsibility

Paper Code: LB 230
Unit – 2: Ethics & the Organization and Ethical Issues in Society

A. THE RATIONAL ORGANIZATION, EMPLOYEE OBLIGATION TO

THE FIRM, FIRM DUTIES TO THE EMPLOYEE
The Rational Organization
Irrespective of its size, the management of an organization, is ought to function through formalized
systems to communicate with their people, about what they are supposed to know and do, officially.
Often in the realm of communication, the old axiom holds true: ‘Actions speak louder than words’.
Which means, what the management really does, is the message that employees make note of,
replicate and respond to (almost immediately).
The actions of the management are what makes for those social conversations in the break rooms and
constitute an informal grapevine almost automatically. Now, an organizational circus begins when,
what is said and what is actually done has a huge gap! The workplace realities are a true reflection of
the management thought process.
If people comprehend what they are doing and why they are doing it, it means they have a rationale,
unifying their workplace. The moment there are contradictory messages, the work environment
becomes a place of negativity where everything is viewed as a threat and employees refrain from
compliance and commitment.
Which is why, the management, by its very essence should work their way through formal means
and systems to build a rational organization. This calls for a rationality audit by each manager where
he/she takes stock of the workings of their teams
Optimizing the Assets of the organization
Hiring and possessing resources is not the same as utilizing them optimally. To set stage for further
discussion on this point, let’s define what asset optimizing is.
When an organization has skills and knowledge resources and they are employed in the right manner,
the right place and right time, optimization has occurred.
Most organizations today go by the rationale, “People are our most important asset” while that may
be easier said than done, as much as people being the brightest light at the end of the tunnel, they
could be the reason for heartburn as well!
Having said that, getting people to do what the organization needs is the toughest job that manager’s
hold. We hear managers say daily, ‘we want good people’… as if the quest for good people will
solve their problem! The answer is rarely found in just hiring good people with outstanding
capabilities. In reality, outstanding performance is little to do with the capabilities and more to do
with the work environment that fosters superior performance!
Good talent can flourish in one place and die in another.

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Outstanding people are hard to come by and an organization’s success or failure lies in the average
talent that it retains. Most organizations have the necessary knowledge and skills to succeed,
however what works in one situation, may not in another. It is then a manager’s job to find smart
ways to utilize what they have and create situations of success.
Now that’s when we can say that optimized utilization of assets has occurred. Having said that,
people are not the most important asset of an organization. It is what they do and how they work
together to create value and gain that competitive advantage. Some organizations may have a richer
talent pool, however it still boils down to the organization’s ability to optimize its selection,
performance management and its rewards mechanism to acquire, utilize and retain their talent.
Although the phrase “rational organization theory” may lead some people to think in terms of
organizational structure or design, the term actually refers to a decision-making framework. The
rational model says that businesses are structures designed to achieve specific goals in logical and
predictable ways. Both logic and predictability refer to the decision-making process. According to
Richard L. Daft, author of “Organization Theory and Design,” no business can rely solely on the
rational organization theory for every decision, but its supporters resort to rational processes
whenever possible.
Characteristics and Common Terms
Company-wide goals and a specific decision-making process form the core of the rational theory.
Goals supply the fact-based criteria necessary to find a solution or decide on a best course of action.
In making rational decisions, individuals use analytics, facts, diagrams, workflows, organizational
charts and terms such as information, efficiency, optimize, implement and design. Other terms
common to rational decision-making are constraints, authority, rules, directives, jurisdiction,
performance and coordination.
Rational Decision-Making
Rational decision-making always follows the same logical process in the same order. Decisions
depend on facts and clear, objective criteria, and do not consider factors such as ethical concerns,
morale or motivation. To make a rational decision, outline the goal and desired outcome, gather data
and brainstorm to develop a list of all possible alternatives. List the pros and cons of each one, make
the decision and then immediately implement it. As a final step, analyze the results.
Advantages of Rational Organization
Each step in the rational organization model has advantages that in total create a simple, streamlined
and clear-cut decision-making process. For example, clearly defining a problem or a situation and
stating the desired or necessary outcome can go a long way toward solving a problem or improving a
situation. Brainstorming and thoroughly researching options not only provides a solid base for
making a good decision, but also may identify alternatives you might not otherwise have considered.
Comparing the pros and cons of each alternative increases the chances that you’ll choose the right
solution.
Disadvantages of a Rational Model
One of the biggest disadvantages of the rational model is that it doesn’t consider the people working
within the business. According to Warren G. Bennis, an organizational consultant and author, the
rational model is like an “organization without people.” A lack of concern for ethical considerations

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can spell trouble for a business. In addition, identifying and researching all possible alternatives --
especially for a complex decision -- can be time-consuming and expensive. The time it takes to work
through decision-making steps can also result in missed opportunities.

Employee Obligation to the Firm

Employees often need to make various moral decisions in the workplace. While many of these
workplace decisions have to be made depending on moral obligations, some morally supportable
decisions may require courage and need to be performed beyond the generally accepted norms.
While discussing workplace ethics, six predominant subjects are of primary importance. These are −
 Obligations to the firm
 Abuse of one’s position
 Bribery and kickbacks
 The obligations to third parties
 Whistleblowing
 Employee’s self-interest
1. Obligations to the Firm
Employees are hired for the company’s tasks. The employees may obligate themselves to do the
work of the particular company for financial gains. The employers often have numerous conditions
to employment which the employee has to follow. These may include dress codes and respectful
behaviour.
Loyalty to the Company
Most people have a viewpoint that employees must have some moral obligations to stay loyal to their
organizations. It is true that employees are obligated to do the tasks offered to them, but is it
acceptable to have an obligation to work for the company in a manner that is beyond the assigned
jobs?
Many employers may think so, but is not mentioned anywhere. The employees are not bound or
obligated to have any kind of loyalty to the employers. But on a moral ground, loyalty to the
company is often considered to be a good thing and it is plausible that the loyalty is rewarded
through pay-raises, promotions, and good recommendations etc.
Conflicts of Interest
Employees can have a conflict of interest with the company. Some of these conflicts of interest are
minor and include general workplace conditions or situations. However, some other conflicts may be
serious and can let the employees to show disloyalty.
Generally, employees must avoid significant conflicts of interest by not involving themselves in
disloyal activities. However, it is difficult enough to decide when a conflict is significant and it may
not always clear what employees should do besides resisting the temptation to be disloyal.

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Few other types of Ethical Obligations of an Employee towards the firm are as follow-
As an employee, there are key obligations you have to your employer:
1. Loyalty: As an employee, you are expected to show loyalty to your boss and company. This can
take many forms, including not bad mouthing your employer, not sharing company information,
and avoiding outside work that poses a conflict of interest. Let's imagine you are a computer
programmer that works for a gaming company. Your job is to help create new, exciting games
for consumers. You have access to confidential information, including upcoming releases and
programming codes. It is not only your legal responsibility, it is your moral responsibility to keep
that information private and not share without outside sources. Loyalty can also extend to
supporting your boss and co-workers and not spreading hurtful rumours or confidential
information about them to others in the company.
2. Honouring work hours: Your programming position has flexible work hours, including the
chance to work from home a few days a week. It is your ethical responsibility to ensure you meet
your requirements, whether they be a specific number of hours you must work each week or
deadlines for your task completion. Especially when your work hours are flexible, you must be
ethical in showing up for the time you are committed to work.
3. Proper use of funds: Your boss has just given you a corporate credit card to cover your expenses
for your trip to the gaming conference next month. She explains that the card does not have a
limit. However, you are aware of the budget that was established for your trip. Being an ethical
employee, you respect the use of the card and only charge reasonable amounts that are directly
related to the trip you are taking. Your meals are within the budget and you keep all the other
costs within the parameters given. Proper use of funds includes managing all money and
resources to purchase or use as is expected by the company.
4. Respect: Respect is an overall statement, as being an ethical employee includes respecting your
workplace, your co-workers and boss, and the establishment. As an ethical employee, you do
your best to be professional and honest with everyone you come in contact with and in your use
of company resources.

2. Abuse of Official Position

Using the official position for private or personal gains is often considered as an abuse of power.
Such abuse can result from disloyalty.
Insider Trading
Insider trading occurs when an employee has access to company information that’s usually
unavailable to the public and can have an impact on the stock prices. For example, some employees
may come to know that their company is going to be bankrupt before general public and they can sell
all their stock. People who tend to buy the stocks will be deceived. It is also a kind of insider trading
to encourage near ones to sell their stock having such “insider information.”
Proprietary Data
Companies can often have “trade secrets” which they don’t want to share with other organizations,
and few employees may divulge such information to the benefit of competing organizations which is
unethical.

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Three major arguments why trade secrets should be protected by the law are −
 These are intellectual property.
 Trade secrets theft is wrong.
 Stealing trade secrets is a violation of the confidentiality terms.
Sharing trade secrets and obeying confidentiality information is a difficult moral issue. People have
the right to seek and advance employment and it is not easy to separate proprietary information from
a worker’s own skills and technical knowledge.
3. Bribes and Kickbacks
Bribery is aimed to letting someone to act against their duties. Bribes can be very serious when it can
injure people. Kickbacks are also a form of bribery that involves a person to uses his/her position to
benefit a party or someone.
Bribing foreign officials for favours could harm people. However, instances of bribing are numerous
and they include both large and small organizations.
Gifts and Entertainment
Gifts and entertainment may be used to reward and encourage certain behaviour from employees.
This can result in a conflict of interest. Entertainment isn’t as likely to be morally wrong if allowed
to be used according to ethical standards.
The following considerations may be considered while judging the ethics of gifting −
 The Price of the Gift − Gifts of huge prices are more likely a bribe.
 The Purpose of the Gift − Gift can be used to encourage, for advertising, or as a bribe.
 The Circumstances − A gift given at a special occasion is different than a gift on non-
special occasions, and a gift given openly is more ethical.
 The Position of the Person Receiving the Gift − A person in a position to reciprocate is
more likely to be taking a bribe.
 The Accepted Practices − Gifts as “tips” for a waiter or waitress is norm, but to a CEO; it is
clearly unethical.
 The Company’s Policy − Some companies may have stricter rules about gifts than others.
 The Law − Gifts against the law are usually unacceptable.

4. Obligations to Third Parties

A person is morally obligated to let others know about dangerous and deceptive business practice.
However, employees should compare and judge the importance of their job duties and personal
interests with the importance of the interests of others. It can be morally preferable to let the third
parties know about immoral and illegal business practices, even when it is not a moral obligation to
do so.

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5. Whistleblowing
Whistleblowing is the act of going public with significantly immoral or illegal acts of an
organization one is part of. However, someone is not a whistle blower for discussing the
embarrassing or rude behaviour with public, and a whistle blower doesn’t need to involve in
sabotage or violence.
The reasoning given to judge a whistle-blowing activity may include the following −
1. The motive must be ethical. The employee must act against the organization that committed a
significant immoral or illegal act.
2. The whistleblower should look for less harmful ways to resolve the issue first. Employees
should tell the management and executives of wrong-doing before making the information
public.
3. The whistleblower should have enough evidence. It is unethical to accuse a company when
there’s a possibility of company being innocent.
4. The company’s fault must be specific and significant. The wrong-doing must have specific
and significant reasons.

6. Self-Interest
Are the people obligated to save the interests of others by making misconducts known to the
management or by alerting the public by making significant immoral acts committed by companies
publicly?
It is always preferable to think rationally and impartially regarding morality. It is important to think
about our life and ask the following questions −
 Are we following authorities blindly?
 Are we suffering from a moral tunnel vision?
 Are we mindlessly doing what is asked from us, without considering the impact on outside
parties?
 Are we considering about our possible roles as accomplices in the immoral activities?
 Are we having a proper view of our interests against those of others?
 Is there any substantial evidence for acting against the norms?
Morality often wants us to consider the interests of everyone who can be affected by our decisions
and also about the situations we are in. We can have serious social and personal obligations and
depends on all these important and unique factors.
Ethical obligations are the responsibility of both the employee and the employer.

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Firm Duties To The Employee
Ethical principles apply to all aspects of the employer-employee relationship.
The employer-employee relationship should not be looked at simply in economic terms. It is a
significant human relationship of mutual dependency that has great impact on the people involved. A
person’s job, like a person’s business, is highly valued possessions that pervasively affect the lives of
the employees and their families. With stakeholders everywhere, the relationship is laden with moral
responsibilities. Though the pressures of self-interest are very powerful and compelling, both
workers and bosses should guide their choices by basic ethical principles including honest, candour,
respect and caring.
Employers have a moral obligation to look out for the welfare of employees. It is not a question
only of fair pay and good working conditions, there should be a real and enduring concern for the
well-being of employees. While the welfare of the company and other co-workers must remain the
dominant consideration an ethical employer is willing to make decisions and implement policies in a
manner that demonstrates a genuine concern, even when there are associated costs which impact
profitability. Companies should be loyal to workers as well as shareholders/owners/themselves.
A particularly difficult context that tests an employer’s morality concerns the termination of single
employees or large groups.
Layoffs, plant closings, and other dramatic events of this nature have dramatic psychological and
financial impact on the entire workforce and on the reputation of the company. Thus, they should be
handled with extraordinary caring and sensitivity in terms of how and when the announcement is
made and implemented and what provisions are being made to assist employees who are losing their
jobs. The use of new euphemisms such as “down-sizing” or “right-sizing” may make managers feel
better about the decision to terminate jobs, but it does not change anything from a moral perspective.
As already discussed, employees are entitled to be treated fairly and with respect, and it is the
company’s obligation to see that individual managers do not abuse their power or mistreat their
subordinates. Kill-the-messenger behavior at any management level is improper, as is any active or
passive encouragement of dishonest reporting. Employees should feel free to raise ethical or other
issues without fear of retaliation. Employees are entitled to count on the commitments of the
employer especially about central matters such as pay, raises, and promotions. Employers who chisel
employees, renege on promises, or treat them as if they were simply instrumentalities of the
organization’s interests rather than ends in and of themselves fail to meet their moral responsibilities.
Employees have obligations as well. Employees also have moral obligations, and they go beyond
giving a full day’s work for a full day’s pay. Loyalty goes both ways. Employees have moral duties
to the organization, co-workers, and customers. If an employer were secretly to look for a
replacement for an employee by conducting interviews behind the employee’s back, most employees
would consider that an act of betrayal. “Why didn’t you tell me my job was at risk?” “Why didn’t
you tell me that you were unhappy with my work so I had a chance to improve?” Does the employee
owe the employer less? When an employee, without any notice to an employer secretly looks for a
new job, often covering up interviewing time with deceptions or lies, is the conduct any less
untrustworthy?
When an employer decides to let an employee go, it is generally thought that the employer should
give the employee ample notice or severance pay. But what of the ethics of the employee who walks

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into the boss’ office and says, “I have an opportunity I can’t turn down and they need me to start this
Friday”? Because of the disparity in power, many employees adopt a double standard that gives them
more leeway than they afford the employer. One aspect of this attitude draws on the doubtful
assertions of necessity. Another is the implicit belief that if an offer is too good to refuse, there is no
moral obligation to refuse. It doesn’t take much scrutiny to see that these are self-serving
rationalizations. The moral obligations of an employee include loyalty, candour, caring and respect.
The mismatch in economic strength between the employer and the employee does not change that.
People of character take into account their moral obligations to their employer before they interview
for another job. If they know that their departure will jeopardize the organization, co-workers, or
customers they should make it clear at the job interview that they are not available until they have
provided a reasonable transition. If we are not certain how much hardship departure may cause, the
principle of respect suggests that the parties most affected be given an opportunity to participate in a
discussion to suggest the least harmful alternative. Because the employee-employer relationship
operates in the context of business, there is a tendency to play by different rules dictated by who has
the leverage, and principles of expediency — what you can get away with — rather than moral
principle
What obligations/duties does the employer owe to the employee?
An employer owes their employee the following duties, which again can be implied by the law or
may be found in the employment contract.

1. Duty to pay the employee the agreed amount if the employee arrives for work and can work.
2. Provide the employee with work to do, (this is limited). However, for example, if the employee is
paid by commission and the employer does not give the employee any work or if not working
could damage the employee's reputation, for example, if you are a senior executive in a company.
Then the employer may have broken their duty to the employee.
3. Observe Health & Safety Regulations.
4. Give employees correct information about rights under their contract.
5. Give employees reasonable opportunity to have their complaints looked at.
6. There is no duty to provide references to an employee, (except where the reference is required by
the concerned Authority). However, if a reference is provided by the employer, the employer
owes a duty to the employee to make sure the reference is completed with reasonable skill and
care and is true, accurate and fair. The employer also owes a duty to the receiver of the reference
not to make any negligent statements about the employee.
7. The employer and employee also owe each other a duty of "Mutual Trust & Confidence",
basically they must show respect for each other.

Examples of breaches:

 Harassing or victimising employees, particularly in front of other employees who are less senior
than the victim.
 Physical violence by the employer or employee.
 Theft by employee.
 There is no duty to pay Contractual Sick Pay.

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 There is an obligation on an employer to pay statutory sick pay for the first 28 weeks an
employee is absent due to sickness in any period of 3 years. If an employee is eligible.
 Employees entitled to at least four weeks holiday in any one year period.
When your small business adds employees, then the business and you as the owner inherit some
responsibilities to those employees according to the mandate of both the federal government and
your state government. These responsibilities exist on a broad spectrum and include a variety of
things, including the payment of those employees as well as ensuring that their work environment is
as safe as possible. If you neglect these responsibilities, the legal costs could be high, and could
include the loss of your permits and business licenses.
Employee Payments and Taxes
As a business owner and employer, it is your responsibility to pay your employees. You should
ensure they receive at least the minimum wage per hour for the state in which your business operates.
You should pay each employee the money you owe them or working in a given minimum pay
period. That payment should include any overtime that the employee has worked, any sick leave that
they have taken, and any vacation wages that they are entitled to.
You should ensure that your employees receive their pay checks on time and should strive to never
delay those pay checks so that your employees are also able to meet their own financial obligations
in a timely manner.
Employer Reporting to Employees
You shouldn’t just pay your employees. You should also make sure you report to them about their
earnings. This is one of the most important responsibilities of management to its employees. Each
pay check should include a statement that shows their gross pay, the withholdings, and deductions
that have been made, and their net pay for the pay period in particular and the year to date in general.
For each year the employees should receive an annual statement that shows their gross earnings
during that period, their deductions, and any withholding that have been made. These statements
should come before the end of January of the year after the reporting year.
Maintaining Safety Standards
It is a requirement of the federal government that you maintain a work environment that is safe for
your employees.
It is also imperative that you inform your employees of any areas in your business where they will be
at a high risk of injury so that they are aware. You are also required to train them in the correct safety
procedures so that the risk of incurring an injury can be kept at a minimum.
Maintaining Proper Equipment and Tools
Make sure that each of your employees uses the correct equipment and tools that are safe for the
particular industry that your business operates in. That is another responsibility that rests on you as
the business owner.
You should also regularly inspect the facilities at your business’ place of operations and also test the
safety knowledge of your employees. By doing these regularly, you ensure that your workplace is
always as safe as it possibly can be under any given circumstances.

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Obtaining and Maintaining Insurance
While the above section was all about the measures you can take as a business owner to ensure that
your workplace is as safe as it can possibly be, the fact is that you can never fully cover your bases.
There will always be a risk that accidents will happen.
When your employees suffer injuries in the course of work through no fault of their own, you are
entirely responsible as their employer for filing a claim with the workers’ compensation insurance
provider you had signed up with.
Workers' Compensation Insurance
Workers’ compensation insurance is a special kind of insurance that covers the medical care
expenses of restoring the worker to health, as well as the payment of their wages during the period
that they are recovering. This is known as wage replacement.
Throughout the process, you must always treat your worker with the respect that he deserves. You
should never delay the filing process or attempt to delay it or try to stop the employee themselves
from filing a claim. It is illegal, and you could end up not only facing serious legal fines but also
potential jail time, if it is found that you have failed to honor your end of the bargain, as an employer
and business owner.
The Business Climate
Now, to be entirely fair, it is not your responsibility to make sure your employees are always in a
happy mood. However, it is the social responsibility of a business towards employees to prevent
harassment in the workplace. You shouldn’t harass your workers in any way and neither should you
allow your employees to harass each other in any way.
As a business owner, you have a responsibility to engineer the right kind of work environment for
your employees. It should be one where they all feel respected and treated fairly regardless of their
religion, abilities or disabilities, countries of origin, ethnicity, gender, race or age.
There may be times when your employees come to you and complain about harassment in the
workplace. You should never ignore your employees about these issues. You should confront these
issues directly and immediately. Doing so will not only make your employees feel taken care of,
which could lead to increased productivity, it will also help you avoid high legal costs in the form of
lawsuits for allowing harassment to occur in your workplace.
Responsibility of Employees to Employers
While it is important to know about the social responsibility of the company to the employees, the
employees also have various responsibilities to you as their employer. After all, responsibility goes
both ways.
Following Rules
Your employees should obey the policies and rules of your organization, as well as the instructions
they need to perform the work they are supposed to perform. This is the essence of what it means to
be an employee.

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Honesty
Your employees are expected to be honest in their dealings with and on behalf of your organization.
They should not steal from you or lie to you about business matters. They should also be honest in
the way they represent themselves while applying for employment.
Care and Skill
Your employees should employ due care and skill in the job that they have been assigned to do. They
should offer the full value for the time for which you are paying them.
Confidentiality
The employee is expected to keep the secrets of the company, and should not disclose confidential
company information to unauthorized persons.
Conflict of Interest
The employee is expected to disclose any conflict of interest that may arise. These include
relationships that could compromise you as the business owner, including working for a competitor.
Care of Property
The employee should exercise care for the facilities, equipment, and overall property of the
employer.

B. CORRUPTION, BLACK MARKETING, HOARDING,

BRIBERY
Corruption
The simplest definition is:
“Corruption is the misuse of public power (by elected politician or appointed civil servant) for
private gain”
In order to ensure that not any public corruption but also private corruption between individuals and
businesses could be covered by the same simple definition:
“Corruption is the misuse of entrusted power (by heritage, education, marriage, election,
appointment or whatever else) for private gain.”
This broader definition covers not only the politician and the public servant, but also the CEO and
CFO of a company, the notary public, the team leader at a workplace, the administrator or
admissions-officer to a private school or hospital, the coach of a soccer team, etcetera.
According to the Interpol:
“The effects of corruption are far-reaching: it can undermine political, social and economic
stability, and ultimately threaten the safety and security of society as a whole.
Corruption creates a fertile ground for organized criminal activities, even terrorism, as criminals
are aided in their illegal activities by the complicity of corrupt public officials.

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Economic globalization has made corruption a borderless crime. The competitive world of
international business can leave companies exposed to bribes and fraudulent financial practices.
Corrupt transactions can cross multiple jurisdictions, making the ensuing police investigation both
time-consuming and complex.”
A much more difficult, scientific definition for the concept ‘corruption’ was developed by professor
(emeritus) dr. Petrus van Duyne:
“Corruption is an improbity or decay in the decision-making process in which a decision-maker
consents to deviate or demands deviation from the criterion which should rule his or her decision-
making, in exchange for a reward or for the promise or expectation of a reward, while these motives
influencing his or her decision-making cannot be part of the justification of the decision.”
Major corruption comes close whenever major events involving large sums of money, multiple
‘players’, or huge quantities of products (think of food and pharmaceuticals) often in disaster
situations, are at stake. Preferably, corruption flourishes in situations involving high technology (no
one understands the real quality and value of products), or in situations that are chaotic. Think of
civil war: who is responsible and who is the rebel? Natural disasters like earthquakes, floods,
droughts. The global community reacts quickly but local government might be disorganised and
disoriented. Who maintains law and order? Or maybe the purchase of a technologically far advanced
aircraft, while only a few can understand the technologies implied in development and production of
such a plane. Mostly, the sums of money involved are huge, a relatively small amount of corrupt
payment is difficult to attract attention. Or the number of actions is very large, for instance in betting
stations for results of Olympic Games or international soccer-tournaments which can easily be
manipulated. Geo-politics might play a role like e.g. the East-West conflict did in the second half of
the 20th century, in which the major country-alliances sought support from non-aligned countries.
Fighting corruption takes place in many ‘theatres’:
 political reforms, including the financing of political parties and elections;
 economic reforms, regulating markets and the financial sector;
 financial controls: budget, bookkeeping, reporting;
 Public supervision: media, parliament, local administrators and councils, registration;
 free access to information and data;
 maintaining law and order;
 improving and strengthening of the judicial system;
 institutional reforms: Tax systems, customs, public administration in general;
 whistleblowers and civil society organisations (NGO’s).
We know that corruption will not disappear from society. Our efforts are meant to restrict corruption
and to protect as much as possible the poor and weak in our societies. In the end all corruption costs
are paid by the consumer and the tax-payer. They need protection.

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Characteristics of Corruption
Discussion of corruption is extremely difficult as it is a hidden phenomenon in our societies. Both
parties in exchange of power for privileges want to keep their transaction secret. That makes it so
difficult to establish how wide and deep corruption penetrated our economy and social life.
Moreover, what for some is no more than ‘a friendly turn’ is for others ‘misbehaviour’. What in one
place can be friendliness is unacceptable elsewhere. Normal behaviour at a particular hour of the day
may be unacceptable at another hour.
Let us have a look into some of the characteristics.
a) Recipients and payers.
b) Extortion.
c) Lubricant of society.
d) An ethical problem.
e) Poverty reduction.
f) Small is beautiful.
g) Culture.
h) ‘Kindness among friends’.

a) Recipients and payers

Corruption is the abuse of entrusted power and elected authority for private profit.
Worldwide complaints are heard about politicians and public officials who accept bribes and enrich
themselves privately at the expense of the common citizen. This may be at the expense of the
employee and the employer; consumer and producer; renter and tenant; the one applying for a permit
to do something, or asking exemption from an obligation to pay or to deliver a product or a service.
All those cases may be considered to be abuse of power and authority for one’s own benefit.
Complainers forget that necessarily there should also be payers who benefit from that abuse of power
and authority. The other side of the coin shows payers assuming that their ‘gift’ to a politician or a
public official, may in return deliver profitable preferential treatment or delivery.
Please note that repeatedly is stressed the behaviour by public officials and politicians. Often the last
ones are forgotten. Anyone who wants to fight corruption and safeguard integrity in governance
should not only prevent politicians and public officials from unlawfully accepting gifts, but should
also fight the ‘high and mighty’ that abuse their power and authority to give privileges such as land
rights, permits, diplomas, allowances, money, against a reward.
All over the world we see, generally speaking, that accepting bribes is publicly denounced. The
parliamentarian accepting bribes for using his influence and legislative power to endorse proposals
profitable to some, is condemned in public by everyone. However, in private, those who gain from
those profitable proposals praise his approach as realistic. For them he is the perfect representative

Loknath Sen 13
who recognizes that ‘there is no escaping from corruption, if you don’t want to lose the competitive
struggle’.
b) Extortion
Many among us go one step further. They do not only blame politicians and public officials for
willingly accepting bribes. They also often allege that those having authority in our society ask to be
bribed or give us the opportunity to bribe. This means that the question ‘who is to blame’, shifts from
the person who pays to the person who extorts and receives. Again on the ground of the allegation:
‘There’s no escaping from it, for if you don’t pay, you are bound to fall behind’.
Such asking for a gift may be incidental or general. A generally accepted practice in Pakistan in the
nineties of the 20th century, for example, was that every invoice written out for the government was
increased by 7 percent, as a gift to the public official and/or politician in recompense for the privilege
of being allowed to supply a product or service. Naturally, on top of that there came incidental
additional payments by way of thanks for benefits obtained.
In every society it is known, either publicly or furtively, which public official is open to transactions
with gifts being made reciprocally. The gift on the part of the official may then imply considering an
application with priority, or assigning a contract, scholarship or employment. The potential payer
will look for his “prey”; he will look for the politician/public official of whom everybody knows that
he can be ‘bought’, that he is prepared to break the rules in exchange for a ‘gift’. Therefore, the
reputation that a public official or politician enjoys, is of great significance. Some will never be
approached with a ‘proposition’, as the potential extortionists or bribers do know that they (those
public officials or politicians) are not open to such practices. Equally, as regards some business
enterprises, it is a known fact that they do not keep any cash for bribes. They run less risk of falling
victims to extortion.
c) Lubricant of society
Many think that paying bribes is required to ensure smoother operation of society. They think that
without an occasional gift (for example, around Christmas and New Year), or incidentally (a gift on
the occasion of a marriage or when a child is born) for instance upon entering into a contract for the
supply of a product or a service, such contracts might be lost to them and might be assigned to
others.
For their own enterprises that would then amount to a loss, implying loss of sales potential, which is
not what any enterprise or entrepreneur works for. For entrepreneurs who want to secure sales, those
gifts are a cost item which they account for in advance in their prices. As a consequence products
and services cost unnecessarily more than is needed from a commercial point of view, for as a matter
of fact these gifts have already been budgeted.
If corruption is judged purely on the basis of business economics, macro-economically it costs
money to society which should be considered as a loss. From the micro-economic point of view, for
the bribing entrepreneur, it is profitable. The payer of a bribe secures a desired transaction which – if
evaluated on purely commercial grounds – strictly speaking, should have been assigned to someone
else. That will harm individual entrepreneurs and transactions; it will harm the national economy and
the world economy.
The fact is that, being influenced by payment of bribes, buyers (the politicians, the public officials?),
will often not make the best decision, but take an inferior decision.

Loknath Sen 14
It is not the best producer that wins, and it is not the best product that wins, but the delivering
contract-party that is willing to ‘fork out’ the most money. Naturally, those additional payments will
end up in the economy anyway and are, therefore, a burden from a macro-economic point of view,
either for the taxpayer or for the consumer.
d) An ethical problem
The mere fact that both the payer and the recipient of bribes want to keep their behaviour secret (and
often succeed in doing so as well) shows that such behaviour is generally considered to be improper.
Many consider corruption to be an ethical problem, a behavioural problem. And refer to it as being
‘sinful’, a ‘wrongdoing’. It is a problem to be solved by means of personal ‘reform’.
Those who took the initiative to establish Transparency International (TI), the global coalition
against corruption, in the last decade of the past century, began calling corruption ‘bad business
practices’, which is a moral judgment, not an economical. On the contrary, some in the business
community consider corruption to be ‘good business practices’, as they make more money using
corruption as a business tool!
During the initial attempts to establish TI, insight grew that we were dealing with an economic
phenomenon and that ‘transparency’ should be the key-word.
Still there is also an ethical problem. Corruption is not only an economical phenomenon in any
society or economy. It is not sufficient to call it an economical phenomenon; this ignores the more
general importance of a corruption-free society for all aspects of life and for all population groups,
poor and rich alike. It also ignores that bribery takes always place within a certain social context. It is
a structural problem in companies where the course of actions is not transparent, where the law is not
observed, and observance is not monitored.
A striking aspect in recent developments in trade and industry (and in society at large) is the fact that
ethics has become important to corporate behaviour again. Standards and values are seen as essential
conditions and characteristics for the good quality of citizenship, entrepreneurship and governance.
The concepts ‘people, planet and profit’ are now cherished all over the world in enterprises and often
referred to in their annual reports. They emphasize the fact that in a business-enterprise it is not only
pursuit of ‘profit’ that counts, but that businesses should also take into account the interests of
‘people’ in our society (people, their personnel, executive staff, shareholders, clients, neighbours,
etc.) and also the physical world surrounding us, our ‘planet’, introducing economical management
of raw materials and energy, concern about possible climate, prevention of waste, processing of
waste. Apart from the economics and the financial outcomes of entrepreneurial decisions, socially
and ecologically justifiable behaviour is now also identified as being important.
Emphasizing the ‘sinfulness’ of corruption, aims at improving especially individual and personal
behaviour. Poor entrepreneurship (in a moral sense) should then be improved on a personal basis.
Our focusing on the conditions and the implications of corrupt behaviour aims rather on the entire
structure of society and economy, and on the conditions that exist within that structure to prevent and
fight corrupt behaviour and safeguard integrity. Good entrepreneurship is judged with regard to its
quality in all three aspects: People, Planet and Profit. The qualification ‘poor’ is not a sign of
sinfulness, but a quality that signifies an adverse effect on all three aspects, not only on the
economics.
Corruption is an economic phenomenon with an ethical aura.

Loknath Sen 15
e) Poverty reduction
Poverty in the world is often brought up to account for the phenomenon of corruption. Is that
satisfactory? Is it correct and is it proven that the poor are more corrupt than the rich? How come
then, that some political leaders, e.g. Suharto in Indonesia, Mobutu in Congo, and Abacha in Nigeria,
but also Kohl in Germany and Mitterrand and Chirac in France, are or were so deeply implicated in
bribery affairs? They can hardly be said to suffer poverty, can they? Neither can this be said from
business leaders, often millionaires, if not billionaires, who are implicated in corruption affairs with
those political leaders.
The explanation that refers to individual poverty reduction is especially given by those who have a
keen eye for corruption among lower operational staff in government service, notably lower office
clerks, police officers, customs officers, the military, teachers, admission staff in hospitals, bus ticket
collectors, car-park attendants, garbage collectors, etc., who on an operational level often have good
opportunities to extract extra income or privileges from decisions they might take of importance to
entrepreneurs and citizens. Consequently, these have a certain value.
The explanation that is given for their sometimes corrupt behaviour is that they are poorly paid and
that, therefore, they are forced to live on what they can get by way of bribes. Then it fits into the
picture painted by this explanation to say that this problem can become even more serious if not only
their salaries are low, but, on top of that, they are not paid in time.
Investigations into the effect of the level of income enjoyed by a person, however, provide sufficient
proof that this explanation is not correct. Low pay does surely not automatically imply that,
consequently, the person concerned is corrupt. What is of much greater importance for the
prevention of, or fight against, corruption at a lower level in all kinds of hierarchies, is the clearness
and transparency of the rules and of the decision-making process, and the control exercised on the
application of the rules. Timely payment of salaries is an important pre-condition to prevent corrupt
behaviour.
f) Small is beautiful
The example that is always given to illustrate such a case is the transport of fresh vegetables. Is the
payment of an insignificant amount of money to the customs officer who can speed up a border
check on the perishable cargo in the truck or ship, allowed? He is not doing anything unlawful, he is
doing what he has to do, but he does it a bit quicker or earlier. As a result there will be a considerably
bigger chance for these vegetables to reach their market fresh. The assumption is that without such
‘facilitating payment’, that truck or that ship may be detained for many more hours or even days,
causing the cargo to turn bad, which will result in large financial losses.
For many people ‘petty’ corruption is more annoying than grand-scale corruption. Citizens have a
horror of little extras having to be paid for all kinds of services of public authorities. ‘Petty’
corruption is rampant in the lower ranks of organizations, wherever at higher levels ‘grand’
corruption prevails among public officials and politicians. When lower ranking public officials and
politicians see, that their higher ranking colleagues line their pockets with big gifts, it might occur to
them that it is justifiable to get their share.
A boss who takes his share in ‘grand’ corruption, will have a harder time acting against ‘petty’
corruption by his underlings within his own service or political party.

Loknath Sen 16
g) Culture
Gifts are inherent to human relations and therefore present in all cultures. You give and receive gifts
on the occasion of birthdays, Santa Claus or Christmas; on the occasion of memorable events; an
appointment or a departure; marriage or a retirement.
Everybody sees what you give or receive. Such openness is of great importance. In many cultures
presenting of gifts is part of the payment traffic. If you make a gift to a village chief in Africa, make
it visible to all the villagers who will all benefit from such a gift.
When you receive a gift from them, it will also be open and visible to everyone. Corrupt payments
are made in hiding, are not made known. A gift made in public will also impose a certain obligation
upon the recipient. On a next occasion you will show your gratitude by reciprocating the gift and you
share the gift received with your family and friends. In fact, in our everyday life it is not much
different. You give and receive on birthdays, on the occasion of marriages and births, and on other
festive occasions. Look at the reciprocal state visits of Heads of government and Heads of state,
exchanging gifts.
Bribes are also gifts, but they are made in secret. High-ranking politicians and public officials in
many countries accumulate big fortunes thanks to bribes received. In quite some countries the
possessions of the dictator amount to more than the total national debt.
h) ‘Kindness among friends’
It is essential, whether you just want to be ‘thoughtful’, or whether your gift is presented with a
certain intention. Is it a sign of thoughtfulness or is it hiding a particular purpose, an expected
‘return’ in the future? Whether ‘attention’ or ‘intention’, the difference is of great importance for the
relationship. Is it a ‘friendly turn’ or is it an ‘investment’?
To have friends belongs to culture. However, can you ‘buy’ a friend? Is real friendship not to be
based on honesty and transparency? To give presents reciprocally is a sign of friendship. It should
not get lost in a misuse of power for private gains.

Black Marketing
The term ’black-marketing’ is obscure and difficult to define precisely. However, attempts by
sociologists, criminologists and jurists have been made from time to time to explain its true meaning.
The actual origin of term ‘black-marketing’ is not clearly known, although it seems to have been
identical with ‘black’ to indicate ‘illegal activities’ occurring under conditions of great-secrecy.
Black-market includes the risk of fraud, the possibility of violence, being saddled with counterfeit
goods or adulterated products (which is especially dangerous in the case of medications), and the fact
that the buyer has no recourse.
Participating in the black market is not always a black and white matter. Suppose one is on vacation
with his/her family in an exotic location and run out of formula for his/her baby? If there is nothing
available in local stores and the only way to acquire baby formula is through a black-market
transaction, few people would hesitate to make the purchase. Black-marketing includes specific
underground economies:

 Illegal Economy,

Loknath Sen 17
 Unreported Economy,
 Unrecorded economy,
 Informal economy.
In this materialistic world everyone is supposing to earn more and more profits, for that they also
choose to go in underground activities which include activities like: Illegal Drugs, Prostitution,
Animals and Animal Products, Alcohol& Tobacco , Transportation Providers, Housing rental,
Copyrighted Media, Cyber-Crime Black-market. The major effects of Black-Marketing are:
 Affects public revenues,
 Degenerates the investable surplus,
 Delimits the national productivity,
 Drains the balance of payments,
 Distorts equity and equality concepts of economic distribution
 Increase gulf between have and have not means: disequilibrium between rich and poor
people.
Organizations of these professional crimes has paralleled a similar trend not only in business
communities but also equally in labour and men in professions. It is not longer limited in its nature
and scope and has travelled beyond trade and business frontiers and has also penalties. Activities
involved in Black-marketing:
 Racketeering: is the organized illegal activity of the business community to bypass these
legislations, rules and regulations. It is resorted to either through profiteering or hoarding of
consumer goods.
 Profiteering: implies selling a thing at rate in excess of its controlled price or reasonable
price.
 Concealment: which include suppression of fact relating to acquisition or disposal of things
controlled by different laws, rules and regulations for production, manufacture, supply,
disposal, distribution, sale, rationing for production.
 Hoarding: means storage of goods in excess of a permissible quantity
Prevailing Laws on Black-Marketing
Black-marketing has become a global problem. All most each and every country faces problems
caused by it. Specifically black-marketing of arms and weapons has recognized at international level,
as it also leadsto terrorist activities. Taking notice of this United Nations has also legislated treaties
and resolutions to curb the black-marketing. At international level the efforts taken by Arms Trade
Treaty (ATT) to Prevent and Control Black-Marketing of Arms, 2014, Resolution: -Weapons of
Mass Destruction (WMD). In India, also has taken number of steps towards this problem. Number of
committees and laws are there to witness the serious thought of legislature’s intention to curb this
problem. In the process, various laws enacted by Parliament: -

 The Anti-Corruption Laws (Amendment) Act, 1964,

 Amending the Indian Penal Code 1860,
 The Code of Criminal Procedure, 1898,
 The Criminal Law (Amendment)Ordinance, 1944,
 The Delhi Special Police Establishment Act, 1946,
 The Prevention of Corruption Act, 1947

Loknath Sen 18
  The Criminal Law (Amendment) Act, 1952;
 The Foreign Exchange Regulation (Amendment) Act, 1964,
 The Prevention of Food Adulteration (Amendment) Act, 1964,
 The Essential Commodities (Amendment) Act, 1964 and
 The Wealth tax (Amendment) Act. 1964.

Hoarding
Hoarding is a speculator buying large amounts of a product with the intention of benefiting from
future price rises. The term hoarding is applied most often to the purchase of commodities,
particularly gold. Occasionally, however, the hoarding is used in many economic ways. Political
leaders might argue, for example, that speculators stockpile dollars during a currency crisis.
Hoarding is sometimes blamed for shortages that are actually caused by price controls, fixed
exchange rates, and other government policies.
Hoarding is commonly criticized for creating shortages of goods in the real economy. It is possible
for hoarding to create a cycle of speculation, self-fulfilling prophecies, and inflation. If several
wealthy individuals start hoarding wheat, the price will begin to increase. Middle -class merchants
will notice, and then they might hold back wheat supplies in anticipation of future price increases.
That is enough to raise prices again. Panicked buying may create real shortages of wheat in some
locations. The poorest in some countries could even be at risk of starvation if the cycle continues
beyond that point.
Hoarding is buying goods and storing them in the hope of selling them at a higher price. Of course,
there's an aspect to that in practically every business. Ordinary business behaviour is different from
hoarding mainly in that most businesses add value--the baker transforms the flour into bread, the
butcher cuts up a carcass into steaks and chops.
Ordinary businesses also have a steady flow to their buying and selling. The gas station may have
thousands of gallons of gasoline in its underground tanks, but that gasoline is for sale every day, not
held off the market waiting for the price to go up.
A hoarder, though, doesn't add value by transforming the product in some useful way, nor does he
make his money on the mark-up from wholesale to retail. He just buys stuff and holds on to it,
hoping to sell after the price goes up.
Merely doing that is ethically neutral--often, in fact, beneficial. A clever hoarder will buy when
prices are low (which is a source of price support for suppliers who would otherwise be suffering)
and then sell when prices are high (providing supplies when there would otherwise be a shortage). If
he makes a profit, it's a legitimate return on the capital that was tied up during a period of low prices.
Buying low and selling high is not just a way to make money; it also helps stabilize the market,
protecting both suppliers and consumers.
Hoarding becomes ethically objectionable when the hoarder waits until prices are already high, and
then buys goods in the hope that prices will go even higher. That's not stabilizing. That can turn
tight supplies into shortages and send prices up to where basic staples are beyond the means of all
but the wealthy.

Loknath Sen 19
Note that this sort of hoarding is also not a very good way to make money. If supply and demand are
already clearing, at whatever price, there's no particular reason to suppose that prices will go even
higher. In fact, over the medium term--once suppliers have a chance to grow more or make more,
and once consumers have a chance to adjust their habits to use less, you can expect prices to go back
down. Hoarders buying at that point may drive the price up in a speculative frenzy, but once they
start selling, the price will go right back down again, meaning that most of them won't make any
money. They will, though, make the price gyrate. It's those price gyrations, together with the
shortages caused by taking the product off the market that makes hoarding objectionable.
From an ethical point of view, there's no reason for ordinary consumers to worry that they might be
doing something bad by stocking up. In fact, the stockpiles of ordinary consumers are a positive,
stabilizing force when there are supply and price shocks, because the consumer with a stockpile will
naturally limit purchases when there's a shortage. It's only the consumers with bare shelves who are
buying when the price has just shot up.
Hoarding is a bad word, though--something that you wouldn't want to be accused of, even if you
could make a reasoned argument about the stabilizing effects of stockpiles. In the US, we're not at
the point of ugly mobs forming when someone carries a couple extra bags of rice out of the grocery
store, but Americans are as good at forming ugly mobs as people anywhere. Ethics aside, as a
simple, practical matter, you don't want to be trying to build your stockpile afte r shortages are
already in the news. Once that happens, cut back on use to make your current supplies last. Switch
to stockpiling stuff that's still cheap--there's always something, unless times are very bad indeed.
Especially during a time of shortages and soaring prices, there's no better investment.

Bribery
There is no universal definition of bribery but all definitions have in common that it involves
someone in appointed position acting voluntarily in breach of trust in exchange for a benefit. The
benefit does not have to involve cash or a payment exchanging hands. It can take many forms such
as lavish gifts; hospitality and expenses, access to assets or a favour made to a relative, friend or
favoured cause.
Bribery can be defined as: the offering, promising, giving, accepting or soliciting of an advantage
as an inducement for an action which is illegal, unethical or a breach of trust. Inducements can take
the form of money, gifts, loans, fees, rewards or other advantages (taxes, services, donations, favours
etc.).
Bribery occurs when a person offers something of value to another person in order to receive
something in exchange. However, bribery can also be illegal, especially when it involves a gift
bestowed on a public official for particular services or actions. The bribe could be for a favour,
influence, favourable treatment and more, and it could be offered to a governmental figure, such as a
mayor or other politician, a police officer, a sports figure, a businessman or anyone who h as the
power to accept a bribe and perform the requested service.
Frequently, bribery is found in the governmental arena. Bribes are typically made in order to obtain a
certain decision, such as a zoning determination by a local zoning board. Other types of favouritism
may be sought, such as bribery for the award of a construction contract for a government building.

Loknath Sen 20
C. TYPES OF CORPORATE CRIME, SHOP LIFTING,
SOLUTION TO THE PROBLEM
Types of Corporate Crime
According to Australian criminologist John Braithwaite, corporate crime is defined as, “the conduct
of corporation or employees acting on behalf of a corporation, which is prescribed and punishable by
law.” It is also known as white collar crime or organizational crime since the individuals commit
crimes for the benefit of the organization.
They make crime their sole livelihood and get identified with crime; however, they are not
considered criminals especially since they are becoming the necessary evils today. Neither can the
society survive with them nor without them?
Corporate crimes have certain identifiable features; they are characterized by low visibility, they are
not easy to detect because they are performed in such a way that nobody gets to know the structure
of action and communication, also the legal framework is maintained. Another feature is the distance
between the offender and the victim.
There are no individuals committing these crimes rather, it refers to a group of individuals, other
corporations, agencies or society as a whole. It is owing to this that they do not get revealed easily.
Only law enforcement agencies inquiring or investigating can get hold of these crimes.
Corporate crime has been considered the time and again to be the greater version to white collar jobs
as it involves crimes performed by the higher class of our society. The concept of corporate crimes
and white collar crimes overlap with each other. One of it is crimes committed by individuals who
are in the decision making the level of corporate sectors against their workers, society or the
environment and the other is crimes done for their own benefit.
Certain types of corporate crimes can be insider trading, embezzlement, money laundering,
forgery, bribing, etc.
Corporate crime also has a huge effect on one’s social and economic lives. It ranges from affecting
mind and body to property and environment. The victims report bitterness, health problems,
depression, and anger. They feel a breach of trust and even lose their jobs due to these crimes. As to
affecting the economy, it destroys the investor’s trust and confidence. Therefore the growth of the
economy gets disrupted. The good money gets driven away by the bad money slowly.
As corporate crimes are difficult to prevent or deter, especially because they are performed by the
elite class of well-educated people of our society they are considered as more threat to our society
than the local street crime like theft, burglary, etc.
Much of our lives are affected by corporate activities. In the face of ever-increasing privatization, the
employees eat, drink and survive on what the companies provide.
Thus with great power comes great responsibility. Yet, nowadays a lot of corporate crimes come into
light. Though they are performed in the quiet environment for the benefit of the company yet they
sometimes affect adversely. Crimes exist because these crimes pay higher. If there would have been
harder punishments instead of covering them up, probably the scenario would have changed.

Loknath Sen 21
There are many regularity authorities who look into the crimes like Central Bureau of Investigation
(CBI), Central Vigilance Commission, Serious Fraud Investigation Office, Directorate of
Enforcement (DOE), etc. Yet it is felt that increasing public awareness, putting into force special
sophisticated investigating agencies, having separate commissions for punishments, charging high
fines, strengthening internal policies, etc., would be certain immediate measures which should be
taken.
Crime is the outcome of unethical issues, unethical practices encourage crimes at various levels. At
the corporate level crime also takes place. There are three types of corporate crime.
For our purpose, corporate-level crime has been divided into three broad categories as
1. Crimes involving employees
2. Crimes between firms and
3. Crimes against societies.
The different types of corporate crimes can also be categorised as follows:
1. Crimes involving employees: In a corporate crime an employee can be involved and if an
employee is involved it will be more harmful to both organization and employees.
2. Crimes between firms: another type of crime is against firms. In some cases, crime happens
against firms or organizations.
3. Crimes against societies: This is the most dangerous one because of these types of crime suffer
entire society.
4. Violence against employees: Six million workers blistered on the work within the U.S.A. and
10,000 folks die within the geographical point from injuries and 10,000 from the long-run effects of
activity diseases.
Company executives square measure to blame for the overwhelming majority of deaths as a result of
they need desecrating activity health and safety standards or have selected not to produce adequate
standards.
So, employees square measure safer on the streets than on their job. For each person dead by an
interloper on the road two square measure dead by their workers.
5. Violence against shoppers: thousands of unsafe products injure or kill consumers per annum.
100,000 folks square measure for good disabled every year and 13,000 die. Another vital issue to
require into consideration is the marketing of products within the accumulation.

6. Corporate pollution: the last public additionally experiences violence within the type of
contamination and alternative new crimes.
There square measure many alternative ignorant crimes. However, they’re all committed for the sake
of profit, and that they all hurt the setting.
7. Price fixing: silent value fixing happens once a restricted range of dominant corporations in a very
particular type of market follow the lead of their competitors in value.

Loknath Sen 22
Undisguised value fixing involves secret conferences and delicate communications between
competitors in given industries. Most common forms:
1. Setting costs at planned, similar levels,
2. Dividing the market into regions, with every firm agreeing to remain out of the other’s
territory, and
3. Deciding to require turns to submit winning competitive bids for contracts, typically from
government agencies.
8. False advertising: once corporations use false advertisements to lure shoppers to shop for
products or services that supply few, if any, of the published advantages.
2 forms:
1. Blatantly false and
2. Puffery, this could be a legal, additional delicate type of false advertising that usually
involves creating exaggerated claims for a product or service. It doesn’t violate criminal or
civil laws. However, it’s designed to mislead shoppers.
The concept of white-collar crime found its place in criminology for the first time in 1941 when
Sutherland first published his research paper on white-collar criminality in the American sociological
review. he defined white-collar crime as a crime committed by persons of high social status in course
of their occupation. For example; misrepresentation through fraudulent advertisement, infringement
of patents, copyrights, and trade-marks, a publication of fabricated balance sheets and profit and loss
account of business, etc. White-collar crimes are committed by persons of status, not for need but for
greed.
Sutherland further pointed out that white-collar crime is more harmful to society than ordinary
crimes because the financial loss to the society from white-collar crime is far greater than the
financial loss from burglaries, robberies, larcenies, etc.
Classification of White Collar Crimes
Theoretically, various white-collar crimes may broadly be classified into four major categories as
follows:-
1. Ad hoc crimes: they are also known as personal crimes because in this category of white-collar
crimes, the offender pursues his own individual objective having no face to face contact with the
victim. Hacking on computers, credit card frauds tax evasion, etc. are common forms of ad hoc
white-collar crimes.
2. White-collar crimes involving a breach of trust or breach of faith bestowed by an individual or
institution on the perpetrator. Insider trading, financial embezzlements, misuse of funds fictitious
payrolls, etc. are common illustrations of this type of white-collar crimes.
3. Individuals occupying high positions or status who commit crime incidental to, and in furtherance
of their organizational operations constitute this category of white-collar crimes. People occupying
high position commit such crime, not because it is their central purpose, but because they
individually find an opportunity in the course of their employment to earn quick money or gain

Loknath Sen 23
undue advantages by using their power or influence. Example of such crimes is fraudulent medical
bill claims, fake educational institutions, issuance of fake mark sheet/certificates, etc.
4. White-collar crimes may also be committed as a part of the business itself. Violation of trademarks
or copyrights, patent law or competition law, etc. the violation of domain name and other corporate
crimes are also white-collar crimes of this type.
White-Collar Crime in India
White-collar criminality has become a global phenomenon with the advance of commerce and
technology. Like any other country, India is equally in grip of white-collar criminality. The reason
for an enormous increase in white-collar crime in recent decades is to be found in the fast-developing
economy and industrial growth of this developing country.
The Santhanam committee report in its findings gave a vivid picture of white-collar crimes
committed by persons of respectability such as businessman, industrialists, contractors, and suppliers
as also the corrupt public officials.
The commission broadly classified white-collar crimes and socioeconomic crimes into eight
categories and suggested the insertion of a new chapter on white-collar crimes in the Indian penal
code.
White-Collar Crime In Certain Professions:
1. Medical Profession
White-collar crimes are commonly committed by persons belonging to the medical profession
includes-
 issuance of false medical certificates.
 helping illegal abortions.
 selling sample drugs and medicines to patients and chemists.
 sex determination of a child in the worm.
 fake and intended prolonged treatments to increase the bills.
2. Engineering
 # underhand dealings with contractors and suppliers
 # passing of sub-standard works and materials
 # maintenance of bogus records of work-charged labor
 # construction of buildings, roads, canals, dams, and bridges with sub-standard material
3. Legal Profession
 violating ethical standards of the legal profession to earn large profits
 engaging professional witnesses for fake testimony
 fabricating false pieces of evidence
4. Educational Institutions
 by submitting fictitious and fake details about their institutions to achieve financial aid and
government grants.
 fake and bogus enrolment of students.

Loknath Sen 24
  charging huge amounts by donations and capitation fees
 procuring students to appear in different examinations on the basis of manipulated eligibility
certificates in return of huge sums.

Solution to the Problem

White collar crime is one of the greatest challenges that businesses face. While you need to put some
trust in your employees, you cannot do so blindly. Consider these five ways of preventing white
collar crime within your business.
1. Implementing Verification Systems
It is not a good idea to allow one employee to handle all contracts, financial transactions or fiscal
management. Implementing a verification or checks and balances system helps to prevent white
collar crime within your business. No one person in your organization should have too much power
or access that would allow them to conduct crimes. Even if one fishy transaction were performed by
an employee, a thorough verification of the transaction could catch the culprit.
2. Tracking Internet Activities
White collar crime often involves the internet. Be sure to use software in your business that closely
monitors the websites, social media connections and activities conducted by your employees. If your
business does not already have an internet usage policy in place, create one. You may also want to
require that employees using their personal devices have monitoring software installed by your
information technology department.
3. Working with an Attorney
Consider working with a white collar crime attorney. These legal practitioners can advise you on
what to do if you suspect your employees are conducting illegal activities. An attorney can inform
you of your rights as a business owner, including how to go about pressing charges for white collar
crime.
4. Monitoring Employees
Monitoring your employees helps to keep your business secure. Knowing they are being monitored
could be an effective deterrent to criminal activities. Video cameras are an effective tool for
monitoring areas of temptation, such as cash registers and supply cabinets. Consider a system that
saves the recordings in case you need them for future evidence of white collar crimes.
5. Inventorying Equipment
Inventorying equipment and supplies on a regular basis reduces the risk of theft. It is also a wise plan
to check purchase orders against your inventory. Consider implementing an RFID tagging system
and a regular survey of the equipment and supplies owned by your business.
These five methods of reducing your risk of white collar crime could help to keep the doors of your
business open. Each of these methods requires an investment of time, energy and resources. Your
investment will be worthwhile because it greatly reduces your company’s risk of dealing with the
aftermath of significant criminal activities.

Loknath Sen 25
Remedial Measures and conclusions
In country like India where large scale starvation, mass illiteracy, and ignorance affect the life of the
people, white-collar crimes are bound to multiply in large proportion. Control of these crimes is a
crucial problem for criminal justice administration in this country. However, some of the remedial
measures for combating white-collar criminality may be stated as follows:
1. Creating public awareness against these crimes through the media of press, platform, and other
audio-visual aids. Intensive legal literacy programs may perhaps help in reducing the incidence
of white-collar criminality to a considerable extent.
2. Special tribunals should be constituted with power to award sentence of imprisonment.
3. Stringent regulatory laws and drastic punishment for white-collar criminals
4. A separate chapter on white-collar crimes and socio-economic crimes should be incorporated in
the Indian penal code by amending it.
5. White-collar offenders should be dealt with sternly by prescribing stiffer punishments keeping in
view the gravity of injury caused to society because of these crimes.
Acts/Legislation against White Collar Crime in India:
In India various legislation for identifying white-collar crime are as follows:
1. Indian penal code, 1860
2. Companies Act, 1961
3. Customs Act, 1962
4. Prevention of corruption Act,1988
5. Income tax Act, 1961
6. Commodities Act, 1955
7. Imports and exports control Act, 1950
8. IT Act, 2005
9. Prevention of money laundering Act, 2002
10. Lokpal Act, 2014

Shoplifting
Shoplifting offenses are fairly common, but that doesn't mean shoplifting crimes aren't taken
seriously. Every state's penal (criminal) code includes provisions that apply to shoplifting (usually
under the umbrella of theft or larceny statutes), and the penalties can be harsh—especially when the
dollar value of the merchandise is high or the offender has a criminal record.
What Is Shoplifting?
Shoplifting is typically defined as the unauthorized removal of merchandise from a store without
paying for it. However, successfully leaving the store with unpaid merchandise is not the only way to
commit a shoplifting crime. In certain cases, the intent to steal, along with an act in furtherance of
that intent, can also result in criminal charges for shoplifting (or retail fraud). An act in furtherance
of shoplifting might include:
 altering a price tag
 removing (or even just trying to remove) security tags or other theft-prevention devices

Loknath Sen 26
  hiding or concealing an item on your person while still in the store (putting merchandise in
your pocket or purse), or
 removing an item from its packaging and concealing it in or among other merchandise.
"Shoplifting" generally refers to the theft of merchandise from a store or place of business.
Shoplifting is a type of larceny, which simply means taking the property of someone else without
their permission, and with the intent to permanently deprive the owner of the property taken.
Though states may punish shoplifting under their general larceny or theft statutes, many states have
enacted statutes to specifically address shoplifting. States may refer to the crime by different names,
including "retail theft" and "concealment of merchandise."
Elements of Shoplifting
Each state's laws vary, but generally shoplifting offenses include two basic elements:
1. Willfully concealing or taking possession of items being offered for sale; and
2. The intent to deprive the items' rightful owner (typically the store) of possession of the items,
without paying the purchase price.
Crucially, this means that in most states, one can break shoplifting laws without attempting to get out
of a store with stolen goods. Simply concealing merchandise, inside or outside the store, will often
be enough. One must have the intent to take the item from the store; however, many states consider
the act of concealing merchandise to be evidence of intent.
In addition to hiding an item to avoid paying for it, shoplifting laws also make it illegal to take
actions to avoid paying the full purchase price for an item. This can include altering price tags,
manipulating merchandise, and putting goods into different containers or packaging to avoid paying
all or part of the purchase price.
Severity of Shoplifting Charges
Like charges for other types of theft, the severity of shoplifting charges generally depends on the
value of the goods involved. If firearms, explosives or incendiary devices are shoplifted, the severity
of charges increases in many states.
States laws often include a range of charges, and can allow prosecutors discretion in deciding which
charges to pursue in a given case. In many states, the range of shoplifting charges runs from a low
level "infraction," to misdemeanour, up to differing degrees of felony charges. In some states, any
shoplifting offense will be charged as at least a misdemeanour.
Often, the prosecutor will be able to choose between multiple levels of charges. Prior criminal
convictions, specifically prior theft convictions, regularly play a large part in the prosecutor's
decision of which charge to pursue. In some states, prior theft convictions automatically result in a
more severe charge.
Typically, infractions result in a fine. Depending on the state, misdemeanour charges may result in
jail time (less than one year), probation and/or a fine. Felonies may result in a longer jail sentence,
probation and/or a larger fine.

Loknath Sen 27
State laws vary widely in the severity of shoplifting charges. In some places, any shoplifting offense
may result in a jail sentence.
In-Store Detention of Shoplifters
While there is such thing as a citizen's arrest, private citizens generally may not legally hold people
against their will. Doing so opens the door to civil and even criminal liability for false imprisonment.
However, many states have enacted statutes specifically authorizing stores and their employees to
detain suspected shoplifters in certain circumstances. These laws serve to protect the stores from
lawsuits claiming false imprisonment or false arrest.
Though these laws vary, store owners and their employees generally are allowed to detain an
individual when they have probable cause to suspect shoplifting. However, any such detention of a
suspected shoplifter must be reasonable in length and manner. Detentions without probable cause,
for an unreasonable amount of time, or in an unreasonable manner may leave the store open to
liability for false imprisonment and possibly other claims.
What constitutes probable cause to suspect shoplifting comes down to case by case specifics. Mere
suspicion typically will not suffice. Most states require that the store or its employees have evidence
which would lead a reasonable person to believe that shoplifting had occurred or was in progress. If
the store bases its detention of a suspected shoplifter on information from a non-employee informer,
that informer must have a reasonable basis for suspecting shoplifting.
Whether a detention is considered unreasonable is determined on a case by case basis, but there are
factors that can nudge the detention into unreasonable territory quickly. The three most common
factors are the length of detention, the purpose of the detention, and the force that was used. A
excessively long detention continued for the purpose of securing a confession or a release of store
liability, or the use of excessive force would be considered unreasonable under many states' laws. An
unreasonable detention could leave the store and its employees open to liability for false
imprisonment and possibly other claims, such as assault or battery.
Get Legal Help with Your Shoplifting Charges
Depending on the laws of your state and specific factors such as the value of any items shoplifted, if
you're facing shoplifting charges they could be treated as infractions, misdemeanours or felonies, and
could result in incarceration, probation and/or a fine. Because of these possibilities, you'll want to
learn more about your specific situation by talking to a criminal defence attorney near you today.

D. EUTHANASIA, CHILD LABOUR, MINORITIES

Euthanasia
Euthanasia, also called mercy killing, act or practice of painlessly putting to death persons suffering
from painful and incurable disease or incapacitating physical disorder or allowing them to die by
withholding treatment or withdrawing artificial life-support measures. Because there is no specific
provision for it in most legal systems, it is usually regarded as either suicide (if performed by the
patient himself) or murder (if performed by another). Physicians may, however, lawfully decide not
to prolong life in cases of extreme suffering, and they may administer drugs to relieve pain even if
this shortens the patient’s life. In the late 20th century, several European countries had special

Loknath Sen 28
provisions in their criminal codes for lenient sentencing and the consideration of extenuating
circumstances in prosecutions for euthanasia.
The opinion that euthanasia is morally permissible is traceable to Socrates, Plato, and the Stoics. It is
rejected in traditional Christian belief, chiefly because it is thought to contravene the prohibition of
murder in the Ten Commandments. The organized movement for legalization of euthanasia
commenced in England in 1935, when C. Killick Millard founded the Voluntary Euthanasia
Legalisation Society (later called the Euthanasia Society). The society’s bill was defeated in the
House of Lords in 1936, as was a motion on the same subject in the House of Lords in 1950. In the
United States the Euthanasia Society of America was founded in 1938.
The first countries to legalize euthanasia were the Netherlands in 2001 and Belgium in 2002. In 1997
Oregon became the first state in the United States to decriminalize physician-assisted suicide;
opponents of the controversial law, however, attempted to have it overturned. In 2009 the Supreme
Court of South Korea recognized a “right to die with dignity” in its decision to approve a request by
the family of a brain-dead woman that she be removed from life-support systems.
The potential of modern medical practice to prolong life through technological means has provoked
the question of what courses of action should be available to the physician and the family in cases of
extreme physical or emotional suffering, especially if the patient is incapable of choice. Passively
doing nothing to prolong life or withdrawing life-support measures has resulted in criminal charges
being brought against physicians; on the other hand, the families of comatose and apparently
terminal patients have instituted legal action against the medical establishment to make them stop the
use of extraordinary life support.
The term Euthanasia comes from two Ancient Greek words: ‘Eu’ means ‘Good’, and ‘thantos’
means ‘death’, so Euthanasia means good death. It is an act or practice of ending the life of an
individual suffering from a terminal illness or in an incurable condition by injection or by suspending
extra ordinary medical treatment in order to free him of intolerable pain or from terminal illness.
Euthanasia is defined as an intentional killing by an act or omission of person whose life is felt is not
to be worth living. It is also known as ‘Mercy Killing’ which is an act where the individual who, is in
an irremediable condition or has no chances of survival as he is suffering from painful life, ends his
life in a painless manner. It is a gentle, easy and painless death. It implies the procuring of an
individual’s death, so as to avoid or end pain or suffering, especially of individuals suffering from
incurable diseases. Oxford dictionary defines it as the painless killing of a person who has an
incurable disease or who is in an irreversible coma. According to the House of Lords select
Committee on Medical Ethics, it is “a deliberate intervention under taken with the express intention
of ending life to relieve intractable suffering”. Thus it can be said that Euthanasia is the deliberated
and intentional killing of a human being by a direct action, such as lethal injection, or by the failure
to perform even the most basic medical care or by withdrawing life support system in order to
release that human being from painful life. It is basically to bring about the death of a terminally ill
patient or a disabled. It is resorted to so that the last days of a patient who has been suffering from
such an illness which is terminal in nature or which has disabled him can peacefully end up his life
and which can also prove to be less painful for him. Thus the basic intention behind euthanasia is to
ensure a less painful death to a person who is in any case going to die after a long period of suffering.
Euthanasia is practiced so that a person can live as well as die with dignity. In brief, it means putting
a person to painless death in case of incurable diseases or when life become purpose less or hopeless
as a result of mental or physical handicap.

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Child Labour
The International Labour Organization (ILO), a subsidiary of the United Nations, defines child
labour as “work that deprives children of their childhood, their potential, and their dignity, and that
is harmful to physical and mental development.” (International Labour Organisation, n.d)
Child labour extends into many different activities such as agriculture, manufacturing, mining and
domestic service (i.e. house servant). Children are forced into child labour because of distinct
factors; migration, emergencies, the lack of decent work available and poverty which is known as the
most influencing factor. (UNICEF, 2017)
According to 2017 statics India is one of the leading countries in Asia has a whopping 33 million
children employed in various forms of child labour. In Indian context, "Child" as defined by the child
labour (prohibition and regulation) Act 1986 is a person who has not completed the age of 14 years
.As a layman we can understand that Child labour is the practice of having children engage in
economic activity, on a part or full time basis. Every child is considered as a gift of god, it must be
nurtured with care and affection within the family and society. But unfortunately due to the socio
economic problems children were forced to work in industries, leather factories, hotels and eatery.
The child labour is not an isolated phenomenon it is coupled with socio economic problem of the
society so in order to eliminate child labour first we should focus on socio economic issues of the
society. It is in the hands of administrative .It should bring effective measures to eliminate child
labour.
There are many inter-linked factors contributing to the prevalence of child labour. Child labour is
both a cause and consequence of poverty. Household poverty forces children into the labour market
to earn money. Some perform child labour to supplement family income while many also are in it for
survival. They miss out on an opportunity to gain an education, further perpetuating household
poverty across generations, slowing the economic growth and social development. Child labour
impedes children from gaining the skills and education they need to have opportunities of decent
work as an adult. Inequality, lack of educational opportunities, slow demographic transition,
traditions and cultural expectations all contribute to the persistence of child labour in India. Age, sex,
ethnicity, caste and deprivation affect the type and intensity of work that children perform.
Agriculture and informal sector employment continue to be sectors where children end up working.
The ILO experience is that stable economic growth, respect for labour standards, decent work,
universal education, social protection, recognizing the needs and rights of the children —together
help tackle the root causes of child labour.
As per Census 2011, the total child population in India in the age group (5-14) years is 259.6 million.
Of these, 10.1 million (3.9% of total child population) are working, either as ‘main worker’ or as
‘marginal worker’. In addition, more than 42.7 million children in India are out of school. However,
the good news is that the incidence of child labour has decreased in India by 2.6 million between
2001 and 2011. However, the decline was more visible in rural areas, while the number of child
workers has increased in urban areas, indicating the growing demand for child workers in menial
jobs. Child labour has different ramifications in both rural and urban India.
Despite rates of child labour declining over the last few years, children are still being used in some
severe forms of child labour such as bonded labour, child soldiers, and trafficking. Across India child
labourers can be found in a variety of industries: in brick kilns, carpet weaving, garment making,
domestic service, food and refreshment services (such as tea stalls), agriculture, fisheries and mining.

Loknath Sen 30
Children are also at risk of various other forms of exploitation including sexual exploitation and
production of child pornography, including online. Child labour and exploitation are the result of
many factors, including poverty, social norms condoning them, lack of decent work opportunities for
adults and adolescents, migration and emergencies. These factors are not only the cause but also a
consequence of social inequities reinforced by discrimination.
Children belong in schools not workplaces. Child labour deprives children of their right to go to
school and reinforces intergenerational cycles of poverty. Child labour acts as a major barrier to
education, affecting both attendance and performance in school.
The continuing persistence of child labour and exploitation poses a threat to national economies and
has severe negative short and long-term consequences for children such as denial of education and
undermining physical and mental health.
Child trafficking is also linked to child labour and it always results in child abuse. Trafficked
children face all forms of abuse-physical, mental, sexual and emotional. Trafficked children are
subjected to prostitution, forced into marriage or illegally adopted; they provide cheap or unpaid
labour, are forced to work as house servants or beggars and may be recruited into armed groups.
Child labour and other forms of exploitation are preventable through integrated approaches that
strengthen child protection systems as well as simultaneously addressing poverty and inequity,
improve access to and quality of education and mobilize public support for respecting children’s
rights.
Teachers and others in the education system can be frontline supporters to protect children and can
alert other stakeholders such as social workers to situations where children display signs of distress
or indicate they work long hours. Getting children out of work and into school also requires broader
changes in public policy to empower families to choose education over exploitative labour.
UNICEF works with government and for-profit agencies to put in place the necessary policy
framework to end child labour. It works with businesses to assess the supply chains and to find
sustainable options to address business practices that lead to child labour. It works with families to
support the ending of labour that is a result of bonded or debt labour. UNICEF supports state
governments to integrate programmes that would end child labour. We also support communities in
changing their cultural acceptance of child labour, while ensuring alternative income to families,
access to preschools, quality education and protection services.
According to statistics by action Aid India, 1 in every 11 children in India works to earn a living.
There are five states which are India's biggest child labour employers Bihar, Uttar Pradesh,
Rajasthan, Madhya Pradesh and Maharashtra, as per data given out by save children NGO. National
capital Delhi is responsible for a share of 1 million child labour alone. A recent analysis by CRY of
census data in the country shows that the overall decrease in child labour is only 2.2 per cent year on
year, over the last 10 years. Also it has revealed that child labour has grown by more than 50 percent
in urban areas. There are 33 million child labourers between the ages of 5 - 18 years in INDIA as per
census 2011 data and 10.13 million between the ages of 5- 14 years. Considering that there are 444
million children India under the age of 18, they form 37 percent of the total population in the
country. Therefore the child labourer in the country in real figures boils down to 10,130,000 kids
involved various occupations across the hazardous sectors and this is only data from six years ago.

Loknath Sen 31
Minorities
All countries in the world include persons belonging to national or ethnic, religious and linguistic
minorities, enriching the diversity of their societies. Although a great variety of minority situations
exist, common to all is the fact that, too often, minorities face multiple forms of discrimination
resulting in marginalisation and exclusion. Achieving effective participation of minorities and ending
their exclusion requires that we embrace diversity through the promotion and implementation of
international human rights standards.
Minority, a culturally, ethnically, or racially distinct group that coexists with but is subordinate to a
more dominant group. As the term is used in the social sciences, this subordinacy is the chief
defining characteristic of a minority group.
The protection of the rights of minorities is provided for under article 27 of the International
Covenant on Civil and Political Rights and article 30 of the Convention on the Rights of the Child.
However, the United Nations Declaration on the Rights of Persons Belonging to National or Ethnic,
Religious and Linguistic Minorities is the document which sets essential standards and offers
guidance to States in adopting appropriate legislative and other measures to secure the rights of
persons belonging to minorities. Overall, States through their commitments under treaty law, and
minorities themselves, or their representatives can influence the human rights monitoring and
implementation procedures and work toward securing effective participation and inclusion.
Adopted by consensus in 1992, the United Nations Minorities Declaration in its article 1 refers to
minorities as based on national or ethnic, cultural, religious and linguistic identity, and provides that
States should protect their existence. There is no internationally agreed definition as to which groups
constitute minorities. It is often stressed that the existence of a minority is a question of fact and that
any definition must include both objective factors (such as the existence of a shared ethnicity,
language or religion) and subjective factors (including that individuals must identify themselves as
members of a minority).
The difficulty in arriving at a widely acceptable definition lies in the variety of situations in which
minorities live. Some live together in well-defined areas, separated from the dominant part of the
population. Others are scattered throughout the country. Some minorities have a strong sense of
collective identity and recorded history; others retain only a fragmented notion of their common
heritage.
The term minority as used in the United Nations human rights system usually refers to national or
ethnic, religious and linguistic minorities, pursuant to the United Nations Minorities Declaration. All
States have one or more minority groups within their national territories, characterized by their own
national, ethnic, linguistic or religious identity, which differs from that of the majority population.
According to a definition offered in 1977 by Francesco Capotorti, Special Rapporteur of the United
Nations Sub-Commission on Prevention of Discrimination and Protection of Minorities, a minority
is: A group numerically inferior to the rest of the population of a State, in a non-dominant position,
whose members - being nationals of the State - possess ethnic, religious or linguistic characteristics
differing from those of the rest of the population and show, if only implicitly, a sense of solidarity,
directed towards preserving their culture, traditions, religion or language.
While the nationality criterion included in the above definition has often been challenged, the
requirement to be in a non-dominant position remains important. In most instances a minority group

Loknath Sen 32
will be a numerical minority, but in others a numerical majority may also find itself in a minority -
like or non-dominant position, such as Blacks under the apartheid regime in South Africa. In some
situations, a group which constitutes a majority in a State as a whole may be in a non-dominant
position within a particular region of the State in question.
In addition, it has been argued that the use of subjective criteria, such as the will on the part of the
members of the groups in question to preserve their own characteristics and the wish of the
individuals concerned to be considered part of that group, combined with certain specific objective
requirements, such as those listed in the Capotorti definition, should be taken into account. It is now
commonly accepted that recognition of minority status is not solely for the State to decide, but
should be based on both objective and subjective criteria.
The lack of significant distinguishing characteristics keeps certain groups from being classified as
minorities. For instance, while Freemasons subscribe to some beliefs that are different from those of
other groups, they lack external behaviours or other features that would distinguish them from the
general population and thus cannot be considered a minority. Likewise, a group that is assembled for
primarily economic reasons, such as a trade union, is seldom considered a minority. However, some
minorities have, by custom or force, come to occupy distinctive economic niches in a society.
Because they are socially separated or segregated from the dominant forces of a society, members of
a minority group usually are cut off from a full involvement in the workings of the society and from
an equal share in the society’s rewards. Thus, the role of minority groups varies from society to
society depending on the structure of the social system and the relative power of the minority group.
For instance, the degree of social mobility of a member of a minority group depends on whether the
society in which he lives is closed or open. A closed society is one in which an individual’s role and
function can theoretically never be changed, as in the traditional Hindu caste system. An open
society, on the other hand, allows the individual to change his role and to benefit from corresponding
changes in status. Unlike a closed society, which stresses hierarchical cooperation between social
groups, an open society permits different social groups to vie for the same resources, so their
relations are competitive. In an open society the rank that the individual attains for himself is more
important than the ranking of his social group.
Muslims, Sikhs, Christians, Buddhists, Jainand Zorastrians (Parsis) have been notified as minority
communities under Section 2 (c)of the National Commission for Minorities Act, 1992. As per
theCensus 2011, the percentage of minorities in the country is about 19.3% of the total population of
the country.The population of Muslims are 14.2%; Christians 2.3%; Sikhs 1.7%, Buddhists 0.7%,
Jain 0.4% and Parsis 0.006%. The following communities have been notified as minority
communities by the Government of India, Ministry of Minority Affairs;
1. Sikhs
2. Muslims
3. Christians
4. Zoroastrians
5. Buddhists
6. Jains

Loknath Sen 33
Geographic spread of minorities in India
Notified minorities constitute about 19% population of the country.
In rural India during 2009-10, 11 per cent of households followed Islam with about 12 per cent of the
population. Christianity was followed by around 2 per cent of the households constituting about 2 per
cent of the population. In urban areas, the percentages of households and population following Islam
were about 13 and 16 and following Christianity were about 3 and 3, respectively.
Government of India has also forwarded a list of 121 minority concentration districts having at least
25% minority population, excluding those States / UTs where minorities are in majority (J & K,
Punjab, Meghalaya, Mizoram, Nagaland and Lakshadweep).
Socio-economic status of minorities in India
According to 66th round of NSS,
 The sex-ratio for Muslims in both rural and urban areas showed a decline between 2004-05
and 2009-10; however those corresponding to Christians showed an improvement during this
period.
 The average household size, in both rural and urban areas, for Muslims was higher than those
of other religious groups, and the average household size was the lowest among Christians.
The household size in rural areas was higher than that of urban areas for each of the religious
groups.
 In rural areas, self-employment was the mainstay for all the religious groups. The proportion
of households with major income from self-employed in agriculture was the highest among
Sikh households (about 36 per cent). The proportion of households belonging to the
household type rural labour was the highest among Muslims (about 41 per cent). In urban
India, the proportion of households with major source of earnings as self-employment was
highest for Muslims (46 per cent). The major source of earnings from regular wage/salaried
was the highest for Christians households (43 per cent) in urban areas.
 Among all the land possessed classes, in rural areas, proportion of households belonging to
the land possessed class ‘0.005-0.40’ hectare was the highest for all the major religious
groups, which was more than 40 per cent.
 About 43 per cent of Christian households and 38 per cent of Muslim households cultivated
more than or equal to 0.001 hectare of land but less than 1.00 hectare of land. The proportion
of households cultivating more than 4.00 hectares of land was the highest for Sikhs (6 per
cent), followed by Hindus (3 per cent).
 For both rural and urban India, average Monthly per Capita Expenditure (MPCE) was the
highest for Sikh households followed by Christians. At the all-India level, the average MPCE
of Sikh household was Rs. 1659 while that for Muslim household was Rs. 980.
 The literacy rate among persons of age 15 years and above was the highest for Christians, for
both the sexes in rural and urban areas. The proportion of persons of age 15 years and above
with educational level secondary and above was the highest for Christians, followed by
Sikhs.

Loknath Sen 34
  The current attendance rates in educational institutions were higher among males than
females and also higher in urban areas than in rural areas. The current attendance rates in
educational institutions among persons of age 0-29 years were the highest among Christians
for rural males, rural females, urban males and urban females.
 The Labour Force Participation Rate (LFPR) for male was much higher than female for all
religious groups - the differential being greater in urban areas. The male-female differential in
LFPR was the lowest among Christians. The LFPR for rural male, rural female and urban
female was the highest for Christians while that for urban male was the highest for Sikhs.
 Work Participation Rate (WPR) for male was much higher than female for all the religious
groups - the differential being greater in the urban areas. The male-female differential in
WPR was the lowest among Christians.
 In rural areas, majority of male workers belonged to the categories not literate (28 per cent)
or literate and up to primary (28 per cent) while majority of female workers belonged to the
category not literate (59 per cent). The proportion of male workers with general education
level secondary & above was the highest for Christians (32 per cent), followed by Sikhs (30
per cent). In urban areas, majority of male workers belonged to the education category level
secondary & above (52 per cent). Among urban males, proportion of workers with level of
education secondary & above was 58 per cent each for Christians and Sikhs whereas those
were 30 per cent for Muslims.
 The unemployment rate in rural areas is less than that of urban areas. In rural areas, during
2009-10, unemployment rate was the highest for Christians for both males (3 per cent) and
females (6 per cent). In urban areas, unemployment rate was the highest for Sikhs for both
males (6 per cent) and females (8 per cent).

Loknath Sen 35