PRESENTED BY ROLL NUMBER -6342

Corruption

is the abuse of entrusted power for

private gain In philosophical , theological or moral discussions , corruption is spiritual or moral impurity or deviation from an ideal Corruption may include many activities including bribery and embezzlement Corruption =Authority + Monopoly - Transparency

 Trivial

and Grand Corruption Political and Business Corruption Chaotic and Organized Corruption Individual and Group Corruption

 Trivial

Corruption is considered as the most widely spread corruption in India. Grand corruption is very extensive corruption done by political leaders Political Corruption is prevalent in developing countries and extreme in India. Business corruption is practiced by business class people In Chaotic corruption the system and process of offering bribe is not organized at all. In organized corruption there is process system for bribing In Individual Corruption only a single person or official is involved in practicing bribing. This type of corruption can be seen in government offices and institutions In Group Corruption a group of people work as unit to practice bribing

 Bribery
Embezzlement ,

Theft and Fraud Extortion and Blackmail Abuse of discretion Favoritism, Nepotism and Clientelism Improper Political Contributions

Bribery is the improper use of gifts and favors in exchange for personal gain. This is also known as kickbacks. The types of favors given are diverse and include money , gifts , company shares , entertainment , employment etc. The personal gain that is given can be anything from actively giving preferential treatment to having an indiscretion or crime overlooked.

Embezzlement and theft involve someone with access to funds or assets or illegally taking control of them. Fraud involves using deception to convince the owner of funds or assets to give them upto unauthorized party. Examples include the misdirection of company funds into shadow companies(and then into the pockets of corrupt employees) , the skimming of foreign aid money , scams and corrupt activity.

Extortion and blackmail centre around the use of threats. This can be the threat of violence or false imprisonment as well as exposure of an individuals secrets or prior crimes. This includes such behaviour as an influential person threatening to go to the media if he doesnt receive speedy medical treatment(at the expense of other patients) , threatening public officials with exposure of their secrets if they donot vote in a particular manner , or demanding money in exchange for continued secrecy.

Abuse of discretion refers to the misuse of ones powers and decision making facilities. Examples include a judge improperly dismissing a criminal case or a customs official using his discretion to allow a banned substance through a port.

Favoritism , nepotism and clientelism involve the favoring of not the penetrator of corruption but someone related to them , such as friend , family member or member of an association. Examples would include hiring a family member to a role they are not qualified for or promoting a staff member who belongs to the same political party as you regardless of merit.

This is the use of contributions to political parties to secure illicit power , not because one favors their policies . An example would be tobacco or alcohol companies funding major political parties as a means of influencing the policing of their industry.

 Government/Public

Sector Legislative System Executive System Judiciary System Corporate

Public sector corruption is one of the more dangerous forms of corruption of the governing body and can lead to widespread effects. Recent research by the World Bank suggests that who makes policy decisions(elected officials or bureaucrats) can be critical in determining the level of corruption because of the incentives different policy-makers face.

Political corruption is the abuse of public power, office or resources by elected government officials for personal gain for example by extortion, soliciting or offering bribes . It can also take the form of office holders maintaining themselves in office by purchasing votes by enacting laws which use taxpayers money.

Police corruption is a specific form of police misconduct designed to obtain financial benefits , other personal gain , and or career advancement for a police officer or officers in exchange for not pursuing , or selectively pursuing an investigation or arrest . One common form of police corruption is soliciting and or accepting bribes in exchange for not reporting organized drug or prostitution rings or other illegal activities . Another example is police officers floating the police code of conduct in order to secure convictions of suspects for example , through the use of falsified evidence. More rarely , police officers may deliberately and systematically participate in organized crime themselves. In most major cities , there are internal affairs sections to investigate suspected police corruption or misconduct.

Judicial corruption refers to corruption related misconduct of judges , through receiving or giving bribes , improper sentencing of convicted criminals , bias in the hearing and judgement of arguments and other such misconduct .

As corporations and business entities grow larger , sometimes with a monetary turnover many times that of small countries , the threat of corruption in the business world , within the organization , in dealings with other organizations and in dealings with the government is a looming and growing threat . Companies may engage in political corruption.

Costs of corruption even if you dont come into direct contact with corruption , corruption affects you . Corruption reduces the overall wealth in a country since it can discourage businesses from operating in such a corrupt setting In countries with high levels of corruption the average income is about 3 times lower than in less corrupt countries .Corruption also reduces the amount of money the government has to pay to good workers and purchase supplies such as books and medicine. It distorts the way the government uses its money too. The result is that schools, health clinics, roads, sewer systems , police forces and many other services that governments provide are worse than they would otherwise be

 Because

of this infant mortality rates are about 3 times higher and literacy rates are about 25% lower in high corruption countries than in countries with low to medium levels of corruption Corruption is unfair and allow those with money or connections to bend the law or government rules in their favor. They can pay off judges for example or divert scarce drinking water to their land. For these reasons corruption harms the environment and undermines trust in government

Corruption in India is a major issue and adversely affects its economy A 2005 study conducted by Transparency International in India found that more than 62% of Indians have first-hand experience of paying bribes or influence peddling to get jobs done in public offices successfully. In 2012 India has ranked 94th out of 176 countries in Transparency Internationals Corruption Perceptions Index , tied with Benin , Colombia, Djibouti ,Greece ,Moldova , Mongolia and Senegal Corruption has taken the role of a persistent aspect of Indian politics and administration

As of December 2008 ,120 of Indias 523 parliament members were facing criminal charges Many of the biggest scandals since 2010 have involved very high levels of government including Cabinet Ministers and Chief Ministers such as in the 2G Spectrum Scam ,the 2010 Commonwealth Games Scam , Mining scandal in Karnataka and cash for vote scam

 Recently

the government increased the salary of the M.P.S from Rs. 16,000 to Rs. 50,000 that is 300% increase to the existing salary .But many of them are unhappy with rise and want the government to increase the salary to a much more extent . This clearly show the politicians are in constant thirst for monetary benefits and not caring about the welfare of the people
Tax evasion is one of the most popular forms of corruption. It is mostly practiced by government politicians and officials which leads to the accumulation of black money which in turn spoils the morale of the people

 Officials are

alleged to steal state property . In cities and villages throughout India 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 government hospitals , corruption is associated with non availability of medicines , getting admission ,consultation with doctors and availing diagnostic services. National Rural Health Mission is another health carerelated government program that has been subject to large scale corruption allegation. The program has been run since 2005 by the Ministry of Health of the Indian Government The National Rural Health Mission Program has been clouded by a large scale corruption scandal in which top government officials were arrested ,several of whom died under mysterious circumstances including one in prison

 Corruption

, waste and fraud related losses from this government program has been alleged to be Rs.10,000 crores(US $2 Billion)

In early August 2011 ,an iron ore mining scandal became a media focus In September 2011 Janardhan Reddy an elected member of Karnatakas legislative assembly was arrested on charges of corruption and illegally mining of iron ore in his home state of Karnataka It was alleged that his company received preferential award of resources ,organized and exported billions of dollars worth of iron ore to China in recent years without paying any royalty to the state government exchequer of Karnataka or the central government of India and these Chinese companies made payment to shell companies controlled by Reddy and registered in Caribbean and north Atlantic tax havens

 It

was also alleged that corrupt government officials cooperated with Reddy ,starting from government officials in charge of regulating mining to government officials in charge of regulating port facilities and shipping These officials received monthly bribes in exchange for enabling illegal export of illegally mined iron ore to China

The most important factor is the nature of human being. People in general have a great thirst for luxuries and comforts and as a result of which they get themselves involved in monetary or material benefits Moral and spiritual values are not given utmost importance in education system, which is highly responsible for the deterioration of the society The salary paid to employees is very less and as a result of which they are forced to earn money by illegal ways The punishments imposed on criminals are inadequate The political leaders have spoiled the society completely. They lead a luxurious life and donot even care about society People of India are not awakened and enlightened . They fear to raise voice against anti-social elements prevailing in the society

 Bofors

Scandal Tehelka 2G Spectrum Scam Common Wealth Games Scandal IPO Demat Scam Satyam Scandal Securities scam( Harshad Mehta Scam)

 The

then PM Rajiv Gandhi and several others were accused of receiving bribes from Bofors AB for winning a bid to supply Indias 155 mm field howitzer. The scale of the corruption was far worse than any that India had seen before , and directly led to the defeat of Gandhis ruling Indian National Congress Party in the November 1989 general elections It has been speculated that the scale of scandal was to the tune of Rs. 40 crore

 On

February 5, 2004 , The Delhi High Court quashed the charges of bribery against Rajiv Gandhi and others . On May 31,2005 , the court dismissed the Bofors case allegations against British business brothers , Shrichand , Gopichand and Prakash Hinduja On May 4,2001,Cottavio Quattrochi , accused as the middleman in the scandal because of intimacy with Rajiv and his Italian born wife Sonia Gandhi , was freed from the case as there was no credible evidence against him.

 Tehelka

showed several political figures as well as army top brass , colluding to take bribes that approached 4% of orders totalling hundreds of crores in order to approve defence contracts Indeed , in September 2001 , Tehelkas editor-inchief , Tarun Tejpal was charged with immoral trafficking for offering prostitutes to the MoD officials during the sting operation

The then Defence Minister , George Fernandas , resigned after the tapes were made public, but he was reinstated later. Part of the tapes showed the treasurer of his party talking about accepting bribes of 1 crore or more from arms dealer ex-Naval officer Lt Commander Suresh Nanda , son of ex-chief of Naval Staff Admiral [Link] However five years later in October 2006 , the CBI filed charges against George Fernandas , former Chief of Naval Staff Admiral Sushil Kumar and others in the Barak missile case , claiming that there was reasonable basis to suspect corruption and criminal conspiracy . In March 2008 , the Nandas were arrested. Fernandas was interrogated in May 2008.

THE 2G Spectrum scam involved politicians and government officials in India illegally undercharging mobile telephony companies for frequency allocation licenses which they would then use to create 2G subscriptions for cellphones Entry fee for subscription licenses in 2008 was pegged at 2001 prices No procedures were followed . Rules were changed after the game had begun , cut-off date for applications was advanced by a week . No proper auction process was followed , no bids were invited . Advice of TRAI , Law Ministry , Finance Ministry was ignored. The shortfall between the money collected and the money that the law mandated to be collected is estimated to be Rs. 1,76,645 crores as valued by the Comptroller and Audit General of India based on 3G and BWA spectrum auction prices in 2010 In a chargesheet filed by the investigating agency ,CBI , the loss was Rs. 30,984.55 crores

The Supreme Court declared allotment of spectrum as unconstitutional and arbitrary and quashed all the 122 licenses issued in 2008 during tenure of A Raja(then minister for Communications and IT) the main accused in the 2G case The Court further said that A Raja wanted to favor some companies at the cost of the public exchequer and virtually gifted away important national asset. On August 2012 when as per directions of the Supreme Court , Government of India revised the base price for 5 MHz 2G spectrum to be around Rs.14000 Crore which roughly gives the value of spectrum to be around Rs.2800 Crore per MHz

 The

commonwealth games spawned a maze of corrupt deals ,most of them involving inflated controls. Instead of selecting companies who offered the best prices ,equipments and services were hired from firms who overquoted. Often companies who offered better deals were disqualified for inexplicable reasons. A foot overbridge collapsed outside the main venue ,Jawaharlal Stadium just 2 weeks before the games, the army re-built it.

 Mr.

Kalmadi ,Chairman of organizing committee of Commonwealth games was accused of handling out Rs.141crores contract to Swiss Timing for its timing equipment the deal was inflated by Rs.95 Crores .An official recommended the disqualification of a Swedish company , allegedly at Mr. Kalmadi behest ,leaving only the Swiss firm in the fray. The CBI which probed the case filed a chargesheet against Kalmadi in May 2011.

An IPO is the first sale of an entitys common shares to public investors. When an entity wants to enter the market , it makes its shares available to common investors in form of an auction sale Each application for an IPO has to be within a cut-off figure , which is eligible for allotment in the retail investors category. But in this case , financiers and market players illegally cornered these retail investors shares The IPO scam came to light in 2005 when the private Yes Bank launched its initial public offering. Roopalben Panchal , a resident of Ahmedabad had allegedly opened several fake demat accounts and subbsequently raised finances on the shares alloted to her through Bharat Overseas Bank branches

 SEBI

started a broad investigation into IPO allotments for Yes Bank in 2005 Apart from the Yes Bank fraud , SEBI reportedly had definite data about two IPOs where retail allotments were rigged , but market observers believed the scam was for bigger The Income Tax Department in Ahmedabad found that two major accused , Panchal and Sugandh Investments together made Rs.60.62 Crore in 18 months

Former Chairman [Link] Raju was the prime convict in the case with several other board members Satyam Scam involved amount close to 10,000 Crore At that time Satyam was the fourth largest IT firm in India carrying Indias outsourcing image globally An announcement that shocked the corporate India was that [Link] resigned The companys balance sheet was inflated to Rs. 5361 Crore at the end of September 2008 against the actual Rs. 5,040 Crore There was an artificial cash balance of Rs. 588 Crore in September 2008

 Raju

also admitted that Satyams profits were inflated over several years and it was difficult for him to stop this fraud gap. The Maytas deal was the last attempt to fill the fictitious assets with real ones. Raju also said that Rs.1230 crore was arranged to Satyam which was not reflected in its books to keep Satyams operations running . For this the promoter had to pledge the promoters shares and raised funds from other sources

 Jobs

of over 50,000 technocrats were at risk Countrys booming economy feared slight collapse as countrys GDP fell by estimated 0.4% Indias IT sector suffered downturn as its image was tarnished globally

 Satyam

computers on December 16,2008, announced that it will acquire 2 group firms Maytas properties and Maytas Infra for $1.6 billion (about 8000 crore) as part of its diversification strategy , this created an alleged violation of corporate governance laws The Ministry of Corporate affairs later ordered a probe into whether the company violated any corporate governance laws while entering into such a deal involving shareholders money

 News

of what is possibly the countrys biggest corporate fraud sent the indices tumbling . The benchmark Sensex slipped over 7% On Wednesday,7 January 2009. Companies perceived to have poor corporate governance standards were most affected. The companys share price fell to 21.3 % since December 15, the day before the crisis broke.

 To

stabilize the sinking Satyam Computers , the Government nominated banker Deepak Parekh , IT Expert Kiran Karnik and former SEBI member C Achutan to the IT Companys board On 13 April 2009 , via a formal public auction process , a 46% stake in Satyam was purchased by Mahindra and Mahindra owned company Tech Mahindra , as part of its diversification strategy. Effective July 2009 , Satyam rebranded its services under the new Mahindra management as Mahindra Satyam with a new corporate website [Link]

Mehta gradually rose to become a stock broker on the BSE and had an expensive lifestyle Through the second half of 1991 , Mehta had earned the title of Big Bull because he was said to have started the bull run. On April 23 , 1992 ,journalist Sucheta Dalal exposed Mehtas illegal methods in a column in the Times of India . Mehta was dipping illegally into the banking system to finance his buying The game went on as long as the stock prices kept going up and no one had a clue about Mehtas modus operandi. Once the scam was exposed the banking system had been swindled of a whopping Rs. 4000 Crore The chairman of the Vijaya Bank committed suicide by jumping from his office roof . He knew that he would be accused if people came to know about his involvement in issuing cheques to Mehta

 Mehta

had a brief comeback as a stock guru in 1998 , giving tips on his own website as well as weekly newspaper column . This time around , he was working with owners of a few companies and recommended only the shares of those companies .This game too did not last long. By the time he died , Mehta had been convicted in only one of the many cases filed against him.

 The

Right to Information Act gives one all the required information about the Government such as what the government is doing with our tax payments. Under this act one has the right to ask government on any problem which one faces. There is a Public Information Officer(PIO) in every government department who is responsible for collecting information on payment of a nominal fee to the PIO . If the PIO refuses to accept the application or if the applicant does not recover the required information on time then the applicant can make a complaint to impose a penalty upto Rs. 25000 on the errant PIO

Another potent check on corruption is Central Vigilance Commission. It was setup by the government to advise and guide Central government agencies in the areas of vigilance. If there are any cases of corruption or any complaints thereof then that can be reported to CVC. CVC also shoulders the responsibility of creating more awareness among people regarding consequences of giving and taking of bribes and corruption Establishment of special courts for speedy justice can be a huge positive aspect. Much time should not elapse between the registration of a case and the delivery of judgement Strong and stringent laws need to be enacted which gives no room for the guilty to escape

 The

PCA(Prevention of Corruption Act) came into force in September 1981. It was an improvisation of the Act of 1947 Thus if an offence against a public servant is proved in the court there will be imprisonment of not less than 6 months upto 5 years and also the person may be fined. In certain cases of habitual offenders imprisonment could be 7 years. There is no limit on the maximum fine payable.

People should be educated about corruption Young people from good educated backgrounds should involve themselves into politics People should be encouraged to speak up whenever they see corruption Departments should be opened to look over the flaws in the system and immediate actions should be taken There should be more NGOs in the country consisting of dedicated persons (and no position holders to earn fame and status)who should act against corruption by organizing people and educating them

 Every

individual should accept and follow all existing systems like Law , Discipline , Traffic etc. Violators should be punished More transparent projection of undergoing nationwide development works should be made known to public If we want our country to be honest , each one of us must be honest. One corrupt person can discredit the entire social structure and tarnish reputation of the entire country

THANKS