Corruption in Public Resources Allocation

Page 2

Topics

► Corruption perception Index ► Top Indian sectors► Top corruption and scams ► Top five reasons► Where to start► Roles and Responsibilities► Role of Indian Inc► Drivers► Use of technology

Page 3

Corruption perception index 2013

Rank 97/177

Page 4

Top Indian sectors

Corruption percolating through the sectorsBribery and corruption are pervasive, but some sectors tend to witness a relatively higher degree of such instances. Following sectors as the most vulnerable to corruption

► Infrastructure and real estate – 85%► Metal and mining 76%► Aerospace and defense 645► Power and utilities 51%

Page 5

Top public Resources

► Mines and Minerals► Oil and Natural Gas► Sand► SEZs► Stock market & Securities► Telecommunication► Defense► Corporate

Page 6

Top stories

► 2011 Antrix Devas deal:  The scam involves former ISRO chairman G Madhavan Nair and three other scientists who were responsible for a controversial contract between Antrix Corporation and Devas Multimedia Private Limited on January 28, 2005. Under the deal, Antrix was to provide 70 MHz of S-Band wavelength to Devas for broadcasting purposes. This was to be done by ISRO leasing out S-band transponders in two satellites (GSAT6 and GSAT6A) to Devas.

► 2013 Chopper scam:

Better known as Choppergate, the scam

involves several politicians and defence

officers, who have been accused of

having accepted bribes from

AugustaWestland to clear a contract to

supply 12 AgustaWestland AW101

helicopters to India

► 2012 Coal block allocation

scam: Dubbed as Coalgate by the media,

the scam once again exposed corruption in the 

higher echelons of power in the country. The

scandal involves allocation of the country's coal

deposits to public and private sector companies

by Prime Minister Manmohan Singh.

► 2010 2G spectru

m: One of

the largest financial scams in

the

country, the 2G scam involves

undercharging by government officials

to various telecom companies d

uring the

allocation of 2G licenses fo

r cell phone

subscriptions.

► 2010 CWG: Among all the scams

in India, the CWG scam is perhaps the

only one that drew the attention of media

worldwide. A day after the conclusion of

the Games, the Centre announced

formation of a special committee to

probe allegations of corruption and

mismanagement against the Organising

Committee (OC).

2011 Tatra truck scam: Top officials of 

Bharat Earth Movers Ltd (BEML), a defence public

sector undertaking,  and the defence ministry siphoned

off Rs750 crore in bribes and commissions over the

past 14 years in the purchase of components for Tatra

trucks.For over a decade, the BEML flouted defence

procurement guidelines and sold Tatra trucks to the

army at an inflated price.► KG basin gas price: SC issues notices to Centre, RIL --The government's controversial decision to raise the price of natural gas came under judicial scrutiny with the Supreme Court on Monday agreeing to examine the matter and issued notices to the Centre and Reliance Industries Ltd (RIL).

► A bench headed by Chief Justice P Sathasivam issued notices to Centre and RIL on the issue.

Page 7

Top 5 reasons

► Weak law Enforcement► Number of government “touch points”► Complicated taxes and licensing system► Very old legislations and rules along with guide

lines► Gaining an unfair advantage in business

What are the top five reasons for this increase in corruption

Page 8

Slide title here

►What next?

Page 9

Where to start

Improvise Financial

model Enhance

Laws

E Governance

Use of technology

Enhance RTI Empower

Execution

Criminal Charges

Page 10

Roles and Responsibilities

• Build strong E Governance

• Transparency in bidding and evaluation process

• Strengthen our Laws and prosecution process

• Empower investigation agencies with autonomous structure

• Transparency at every stage

•Transparency in fund collections

•Disclosure of assets• Credible politics

• Transparency in corporate governance

• Collective business associations

• Anti fraud frame works • Set the tone at the top

Indian Inc Political Accountability

Public ManagementEnforcement

Anti Corruption

Page 11

Role of India Inc

Acknowledge: there are diverse risks for different divisions and geographies, and the one-size-fits-all approach is not effective

Be alert: constant updating is required on current bribery risks in a country, sector, transaction, business opportunity and business partnership

Take the right approach: action taken on policies and procedures should be proportionate to the risks faced and the complexity of the nature, location and scale of commercial activities

Define “Zero tolerance” clearly communicate what this means for the business

Do not be ambiguous: provide clear guidance on gifts, hospitality, political and charitable donations, and demands for facilitation payments

Perform due diligence: carry out systematic risk assessment of third parties, undertake site visits, perform information searches in the public domain and conduct local interviews to collect information on identified sources

Conduct tailor-made training: a continual and relevant training process needs to be in place for the day-today issues employees are likely to face, to guide them effectively for the addressing these effectively

Ensure that “speak up” channels such as hotlines are available for your employees. Businesses need to focus more closely on driving ethical growth for shareholder value.

Page 12

Drivers..

►Enhance our procedures, legislations, rules and guidelines► Bring changes to the new revenue sharing models for states► Build Anti Fraud frame work for all government processes► Identify process, people and technology issue in implementation► Effective vigilance with involvement of all concerned departments►Transparent communication / more information available for public► Set the tone at the top► Include criminal charges along with civil charges► More specific guide lines to the corporate governance►Use of technology and automation to the maximum possibility► Investigate the issues quickly with the help of technology and know

how’s

Page 13

Use of technology

► Develop strong E Governance, E procurement etc.► Connect every supply chain point along with check post / points

► Develop automation in allotment, fee estimations, payments etc.

► Publish all necessary information online►Technology assisted evaluation of materials and process► Use of GlS and GPS technologies►Involve both private and government participation in the investigations.

►Effective investigation of all corruption issues with use of technology to deep dive in to the problem.

Page 14