See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/283794143

Corruption and Scam

Conference Paper · January 2011

CITATIONS READS
0 9,607

2 authors, including:

Vipin Sharma
Jazan University
39 PUBLICATIONS 198 CITATIONS

SEE PROFILE

All content following this page was uploaded by Vipin Sharma on 14 November 2015.

The user has requested enhancement of the downloaded file.

 Corruption and Scam
Dr. Vipin K Sharma
vipinaravali@gmail.com

Abstract: Corruption in India has taken a widely virulent and deliberate form with scams
popping up almost every day. In our daily life, most of us must have been a witness to or a
victim of the corruption thriving in some or the other part of the country. The economy of India
was under socialist-inspired policies for an entire generation from the 1950s until the late 1980s.
The economy was subject to extensive regulation, protectionism, public ownership, leading to
persistent corruption and slow growth. Greed is Good has become the motto for India’s Role
Models in Sport and Military as well. India’s Politicians are leading the protagonists with Realty
being the Main Theme. Many like Real Estate companies in India are notorious for corruption
with the sector being avoided by Fund Managers. The Politicians of the States have made it the
Corruption Capital currently with Bangalore equally famous for Land Grabbing and Real Estate
Scams by Bureaucrats and Politicians. Mafia dons have become powerful enough to topple
governments with some heading the administration as Ministers. India’s Image of Corruption
has become bleaker by the Day with the Commonwealth Games Scam, Adarsh Housing Scam
and the Multi Billion 2G Telecom Spectrum Auction Scam and so many in a row. India’s
Political and Business Elite have scant regard for India’s Justice System as hardly anyone is
prosecuted for Corruption. Only some small fish are made scapegoats while the
Ringleaders deliberately and openly indulge in manipulation and corruption. This is the season
of scams and the biggest ever corruption cases in India have been unearthed more recently. So, I
decided to dig deep to see which scams were the biggest and most damaging to the country and
its citizens alike.

Keywords: Bureaucrat, Corruption, Protagonist, Protectionism, Regulation

Introduction: India and its people are no strangers to scams and scandals. There have been
number of scam cases taken place over the ages since India became independent. The corruption
is all around the corner varying in forms. Among all the political corruption in India is a key
concern. For 2010, India was ranked 87th of 178 countries in Transparency International's
Corruption Perceptions Index, which is huge setback for India. The organizers of Dandi March II
in the United States said, “The recent scams involving unimaginably big amounts of money, such
as the 2G spectrum scam, are well known. It is estimated that more than trillion dollars are put
away away in foreign havens, while 80 percent of Indians earn less than 2$ per day and every
second child is malnourished.”

Historical Background: The economy of India was under socialist-inspired policies for an
entire generation from the 1950s until the late 1980s. The economy was subjected to a long
process resulting red tapism leading to persistent corruption and slow growth. License Raj was
often at the core of corruption. The Vohra Report was submitted by the former Indian Union
Home Secretary, N.N. Vohra, in October 1993 which studied the problem of the criminalization
of politics and of the nexus among criminals, politicians and bureaucrats in India. The report
contained several observations made by official agencies on the criminal network running a
parallel government. It also traced out criminal gangs who enjoyed the patronage of politicians -
of all political parties - and the protection of government functionaries. It revealed that political
leaders had become the leaders of gangs. They were connected to the military. Over the years
criminals had been elected in all types of elections. The unpublished annexure to the Vohra
Report are believed to contain highly explosive material.

Glimpse of Scam account: Transparency International in India found that more than seventy
five percent of the people had firsthand experience of paying bribe or peddling influence to get
any type of job done in a public office. Taxes and bribes are a daily life fact, common between
state borders; T I estimates that truckers pay annually US$5 billion in bribes. India tops the list
for black money in the entire world with almost US$1456 billion in Swiss banks (USD 1.4
trillion approximately) in the form of black money. According to the data provided by the
Swiss Banking Association Report (2006), India has more black money than the rest of the world
combined. Indian Swiss bank account assets are worth 13 times the country’s national debt.
Indian black money is sometimes physically transferred abroad.

The CEO of a Mumbai-based equity firm recently told journalists that the money is flown abroad
in "special flights" out of Mumbai and Delhi airports to Zurich. Indeed Indians would be the
largest depositors of illegal money in Swiss banks, according to sources in the banking industry.
The estimated average amount stashed away annually from India during 2002-2006 is $27.3
billion US dollars.

Independent reports have recently calculated India's traditionally ruling family's (Gandhi's)
financial net worth to be anywhere between $9.41 billion (Rs 42,345 crore) to $18.66 billion (Rs
83,900 crore), most of it in the form of illegal monies. Harvard scholar Yevgenia Albats cited
KGB correspondence about payments to Rajiv Gandhi and his family, which had been arranged
by Viktor Chebrikov, which shows that KGB chief Viktor Chebrikov sought in writing an
"authorization to make payments in US dollars to the family members of Rajiv Gandhi, namely
Sonia Gandhi, Rahul Gandhi and Paola Maino, mother of Sonia Gandhi" from the CPSU in
December 1985.

Some of the prominent Scams: We have had a number of scams in India; but none bigger than
the scam involving the process of allocating unified access service licenses. Few of them are
Satyam scam, Madhu Koda corruption, Mhada flats in Mumbai (Congress government
constructed posh flats using public money and gave away flats to its members flouting rules),
Siachen army ration scam, IPL scam, Sukna land scam, Raja’s 2G scam, Karnataka land scam,
Kalmadi’s Commonwealth games scam, Adarsh society scam and ISRO scam. Scams leading to
explosion of corruption are spread over the various fields and few of them are explained in the
subsequent paragraphs.

Politics: Criminalization of Indian politics is a problem. Mafia dons have become powerful
enough to topple governments with some heading the administration as Ministers. In July 2008
The Washington Post reported that nearly a fourth of the 540 Indian Parliament members faced
criminal charges, "including human trafficking, immigration rackets, embezzlement, rape and
even murder". At state level, things are often worse. In Uttar Pradesh Assembly elections 2002,
candidates with criminal records won the majority of seats. The recent disclosure in Wilki has
shaken our political system where people were found involved offering bribe to prove their
majority in parliament.

Armed forces: The Indian Armed Forces have frequently witnessed corruption involving senior
armed forces officers of even senior ranks from all the three forces. Many officers have been
caught for allegedly selling defence stores in the black market in the border districts of Indian
states and territories. Recent Sukhna land scandal involving four Indian Lieutenant Generals
has upset public faith in the country's growing military at a time when huge money is being spent
on modernizing the armed forces. A series of eye-popping fraud cases has damaged the
institution in recent years. The recent Adarsh land scam is another example of the nexus
between the armed forces, bureaucracy and the politicians in the embezzlement of government
property.

Bureaucracy: Taxes and bribes are common between state borders; Transparency International
(TI) estimates that truck drivers pay annually US$5 billion in bribes. A 2005 study done by
Transparency International in India found that more than fifty percent of the people had firsthand
experience of paying bribe or peddling influence to get a job done in a public office. A 2009
survey of the leading economies of Asia, revealed Indian bureaucracy to be not just least
efficient out of remaining Asian countries; further it was also found that working with India's
civil servants was a "slow and painful" process. The involvement of a senior bureaucrat Mr Ravi
Inder Singh posted in Home Ministry has further perpetrated and undermined the foundation of
ethics in our country.

Land and property: It has been observed that the officials have crossed all records in stealing
state property. Mafia Raj consisting of municipal and other government officials, elected
politicians, judicial officers, real estate developers and law enforcement officials, acquire,
develop and sell land in illegal ways in cities and villages throughout India,.

Judiciary: Corruption is unbridled in the judicial system of India. According to TI, judicial
corruption in India is attributable to factors such as "delays in the disposal of cases, shortage of
judges and complex procedures, all of which are exacerbated by a preponderance of new laws".
Recently chief justice of high court and judges like Nirmla Yadav are being investigated in many
corruption cases.

Police: Police is perceived as our protector but despite State prohibitions against torture and
custodial misconduct by the police, torture is widespread in police custody, which is a major
reason behind deaths in custody. The police often torture innocent people until a 'confession' is
obtained to save influential and wealthy offenders. G.P. Joshi, the programme coordinator of the
Indian branch of the Commonwealth Human Rights Initiative in New Delhi comments that the
main issue at hand concerning police violence is a lack of accountability of the police.

Religious institutions: In India, the corruption has also crept into religious institutions. Some of
the Church of North India is making money by selling Baptism certificates. A group of church
leaders and activists has launched a campaign to combat the corruption within churches. The
chief economic consequences of corruption are the loss to the economy an unhealthy climate for
investment and an increase in the cost of government-subsidised services. The TI India study
estimates the monetary value of petty corruption in 11 basic services provided by the
government, like education, healthcare, judiciary, police etc., to be around rupees 21,068 crore
(US$4.7 billion). India still ranks in the bottom quartile of developing nations in terms of the
ease of doing business, and compared to China and other lower developed Asian nations, the
average time taken to secure the clearances for a startup or to invoke bankruptcy is much greater.

Tender and contracts: Government officials having enormous powers in awarding contracts
engage in preferential treatment for selected bidders and display negligence in quality control.
Many state-funded construction activities in India, such as road building, are dominated by
construction mafias, which are groupings of corrupt public works officials, materials suppliers,
politicians and construction contractors. Shoddy construction and material substitution (e.g.
mixing sand in cement while submitting expenses for cement) result in bridge collapse (in
commonwealth games) roads and highways being dangerous, and sometimes simply washed
away when India's heavy monsoon season arrives as has been witnessed last year.

Medical Services: There have been cases of diversion of medical supplies from government
hospitals and clinics as well as supply and distribution of medicines of inferior quality. Some
hospitals are charging extra amounts from rich people. In Government Hospitals, corruption is
associated with non availability of medicines or fake medicines, getting admission, consultations
with doctors and availing diagnostic services which can be seen easily outside any of Govt
hospitals. An unfair co-operation from medi-insurance companies and hospitals exaggerate this
situation further.
Death Certificates: The corrupt officials are often asking Grieving families to pay bribes to
obtain the Death Certificate.

Transport: India has multiple authorities for vehicular laws as well as overlapping laws at the
central government and state government level which deteriorates bureaucratic complications.
Officials who administer transportation regulations, safety norms, and traffic violations engage
in rent seeking activity. Usually a lenient treatment for an offending driver or vehicle is
accompanied by expectation of a bribe. This leads to facilitation payments to accelerate normal
government processes.

Income tax: There have been several cases of collusion of officials of the income tax department
of India for a favorable tax treatment in return for bribes.

Major Steps to Curb Corruption:

Right to information act: The Right to Information Act (2005) and equivalent acts in the states
have been fruitful for us as the 2006 report by Transparency International puts India at the 70th
place and states that significant improvements were made by India in reducing corruption. RTI
requires government officials to furnish information requested by citizens or face punitive
action.The computerization of services and various central and state government acts that
established vigilance commissions have considerably reduced corruption or at least have opened
up avenues to redress grievances. An amendment to the Constitution has been proposed to
implement the Lokayukta (an anti-government corruption organization in the Indian states)
uniformly across Indian States as a three-member body, headed by a retired Supreme Court
judge or high court chief justice, and comprise of the state vigilance commissioner and a jurist or
an eminent administrator as other members.

Creation of Anti-Corruption Police and Courts: It has been proposed to create an anti-theft
law enforcement agency that investigates and prosecutes corruption at all levels of government,
including state and local level. It will also have the provision for special courts that are more
efficient than the traditional Indian courts with traveling judges and law enforcement agents. Few
states like Andhra Pradesh (Andhra Pradesh Anti-corruption Bureau) and Karnataka (Lokayukta)
have such agencies and courts.
Civil sector initiatives: Some popular initiative like Jaago Re! One Billion Votes from Tata Tea
has now changed its focus from voter registration to fighting corruption. 5th Pillar is one such
organization that is promoting the use of Zero Rupee Notes to fight corruption by shaming the
officials who ask for bribe

Whistleblowers: The assassination of Satyendra Dubey has waked us up from a deep sleep to
have a law to protect whistleblowers because they play a major role in the fight against
corruption. Indian courts are regularly ordering probe in cases of murders or so-called suicide of
several whistle blowers. Many companies have included this in their policy. Kerala High Court
ordered CBI probe on 18th February 2011 in murder of V Sasindran Company Secretary of
Palakkad based Malabar Cement Limited, a Government company in Kerala and his two minor
children. However, CBI showed its unwillingness for probing into such cases citing over-burden
as a reason.

Consumer protection Websites:

nobribe.org is a platform for corruption free India and advocates the use of direct and regular
measurement of corruption to force the hands of the leadership into dealing with corruption
related issues.

www.indiaagainstcorruption.com is a movement created by concerned citizens from all

spheres, and professions, who've come together to fight corruption in India.

www.ipaidabribe.com is one such site.

www.ekakizunj.com It is inspired by G. R. Khairnar, the erstwhile Mumbai Municipal Deputy

Commissioner and intends to create a database of all the corrupt in India.

Conclusion: We have no doubt in mentioning that one of the major problems and obstacles to
development that many developing countries face is corruption by greedy, power-hungry
politicians, which is endemic in certain parts of the world. Being Asia's third-largest economy
India needs to deal with the malice of corruption and improve governance. The politico-
economic regime has established many distortions. We have witnessed a sea change in the years
following 1991; some of the distorted cultural norms that took hold during the earlier period are
slowly being repaired by the absolute forces of competition. The process will be long and slow,
however, it will not change overnight. If we start nipping in the bud the corrupt forces by
adhering to moral, spiritual, ethical values and social responsibility through formal education,
training programs, seminars etc then we are surely establishing a world of peace, progress and
prosperity.

Notes and References

1. "A.P. Departments - Anti-Corruption Bureau". A.P. Government.

http://www.aponline.gov.in/. Retrieved 25th June 2010.

2. Albats. KGB: The State Within a State. Translated from the Russian by Catherine A.
Fitzpatrick. 1995. First edition in 1994.

3. Are even the Priests taking to corruption? www.ibnlive.com

4. Corruption in Indian Armed Forces: 72 officers sold their weapons for profit - Army.
www.defenceforum.in

5. Example of a central government department's implementation of the Right to

Information Act.

6. "India's Rising Growth Potential". Goldman Sachs. 2007.

7. Indian bureaucracy ranked worst in Asia: Survey The Times of India, June 3, 2009.

8. Is corruption widespread in the Indian armed forces? How can it be dealt with?
www.dnaindia.com

9. "Jaago Re Campaign from Tata Tea". Tata Tea. http://www.jaagore.com/.

10. K.R. Gupta and J.R. Gupta, Indian Economy, Vol #2, Atlantic Publishers & Distributors,
2008, ISBN 8126909269. Snippet: ... the land market already stands subverted and an
active land mafia has already been created ...
View publication stats

11. "Lokayukta may get constitutional status". www.deccanherald.com Retrieved 30th

June, 2010.

12. Police Accountability in India: Policing Contaminated by Politics. www.hrsolidarity.net

13. Prabhakar, Binoy. "Black money trail: 'India drained of Rs 20 lakh crore during 1948-
2008'".

14. Rajinder Puri (15 August 2006). "Can Corrupt Politicians Preserve Freedom?" Retrieved
7 April 2010.

15. "Two Income Tax officials booked for corruption". Indian Express. Praful Bidwai.
"INDIA: Legal System in the Dock".