Research paper
For
Corporate social responsibility, human values and ethics
On
Corruption and scams in Indian, causes and cures
Submitted byShubham Sharma
MBA SEM 4th 03861203910, Batch-2011-2012
In India, the epidemic of corruption is spreading rapidly in every fields and [Link] and builders are constructing weak and low standard roads, bridges and houses. Students are engaged in mass [Link] and examining body are indulge in leaking out question papers. Doctors prescribe unnecessary medicines and pathology examinations for commissions. Traders are engaged in overcharging, adulteration and under weighing. Government officials take bribe for doing or sanctioning any work or contracts. Scams in banks, financial institutions, sports, defence department, religious places, government projects are the order of the day. Hence, it has become biggest threat to the social and economical development of India. There is termendous loss of national wealth due to various scams. In order to cure society from this deadly social pathology. We should know its causes, consequences and cures.
Scams in India
1) 2G Spectrum Scam
We have had a number of scams in India; but none bigger than the scam involving the process of allocating unified access service licenses. At the heart of this Rs.1.76-lakh crore worth of scam is the former Telecom minister A Raja who according to the CAG, has evaded norms at every level as he carried out the dubious 2G license awards in 2008 at a throw-away price which were pegged at 2001 prices.
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
As they say, every scam must have something unique in it to make money out of it in an unscrupulous manner- and Telgi scam had all the suspense and drama that the scandal needed to thrive and be busted. Abdul Karim Telgi had mastered the art of forgery in printing duplicate stamp papers and sold them to banks and other institutions. The tentacles of the fake stamp and stamp paper case had penetrated 12 states and was estimated at a whooping Rs. 20000 crore plus. The Telgi clearly had a lot of support from government departments that were responsible for the production and sale of high security stamps.
4) Satyam Scam
The scam at Satyam Computer Services is something that will shatter the peace and tranquillity of Indian investors and shareholder community beyond repair. Satyam is the biggest fraud in the corporate history to the tune of Rs. 14000 [Link] companys disgraced former chairman Ramalinga Raju kept everyone in the dark for a decade by fudging the books of accounts for several years and inflating revenues and profit figures of Satyam. Finally, the company was taken over by the Tech Mahindra which has done wonderfully well to revive the brand Satyam.
5) Bofors Scam
The Bofors scandal is known as the hallmark of Indian corruption. The Bofors scam was a major corruption scandal in India in the 1980s; when the then PM Rajiv Gandhi and several others including a powerful NRI family named the Hindujas, were accused of receiving kickbacks from Bofors AB for winning a bid to supply Indias 155 mm field howitzer. The Swedish State Radio had broadcast a startling report about an undercover operation carried out by Bofors, Swedens biggest arms manufacturer, whereby $16 million were allegedly paid to members of PM Rajiv Gandhis Congress.
Most of all, the Bofors scam had a strong emotional appeal because it was a scam related to the defense services and Indias security interests.
6) The Fodder Scam
If you havent heard of Bihars fodder scam of 1996, you might still be able to recognize it by the name of Chara Ghotala , as it is popularly known in the vernacular language. In this corruption scandal worth Rs.900 crore, an unholy nexus was traced involved in fabrication of vast herds of fictitious livestock for which fodder, medicine and animal husbandry equipment was supposedly procured.
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
Well, I am running out of time and space over here. The list of scandals in India is just not ending and becoming grave by every decade. 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) harshad Mehta & Ketan Parekh Stock Market Scam
Although not corruption scams, these have affected many people. There is no way that the investor community could forget the unfortunate Rs. 4000 crore Harshad Mehta scam and over Rs. 1000 crore Ketan Parekh scam which eroded the shareholders wealth in form of big market jolt.
10) Isro scam
The Contract signed between Antrix Corporation and Devas Multimedia Private Limited on January 28, 2005 during his tenure as Chairman ISRO and Secretary, DOS, created a lot of controversy in India. Following the controversy on January 25, 2012 he was barred from holding any Government jobs. which government took for review recently.
11) Tatra scam
n July 2011 Mumbai based newspaper DNA published a report alleging that over past 14 years Tatra Sipox (UK) Limited, purported British subsidiary of Tatra Sipox as (Slovakia) has paid kickbacks worth 750 crore (US$149.63 million) to BEML and various Indian defence officials and secured defence contracts worth 5,000 crore (US$997.5 million). Allegations of kickbacks being offered for procuring Tatra trucks again surfaced in March 2012 when the Chief of the Army Staff (India) General Vijay Kumar Singh alleged that a retired Lieutenant-General offered a sum of Rs. 14 crores for clearing a tranche of 600 Tatra trucks for use by the Indian Army.
12) Adarsh scam
The Adarsh society high-rise was constructed in the Colaba locality of Mumbai, which is considered a sensitive coastal area by the Indian Defence forces and houses various
Indian Defense [Link] society is also alleged to have violated the Indian environment ministry rules.[Some of the more blatant transgressions included obtaining a No Objection Certificate from the Army towards construction of the building in a sensitive zone, getting the MMRDA development plan modified and obtaining another NOC for residential development in Coastal Regulation Zone, often through manipulation of records and misrepresentation of facts. Efforts by honest officers to bring this to the notice of top officials were ignored.
LAWS AND PROVISIONS IN INDIA TO TACKLE CORRUPTION (i) The Prevention of Corruption Act, 1988 The Prevention of Corruption Act 1988 (hereinafter referred to as the Corruption Act) was enacted to consolidate different anti-corruption provisions from various pieces of legislation under one umbrella and to make them more effective. The Corruption Act, inter alia, widened the scope of the definition of a public servant; enhanced penalties provided for offences in earlier laws; incorporated the provisions of freezing of suspected property during trial; mandated trial on a day-to-day basis, prohibited the grant of stay on trial; etc. The Corruption Act is the main law for dealing with offences pertaining to corruption in India, however many avenues of corruption cannot be dealt with under the Prevention of Corruption Act, 1988. (ii) India and the United Nations Convention against Corruption 2003 (UNCAC)India has welcomed the UNCAC, which provides for international cooperation and mutual legal assistance in investigating cases of corruption and recovery of assets. India signed the UNCAC in December 2005. By signing the Convention India has reiterated its resolve to strengthen international co-operation as envisaged in the Convention. It is in the process of enactment of requisite enabling legislations by the concerned Ministries or Departments before ratifiying
the Convention. Once ratified, the Convention will boost Indias effort and commitment to fight corruption at both domestic and international level. (iii) The Prevention of Money Laundering Act 2002 (Article 23 of the UNCAC)Many public servants are able to hold their ill-gotten wealth in foreign countries, which they subsequently transfer to their homeland through money laundering, disguising them as funds, apparently from a legal source. This Act empowers the Directorate of Enforcement, India, and Financial Intelligence Unit, India, both agencies of the Government of India, to investigate and prosecute such persons under the said Act. (iv) The Foreign Exchange Management Act 1999 Middlemen or touts, who take huge commissions for brokering deals pertaining to purchases from foreign suppliers, often transfer such money in foreign currencies, claiming it to be the proceeds of some business abroad. This Act empowers the Directorate of Enforcement, India to investigate and prosecute such persons under the said act. (v) The Right to Information Act 2005 It is a well-known fact that too much secrecy in public administration breeds corruption. The Right to Information Act aims at ensuring efficiency, transparency and accountability in public life. This Act requires all public authorities, except the ones that handle work relating to national security, to publish all information about their functioning at regular intervals through various means of communication, including the Internet. Now any person can seek any information from the concerned public authority just by filing an application at almost at no cost. The public authority has to reply to the application compulsorily within 30 days. If the
information sought is denied, the applicant has a right to agitate further before the appellate authorities under this Act. This can indeed be described as a revolutionary step towards the eradication of corruption from public life. (vi) India and the United Nations Convention against Corruption 2003 (UNCAC) India has welcomed the UNCAC, which provides for international co-operation and mutual legal assistance in investigating cases of corruption and recovery of assets. India signed the UNCAC in December 2005. By signing the Convention India has reiterated its resolve to strengthen international co-operation as envisaged in the Convention. It is in the process of enactment of requisite enabling legislations by the concerned Ministries or Departments before ratifiying the Convention. Once ratified, the Convention will boost Indias effort and commitment to fight corruption at both domestic and international level. (vii) Cases referred by the Central Vigilance Commission (CVC) and the Chief Vigilance Officers (CVOs) of other Government Departments The Central Vigilance Commission is a statutory body which monitors corruption in governmental departments. It supervises the work of Chief Vigilance Officers of all the departments of government and issues guidelines to them. The CVC also receives complaints from the general public about corruption. It refers such complaints to the CBI for verification and investigation if found to contain verifiable allegations. The CVOs are in-house supervisors of government departments who monitor the conduct of personnel and enquire into complaints against them pertaining to corruption. If upon enquiry they conclude that a criminal case under the Corruption Act appears to have been made out, they refer the case to the CBI for investigation.
(viii) Use of Telephonic/Electronic Surveillance The legal provisions relating to telephonic or electronic surveillance under the Indian Telegraph Act 1885 are effectively used by the CBI to gather accurate information about corrupt activities of the public servants. After ascertaining details about various phone numbers and email identifications used by the public servant, permission of the competent authority is taken to put the same under surveillance. Information gathered during such surveillance has been successfully used in exposing big scams. (ix) Freezing, Seizure and Confiscation of Properties - The Criminal Law (Amendment) Ordinance, 1944 (Article 31 of UNCAC) This is an important law on freezing, seizure and confiscation of properties which are proceeds of crime, including offences under the Corruption Act. Such properties identified during investigation can be frozen under this law. Properties can remain frozen till disposal of the case by the court after completion of the investigation. If the alleged offence is proved in the court of law and the property is proved to be the proceeds of crime, the court will order its confiscation. PROBLEMS AND CHALLENGES Despite adequate laws to fight corruption in the public sector, it is still one of the biggest menaces Indian society is facing today to tackle corruption prevalent in our society. The Indian criminal justice system has been facing many problems and challenges in its fight against corruption, some of which are highlighted below:(a) No Law to tackle Corruption in the Private Sector The Prevention of Corruption Act 1988 is the existing law in India dealing with offences relating to corruption. This law, however, was essentially enacted to take
care of corruption cases in the public sector and by public servants, whereas in fact, there is widespread corruption in the private sector also which seriously hampers the overall growth and development of the [Link] the liberalization of the Indian economy in the early 1990s, the private sector has expanded greatly. T he problem of corruption in the private sector is increasing with the expansion of the private sector. Today it has assumed alarming proportions. It has become the single biggest menace to Indian society. Efforts areunderway to enact laws to deal with corruption in the private sector as envisaged in the UNCAC. (b) Inherent Delays in the Criminal Justice System The system is painfully slow and punishments are not swift. As explained earlier, sec. 19 of the Corruption Act requires prior permission of the authority competent to remove a public servant from his or her post before launching prosecution against him or her in court. This often delays the launch of a prosecution. Upon receiving reports from the investigating agencies seeking approval for a prosecution, the concerned authorities often take considerable time to grant such permission. Also, permission is sometimes denied onpolitical and other grounds. The Corruption Act provides for trial of corruption cases under the act exclusively by the Special Judges. The number of Special Judges is highly insufficient compared to the number of corruption cases filed in their courts. As a result, these courts are overburdened and there is a large discrepancy in the number of cases disposed by the investigating agencies and the number of cases disposed by the courts, adding to the backlogeach year. During trial of offences, adjournments are often taken or granted on various grounds. Further, the proceedings in the trial court are challenged at various stages by parties filing petitions in the same court as well as in higher courts. Appeals and revisions filed in higher courts against the order of the trial court often take years to be concluded. (c) Hostile Witnesses
In order to convict a corrupt public servant, the prosecution has to prove its case beyond doubt. This is a strict legal requirement as per the Indian Evidence Act, the general law on evidence in India. There is no exception to this requirement even for corruption cases. Prosecution has to depend heavily on the testimony of witnesses to prove its case beyond doubt. However, witnesses often do not support the prosecution case because of influence, allurement and intimidation from the other side. There is no witness protection scheme, nor are there provisions for quick and effective action against witnesses who become hostile. As a result, witnesses frequently become unco-operative and spoil the prosecution case. Punishments are, therefore, not swift and effective under the Corruption Act and dont deter corrupt public servants. (d) Ineffective Asset Recovery Though there are legal provisions for confiscation and recovery of property acquired as proceeds of crime, such recovery is not easy. Corrupt public servants often acquire properties with the proceeds of crime in the names of their friends, relatives, family members and other acquaintances. Therefore, it is not easy to prove in court that such properties are the proceeds of crime. Such properties are quite often held offshore under strict privacy laws and it is not easy to trace and recover them, especially in the absence of desired international co-operation.
Causes of corruption in India
1) Lack of effective management and organisation: Due to mismanagement and misorganisation, there is a weak control on various departments and their working. This leads to lack of coordination and control among departments and levels of organisation. This uncontrolled and unsupervised administration gives rise to corruption on large scale. Besides, appointment of inefficient and incapable managers and executives on various levels of hierarchy also leads to
mismanagement and misorganisation. The only cause of this wrong appointment is corruption. Hence, corruption breeds corruption. 2) Lack of economical stability: Economical crisis and price hike are major causes of corruption. Economical crisis leads to unemployment and change in standard of living. It develops a feeling of insecurity in the minds of affected people. Most of the people do not have patience and courage to face this situation. In order to regain their employment and to maintain standard of living and status,this affected people engage themselves in illegal and immoral activities. They do not want to work hard again for achieving the same position and post. They use various illegal short cuts for achieving them. 3)Lack of effective leadership: Good leaders can only lead people towards growth, development and progress. They play significant role in eradication of social evils. In India, there is tremendous shortage of good leaders. Leaders convey message of citizens to the administration and [Link] lead the people against corruption and social evils. A country cannot survive without honest and sincere leaders. There is urgent need of leaders like Mahatma Gandhiji. We need more Anna Hazares and Medha patkars. 4) Lack of support: There are few good leaders in India. They strive hard to eradicate corruption from the society. But due to lack of support and cooperation from people, the voice and efforts of these great leaders are often suppressed. People of India are more concerned with their life than the development and protection of their country against social evils. Many citizens have accepted corruption as a part of their life. They think, it is useless and waste of time, to support leaders against corruption. 5) Lack of values: Home and educational institution play a significant role in character building of citizens. Moral values are only taught in most of these institutions. But, they are not properly inculcated in individual. This is the basic cause of corruption. Many parents and teachers do not practise what they preach.
Hence,their preaching does not bring out desired results. Children imitate parents. If parents are corrupt,it is more likely that children will also become corrupt. 6) Lack of love for country: Due to rapid modernisation and globalisation, people are becoming more and more selfish. They are only concerned with self enrichment and wealth accumulation. The only objective of many Indian is to become rich as soon as possible. They consider themselves as patriotic just by celebrating independence and republic day. They do not know the actual meaning of patriotism. They are not concerned with development of nation and rights of others. Due to this attitude, they easily get involved in corruption and immoral activities. During strike and protests, many politically affiliated citizens damage and destroy public property. 7) Lack of proper system: In India, corruption exists in all levels and areas of system. Very few honest people survive in this corrupt system. Those who raise their voice against corruption are killed or forced to resign. This accelerates the growth of corruption. Most of the people involved in Indian system have take corruption as part and parcel of their duties. They don't have hatred or ill feeling towards corruption. They think that without it, we cannot survive and sustain in this system. Besides, systems are interrelated and interdependent. As a result, corruption spreads like tumour in all the systems. 8) Lack of satisfaction: Greed results from non-satisfaction. People are not satisfied with their current status, position and wealth. They want to become millionaire in a short span of time. Growth and richness is not bad. But it is sad to see that the Indian are adopting illegal and immoral ways to achieve them. Many Indians are engaged in unhealthy competitions of wealth accumulation(with relatives, colleagues and neighbours). 9) Lack of autonomy: Establishment and expansion of private and business sector depend on approval of politician. Many politician misuse their authority and power. They have only one criterion for approval "Pay us otherwise you will not get paid".
Entrepreneurs consider bribery as tax like other official taxes. Bribery has become necessary for the establishment of organisation. Companies and contractors secure contracts and government projects due to bribe. Good quotations and work of company does not considered to be criteria for securing contracts. 10) Lack of good control and vigilance: In India, some agencies are working day and night to stop corruption. But some officials of these agencies get tempted towards illegal commissions and leave corrupt people without any penalty and punishment. Corruption breeds corruption. To keep a check on crores of people, more agencies and more honest officials are required. Hence, there is a tremendous shortage of these agencies and officials in India. This results in lack of control and vigilance on illegal activities. 11) Lack of good remuneration: In private sector, employer decides salary and employment benefits. He has complete freedom and there is no pressure on him from government. Due to this fact, many employers pay less for more work. They exploit employees of their companies. Even the working conditions in most of the establishments are [Link] does not have any social security and retirement benefits. Employees get frustrated and adopt illegal means to make their earnings better and future secure. 12) Lack of employment: Many unemployed educated youth fall prey to corruption. They are willing to pay huge amount for jobs. Many employer take undue advantage of this situation. They take bribe and give appointment letters. The appointed employee uses all means (legal and illegal) to recover his lost money as early as possible. Hence,Corruption breeds corruption. When these employees achieve power and authority. They take bribe from candidates for jobs. These tradition of corruption continues from generation to generation without any check and control. 13) Lack of seats and educational institutions: In order to fulfil dreams and ambitions of their children, parents pay huge donation to secure admission for their
children. Hence, the basis of admission is not merit but money. Management use maximum utilisation of quota granted to them. Every year there is a increase in donation amount. Affluent students who secured less percentage in examinations, easily gets admissions by paying huge donations. Poor students who secured good percentage struggle day and night to get admissions. Many a time their efforts go in vain due to lack of seats and more number of applicants.
Cures for corruption in India
1) Value education: Parents and teachers should inculcate moral values in children. Practice is more persuasive than preaching. The best way to inculcate values in children is not only to preach but to set an example by actual [Link] should set themselves as a models of good behaviour. They should narrate stories based on moral values. Teacher should not only teach morals in value education period but they should inculcate values in pupils by correlating value education with various subjects and activities. They should not leave any stone unturned for achieving this great purpose. 2) Effective and regular vigilance: Strict action should be taken against lazy and corrupt officials. Number of agencies and officials should be increased. They should be properly trained in the latest investigative skills. Government should supervise and monitor these agencies. They should be quick and active in their duties. They should not delay their investigation and inspection .Since,these delay is the cause for loss of tremendous wealth of nation.
3) Responsible citizen: If an individual is corrupt,he cannot expect those in power to be free from corruption. Hence, it is essential for every citizen to perform his duties faithfully and to the best of their abilities . Every citizen should strive hard to eradicate corruption. People of India should report cases of corruption to vigilance department immediately without delay. They should follow up the cases of
corruption. Since, merely reporting the evil practice is not sufficient for its complete eradication. 4)Strong and Effective leadership and administration: All those who are granted powers and authority by people should fulfil their promises and pledge. They should strive their utmost to eradicate corruption from systems and administrations. They should give up hypocrisy. Government and vigilance agencies should keep a check on their source of income and bank accounts. If any leader is not performing his duties properly, then he should be immediately terminated from the position. It should be performance based position. Government should do performance appraisal of leaders regularly. 5)Media: Media has wider coverage and impact. It plays an important role in changing the life of people. It should frequently expose the cases of corruption. It should educate people against corruption on regular basis. Journalists and editors should give complete information about the issues related to corruption in their newspapers. Reporters should give more importance to the news and information on corruption, they should report corruption cases immediately. 6) Legislation: Government should frame strict and stringent anti-corruption laws . Severe punishments and penalties should be imposed on corrupt people. The justice and proceedings should not be delayed. Immediate action should be taken against corrupt people. The punishment should act as a good lesson for other corrupt people. 7)Social organisation: Non government organisations should work in coordination with people and vigilance departments for prevention of illegal activities. They should devise and plan innovative strategies and methods against corruption. 8)Declaration of wealth and assets: It should be made mandatory for political leaders and government officials to declare their wealth and [Link]
agencies should strictly and properly check their claims and declaration. 9)Transparency: Every process of selection, dealing and appointments of different fields should be made [Link] should be made aware of reasons and merit for selection of candidates, contracts,tenders, etc. 10)Advertising: Advertising and marketing agencies should educate and aware people against corruption. There should be appealing ads on internet, vehicles, bus stops, railway stations,sign boards and television. 11)Serials and films: Films are powerful medium of mass communication. Films have powerful influence and widespread appeal. Films can be used to create public opinion against [Link] should make certain popular serials and movies against corruption. Serials should have different episodes dealing with various types of corruption and their cures. 12)Appointment and admissions: Selection of students, managers, officers and executives should only be based on merit. It is the responsibility of candidates and parents to critically examine the selection and appointment procedures. They should report irregularities to the higher authorities without delay. 13)Religious sermon: In India, people show very strict adherence to their faith and belief. They are very sensitive towards religion, place of worship and religious leaders. They have deep attachment and great respect for preachers and spiritual [Link] try to adopt the teachings of their spiritual leaders in day to day life. Hence, religious leaders should give sermons against corruption. 14)Loyalty and patriotism: Every citizen of India should become patriotic in true [Link] should give priority and preference to the development of his nation. He should always remain loyal to their beautiful culture, ethics and country. Social workers, political leaders, media and teachers should inculcate true patriotism in the citizens of India.
15)Dedicated and diligent leaders: There should be more dedicated, devoted and diligent leaders like Medha Patkar and Anna Hazare. These leaders dedicated their whole life for eradicating corruption. It is the responsibility of every citizen of India to support and cooperate with leaders who are sincerely striving against corruption. 16) Coordination and control: All government and non government agencies should work in coordination with media, educational institutions and corporate sectors to control and eradicate corruption. They should be united in their efforts against corruption. 17)Creative writers: Pen is mightier than sword. Creative writers should write appealing articles and books against corruption. They should write interesting short stories based on honesty. 18)College and Universities: These institutions should educate and train the youth against corruption. They should organise symposium, debates,group discussion, seminars and lectures for this purpose.
Shubham sharma MBA SEM 4th 03861203910 Batch-2011-2012
