BUSINESS

ENVIRONMENT (CP-
208)
CORRUPTION AND ITS IMPACT- In Business







CONTENTS
INTRODUCTION
IMPACT OF CORRUPTION ON INDIAS GDP GROWTH
IMPACT OF CORRUPTION ON BUSINESS
PERCEPTION OF MOST CORRUPT INDUSTRIES
WORLD'S LEAST CORRUPT NATIONS.
L EAST CORRUPT COUNTRIES
MOST CORRUPT COUNTRIES
THE IMPACTS OF CORRUPTION ON ENVIRONMENT.
TOP 10 CORRUPTION SCAMS IN INDIA
WHAT IS THE NATURE OF BRIBE DEMANDS IN INDIA?
WHO DEMAND BRIBE IN INDIA?
PREVENTION OF CORRUPTION
2011 INDIAN ANTI-CORRUPTION MOVEMENT


INTRODUCTION
Corruption is not just the clearly bad cases of government officials skimming
off money for their own benefit. It includes cases where the systems dont
work well, and ordinary people are left in a bind, needing to give a bribe for
the medicine or the licenses they need.
Corrupt behavior is a type of opportunistic behavior by an agent in which the agent
uses the resources of the principal not to accomplish the goals of the principal but
for the agents own purposes.
Here the principal is a person or organization owning property that it wishes to use
in its interests.
The agent is a person hired to manage the property of the principal in order to
advance the principals goals more effectively.
Corrupt behavior is the intentional betrayal of the principals interests by the agent
for the agents own benefit.
Over 2/3
rd
of the survey respondents perceive that India can touch 9% GDP
growth if corruption is controlled. Otherwise, it would result in volatile political
and economic environment.
IMPACT OF CORRUPTION ON INDIAS GDP GROWTH




IMPACT OF CORRUPTION ON BUSINESS

PERCEPTION OF MOST CORRUPT INDUSTRIES



WORLD'S LEAST CORRUPT NATIONS.
India ranked 95
Corruption is a major cause of concern in developing and
developed nations. In some nations it is highly cancerous and poses a threat to
overall economic growth. Transparency International, a global organisation
that works against corruption, comes out with a Corruption Perceptions Index
(CPI) every year says, "No region or country in the world is immune to the
damages of corruption".
The Corruption Perceptions Index ranks countries and territories
according to their perceived levels of public sector corruption.
It is an aggregate indicator that combines different sources of
information about corruption, making it possible to compare countries.
A country's score is measured on a scale of 1 - 10, where 1 means that a
country is perceived as highly corrupt and 10 means that a country is
perceived as very clean.
India doesn't feature on the top 25 list of least nations in the world, nor
is it in bottom 25. This certainly brings about a ray of hope.
The Indian government has been on its toes for the past few months.
Not only has it been rocked by scams of gigantic proportions, but has
also seen the rise of an anti-corruption movement.
L EAST CORRUPT COUNTRIES
Country: New Zealand
Ranking: 1
Score: 9.5
Country: Denmark
Raking: 2
Score: 9.4
Country: Finland
Raking: 2
Score: 9.4
Country: Sweden
Ranking: 4
Score: 9.3
Country: Singapore
Raking: 5
Score: 9.2


MOST CORRUPT COUNTRIES
Venezuela ranks 172 among 182 countries with score 1.9
Haiti ranks 175 with score 1.8
Iraq ranks 175 with score 1.8
Sudan ranks 177 with score 1.6
Turkmenistan : 177 : 1.6
Uzbekistan : 177 : 1.6
Afghanistan : 180 : 1.5
Myanmar : 180 : 1.5
North Korea : 182 : 1
THE IMPACTS OF CORRUPTION ON ENVIRONMENT.
Establishes environmentally damaging policies and practices to enrich
bureaucrats and criminals.
Allocates environmental resources in an unfair manner allowing
environmentally damaging practices.
Diverts funds allocated for environmental programs to private pockets.
Allows trafficking in wildlife and other natural resources.
Allows depletion of natural resources and pollution of environment
through bribery in environmental inspections and permitting system





TOP 10 CORRUPTION SCAMS IN INDIA
1) 2G Spectrum Scam
The much speculated about 2G Spectrum Scam has been one of the
most expensive scams in the nations record. Former telecom minister Mr. A.
Raja was the person who skillfully siphoned 1.76-lakh crore INR by evading the
2G licensing norms. He awarded the 2G accounts at the price rate of 2001
instead of the increased rate in 2008. As a result India lost an unbelievable
huge amount of money and this might have severe effect on the countrys
economy.
2)Commonwealth Games Scam
Another feather in the cap of Indian scandal list is Commonwealth
Games loot.
Yes, literally a loot! Even before the long awaited sporting bonanza could
see the day of light, the grand event was soaked in the allegations of
corruption.
It is estimated that out of Rs. 70000 crore spent on the Games, only half
the said amount was spent on Indian sportspersons.
The Central Vigilance Commission, involved in probing the alleged
corruption in various Commonwealth Games-related projects, has found
discrepancies in tenders like payment to non-existent parties, will-ful
delays in execution of contracts, over-inflated price and bungling in
purchase of equipment through tendering and misappropriation of
funds.
3) Telgi Scam
Abdul Karim Telgi, the maestro of conning, managed to print fake stamp
papers and then he sold them to various financial institutions and banks.
It affected various states and the scam was worth more than 20000
crore INR. This scam became possible because the offender has strong
connections with high government officials and this is indeed the major
failure of the Indian political and judiciary system.

4) Satyam Scam
The recent scam that took place in Satyam computer Service which is
considered one of the most promising IT companies in India, certainly
startled the investors, foreign clients and Indian masses. The 14000
crore worth Satyam fraud is the largest corporate scam in the history of
India. The companys chairperson Ramlinga Raju executed his fraudulent
endeavors throughout a decade and kept everyone else in dark.
However Indian governments intervention in this matter saved a
number of young workers from unemployment and finally the company
was taken over by Tech Mahendra.
5) Bofors Scam
Bofors scam is accepted as the hallmark in the list of top 10
corruption in India. It took place in the 1980s and Prime Minister of that
time Mr. Rajiv Gandhi and several powerful names were found involved
in it. The well-known NRI family Hindujas connection was identified in
the Bofors scam. They were accused of taking bribe from Bofors, the
largest arms manufacturing corporation of Sweden for a contract they
won to supply 155 mm field howitzer to India. A shocking report was
broadcasted by the Swedish radio to reveal the scam wherein Rajiv
Gandhis congress accepted $16 million as kickback. This was a sensitive
issue as the matter was related with Indias security. However, with the
political heads involved in this scam, no proper punishment was given to
the offenders.
6) The Fodder Scam
Fodder Scam, popularly known as the Chara Ghotala took place in
1996, in Bihar. In this major corruption in india an uncouth connection
was detected in the production of vast herds of fictitious livestock for
which animal husbandry gears, medicine and fodder worth 900 crore
INR was allegedly procured. It was indeed a major waste of nations
funds and caused severe damage to the legal and economic situation of
the country.


7) The Hawala Scandal
The Hawala case to the tune of $18 million bribery scandal, which came
in the open in 1996, involved payments allegedly received by countrys
leading politicians through hawala brokers.
From the list of those accused also included Lal Krishna Advani who was
then the Leader of Opposition.
Thus, for the first time in Indian politics, it gave a feeling of open loot all
around the public, involving all the major political players being accused
of having accepted bribes and also alleged connections about payments
being channelled to Hizbul Mujahideen militants in Kashmir.
8) IPL Scam
Most of us are aware about the recent scam in IPL and embezzlement
with respect to bidding for various franchisees.
The scandal already claimed the portfolios of two big-wigs in the form of
Shashi Tharoor and former IPL chief Lalit Modi.
9)Stock Market scam by Harshad Mehta:
Harshad Mehta, the former employee of New India Assurance, entered
the stock market and soon became one of the most reliable and revered
icon of the market. He alone decided the fate of the stock market and
even banks trusted him with their ready forward deals. However
Harshad managed to produce seamlessly original looking fake bank
receipts and many banks lent him huge amounts of money assuming
that they were doing this in return of government securities. In short he
siphoned lump sum from the banking system and raised a large fund for
himself. Though he was convicted and banished from the stock market
scenario, he had already caused loss worth more than 4000 corers INR.
10)The Coal Scam
It has already been termed as the mother of all scams, as the black
money involved here has swallowed all the other previous scams. The
report on coal scam by CAG (Comptroller and Auditor General), has

accused the Government of India for illegally and irregularly providing
our nations coal deposits to private and state run entities instead of
auctioning them in the public. And this has resulted a loss of a whopping
1,86,000 crore rupees to our national treasury in the period 2004
2009. There have been estimates released by the media that the actual
loss was 10,60,000 crore rupees. And what is more sickening is, in that
period of five years, all the major coal dealings in the country went right
under the nose of our Prime Minister.
WHAT IS THE NATURE OF BRIBE DEMANDS IN
INDIA?






WHO DEMAND BRIBE IN INDIA?

PREVENTION OF CORRUPTION
Genesis:-
The Prevention of Corruption Act, 1988 (henceforth referred to as PCA)
came into force on 9th September, 1988.
It incorporated the Prevention of Corruption Act, 1947, the Criminal Law
Amendment Act, 1952, and sec. 161 to 165-A of the Indian Penal Code
with modifications and amended the Criminal Law Amendment
Ordinanc,k1944. The PCA, 1988l, thereby widened the coverage,
strengthened the provisions and made them more effective.
2011 INDIAN ANTI-CORRUPTION MOVEMENT
The Indian anti-corruption movement has been named among the "Top
10 News Stories of 2011" by Time magazine.

The movement has gained momentum since April 4, 2011, when anti-
corruption activist Anna Hazare began his now-famous hunger strike at
the Jantar Mantar in New Delhi.
Another important aim, led by protests under Swami Ramdev, is the
returning of black money from Swiss and other foreign banks.
DATE: April 4, 2011 (2011-04-04) ongoing
LOCATION: India
STATUS: ONGOING
CAUSES:
Government corruption
Police corruption
Corporate corruption
Electoral fraud
Discretionary powers of politician
Black money
GOALS:

Establishing strong and independent janlok pal anti-corruption
legislation and enforcement;(Not Completed Yet)
Publicising People to vote against Parties who are against Strong Lokpal
Bill & consequently white wash Government in Vidhan Sabha Elections in
5 states in 2012 and Indian Elections 2014(Not Yet Completed)
Establishing strong "Right to Reject Bill"(Not Completed Yet)
Repatriating and seizing almost 350 Billion $ to 1.4 Trillion $ black money
from abroad and making it a national income;(Not Completed Yet)
Electoral and Judicial reform;(Not Completed Yet)

CHARACTERISTICS:
Non violent protest
Satyagraha
Hunger strikes
Civil resistance
Civil disobedience
Demonstrations
sit-ins
occupations
Fast-unto-death
Online activism