Nuances of corruption and development
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Nuances of Corruption and Development
Mahesh KumarChennaiNEXT & Satta Panchayat Iyakkam
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India’s Current Position
• Human Development Index• Ease of Doing Business Index• Gender Gap Index• Press Freedom Index• Per Capita GDP• Global Innovation Index • Environment Performance Index
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India’s RANK
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Corruption Related Index
• Corruption Perception Index : 85/174• Global Competitiveness Index : 51/139• Index of Economic Freedom 2011 : 124/183• Economic Freedom of the World : 94/ 141• Ease of Doing Business: 132/183
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Global Competitiveness Index
• World Economic Forum• Diversion of Public Funds: 71/139• Trust in Politicians: 88/139• Bribes : 83/139• Ethical behavior of Private Firms: 70/139 • Efficacy of Corporate Boards: 76/139
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History
• Ancient • Mentions in Rig Veda (Around 1500 BCE)• Arthsashtra ( 2nd Century BCE)
• Modern • Singapore • Hong Kong • USA
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Corrupt Indians??
• Amendment to PCA Act • Indians Vs Rest of Country • Indians in other countries
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Corrupt Indians??• Readers Digest Experiment
• 2006: 12 wallets each in 16 cities around the world ( $50) – 2nd best with 9 returned• Except for Hungary, more honest than USA, Russia, England, Brazil, and
Switzerland. • 2007: 30 mobile phones each in 32 cities – India Rank : 5/32
• Rule of 80:10:10• Role of Institutions
• “The proper function of a government is to make it easy for people to do good and difficult for them to do evil” – William Gladstone
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Types of Corruption
• Coercive• Ipaidabribe.com
• 1.23 Lakh reports since 2010• Rs.500 for passport verification or Rs.50000 for eKatha
• Collusive • 2G Scam
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Corruption – Penalty elsewhere
• US - Rod Blagojevich Saga• Governor of Illinois, contribution to his political fund, in exchange
for a seat• arrested – Dec 2008, indictment – Aug 2010• Retrial : April 2011, Conviction – Dec 2011• Impeachment: Jan 2009, barred from public office • 14 years in Jail
• Singapore and Hong – Kong
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Corruption Since Independence
• Areas where reduced • Railways • Telephone• Natural Resource Allocation • Cement, Sugar and Steel • Passport • Income Tax
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Corruption Since Independence
• New Areas started • Permit ( Educational Institutions)• Appointments and Transfers• Real Estate • Auction & Tenders etc• Loans in PSU • PPP
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Poor – Disproportionately affected
• Welfare Measures• PDS
• 46.7% leakage = Rs 48,000 Cr at 2012 , Rs 61,000 Cr at 2015
• NREGA• Average Annual Outaly Rs 40,000 Cr – Similar leakage as PDS – NSS
Survey
•
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Poor – Disproportionately affected
• Informal Sector• Hafta or Mamool :
• Street Vendors in Delhi : 5000 License for 5 Lakh Vendors• Hafta : 20% to 50% of Revenue • Frequent raids + use of force
• Licensing : Cycle Rickshaw in Delhi • 1 Lakh License for 5 Lakh Vehicle • Bribe – 5 to 20% of Cost ,• Renewal every 3 year – Half of license bribe
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Poor – Disproportionately affected
• Tenders : Jharkand • Good Roads increase rural income by 18% • Expenditure on Roads : 54% Commission • Agriculture Growth – Twice faster in elimination of poverty than
other sectors• Irrigation project : 48% Commission
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BPLCORRUPTION RANK – DEPARTMENT WISE
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SLUMS
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Corruption and Developement
• Bribes – 3% of World GDP • GDP growth and Corruption Co-relation in G20 Countries• Ease of Doing Business Index• Jobs and Indian in next decade
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CORRUPTION - FORMULA
•Corruption = (Monopoly + Discretion) - (Accountability + Integrity + Transparency)
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Equilibrium of Corruption
• Politician • Bureaucrat• People/Voters • Election Expenditure • Politics