Monday, January 3, 2011

Corruption in India: National Laws&International Response

Corruption in India: National Laws&International Response
The corruption was bye-product of colonial British Rule,it is reported that during British Rule ,the administration was corrupt and the menace of corruption continued due to License- permit Raj policies of the central government and  more over,it is rampant in all sectors both private and public sector due to  poor regulatory laws and enforcement mechanism.The recent scandals like 2G Spectrum Telecommunication scam,Commonwealth Games Scandal, Adarsh Housing Society Scam, Corporate Loan Bribery scandals rocked the nation and stunned all right thinking individuals.The corruption is effecting every walk of life .The corruption and red tap ism is an obstacle to the development of economy , removal of poverty and unemployment.The prestigious Lok Pal Bill is pending since 43 years speaks volumes of political will to fight the menace of corruption.

The Apex court could not remain mute spectator to rampant corruption in the country ,the  Supreme Court Bench of Justice G.S. Singhvi and Justice A.K. Ganguly, hearing a writ petition filed by the Centre for Public Interest Litigation seeking action on the basis of the draft report submitted by the CAG, pulled up the central government for the slow progress of investigations into the 2G spectrum scam.

The Supreme Court on Nov 18 2010, asked the prime minister to file an affidavit when hearing a petition filed by Janata Party president Subramaniam Swamy that he had written to Manmohan Singh in November 2008 seeking permission to prosecute former communications minister A. Raja.


Justice Krishna Iyer sent a congratulatory letter to Justice Ganguly, one of the two judges hearing the public interest litigation[PIL] in the 2G spectrum allotment issue.He said ‘Court is one institution that still survives to battle corruption which must be eliminated if justice is to be a reality in India. It is the omniscient money power that governs state power today,’ ‘Corruption, like god, is omnipotent in India and operationally on top,’ the former judge observed. ‘Indian corruption is above god, above cricket, above Commonwealth Games. It is in every institution and office,’ .‘Every Indian, including those in the central and state governments, is marketable and sells his dignity to dollar and MNCs,’ ‘By silence and inaction, several others compromise on dignity. Inaction is not innocence. But action is an obligation,’


The bench of Justice Markandeya Katju and Justice TS Thakur  in Supreme Court  said "It is very unfortunate that there is no control over corruption in the country. There is rampant corruption particularly in the department of income tax, sales tax and excise department. Nothing moves without money," ."Mr Venugopal we did not expect at least a counsel of your stature to appear for such people. Mahatma Gandhi was also an advocate, but he never appeared for such people," Justice Katju observed.The senior counsel initially shot back, saying, "My lord in that case I would be losing most of my clients!" a remark that sent the entire court hall into a burst of laughter.

On appointment of P.J Thomas as a head of Central Vigilance Commission , Chief Justice S. H. Kapadia said “how well he could function” at the agency, when Thomas faces charges from an alleged palm-oil scam in the 1990s for which he was not prosecuted.“In every matter he deals with, he will face embarrassment and under these circumstances we want to know if he will be able to function as CVC"


It is matter of irony that India is one of the  among 14 of 140 signatory countries that have failed to ratify a UN convention against corruption and  principle opposition parties sought a reply from the prime minister of India on the issue."The central government of India plans to ensure all politicians and bureaucrats are covered under the ordinance, fast-track all corruption cases, ensure that any agency or individual could make a complaint. They will also ensure corruption could be defined as expediting a policy to benefit a company or individuals and that taking bribe money to circumvent an existing law or policy is also penalized."

It is fashionable to be called corrupt and lead luxurious life style with black money earned through illegal means and people have accepted fact that corruption is part of life and they cant fight it out  because of system flaws and lack of political will to fight.

What corruption means?
Corruption is unethical, immoral, and illegal in many societies, religions, and countries"" ”.

According to  Wikipedia the word 'corrupt' (Middle English, from Latin corruptus, past participle of corrumpere, to destroy : com-, intensive pref. and rumpere, to break) when used as an adjective literally means "utterly broken".

 In modern English usage the words corruption and corrupt have many meanings:

Political corruption- the abuse of public power, office, or resources by government officials or employees for personal gain, e.g. by extortion, soliciting or offering bribes
Police corruption- 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
Corporate corruption- corporate criminality and the abuse of power by corporation officials, either internally or externally, including the fact that police obstruct justice.
Data corruption- an unintended change to data in storage or in transit Linguistic corruption- the change in meaning to a language or a text introduced by cumulative errors in transcription as changes in the language speakers' comprehension

'Corruption' according to Dictionary.Com means [:Origin: 1300–50;  ME corrupcio]

1.the act of corrupting or state of being corrupt.
2.moral perversion; depravity.
3.perversion of integrity.
4.corrupt or dishonest proceedings.
5.bribery.
6.debasement or alteration, as of language or a text.
7.a debased form of a word.
8.putrefactive decay; rottenness.
9.any corrupting influence or agency.

Kautilya 's 'Arthashastra'  [350–283 BC]" is brilliant and comprehensive treatise on all aspects of international relations, intelligence and good governance" and expressly discusses corruption and its control.

Facts &Figures of Corruption in India
Recent scams &their amount during year 2010

1.Fake housing loan[2010]- not known [thousands of crores]
2.Adarsh Housing Society2010] Mumbai scam-not known
3.Rice Scam[2010] -2,00,000 crore
4.2G spectrum[2010] :1.76-lakh crore
5.IPL scam[2010]-unknown
6.Commom Wealth games[2010] -4000 crore spent
7.Citi Bank scandal[2010]-300 crores

Other major scams :
1.Telgi Scam-2000 crore
2.Satyam Scandal -1400 crore
3.Fodder scam-900 crore
4.Hawala-18 milliom crore


  • "According to Transparency International's Corruption Perception Index (CPI), India is one of the least corrupt governments in South Asia. It has a CPI score of 3.3 (rank 87th), compared to Pakistan (2.3, rank 143th), Bangladesh (2.4, rank 134th), Nepal (2.2, rank 146th), and Sri Lanka (3.2, rank 92nd) in 2010.

  • 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".


  • Management Guru C.K.Prahalad , the cost of corruption to the country might as well exceed Rs. 250,000 crores

  • It is reported that about 8000 crores spent by Indian political parties/politicians during last general election held during year 2009.

  • The underground economy  is at  shocking 40-50% of GDP,according to International NGO Indians holds about 2 lakh crores money under unanimous  accounts in Swiss banks speaks volumes of corruption in India.Deregulation & trade liberalization actually contributed to & accelerated transfer of illicit money abroad

  • India ranks an awful 165th out of 183 countries in the World Bank’s measure of the difficulty of starting a business.
  • Some 68% of India’s aggregate illicit capital loss occurred after India’s economic reforms in 1991
  • Total capital flight out of India represents about 16.6% of India’s GDP as of year-end 2008

The National instruments regulating the Corruption in India

  • Prevention of Corruption Act,1988[as amended in 2008]-1988 PCA attaches criminal liability under the Indian Penal Code to both public and private sector corruption.
  • Indian Penal Code ,1872 -provision penalizing a public servant who takes gratification  under Section 161 ,Criminal Law Amendment Ordinance of 1944&Criminal Law Amendment 1988.[added words "an authority or a body owned or controlled or aided by the Government"]
  • Benami Transaction (Prohibition) Act was passed in 1988 but the relevant rules had not been framed and no one had been arrested under it.

  • The Prevention of Money Laundering Act, 2002 (PMLA)[last amended 2009]
  • Central Vigilance Commission Act-[CVC] 2003 is designed to inquire into allegations of corruption by administrative officials only.
  • Central Burea of Investigation[CBI][Delhi Special Police Establishment Act, 1946]premier investigating agency of the country, functions under the supervision of the Ministry of Personnel, Public grievances and Pensions (under the Prime Minister
  • Comptroller and Auditor General of India[CAG].established by the Constitution of India ,an officail auditor.
  • Right to Information Act,2005[RTI]-The RTI states that "the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in the Official Secrets Act of 1923.
  • Public Disclosure (Protection of Whistleblowers) Bill.pending Since 2002
  • Commissions of Inquiry Act 1952
  • Lok Pal 2010[awaiting select committee nod]  [an ombudsman] -this institution cover all government ministers, officers at centre including Prime Minister (Under Debate).
  • Lok Ayuktha -This institution covers state government and its officers.


Other agencies who play key role in controlling corruption ;
  • Reserve Bank of India
  • Income Tax department
  • Enforcement Directorate
  • SEBI
  • Custom department

International Law and Corruption:

Even though the issue of corruption is subject of national laws ,some significant developments of anti -corruption laws in International spheres.

  • UN Convention against Corruption (UNCAC) 2003 India has signed on 9 Dec 2005,     but not ratified  the treaty.
  • The G-20 summit finalised an anti-corruption action plan at the Seoul Summit, which was signed by India.
  • United Nations Convention against Transnational Organized Crime (UNTOC)
  • OECD Anti-Bribery Convention
  • ADB-OECD Action Plan for Asia-Pacific
  • The Inter-American Convention against Corruption (OAS Convention)
  • African Nations Convention against Transnational Organized Crime (UNTOC)
  • Council of Europe Criminal Law Convention.
  • Council of Europe Civil Law Convention.
  • Resolution (99) 5 of the Committee of Ministers of the Council of Europe: Agreement Establishing the Group of States against Corruption.
  • Resolution (97) 24 of the Committee of Ministers of the Council of Europe: Twenty Guiding Principles for the Fight against Corruption.

  • European Union Convention on the Protection of the Communities' Financial Interests and the Fight against Corruption and two protocols.


U.N Secretary-General, Ban Ki-moon said at the occasion of International Anti-Corruption Day on 9 December 2009 that it the world's vulnerable who suffer "first and worst" by corruption such as the theft of public money or foreign aid for private gain. The result, he says, is fewer resources to fund the building of infrastructure such as schools, hospitals and roads. Mr. Ban notes, however, that corruption "is not some vast impersonal force" but "the result of personal decisions, most often motivated by greed." Pointing out that "the UN Convention against Corruption is the world's strongest legal instrument to build integrity and fight corruption", he also called on businesses to adopt anti-corruption measures in line with the Convention.


World Bank [WB} Initiatives :
It is apt give importance to  World Bank ,which recommended that legislation ought to  have the following components:

  1.  Freedom-of-information law (FOIA)
  2. Whistle-blower protection law
  3.  Conflict-of-interest laws
  4. Procurement laws
  5. Anti-money-laundering regulations


USA response to Corruption :

In USA,Congress passed the International Anticorruption and Good Governance Act of 2000 (IAGGA) (Public Law 106-309) on October 5, 2000
US (Foreign and Corrupt Practices Act (FCPA)law enforcers are showing more aggressiveness  in pursuing foreign companies that pay bribes, it would seem the right time for European executives to bulletproof their firms against ethics breaches.The most MNC are very scared of US anti-bribery law.


Corruption in Indian Judiciary :

Due to criticism that there is rampant corruption in Judiciary ,the central government  prepared "The Judges Inquiry (Amendment) Bill 2008" was introduced in Parliament for setting up of a panel called the National Judicial Council, headed by the Chief Justice of India, that will probe into allegations of corruption and misconduct by High Court and Supreme Court judges.There is demand to establish National Judicial Commission to oversee the appointment of judges to High Court and Supreme Court through fair and impartial manner.


According to the Global Corruption Report 2007, the upper judiciary is considered relatively clean, with open court proceedings and free access to prosecution documents, authenticated orders, etc. In the lower justice institutions, corruption is reportedly rampant and systemic.However contrary to view ,

  • Senior Advocate &former minister ,Shri Shanti Bhushan in the year 2010 submitted list of corrupt judges to Supreme Court stunned the nation.
  • Chief Justice of Karnataka[now resigned] Justice.Dinakaran faces corruption charges and assets disproportionate to known sources of income
  • Former Chief Justice of Supreme Court &now NHRC chief Retd.Justice.K.G Balakrishnan and his son-in-law faces charges of holding assets disproportionate to known sources of income.He was criticized for his comments on his post not being that of a public servant, but that of a constitutional authority and later he changed his stand. 
  • Senior advocate Fali Nariman has written to former justice V R Krishna Iyer supporting his call for a judicial probe into allegations of unaccounted wealth accumulated by ex-CJI (Chief Justice of India) Balakrishnan’s relatives as another such case is being brought to fore.

  • Justice Sen of Calcuttat High court faces corruption charges and likely to face impeachment motion in parliament. 

Supreme Court Bench, Justice B N Agrawal, Justice V S Sirpurkar and Justice G S Singhvi :"We are not giving the certificate that no judge is corrupt. Black sheep are everywhere. It's only a question of degree."

Supreme Court Judge, Justice Agarwal:"What about the character of politicians, lawyers and the society? We come from the same corrupt society and do not descend from heaven. But it seems you have descended from heaven and are, therefore, accusing us."

Supreme Court Bench, Justice Arijit Pasayat, Justice V S Sirpurkar and Justice G S Singhvi :"The time has come because people have started categorizing some judges as very honest despite it being the foremost qualification of any judge. It is the system. We have to find the mechanism to stem the rot


In an study by TI&CMS  ,"The sheer number of cases  ( more 26 million at last count) says it all. Given that, and the number of judges across various states (per lakh of population), the system is rife with delays and inefficiencies -- ideal conditions for middlemen to step in. In the year preceding the survey, 59% of respondents paid bribes to lawyers, 5% to judges, and 30% to court officials"

Conclusion:
One of the challenging situation  for any government is how to control growing menace of corruption spread over every walk of life making life of the ordinary citizens miserable and trouble some.We need to strengthened the law for protection of whistle blower so that citizens freely and openly complain against corruption and wrong doing in government and private sector.The honest officers should be encouraged and should be appointment for top post  as reward for their honesty and integrity.

The school curriculum  should teach good morals for students  and anti-corruption feeling should be in -calculated right from elementary stage.Former President Dr A P J Abdul Kalam once said students should revolt against their parents and ensure that they  don't  take bribe from people, while performing their official duties.

There is a need for separate fast track courts for Anti-graft cases in all parts of the country to expedite the case ,which are pending in courts.The justice delayed is justice denied.

It is worth mentioning  the three components of reform, as suggested by Thomas Carothers, “The Rule of Law Revival,” Foreign Affairs,1998-Revise laws ,strengthen rule-of-law institutions (especially with regard to accountability)Increase public trust and confidence by encouraging government compliance with laws and citizen-driven human rights and anti corruption campaigns.


Sources of Information /Resources :
  1. Transparency International
  2. World Bank website
  3. UN Website& other national website resources
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