How to tackle Corruption in India

Most of the people are unaware of what effect their actions will have on others. People are becoming very greedy and egotistic which has resulted in inhuman exploitation of others. Most people believe that money is the power and the ultimate goal of their life has become only to earn money, no matter even if they need to take unethical and illegal ways.

They have gone even to the extent of snatching others basic necessities of life. Black-marketing, corruption, murder, and adulteration hold no bar for them. They can adulterate even food-stuff such as milk, ghee, spices,etc., and also lifesaving medicines. As such many people have now become cruel and selfish.

We often blame the government, politicians and other people but hardly take any responsibility to improve ourselves. We talk about the corruption and lack of our ethical values but often do not take any action to eliminate corruption or to promote, honesty, integrity and ethics in our societies. My fellow Indians, it is time to join our hands together to fight corruption.

What is corruption?As per the Transparency International (TI); Corruption is operationally defined as the misuse of entrusted power for private gain or the use of public office for private gain. In other words, use of official position, rank or status by an office bearer for his/her own personal benefit. Therefore the corrupt behaviour would include, bribery, fraud, stealing the public resources, partiality/favouritism, seizure of public assets for private use, etc.

Transparency International (TI) further differentiates between "according to rule" corruption and "against the rule" corruption. Facilitation payments, where a bribe is paid to receive preferential treatment for something that the bribe receiver is required to do by law, constitute the former. The latter, on the other hand, is a bribe paid to obtain service.

Corruption in IndiaThe most shocking part of the widespread corruption in India is the fact that it is not anymore within the parameters of how TI defines corruption, it is no longer limited to politicians or the public servants, it has become very common amongst almost every section of the society at every level. It is not only prevalent amongst rich who are greedy in spite of possessing enough but also prevalent amongst poor. The fact is that large number of Indians are now involved in corrupt practices in one way or the other, either due to greed or due to so called compulsion. People have gone even to the extent of adulteration of food-stuff such as milk, ghee, spices and also lifesaving medicines.

International Perspective on IndiaOn the international stage, India is considered a nuclear power and one of the fast growing countries in the world. Despite of the very high level corruption, the world's economists consider India as Emerging power in the world. The US government is talking about India's world power status (http://www.cato.org/pubs/pas/pa-381es.html). The Forbes magazine lists 53 Indian billionaires in the world. India has also become the biggest exporter in the world of software services and software workers. The Indians are contributing to American and Global progress; a few facts are: 12% of scientists in the US are Indians 38% of

doctors(physicians, dentists, PhDs, etc) in America are Indians; 36% of NASA scientists are Indians; 34% of Microsoft employees are Indians; 28% of IBM employees are Indians; 17% of INTEL scientists are Indians(German Magazine).BUT same time India is amongst the most corrupt countries of the world with a score of only 3.4 out of 10. It ranks 84th amongst 180 countries (Corruption Perceptions Index 2009, (http://www.transparency.org/policy_research/surveys_indices/cpi/2009/cpi_2009_table ). India is worse than many countries in Asia and Africa such as Botswana, Ghana, Namibia, Taiwan, Korea, Bhutan, and China.In the world competitiveness scoreboard, which is the assessment of several factors, e.g. Government system, Business efficiency, infrastructure, etc., it is dragging only at 31st position.

Though India boasts of a high economic growth, it is shameful that there is still large scale poverty in India. It has the world's largest number of poor people living in a single country. The recent study confirms that India has more poor people than in 26 African Countries.(VOA news). One of the main reasons of this poverty is ‘CURRUPTION'. A recent news on IBNLive ‘Corrupt Indians siphoned out $125 bn in 8 years', more than $125 billion worth of funds meant for the uplift of Indians were illegally siphoned out of the country by corrupt politicians and corporate sectors, between 2000 and 2008. Last year there was shocking news in Indian media reporting on trillions of dollar black money Indians have in Swiss bank. Almost every day we hear about many scandals and corruption cases in several government and corporate sectors in India.

The government of India has taken many steps to reduce poverty, stop corruption and improve delivery of public service but most of them did not get much success due the corruption and bureaucracy in whole system and at each level. Several international investors and development agencies are always afraid to invest in India due to the high level corruption. The recent example of misuse of fund and corruption in commonwealth game is shame for our country.

Main cause of corruptionWhy do officials misuse public office for private gain and steal public money? Why does a common man get involved in the corruption and unethical activity? Although there are many causes of corruption but based upon several research, surveys and studies, the following are most common causes in most of the governments and societies:

- Lack of rules, regulations, transparency and accountability in public sectors.- Lack of control, supervision and auditing.- Lack of articulated Code of Conduct for public servants and politicians.- Attitudes or circumstances that make average people disregard the law.- The change in the value system and ethical qualities of people. The moral and ethics have declined and most people give more importance to money than excellence.- Bribe may provide a convenient means of getting work done or avoid any punishment.- Bad incentives, such as any employee not earning enough to live on; so he supplements his income with bribes.- Tolerance of people towards corruption.- Absence of strong public forum or civil society to oppose corruption.- etc.Consequences of Corruption

Corruption is found to be one of the most damaging consequences of poor governance and poverty, classified by lack of efficiency, transparency and accountability. Corruption diminishes investment and suppresses economic growth and development and also reduces the effectiveness of public administration. It diverts the public resources towards corrupt politicians and officials and away from the needy and poor people. So, corruption can be considered anti-poor and anti-development.

How to eliminate corruption in IndiaMany people think that only government has responsibility for eliminating corruption and we often blames the government; however in view of the level of corruption and the existing framework that we have in India, it is very clear that government alone cannot stop corruption. If we, the people of India and civil society institutions remain unconcerned and hopeless in fighting against corruption then it can never be eliminated or even can't be reduced. Thus, it is the responsibility and duty of every Indian to fight against corruption and take some actions to promote honesty and integrity and contribute in the motion of ‘Honesty' in India.

No matter what your position is, what your age is, whether you are a government employee or working in a private sector, a student, a retired person or even a housewife, each and every individual has the ability to contribute in eliminating corruption in India and push government, civil society and policy makers to implement more measures at each level. .

Furthermore, fighting corruption requires more than government policy, laws, tools and legal system; it requires awareness of our social responsibility, moral values, excellence in our daily work, etc. We need role models, campaigns, debates, and many different approaches to educate our people, to inspire our young generations, to change the mindset of corrupt people and to tackle with every cause. Moreover it need willingness, commitment and active participation of media, civic associations, voluntary groups, teachers, students, social workers, etc.

Overall, India has a strong potential for being a reasonably corruption-free society if every citizen of India, joins hands together and take some actions to deal with every cause. In this 21st century we have knowledge and proven mechanism to fight corruption. We also have the power of media and technology to spread the message to millions of people within a fraction of second.

So don't sit back; every one of us needs to come forward and take actions. If you are not affected today you will be affected tomorrow.

In addition to the ongoing initiatives such as Citizens' Charters, RTI Act, social audit, e-governance, lokayukta, etc., which needs some improvement and harmonized approach across all states, the followings are a few other good initiatives which could help to tackle corruption and every cause:

1.Initiative taken by St Joseph's School in Darjeeling to award a certificate of merit — of honesty — to students who desist from cheating is an excellent example. Another example of opening a bookshop without salesman at Bhagat Puran Singh Memorial Senior Secondary School and Girls College at Rajewal town in Ludhiana, is great initiative ( http://www.inewsindia.com/2008/07/28/limit-of-honesty-a-bookshop-without-a-salesman )

2.Introducing anti-corruption classes in the school curriculum in Indonesia is another great example to fight against corruption. (http://timesofindia.indiatimes.com/Sunday-TOI/Taking-lessons-in-honesty/articleshow/4130109.cms#ixzz0zwFCSMhK )3.The Citizens Charter in Indian Government (http://goicharters.nic.in ) which was introduced to improve the quality of public services to ensure accountability, transparency and quality of services provided by various government organizations was also a good approach but it has not been very effective as many people are not aware of it.Our media can help to bring awareness of these kinds of initiatives, so that others also can learn from them. We have so many TV channels in India, if these channels start inviting role models, social workers, celebrities and youths on one platform to hold debates/discussions and bring awareness of consequences of the increasing corruptions, I believe people will become more active in fighting corruption and improve their ethical qualities.

The media can interview general public, government officers, etc., if they know about Citizens Charters.

Our teachers can also play a major role in teaching moral values & integrity to our young generation. To bring the awareness and educating the young generation in upholding the honesty, they can also organize debates, discussions and plays in school to encourage the new generation to be an honest citizen.

If not you, then who? If not now, then when?" Join the ‘Indian Honesty Movement' group on Yahoo to build a network of the honest people in India like you to share your thoughts and ideas. Forward this article to all your Indian friends to create more awareness.

Anti-corruption efforts

Right to information act

Main article: Right to Information Act

The Right to Information Act (2005) and equivalent acts in the states, that require government officials to furnish information requested by citizens or face punitive action, computerisation of services and various central and state government acts that established vigilance commissions have considerably reduced corruption or at least have opened up avenues to redress grievances.[1][29] The 2006 report by Transparency International puts India at the 70th place and states that significant improvements were made by India in reducing corruption.[30][31]

Ombudsmen

The LokAyukta is an anti-government corruption organization in the Indian states [32][33]. These institutions are based on the Ombudsman in Scandinavian countries. An amendment to the Constitution has been proposed to implement the Lokayukta uniformly across Indian States as a three-member body, headed by a retired Supreme Court judge or

high court chief justice, and comprise of the state vigilance commissioner and a jurist or an eminent administrator as other members [34].

Computerization

Bhoomi is a project jointly funded by the Government of India and the Government of Karnataka to digitize the paper land records and create a software mechanism to control changes to the land registry in Karnataka. The project was designed to eliminate the long-standing problem of inefficiency and corruption.

Introduction of smart cards for vehicle registration and drivers licenses by Karnataka Regional Transport Organization [35] .

Enforcement automation of traffic violations by Bangalore Traffic Police [36].

Whistleblowers

Whistleblowers play a major role in the fight against corruption. India currently does not have a law to protect whistleblowers, which was highlighted by the assassination of Satyendra Dubey.

Creation of Anti-Corruption Police and Courts

Some have called for the Central Government to create an anti-theft law enforcement agency that investigates and prosecutes corruption at all levels of government, including state and local level. Special courts that are more efficient than the traditional Indian courts with traveling judges and law enforcement agents are being proposed. The proposal has not yet been acted upon by the Indian government. Certain states such as Andhra Pradesh (Andhra Pradesh Anti-corruption Bureau) and Karnataka (Lokayukta) have similar agencies and courts [37][32]. The creation of a central agency with specialized courts with broad powers, however, is likely to have greater impact in curbing corruption at all levels[opinion][citation needed].

Private sector initiatives

Several new initiatives have come up in the private sector to raise awareness about Corruption related issues and to build anti-corruption platforms. http://5thpillar.org is one such organization that is promoting the use of Zero Rupee Notes [38] to fight corruption by shaming the officials who ask for bribe. Another popular initiative Jaago Re!One Billion Votes from Tata Tea has now changed its focus from voter registration to fighting corruption [39]. nobribe.org is another platform for corruption free India and advocates the use of direct and regular measurement of corruption to force the hands of the leadership into dealing with corruption related issues[40].

Corruption keeps India poor

<table align="center" border="0" cellpadding="0" cellspacing="0" width="90%"><tbody><tr><td class="DCText">By Joginder Singh</td></tr> <tr><td class="DCText"> According to a report published by National Commission for Enterprises in the Unorganised Sector (NCEUS), a government-affiliated body, on the state of informal or unorganised employment in India, 394.9 million workers, or 86 per cent of India’s working population, toil in the unorganised sector. Nearly 80 per cent of these workers are among those who live on less than Rs 20 per day.

Agriculture, the report says, is a fertile ground for poverty, especially for small and marginal farmers, 84 per cent of whom spent more than they earned and were often caught in debt traps. “These are the discriminated, disadvantaged and downtrodden. People who live on Rs 20 or less per day are the real poor and vulnerable.†Technically, a large chunk of these 836 million Indians — 77 per cent �of the country’s population — are above the poverty line at Rs 12 per day.

The dismally poor comprise largely STs, SCs, OBCs and Muslims. The report says that 88 per cent of Scheduled Tribes and Scheduled Castes, 80 per cent of Other Backward Classes and 85 per cent of Muslims belong to the category of “poor and vulnerable,†earning less than Rs 20 a day.�

A part of the period the report covers was the time when the previous government was in power and had used “India Shining†as election slogan. However, lessons �learnt are soon forgotten and now the present government is making claims about “Incredible India.†�

There is no doubt that dire poverty exists in our country. It was the late Rajiv Gandhi who had once remarked that out of every one rupee sent by Delhi, only 15 paise or 15 per cent reached the recipient or the intended destination. This observation was made in 1988, nearly 20 years ago. Since then things have gone from bad to worse, with all kinds of scams being unearthed. These scams generally involve people’s representatives who live on people’s money, and consider themselves to be India’s saviours. There is no dearth of money in this country, but a dearth of will to deal with the corrupt and to ensure that people’s money is spent for the people.

Although one scam may differ from another in name, the basic approach of all scams is to make as much money as possible out of public projects. Similarly, when it comes to covering up these misdeeds, the techniques are also similar. According to one estimate, the total amount of money stashed in the foreign bank accounts of Indian politicians and others is around US $410 billion.

Corruption is the single most major factor keeping India poor and backward despite having the best of natural and human resources. It is a major destabilising factor in politics as well as economics. Most government schemes have built-in scope for corruption. In fact no scheme ever stipulates the action that will follow in case of any malpractice.

The delivery system that is the Indian bureaucracy has let the country down, along with some corrupt politicians and rulers. Of course, there are honest politicians and officers, as otherwise, we would not have even a semblance of progress. But a report has shown that public servants received Rs 21,068 crores as bribe, apart from cuts from several government schemes last year. Between 1996 and 2000, the CBI and the Central Vigilance Commission investigated 13,265 individuals for corruption. And between 1998 and 2001, the CBI registered 2,256 cases under the Prevention of Corruption Act. Of these 41 were from administrative departments, four were from the police and 23 from the revenue department. This is a drop in the ocean, when the total number of government and public sector employees in the states and the Centre runs to 194 million.

Corruption in Indian bureaucracy has now come to be accepted as part of the machinery that governs India. Millions are at the receiving end of this phenomenon in their everyday lives, whenever they come in contact with any arm of government at any level anywhere in India. Unless corruption is checked, the vast majority of Indians who are not in a position to give bribes, will remain immersed in terrible and inescapable poverty. Any amount of funding to ameliorate their lot whether through employment guarantee or other rural development schemes, will be like throwing away good money.

The legal system is already overloaded as the following court pendency, as on February 27, 2006 will show: Supreme Court 33,635 cases; high courts 3,341,040 cases; subordinate courts 25,306,458 cases.

It is for this reason that the corrupt, the embezzlers and other criminals have no fear of the law. By delaying the process of justice, they keep punishment at bay. Quick justice is not the priority of any government, though they all talk about zero tolerance. If we can tackle corruption, we can tackle poverty as well.

William S. Halsey says, “All the problems become smaller if you don’t dodge them, but confront them. Touch a thistle timidly, and it pricks you; grasp it boldly, its spines crumble.†It is not the country, but the leadership, which is on trial.�

How to measure Corruption? 1

There are two main types of Corruption  based on its quantum – Petty

Corruption faced by common man in his day to day life and Grand Corruption

which takes place at higher levels. While the former is based predominantly on

duress, the latter is more consensual and is driven by expectations of mutual

gain. Out of the two, Grand Corruption is more difficult to measure as both

parties have an interest in keeping things under cover.

Measurement of Corruption thus far, has been limited to measuring perception

of Corruption (CPI). This is an indirect measure of Corruption where a sample of

population is polled about their perception of the level of Corruption present in

a region or service. Since the queries are general and have no reference to

specific instances of Corruption, people are more forthcoming and the data is

easier to collect. However as the data may or may not be based on ’self

experience’, it is likely to vary wildly between real and imaginary. Also since

there is also no correlation between when the bribe was paid and when the

question was asked, so the responders are more likely to adjust their responses

along expected lines with the passage of time. Hence  Perception while being an

important indicator can not replace direct measurement of Corruption.

Direct Measurement of Corruption is a daunting task because of the cloud of

secrecy and fear associated with it. The victims fear retaliation and the

perpetrators have a vested interest in secrecy, leading to a quiet burial of the

incident. So most often, any direct corruption data is difficult to obtain and its

also more likely to be intentionally tampered . Yet this is an exercise that needs

to be indulged into if only to form one of the several indicators in measuring

Corruption.

Various approaches to measure Corruption directly may be suggested based on

how other intractable quantities are measured.  One such model to measure

petty Corruption based on Inflation, is discussed below:-

Inflation Model: As Inflation is measured on the basis of prices of a basket of

goods and services, similarly a basket of public services that suffer from

rampant corruption may be surveyed on a regularly basis to measure Corruption

trends. The basket of services may consists of common services like a) Driving

License b) Registration of new Company c) New Vehicle Registration d)

Registration for Sales Tax e) Passport Application f) Issuance of ‘C’ Forms etc.

Survey questionnaire should cover both the cost of obtaining the service

(including legal fee, bribes paid and agent commission etc.) as well as the time

taken to obtain the services. Those to be surveyed may be chosen randomly

from the list of people who recently availed those services (example- A Harvard

Study on Corruption in Driving Licenses). Such surveys should should be

undertaken at regular intervals across various regions for each of the services

in the basket. Data for the same service across various regions should be

compared to find out if there are any location specific bottlenecks. The time

duration for obtaining the services may act as an alternate indicator of

Corruption trends. The collected data should be aggregated over time to yield a

Corruption trend. While this model may fall short of giving an indication of the

overall quantum of Corruption, it may be useful in determining the trends as

well location specific anomalies.

Other models for measurement of Corruption may be built around Exit Polls or

Confession Boxes.  Those who have recently paid bribes or are  likely to have

paid a bribe, should be encouraged to anonymously disclose their bribes. Exit

polling may be attempted discreetly near the places of service delivery.  Each of

these models would require a lot of tweaking before they deliver credible

results. Much of this initiative will have to come from the Private sector with the

help of academics, media and corporates to make it work. Measuring corruption

is also a lot about collective intent.  It will depend upon how serious we are we

as a society to uproot this menace.

Why do we need to measure Corruption?

There are a whole host of scales and indexes for everything under the sun

including the esoteric Business Confidence index, Human Development index,

Happiness index to the more mundane such as Inflation, GDP, Government

Approval ratings etc.

But for an all important issue like Corruption, the sole measure that exists is the

Corruption Perception index maintained by an international NGO, Transparency

International. While the index has done immense service to the anti-corruption

cause, it is primarily meant for a broad level comparison among countries and is

based on perception rather than actual ground level data. Its utility in managing

our country’s internal affairs is limited. Apart from that, there are no meaningful

studies on the geographical spread of Corruption, nor any information on its

time line trends, no best practices, not even a common place commission of

inquiry on the spread of Corruption.

Overall there are no credible estimates of the quantum or cost of corruption in

India. This has led to a situation where a feeble improvement on the Corruption

Perception Index off late has hidden an astounding growth in the quantum of

Corruption as evident from recent disclosures – Koda scam, I.A.S. raids, 300

Crorepati babus. The monetary estimates of Corruption normally vary from

billions of dollars annually to trillions of dollars in accumulated figures. The

figures are either based on very broad rules of thumb or are completely a

figment of one’s imagination. The higher the estimate, the higher is the air of

invincibility around it. Most of these figures have a hollow ring to them and are

unable to mobilize public opinion to force the hands of the government. We

continue to live in a hazy daze where everyone knows that Corruption exists but

there is no official confirmation of the same. It allows the government to put

their blinkers on and go about their work ignoring the existence of Corruption

completely while continuing to bring out new schemes & policies that benefit

the intermediaries more than their intended recipients. There is another school

of thought that believes that growth in economy will itself deal with Corruption,

so we may choose to ignore it till such time we are riding the growth tiger. In

the process however, Corruption has grown stronger and stronger. Most

importantly, it has led to a situation where Corruption has become a low risk,

high return game and is feeding on itself to grow monstrously.

There are strong reasons for developing new metrics to measure Corruption

despite its underlying difficulties. Some of them are enumerated below:

1. Primary reason for measuring Corruption is that measurement is the first

step towards a cure. We need to measure something to be able control it.

2. The monstrous growth in Corruption can only be dented by a committed

public opinion. Such a public opinion can only be built around a systematic

measure of Corruption.

3. Behind the facade of anti-corruption, there is a growing tolerance for

corruption in our society. It is undesirable, everyone says, but inevitable.

Inevitability blunts public opposition. The inevitability stems largely from our

inability to measure and track Corruption.

4. The smokescreen of impossibility of measuring Corruption because it is

secret is often used to prevent probing on this front. However secrecy hasn’t

stopped us from probing several other clandestine issues such as Sexual

preferences & Political inclinations( Election Surveys, Exit Polls).

5. Corruption has always been treated as aberration of individuals who need to

be exposed & punished. Hence very little effort has been made to check

institutionalized Corruption which needs measurement on an ongoing basis.

6. Most of our present knowledge of Corruption levels is perception based. Even

those perceptions are limited and shaped by new disclosures in scams. We have

never pro actively sought to measure Corruption, which alone can deal with the

fast mutating problem.

We have come a very long way from a Rs. 62 crore Bofors scam which shook the

Central Government and led to a Prime Minister loosing election, to a Rs. 4,000

crore Koda scam where another tainted politician was sworn in as state Chief

Minister soon after the scam came to light. How much farther do we need to

travel before we act? The time to act is now!!

Obituary to Corruption 5 Buoyed by the recent economic growth, all of us have an aspiration to see India

as a developed country soon. Investment in infrastructure is considered the best

bet to get there. Probably, we will get some distance with that strategy; but, I

submit, only rooting out corruption can actually get us to the finishing line. For,

corruption has the evil ability to destroy the nation before any benefit of

progress reaches the common man.

But corruption is neither a new nor a simple phenomenon to conceive of its

ending! In fact, Vedas called corruption a hydra-headed monster! Its heads are

bribery, exploitative profit, vested interest, naked selfish desires, hypocrisy in

the form of false promises, pride, false ego and calumny. It also takes the other

forms like, officiousness, sycophancy, treachery, wickedness etc. If not

controlled with true knowledge containing permanent truths, it spreads very

fast in politics, economics and various organs of the state and institutions of the

society.

With such an overwhelming description, it is not possible to start exploring end

of corruption. So, I chose a simpler definition articulated by Transparency

International “the abuse of entrusted power for private gain”. Looking at it this

way, the solution has just two components. Deal with power. Deal with gain.

One can deal with “power” by improving transparency and increasing

accountability. Information Technology can improve transparency. We have

experienced that from every day examples like railway ticket reservations to

mega illustrations like public monitoring of Government projects. Media can

play a key role in diffusing the power by raising awareness of people through

investigative journalism. This helps instill fear among the corrupt, and also build

courage among common people to fight corruption. Media can also show case

ordinary people who fought and achieved extra ordinary things. Instead of

feeling cynical and helpless, common man will then start blowing whistles! The

common man could also be aided by novel tools of expression viz. our own

examples such as Gandhigiri and Zero value currency notes or the

famous Citizen Initiative for Constant Light from Turkey. Ultimately, the

problem will be solved when democracy deals with corruption; after all Kahlil

Gibran did say many years ago, “so the wrong-doer cannot do wrong without the

hidden will of you all”…

Turning to dealing with “gain”, paying more to those in power is an obvious

solution, whether it is done as is by raising pay levels, or hedge through

performance based pay that is commonly used in business! In effect, what could

be lost if caught while taking bribe, should be more than what one gains

through that bribe for a job done. In reality, the playing field is more complex

than that. The minds of some of the greedy Wall Street executives became

corrupt not because they were underpaid. Nor do many positions of power

operate as “markets” to design pay per performance. We need to invoke the

social norms to deal with this more complex situation. Ethics & Values must find

more emphasis in education. After all that’s where it all begins.

How do we deal with systemic corruption, that is deep rooted; almost

institutionalised? Sequence and eliminate corruption sector by sector, start with

education and taxation? Two sectors with potentially the biggest impact!

Where will corruption take India?

The most disquieting aspect of the widespread corruption in India is the fact that it is not anymore

confined to politicians or the government machinery alone. It is prevalent amongst almost every

section of the society at every level.

As the practice of corruption is a dishonest act, one has to think that most of the Indians are

dishonest, which could be different only in degree between the individuals. As the reason for the

dishonesty is greediness and the desire to get things done at any cost one can think that most of

the country men are greedy and do not anymore think that the means should justify the ends.

This is not a flattering statement and many readers would desire that it would not be so and such

statement could have been avoided. But, the fact is that most of the Indians are involved in

corrupt practices in one way or the other, either due to greed or due to so called compulsion. In

any case, the willingness to sacrifice for the sake of not getting involved in corrupt dealings is

conspicuous by its absence amongst the most.

Today, if one would say that any particular Indian is honest to the core, it could only be a case of

exception rather than a rule.

The study of world phenomenon on corruption has repeatedly branded India as one of the most

corrupt countries in the world. Unfortunately, this view has not disturbed most of the Indians at all

and they do not seem to care as to what others think of them; so long as the existing systems and

practices would allow them to make money and get things done in one way or the other.

The irony is that India is still considered to be a very religious country and it is still widely believed

that the religion is the basis of Indian life, thoughts and actions. This is obviously true, considering

the fact that there are hundreds of temples, churches and mosques spread all over the country

and they are all densely visited day in and day out by the feverishly praying Indians.

Is not religious ethos contrary to corruption and dishonest practices ?The unfortunate situation in

India is that those who call themselves most religious are often found to have indulged

themselves in dishonest practices on many occasions. Several of the religious centres, of all

religions, are suspected to be steeped in nepotism, as such incidents have been repeatedly

published in the press.

It does not shock Indians anymore to know that not only the politicians, ministers and IAS & IPS

officers are corrupt but even the judges, professors, doctors and NGO organisations are.

Corruption is not only prevalent amongst rich who are greedy in spite of possessing enough but

also prevalent amongst poor.

Now, what can be the future of the Indian society in such conditions? It can be only frustration,

chaos, unrest and even bloodshed in the not too distant future. This kind of corruption in the

national polity and public and private life cannot go on for ever, without disturbing the overall

peace in the society. It is sad that those who are in charge of the nation today do not appear to

realise this and still are merrily going ahead with their dealings unconcerned about the harm that

it would inevitably do to the larger national cause.

What is very sad and extremely disquieting about this country is that Ministers suspected to be

involved in murder. Chief ministers of swindling crores of public money, senior police officers of

molestation charges are all living in comforts and enjoying positions, thus effectively exposing the

fact that the crusade against corruption has finally failed in India.

Even as the vicious cycle of corruption would continue with one swindling the other, there could

be a number of persons who would be left out of this cycle due to inefficiency or commitment to

the cause of truth and such persons would be driven down to despair.

The incidents of history indicate that some of such persons who are out of the corruption loop

could take up the war against corruption at one time or the other. But, they would find that in a

corruption entrenched system, they would not be able to improve the conditions and therefore, a

few of them may finally take to physical attack on corrupt and dishonest persons, leading to

violence and bloodshed. Security, dogs and mere police rifles will not be able to beat down such

determined crusaders.

The politicians and bureaucrats would call such crusaders as arsonists or terrorists. But, history

would judge them differently. There are a number of determined isolated war groups already

existing in the country and they are generally branded as terrorist groups and treated brutally by

the state machinery, without investigating the reasons for their existence. One would shudder to

think as what would happen to the peace of the society, if such groups would enlarge in size and

number.

Those holding the positions of President, Prime Minister and Deputy Prime Minister of this

country and Chief Ministers of the states should have the wisdom to realise the potential dangers

facing this corrupt ridden Indian society. They should not remain as small people who would

compromise with the aspects of good governance for the sake of remaining in power for a few

number of days more.

Corruption retarding India’s growth, says Indian PM

The world's second-fastest-growing economy is being held back by its 'evil' nature

Manmohan Singh, the Indian prime minister, has said that corruption is the single greatest threat to the nation’s economic prospects.

In a speech given to an anti-corruption corruption in New Delhi, Mr Singh described the damaging effect that bribes, extortion and fraud have on all levels of life in India.

 He said that graft meant infrastructure projects were late, over-budget, and often poor quality, while labeling India’s opaque business practices “a fertile breeding ground for the evil of corruption.

“The pervasive corruption in our country tarnishes our image [and it] discourages investors who expect fair treatment and transparent dealings with public authorities,” he said.

The difficult task facing the country’s anti-corruption forces was emphasised when shortly afterwards judges of only two of India’s 29 states agreed to declare their assets, despite having been ordered to do so by India's supreme court.

“What message are these judges sending out?” asked Anupama Jha, director of the Indian branch of Transparency International, an international corruption watchdog.

“Judges were once greatly respected and now these questions about judicial corruption have lowered their status. It is a sad situation.”

Nevertheless, India has the second-fastest growing economy in the world, after China.

“They would be even faster growing if they were less corrupt,” said Gareth Price, head of the Asia programme at Chatham House, a foreign policy think tank.

“The fastest growing sector of their economy is IT and that is the only sector that is completely outside the government’s control.”

He said that the history of graft in India was the product mainly of three things. “Firstly, the British bureaucratic legacy to the subcontinent. The British created so many rules that anyone could be shut down if, say, a factory inspector found that a bucket of sand was missing, making the place a ‘fire hazard’. So the inspectors would be bribed simply not to shut the place down.

“Secondly, after Independence India had a Soviet-style system of quotas, in which the licences that you received permitting you to produce a quantity of something basically determined how profitable you would be. So the government would be bribed to hand out licences.

“And the third thing is that the tax system is extraordinarily complex and condusive to corruption. Recent attempt to simplify it met with resistance mainly from business who were afraid they’d end up paying more rather than less.”

Mr Price added that graft may have become more of an issue recently due to an increase in conspicuous consumption. “Twenty years ago people in India who had wealth didn’t necessarily flaunt it.

“But over the past ten years you have seen people driving Porsches around Delhi for the first time. And if you know that someone is a civil servant and is supposed to be on a certain salary but is seen driving a Porsche, corruption becomes more of an issue.”

CASES OF CORRUPTION IN INDIA

Corruption in India: A Case Study

Part I: The Players

I know that corruption in India is pervasive – it touches every aspect of daily life. Yet everytime

I hear another story, whether of petty corruption or grand larceny, I am head-shakingly

shocked; incredulous. I’m usually not in one place long enough to have to face the small

payoffs or to follow the grand cover-ups from start to finish, but this one issue that has come

up affects me, my friends and all of Pondicherry and the neighboring coastal areas of Tamil

Nadu.

Background

The Government of Pondicherry has offered a sweet-heart deal to a developer, Subhash

Projects & Marketing Limited (SPML), to build a deep water port in Pondicherry. Not only will

this be an environmental disaster, but everything about this deal is a scam – from the premise

of the project (the port) to the awarding of the contract. You can read about the environmental

issues on Mark’s blog, as well as on the Save Our Beach blog set up by the Pondicherry

Citizens Action Network, which includes a pages with

downloadablepresentations and documents. I will go into more detail on the scam in a future

posting. First, I want to introduce the players.

C.S. Khairwal, Chief Secretary to the Government of Pondicherry

Khairwal joined the Indian Administrative Service in 1974 and has a long history of

corruption.

C.S. Khairwal is number one on the Central Vigilence Commission (CVC) list (List “A”)

of officers against whom the commission has “advised launching of criminal proceedings”

since 1 January 1990.

In December 1997, the CVC advised prosecution for Khairwal’s misconduct as Joint

Secretary at the Ministry of Surface Transport.

He was prosecuted by the Central Bureau of Investigation (CBI) for possessing

“disproportionate” assets – 28 “immovable” properties valued at Rs. 20 million.  The CBI

“failed” to file the appropriate papers that would have permanently seized Khairwal’s

properties, so they were released back to him.

He was arrested with a mistress and actually spent 2 days in Tihar jail.

Khairwal was prosecuted by the CBI for illegal possession of a huge quantity of foreign

liqour.

The Central Government, rather than suspending Khairwal for his crimes, “retired”

him.  He promptly moved from New Delhi to Pondicherry, where he as reinstated at a higher

level than his previous post. (C.S. Khairwal’s home in Pondicherry, complete with an indoor,

basement, swimming pool, extends onto half of the road in front of the building. The road has

to take a jog around his house.)

Khairwal is closely connected with the SPML, the developer to whom the port contract

was awarded.  The representatives of  SPML stay at his home when they visit Pondicherry.

Subhash Projects & Marketing Limited (SPML)

“Subhash Projects & Marketing Ltd. (SPML) is India’s leading engineering, construction and

project management company with more than 25 years of experience in large-scale turnkey

projects in the public and private sector. Having successfully undertaken over 350 projects in

the areas of water & power management, power distribution, infrastructure and environmental

projects, and with a well-qualified and highly skilled team of more than 1000 engineers, the

Subhash Group is geared to build a future that India has never seen.”From the SPML website

On 28 January 2004, SPML was debarred from accessing the securities market and

dealing in securities for 5 years by the Securities Exchange Board of India (SEBI) for price

manipulation, irregular subscriptions, misstatements and nonlisitng of shares. That period was

reduced to 3 years on 13 December 2006 by the order of the Securities Appellate Tribunal

(SAT), Mumbai.

SPML has no experience in building or managing ports. In fact, it was originally

considered and subsequently rejected by the Governmet of Pondicherry for “want of

experience.”

SPML was indicted and punished with fines by the Calcutta High Court and Supreme

Court for obtaining contracts through underhanded dealins with the Ministry of Power.

Part II: The Scam

In Part I of this report, “Corruption in India: A Case Study”, I introduced the major players

involved in this story: Subhash Projects & Marketing Limited (SPML), an engineering,

construction and project management company, and C.S. Khairwal, Chief Secretary,

Government of Pondicherry. In this post, I will outline the gross neglect of Government

procedures and regulations and the cronyism and corruption that paves every step of the

Pondicherry (now Puducherry) port development process.

1. Tender for consultants for a feasibility study. I mentioned in my previous entry that

SPML submitted a proposal to undertake a feasibility study for the port project and was

rejected for lack of experience. No feasibility study was conducted.

2. The Port Director for Pondicherry was transferred for asking too many questions.

3. The National Institute of Port Management, official consultant to the Government of

Pondicherry, was dumped halfway through their contract for delivering unfavorable findings.

4. There was no tender for the port development. DS Constructions was initially

selected unilaterally.

5. Mr. Rumneek Bawa, CEO of DS Constructions, joins Subhash Projects.SPML is then

awarded the port development contract.

6. C.S. Khairwal is involved in a hastily awarded concessional agreementwith SPML, by-

passing procedural norms. (Mr. Rumneek Bawa stays at C.S. Khairwal’s house when in

Pondicherry.)

Who benefits from the port? By Emanuele

SMPL Wins; Pondicherry Loses

The Memorandum of Understanding (MoU) between the Government of Pondicherry and SPML

is outrageous.

400 acres of prime property (beachfront!) is handed over to SPML at a lease of Rs.

2000/acre/year. To give you an idea of how ridiculous this price is, in 2002, the Department

of Industries & Commerce, Pondicherry, offered subsidies to encourage entrepreneurship by

women and members of Scheduled Caste and Scheduled Tribes at a ceiling of Rs.

5000/month for starting industries in rented buildings. Obviously the comparison is not

parallel, but I think you get the picture.

The leased land can be sold by SPML in ten (10) years at the prevailing market rates.

Market rate today is Rs. 5000/square foot.

Revenue sharing of only 2.6% of profits with the Government of Pondicherry. The

norm is 30% of revenue.

The Government is to buy back the port in 50 years at prevailing market rates.

SPML will make no investment in the project. They will raise funds by mortgaging the

leased land and floating shares. (Early this month, the SPML Board approved an issue of

securities – just after their debarrment from the Securities Exchange expired – to qualified

institutional buyers for an aggregate amount not to exceed $100 million.)

All clearances and licenses are mandated by the MoU.

All mitigation measures (for pollution, environmental degradation, etc.) are the

responsibility of the Government of Pondicherry.

Government jobs on Sale for open Auction Information collected from research articles and newspapers.

"Appointments for open auction, selling key jobs to the highest bidder. "

"`Who can pay the price', almost every government job, posting, promotion, procurement or license is on sale and appointments to higher judiciary are on quid pro quo arrangement. This has been going on for quite some time with hardly anyone raising a finger. Whether in cash or kind, one pays to become a licensee, a vendor, a legislator, a government official, a policeman or a judge. "

"Government jobs are given to those persons who pay huge amount to the ruling party politicians and leaders."

"Government had failed to formulate a permanent recruitment policy for providing jobs to the educated jobless youths."

"Our conviction rate in corruption cases is as low as six per cent. Hence corruption has become a low-risk, high-profit activity."

"While the public service commission has few jobs to offer, the subordinate services federation, whose staff-strength has gone up from five to 20 in two years, hardly selects anyone. The government now gives class four jobs to under-matric youth who could be potential militants. It is the ministers who select on the basis of lists given by MLAs and MLCs. "These jobs are on sale. The going rate is Rs 50,000," alleged an angry resident."

 

Taking bribes on Births and dead bodies

  Posted By: IndiaEyeWitness.Com / Date:

State: Any State   District: Any District   City: Any Place  

One story I know about is, One NRI (it is same for anyone) came to India to complete the kharma kaanda (Process performed after death) of his father after a sudden death. He needs a death certificate to complete some process at home. He is being asked for money (bribe) to give a death certificate immediate very next day even though govt. officer can see that this guy is still crying and is in depression of father's death and a proof of clean shaved head.

One another friend had sent his wife to India for delivery and they are planned to go back to the country as soon as the contract of his work period is completed. When the baby is 10 months old, he need a birth certificate to bring them back. They didn't give him a birth-certificate until he pays bribe, and the reason shown to him is "ye nri ka beta hai.. lafda hai bhai.." . Then he applied for passport and police came to his home for 'Criminal enquiry' for 10 months old baby. And a clean certificate will be issued after giving bribe.

Karnataka.com (link: http://www.karnataka.com/govt/corruption/) is showing a bribe rate card applicable in Bangalore. Birth/Death certificate [genuine cases] - Rs 250/-Birth/Death certificate [fake cases] - Rs 500+Burying a dead body:1. Rs 100 to shift the body from van 2. Rs 150 for the person who gives a bath 3. Rs 500-Rs 2500 for postmortem [in Victoria hospital]. If you don't pay they will tell you they found alcohol in the body and it is a police case. 4. Rs 1000 to bury the body

How we can change these guys who are doing a business on births and deaths? I don’t know how their family can build their house with this kind of money earned on dead bodies and innocent newly borne babies?

 

NEARLY 4,300 CORRUPTION CASES ARE PENDING AGAINST MCD OFFICIALS

New Delhi Has MCD become a haven for corrupt officials? The official data indicates so. There are about 4,300 corruption cases against MCD employees in which the investigations are pending, some of them for more than three decades. In reply to an RTI query, the Public Information Officer of Vigilance department of Municipal Corporation of Delhi (MCD) said that as many as 4,299 cases were pending against about 3,350 officials. The employee strength of the civic body is around 1.5 lakh.Out of the registered cases, 1,435 cases were by anti- corruption branch of the DelhiGovernment, Police and CBI whereas 2,877 such cases were registered by the MCD's vigilance wing. The Anti-Corruption branch has registered 40 cases under different sections of Prevention of Corruption Act against 100 MCD officials and some other private persons. Most of the tainted MCD officials, working at middle and senior levels like zonal incharge, superintendent and executive engineers, have over two to three such cases against them, the RTI reply said.

Exercising his right to information, Vivek Garg, an RTI activist and advocate, sought data related to cases awaiting prosecution in the last 25 years.

"The information was initially denied by the PIO. I filed first appeal after that they sent me 96-page list containing name of officials in MCD against whom departmental action and police cases are pending," Garg said. Even more discouraging is the fact that three officials retired from the MCD without completing the probe in such cases. "MCD has become the nerve centre of corruption. Accused in connivance with other corrupt officials have avoided probe and prosecution in cases against them," Garg said.

However, Chief Vigilance Officer of MCD Pradeep Shrivastava refused to comment over the issue. When contacted, MCD Commissioner K S Mehra expressed unawareness over the issue and said he will be able to comment on it after some time.

INDIA: Widespread corruption in the Public Food Distribution System causing starvation deaths

INDIA: Widespread corruption in the Public Food Distribution System causing starvation deaths

The Prime Minister of India in his foreword in the 'Report to The People' dated May 22, 2007, claims: "In this 60th year of independence, the country should have the satisfaction of recording for the fifth year in a succession a rate of economic growth of over 8.5%."  [1] The Asian Legal Resource Centre (ALRC) however is not sure whether the estimated over 200 million Indians who are presently suffering from malnourishment, and the many more million who have done so during past decades, will be satisfied with this growth.

The country's overwhelming population is often given as an excuse to justify poverty and starvation in India.[2]  This theory is applicable only if the State itself is poor and has no means to procure enough food for its people. India is not poor, even though 70% of Indians are. India’s projected defense budget for 2007-08 is 24 billion US$ and it plans to spend further on its weapons upgrade programme.  [3]Defense spending of such proportions in a country where a section of the population equivalent to 2/3rds the size of that of the United States is undernourished or suffering from malnourishment, is difficult to stomach. The United Nations Special Rapporteur on the Right to Food has highlighted this contradiction of priorities in his report following his mission to India in 2005. [4]

India is a country of contradictions. A country that has a projected 9% development index performs worse than some Sub-Saharan countries with regard to addressing starvation and malnourishment within its territory. The National Minimum Programme promulgated by the Government of India in 2004 speaks about the Rural Employment Guarantee programme, which is also reflected in India’s voluntary pledge to the United Nations Human Rights Council.[5]  However, millions of Indians in rural villages are not benefiting from this programme and remain unemployed. The programme is not properly implemented and in places where there are possibilities of implementation and thus employment, recruitment to the programme is based on caste bias and nepotism.

Poverty and resultant starvation in India is not limited to the lower caste, although they suffer the most. The lower caste forms only about 20% of the Indian population, whereas starvation and malnourishment affect about 53% of its entire population. Starvation and malnourishment are the direct result of the failing administrative system in India. A malfunctioning administrative system has a direct bearing upon the living conditions of the poor. For example, for the distribution of food to targeted population the government has established the Public Food Distribution System (PDS). However, the management of this system suffers from corruption – particularly black marketing,

caste prejudices and the utter failure of various local governments.

The targeted PDS was introduced in India in 1997. The shift from a universal PDS to a targeted PDS was performed with the intention of avoiding the misuse and wastage of subsidised food materials. However, owing to a lack of proper screening methods and transparency in the procedure, the PDS is still a failure in India. For example, the licensing procedure for running a PDS shop is plagued by corruption. Licenses are awarded by the respective state governments and the authority to issue them is delegated to the district administrations, which are notoriously corrupt.

To receive subsidised food a family is required to posses a ration card, which also serves the purpose of determining the family’s financial status. This process involves obtaining certificates from the village-head and officers at the district administration. While the village-heads often refuse to issue such certificates, district administration officials demand bribes. The ALRC has documented several cases where the refusal of the village-heads to issue certificates to the poor is the part of a larger plan; to prevent the poor, particularly those from the lower castes, from accessing government welfare schemes such as the PDS shop. This is because the longer the people remain poor and near starvation, the easier it is for the village-head to continue subjecting them to bonded labour.

The continuation of caste-based discrimination is yet another factor that perpetuates poverty and deprivation of food, as was briefly mentioned in the Special Rapporteur’s report. [6] 60 years after independence, the prevention of caste-based discrimination remains on paper rather than being enforced in practice. Due to this, caste-based discrimination is widely practiced and discrimination prevents the lower castes from accessing food. Additionally, the lower castes are deprived of landed property and those who have titles to particular pieces of land are frequently prevented from actual possession by local feudal lords.

In addition to this, large-scale land holding still continues in various States, including States that have enacted the land ceiling laws. Holdings of large extents of land (by individuals or families) deprive the poor from having arable lands of their own. However, the poor can still benefit from such large-scale cultivation, by being employed by the landlord, although in reality this tends to be for much less pay than that stipulated in the Minimum Wages Act. However, when landlords find that agriculture is not profitable for various reasons and sell off their land to property developers, the most affected are the poor landless communities, as this often results in the starvation of the agricultural labourers who depended upon such large-scale cultivations.

In addition to poverty caused by human interference, large-scale poverty exists in remote regions of the country. One such example is the Murshidabad district of West Bengal. This district shares a border with Bangladesh. Land erosion by the river Padma has rendered large numbers of persons landless. Those who could afford to, left well in advance, but the poor had to stay until their land was taken by the river. This situation is

exploited by cross-border smugglers based in the state who employ the poor to smuggle articles across the border to Bangladesh.

The smuggling involves crossing the river at night, which often claims peoples’ lives, while others are shot and killed by the Border Security Force stationed along the Indian border. Ironically, a major portion of the smuggling involves food – grains collected from PDS shops are smuggled across the border to be sold on the black market. The West Bengal State Government considers the people living along the international border in Murshidabad as being illegal immigrants from Bangladesh and does nothing for their welfare.

The situation of hundreds of families in the Jalangi block of Murshidabad involves grave cases of exploitation, starvation and malnourishment, many of which have been documented by the ALRC's sister origination, the Asian Human Rights Commission[7],  and which has also been mentioned by the Special Rapporteur. The state and central government schemes remain highly ineffective and are totally failing the starving population in Jalangi. However, the government of India has not taken any credible action regarding this issue.

The government of India has formulated and is executing several welfare programmes intended to prevent starvation and malnourishment in India. While proper planning and implementation of these programmes are necessary, what has been mostly ignored is the poor state of functioning of the PDS. The system itself, as claimed by the government, covers only 16% of the total population. [8] The actual number of households using the PDS is around 91 million, significantly less than the 160 million being claimed by the government. 78% of these persons are trying to make use of the system - 26% are from urban areas while 52% are rural households. [9] Of these 91 million households an alarming 61% claim that the PDS is plagued by corruption and 49% claim that corruption has increased in the past year. [10] The PDS is viewed as the most corrupt institution in India.

Such corruption exists in the PDS due to the failed criminal justice system in India. Illegal dealing with rationed articles is a crime in India. [11]  A crime registered under the relevant domestic law must be tried in a special court constituted in each state. However several states are yet to establish such a court, meaning that cases registered under the law in those states will have to wait for years to be decided through the regular courts. Additionally, states most frequently withdraws from prosecutions related to cases registered under the Essential Commodities Act as compared with other prosecutions. This shows not only the tolerance that various state governments exhibit towards corruption within the PDS, but also the influence of the licensees upon the government.

Even though the Rapporteur expresses his concerns about corruption in the PDS, there are no concrete proposals suggested by the Rapporteur in his report to address this issue. To achieve any improvement in addressing the food security in India, there must be a multifaceted approach to the issue focusing on: the implementation of welfare schemes;

increasing the existing network of the PDS within the country; and taking effective steps to prevent corruption within the PDS.

The prevention of corruption within the PDS cannot happen in a vacuum. It will require equipping the criminal justice mechanism in India to specifically address this problem. In addition to an increase in the number of special courts to try offenses related to the distribution of rationed food articles, a separate and independent mechanism must be constituted to investigate such cases. This must be independent from the local police since the latter is itself corrupt and will therefore fail to effectively investigate crimes related to food distribution. There is also a need to change domestic law, in particular the Essential Commodities Act, 1955.

As a country that has a surplus of food, it is a pity that in India, food that is distributed to the poor does not reach them, but is either spoiled and lost or sold on the black market. To change this, there are no quick-fixes. However, the prevention of corruption within the PDS is a critical starting point. The specifics of this are often ignored or overlooked in favour of various other issues.

In this context, the Asian Legal Resource Centre requests the Human Rights Council to:

1. Recommend that the Government of India take immediate steps to prevent widespread corruption within the PDS – these steps must include the establishment of independent and separate mechanisms to investigate cases of corruption in the PDS. This mechanism must be independent from the local police, as the latter is corrupt and therefore inefficient in investigating corruption. This requires a change in the existing domestic law – The Essential Commodities Act, 1955, and the government of India must be urged to make such changes and facilitate this process;

2. Request the UN Special Rapporteur on the Right to Food to further study the specifics of corruption within India's PDS system, so that the Rapporteur can help the government to address this issue more effectively;

3. Request the Government of India to urge its state governments to set-up the required number of special courts to deal with cases of corruption within the PDS;

4. Urge the Government of India to expand a functioning PDS network within the country, so that it covers not only the 16% currently being covered, but covers all persons in need of food security assistance.

5. Request various UN bodies such as the UNDP and the FAO to assist the Government of India in addressing the issue of hunger and starvation in India, particularly through proper and vigorous implementation of development programmes in the country.

6. To further request the Government of India to immediately implement the recommendations made by the UN Rapporteur on Right to Food in his report -

E/CN.4/2006/44/Add.2 - and to make necessary policy changes required to address this situation.

 

Corruption - the main Games in India

India has spent around $5 billion on the Games. (Getty Images: Phil Walter)

The Commonwealth Games has officially opened, and the multi-billion dollar event that was expected to elevate India's profile on the world stage has instead plagued India's reputation.

Allegations of corruption, nepotism, incompetence and sheer negligence have now risen to the forefront, potentially damaging much sought after foreign investment.

But those who know India are not surprised. The economic superpower is built on shaky foundations and has a conflicted corporate culture - modern ideas hand-in-glove with outdated business traditions.

India has spent around $5 billion on the Games - almost nine times its originally estimated budget of $500 million. The Games have been criticised as being the most expensive ever and, in a country where over 800 million people live on less than $2 a day, there is outrage even amongst the nationalists.

Bestselling Indian author and one of Time's 100 Most Influential People, Chetan Bhagat, was an avid supporter of the Games when it was first announced, but instead set out to urge people to boycott it.

He said the Games should be boycotted because the corruption and nepotism that has pervaded the event should not be supported.

"It is corruption or connection, if you have connections, you go further in India, not only in business, but even at an individual level," he said.

Although disappointed at the murky state of affairs in India, Mr Bhagat is pleased that these issues have been exposed and made global, lending a voice to those dominated by the ever-widening gap between the haves and have-nots.

"I want the foreign media to support us because ultimately it is not about India versus Australia or anything; it is about one sixth of humanity which is suffering under corrupt leadership."

One of India's leading newspapers, India Today, undertook an expose on the Games and revealed internal documents which showed organisers spent $80 on one roll of toilet paper, $125 on a first-aid kit and $61 on a soap dispenser which retails in India for only $2.

The controversies do not end there. On August 5, Commonwealth Games Organising Committee (OC) treasurer Anil Khanna handed in his resignation in the wake of allegations that that his son's company, Rebound Ace, had been awarded a contract to lay 14 synthetic surfaces at the RK Khanna Tennis Stadium.

Anil Khanna's resignation came a few hours before an Organising Committee executive board meeting convened to discuss the corruption scandal that has rocked the Games.

Beleaguered Indian Olympics Association chief Suresh Kalmadi has also been caught in the eye of the corruption storm. Suresh Kalmadi, TS Darbari (OC joint director general) and Sanjay Mohindroo's (OC deputy director general) are all named in investigations into alleged irregularities in services provided during the Queen's Baton Relay in London.

Investigations showed that a little-known UK company, AM Films, was paid around $500,000 for its "services" without a written contract.

Mr Kalmadi defended the controversial payments made to the London-based firm and said the company was paid for its services which included items such as portable toilets, ambulances and barricades that had to be put in place for the Queens Baton Relay.

Following what was widely labelled as a "leakage" - India's euphemism for rampant corruption - sports minister M S Gill issued a stern warning saying "prompt and appropriate" action will be taken if any irregularities are brought to the ministry's notice.

Almost all sectors of India's officialdom are riddled with corruption and graft.

The head of the philanthropic Byrraju Foundation, which promotes rural development, Verghese Jacob says around 25 per cent of all costs go to corruption.

In 2009, Transparency International ranked India 84th out of 180 countries in its Corruption Perceptions Index. It was ranked behind China which placed 79th, and well behind advanced economies such as Japan at 17th and Australia at 8th.

It is little wonder then that, not only has India exorbitantly exceeded its budget, but there have been numerous delays in projects.

With corrupt officials siphoning money every step of the way, projects often get delayed, if not derailed, and costs are continuously raised.

Fortunately, after decades of political inertia and underinvestment in infrastructure, some of India's politicians have awakened to the magnitude of the country's corruption crisis.

In October 2006, officials implemented a new right-to-information law that requires both state and central governments to divulge information about expenditures, contracts and hiring to any citizen that requests it.

However, nepotism remains a unifying theme in India's business culture, one that transcends the barriers of region, religion, caste and creed.

India is famous for its dynastic attitude, not only in politics, but also business. The core of nepotism lies in the structure of Indian society, and family has always been the very fulcrum of this society.

Individuals are placed in positions of power, even if they are unmerited candidatures. This form of power and fortune favouring family has been prevalent in the Commonwealth Games.

In an investigation, Indian Express revealed that the Organising Committee includes around 38 of the top brass who are related to one another.

General administration and workforce joint director N P Singh attributes the staggering numbers to sheer coincidence.

"It is a coincidence that so many of them are inter-related," Mr Singh said.

OC vice-chairman Randhir Singh has four nephews on the committee, out of which three of them - Amar Singh Wazir, Yadu Raj Singh and Tejinder Singh - work in the Commonwealth Games Association Relations, directly under Mr Singh.

Bharati Singh Rao, the daughter of a congress MP from Gurgaon (Rao Inderjit Singh), was hired last year as a director.

Boxing Federation secretary general P K Murlidharan Raja's son, Vivek Raja, was also hired as a director in the OC's Workforce division, and the list goes on.

Some of the leading Indian-owned companies also have nepotic characteristics.

One example is ArcelorMittal, which is headed by Indian steel tycoon and one of the world's richest men Lakshmi Mittal, and has a board that includes his son, Aditya Mittal, and his daughter Vanisha Mittal, who was made a board member at the tender age of 23.

Another is Reliance Industries, founded by Indian business baron Dhirubhai Ambani, which was divided and handed down to his two sons, Anil and Mukesh Ambani.

Some of India's greatest business leaders, in the sunset of their lives, think not of their legacy but rather of dividing their kingdom amongst their children.

This defining character of the Indian business arena places great emphasis on an individual's inherited name, often predetermining an individual's station in life.

The prevalent nepotism often sees unqualified people at the reigns of multinational conglomerates, hindering social advancement and preventing India from unlocking its true economic potential.

Billionaire Ratan Tata, founder and chairman of multinational diversified firm Tata Group, is an exception to the rule.

In August this year, he broke away from tradition among Indian family-run conglomerates and launched a global CEO search.

Ratan Tata's half-brother and current managing director Noel Tata was often predicted to be the next-in-line to the throne, but the rumours subsided when the chairman launched the international talent search.

In 2003, Nimesh Kampani, then-majority owner of an Indian securities joint venture with Morgan Stanley, JM Morgan Stanley, offered some publicly-loaded advice by saying, "My son will inherit my wealth but not necessarily my chair. He may, but only if he proves himself capable."

These initiatives are slowly starting to see the nepotism-driven business model weaken.

As foreign investors continue to flood India, bringing with them money, corporate governance and international standards of professionalism, India is starting to take heed.

But the deep-rooted tradition will take decades to erode before once-favoured scions will be passed over by CEOs and chairmen in favour of professionalism and most importantly, egalitarianism.

It has been a PR disaster: a collapsing bridge, costs out of control, management

accused of fraud. It was meant to be so very different.

Indians say the country's reputation should be judged instead by a different

grand project: the Delhi metro.

The Delhi tube is efficient, was delivered on time, and by a public body with

public money.

The Commonwealth Games' projected price tag the year Delhi won the bid was

£42m.

Independent experts say the cost of the Commonwealth Games is

£4.2bn - 100 times more than first thought.

It has now officially jumped to £1.4bn - 34 times the original sum. But

independent experts say the cost is closer to £4.2bn - 100 times more than first

thought.

Government documents seen by Channel 4 News conclude "almost all the

organisations executing works for the Commonwealth Games have considered

inadmissible factors to jack up the reasonable price".

On the eve of a spectacle that should have been a showcase for the best in India,

corruption allegations mount.  As recently as 4 June, fresh probes into goings-on

at the organising committee, in addition to 16 investigations – one  of them

criminal - into government conduct.

The organising committee and the government have a stock position. They have

told Channel 4 News that if there are any unanswered questions, time will

absolve them.

Indians want to know why it took the army to fix a bridge that should

have been finished months ago.

Ask Indians about pride and they point instead to the Delhi metro. One and a half

million passengers a day, 100 miles of track, all delivered in little over seven

years - the same seven years the games organisers spent allegedly wasting time

and money.

Integrity, say Indians, is where the Commonwealth Games went wrong. They

want to know why, for example, it took the army to fix a bridge that should have

been finished months ago.

The law courts, and some 20 government probes may soon have an answer.

 A major medical scam under the umbrella of CWG 2010 has been exposed making the earlier allegations

look closer to truth.

The major sporting event that India is hosting after a long hiatus, has already been stigmatized for the fund

diversion and other related issues.  Reports from the close sources reveal that CWG Cell of Directorate of

Health Services (DHS) Government of NCT of Delhi is buying basic medical equipments at exorbitant prices.

 Moreover, the prices have been artificially inflated by re-routing it through several agents. In a recent tender

for around 100 AED (Automated External Defibrillator) machines awarded to Zoll Medical Corporation, it has

come to pass that the Commonwealth Games Cell of DHS will have to shell out Rs. 8731800 (@ Rs.

1,94,040 each) for the first 45 AED machines.

 

AED is a portable electronic device that makes automatic diagnosis of the potentially life threatening cardiac

arrhythmias in a patient. Zoll Medical Corporation got the tender via the agent Faith Biotech ltd. Zoll has

reportedly procured those equipments from Hanstronics Medical Equipments, which is also based in New

Delhi. Hanstronics has however, supplied the same product recently in at much lesser price.

If market prices of these equipments are to be assessed, it will be observed that 1 unit of AED machine

costs anywhere between Rs. 90000 and Rs. 1 Lac, which includes all taxes and duties.

It is to be noted that Surgicoin, a medical company which was recently exposed in the CWG medical

equipment scandal and was not allowed to take part in the tenders. Surgicoin had quoted Rs 2.75 lakh for

each trolley bed for the order of 124 trolley beds. In reality, the same bed is available for Rs 1.60 lakh each.

If the CWG cell goes ahead with tender, it will shed a total of Rs. 19,40,4000 for 100 machines, which

means it has to pay millions of rupees extra due to artificially inflated rate quoted by the supplier.

At such a critical juncture the common question that arises is why can't the DHS, New Delhi buy bulk

number of AED devices at lesser price when even common people can avail them.

Abdul Karim Telgi

Abdul Karim Telgi (born 1961), is a convicted-counterfeiter from India. He earned money to the tune of several billion US dollars by printing counterfeit stamp paper in India. The scale of his operation and scam can only be matched by the stock market scam of the early 1990s in India done by late Big Bull Harshad Mehta and by the money-laundering scam of Hasan Ali Khan.

Arrest

Telgi was arrested in 1991 by Mumbai police for fraud. During his subsequent prison sentence, he reportedly learned the art of forgery from an expert. He was released and, in 1994, acquired a stamp paper licence from the Government of India.

[edit] Counterfeiting career

He began printing fake stamp paper. He appointed 300 people as agents who sold the fakes to bulk purchasers, including banks, FIs, insurance companies, and share-broking firms. His monthly profits have been estimated as being in the neighbourhood of Rs 202 crore (slightly more than US $40 million).

The size of the scam was estimated to be more than 43,000 Cr Rupees.[3]

The Telgi case brought corruption in the Karnataka police force to light, causing a national scandal in India.[2] A videotape emerged in September 2006 of Abdul Karim Telgi taking a Narco Analysis test. Under the influence of the supposed truth serum, Telgi is said to have blurted out the names of Nationalist Congress Party leaders Sharad Pawar and Chaggan Bhujbal. Pawar has never been publicly linked to the case, but was forced to go public with a denial.

On 17 January 2006, Telgi and several associates were sentenced to ten years' rigorous imprisonment.[4]

On June 28, 2007 Telgi was sentenced to rigorous imprisonment [5] for 13 years and fined a whopping Rs 202 crore on various counts in one of the main cases of the scandal. Hours after Telgi pleaded guilty and repented his actions, Judge Chitra Bedi of a special court pronounced the quantum of punishment under various sections of the IPC and the Maharashtra Control of Organised Crimes Act. This is the harshest punishment given to Telgi in any of the fake stamp paper cases he has been convicted for so far in Maharashtra and Karnataka. Honorable Judge Chitra Bedi observed that she had taken a "lenient view" since Telgi, who is in judicial custody in Pune, had pleaded guilty and also because of his health. Telgi is HIV positive.

Honorable Judge Chitra Bedi sentenced 42 other accused in the case, who too had pleaded guilty, to rigorous impriosnment for up to six years and imposed fines on them. CBI counsel Raja Thakare moved an application in the court seeking the confiscation of Telgi's property to recover the fine slapped on him. Telgi, who broke down earlier in the day while pleading guilty, thanked the judge for "giving him justice."

CBI finds IIT, NIT profs in AICTE scamThe CBI investigators looking into the case of illegal approvals of private engineering colleges all

over India have finally dished out a shocker for one and all, as their investigations move forward.

According to the team some professors from top engineering colleges, including the nation’s best

- Indian Institutes of Technology (IIT) and the National Institutes of Technology (NIT), have

been involved in illegally providing approval to many private engineering colleges across India.

The CBI team has been on the All India Council for Technical Education (AICTE) scam for the

last 11 months and has finally registered 42 cases againstengineering colleges. All these colleges

are guilty of ‘illegally’ obtaining AICTE’s approval despite the fact that most lack even basic

infrastructure and facilities.

The extent of fraud is so much that, the CBI team found a particular college building which was

shown to AICTE’s expert committees on three different occasions for obtaining approval for  three

separate engineering colleges; evidently two out of which were non existent. In many similar

cases, colleges have been taken approval for from the AICTE while in reality they did not exist

and the land shown was farming land.

It is believed that many investigating officers did not even visit the sites before submitting reports

and many knowingly visited same sites over and over again.

CBI has been forwarding fresh complaints to the Human Resource Development Ministry

(MHRD) for further action on many other colleges of the country as well. The ministry will refer the

doubtful cases which reflect criminal intent of officials back to the CBI; however, disciplinary

action will be initiated against the others involved as well.

The CBI has booked several people including an IIT Delhi professor, for submitting wrong reports

to the AICTE, after inspecting the site of Rajendra Singh Institute in Aligarh last year. The site on

which the college was supposedly built was farmland.

The agency is investigating over 100 accused persons across 17 branches of CBI across the

country. Investigations are expected to be over by the end of 2010.

Harshad Mehta

Harshad Mehta ( हरशद मे�हता� ) was an Indian stockbroker and is alleged to have engineered the rise in the BSE stock exchange in the year 1992. Exploiting several loopholes in the banking system, Harshad and his associates siphoned off funds from inter-bank transactions and bought shares heavily at a premium across many segments, triggering a rise in the Sensex. When the scheme was exposed, the banks started demanding the money back, causing the collapse. He was later charged with 72 criminal offenses and more than 600 civil action suits were filed against him. He died in 2002 with many litigations still pending against him.

Stock Market Scandal

Mehta gradually rose to become a stock broker on the Bombay Stock Exchange and lived almost

like a movie star in a 15,000 square feet (1,400 m2) apartment, which had a swimming pool as

well as a golf patch. He also had a taste for flashy cars, which ultimately led to his downfall. The

year was 1990. Years had gone by and the driving ambitions of a young man in the faceless

crowd had been realised. Harshad Mehta was making waves in the stock market. He had been

buying shares heavily since the beginning of 1990. The shares which attracted attention were

those of Associated Cement Company (ACC). The price of ACC was bid up to Rs 10,000. For

those who asked, Mehta had the replacement cost theory as an explanation. The theory basically

argues that old companies should be valued on the basis of the amount of money which would be

required to create another such company.

Through the second half of 1991, Mehta was the darling of the business media and earned the

sobriquet of the ‘Big Bull’, who was said to have started the bull run. But, where was Mehta

getting his endless supply of money from? Nobody had a clue.

On April 23, 1992, journalist Sucheta Dalal in a column in The Times of India, exposed the

dubious ways of Harshad Metha. The broker was dipping illegally into the banking system to

finance his buying.

The authors explain: “The crucial mechanism through which the scam was effected was the ready

forward (RF) deal. The RF is in essence a secured short-term (typically 15-day) loan from one

bank to another. Crudely put, the bank lends against government securities just as a pawnbroker

lends against jeweller. The borrowing bank actually sells the securities to the lending bank and

buys them back at the end of the period of the loan, typically at a slightly higher price.”

It was this ready forward deal that Harshad Mehta and his cronies used with great success to

channel money from the banking system.

A typical ready forward deal involved two banks brought together by a broker in lieu of a

commission. The broker handles neither the cash nor the securities, though that wasn’t the case

in the lead-up to the scam.

“In this settlement process, deliveries of securities and payments were made through the broker.

That is, the seller handed over the securities to the broker, who passed them to the buyer, while

the buyer gave the cheque to the broker, who then made the payment to the seller.

In this settlement process, the buyer and the seller might not even know whom they had traded

with, either being known only to the broker.”

This the brokers could manage primarily because by now they had become market makers and

had started trading on their account. To keep up a semblance of legality, they pretended to be

undertaking the transactions on behalf of a bank.

Another instrument used in a big way was the bank receipt (BR). In a ready forward deal,

securities were not moved back and forth in actuality. Instead, the borrower, i.e. the seller of

securities, gave the buyer of the securities a BR.

As the authors write, a BR “confirms the sale of securities. It acts as a receipt for the money

received by the selling bank. Hence the name - bank receipt. It promises to deliver the securities

to the buyer. It also states that in the mean time, the seller holds the securities in trust of the

buyer.”

Having figured this out, Mehta needed banks, which issue fake BRs, or BRs not backed by any

government securities. “Two small and little known banks - the Bank of Karad (BOK) and the

Metropolitan Co-operative Bank (MCB) - came in handy for this purpose. These banks were

willing to issue BRs as and when required, for a fee,” the authors point out.

Once these fake BRs were issued, they were passed on to other banks and the banks in turn

gave money to Mehta, obviously assuming that they were lending against government securities

when this was not really the case. This money was used to drive up the prices of stocks in the

stock market. When time came to return the money, the shares were sold for a profit and the BR

was retired. The money due to the bank was returned.

The game went on as long as the stock prices kept going up, and no one had a clue about

Mehta’s modus operandi. Once the scam was exposed though, a lot of banks were left holding

BRs which did not have any value - the banking system had been swindled of a whopping Rs

4,000 crore. When the scam was finally revealed, the Chairman of the Vijaya Bank committed

suicide by jumping from the office roof because he knew that if people come to know about his

involvement in issuing cheques to Harshad Mehta, people would accuse him.

Mehta made a brief comeback as a stock market guru, giving tips on his own website as well as a

weekly newspaper column. This time around, he was in cahoots with owners of a few companies

and recommended only those shares. This game, too, did not last long.[1]

Interestingly, by the time he died, Mehta had been convicted in only one of the many cases filed

against him.

Till now, the real story behind the entire scam is unknown. The recent Hindi movie 'Gafla' showed

this scam in a different perspective.[2]

Hasan Ali Khan

Hasan Ali Khan or Syed mohammed Hassan Ali Khan[1] is a 56-year-old stud-farm owner based

in India and allegedly worth USD 8-9 billion or more according to police-authorities. Some news-

sources claim that he might be the fourth richest person in India, surpassing even software

czar Azim Premji.[2].

Disclosing the list of defaulters in the Rajya Sabha on 4th August 2009, the Minister of State for

Finance S S Palanimanickam said in a written reply that Hassan Ali Khan tops the list of tax

defaulters with an outstanding arrear of more than Rs 50,000 crore. [3] Former Union Minister and

BJP MP Arun Shourie said that Ali Khan has been known to be connected to underworld

don Dawood Ibrahim, known to have been channeling very large amounts from unknown sources

into the Indian stock market and had 8 to 9 billion dollars in the UBS and other banks of

Switzerland, and has been responsible for hawala transactions of over Rs. 35,000 crore through

Swiss banks.[4] When asked if Hassan Ali is likely to be arrested, India Today editor Prabhu

Chawla said that he doesn't "have much hope" citing that getting Swiss banks to disclose details

is not easy as India hasn't signed a treaty with the Swiss government.[5]

Claims and allegations

[edit]Money laundering

Officers in investigating agencies in India claimed that this stud farm owner could be the latest

unknown rich businessman on the block. His wealth is said to be in the region of anything

between USD8-9 billion or much more, and most of it unaccounted[6]. He allegedly stashed US$ 8

billion in his Swiss bank accounts (mostly in UBS[7][8]) through money-laundering. His wife Reema

and her brother Faisal Abbas have allegedly helped him hide since 2007. Philip Anandraj has

received an order for the release of his passport from the Mumbai special court for the Prevention

of Money Laundering Act (PMLA) last week, this was further enhanced by the High Court in

Mumbai. The HC has told authorities to hand over Anandaraj's passport by December 7th. Khan's

lawyer Majid Memon said "his client was not in touch with him" as of 17 August 2008[9]. He was a

Pune-resident and horse trading circles describe him as a smart punter but a small time horse

owner[10]. Some newspaper-reports cite that total Indian black money is around US$1,410

billion [11][12][13][14]

Along with his partner Kashinath Tapuriah, Ali allegedly opened two fictitious companies Autumn

Holdings and Paysons in the Virgin Islands and laundered money to the tune of US $280 million.

[15]

A year after he was raided, the US $8 billion man still roams free i.e. he has not been arrested till

date.[16]

The reluctance of these top Swiss banks mentioned above to help Indian investigators is slowing

the unravelling of an intricate multinational trail of money transfers—across Switzerland, New

York, theBritish Virgin Islands and Pune—between an Indian horse owner and a fugitive Saudi

arms dealer, according to officials in the Enforcement Directorate, the government body that

investigates economic crimes. Investigators from the ED, who recently claim to have found $8

billion in the Swiss bank accounts of Hasan Ali Khan, say they now have evidence of a $300

million transfer to him (via a Chase Manhattan bank account in New York) from billionaire Saudi

arms dealer Adnan Khashoggi, whose arms supplies to Tamil terrorists, the LTTE, were revealed

during an investigation into the 1991 assassination of Rajiv Gandhi. The government has told the

Bombay high court that the Khans are “virtually absconding” and if they are allowed to leave

India, investigations could collapse. Khan’s counsel, Milind Sathe, said his client “regularly

appeared before the Directorate”. Asked where Khan was, his main lawyer, Mugdha Jadhav,

said: “Can’t tell you, sorry.” [17]

[edit]Other allegations

Police sources in Hyderabad aver that he had also laid hands on some jewellery of the family

of Nizams and siphoned them off. "There is no police complaint on this because much of the

Nizam's riches have gone missing over the years," sources said. The value of the jewellery he

pilfered is not known and neither the parties that he sold them to.[18]

He has 10 cases lodged against him ,ranging from cheating to con games to extortion. There a

case of in which he is suspected of throwing, or arranging to throw acid on a paediatrician Dr. P

Niranjan Rao of Punjagutta in Hyderabad. By the time he got into the havala business, he was a

well known but shady figure.[19]

His first hawala operation came unstuck. He was tasked to get back into the country monies of a

deadman locked up in a Singapore bank. Though he failed he came in contact with a bigger

operator called Kanti Das Tapadia (sic).[20]

Adnan Khashoggi transferred US $300 million from his Chase Manhattan Bank account in New

York into Hassan Ali's United Bank of Switzerland account in Zurich. The Swiss authorities froze

the account saying that the Funds were from weapons sale. Ali and his close associate Kashinath

Tapuriah then adopted different techniques to try and make this account operational. The link to

Khashoggi adds a new dimension to the investigation into Ali. Khashoggi is known in India as one

of those named in the Jain Commisison of enquiry into the Rajiv Gandhi Assassination and

globally for brokering arms deals between the US and Saudi Arabia. Investigators say that this

only convinces them of Ali's wide range of operations and contacts.[21]

[edit]Convictions and court-cases

The oldest case against Hasan Ali pertained to an acid attack on a doctor, his neighbour, in 1984.

Dr P Niranjan Rao's face was disfigured and he had to undergo 30 surgeries. Since the police

could not trace the records relating to the case, it is not clear whether Hasan Ali was arrested and

acquitted in this case.[22]

Khan was arrested, convicted, but subsequently acquitted in some bank-fraud and similar fraud

cases amounting to Rs. 2 crore (USD 500,000) in the early 1990s.[23] What happened: In 1990,

the manager of State Bank of India, Charminar branch, had lodged a complaint stating that

Hasan Ali had fraudulently withdrawn a total of Rs 26 lakh on three occasions against cheques

that later bounced. A similar case was lodged for defrauding the Grindlays Bank. In September

1991, the central government had announced an amnesty scheme wherein it allowed Indian

citizens to get foreign exchange from outside. Subsequently at least four persons approached

Hasan Ali, who promised them demand drafts in dollars. He had allegedly collected Rs 10.35 lakh

from Suresh Mehta, Rs 6.29 lakh from Rajesh Gupta, Rs 36 lakh from T Ramnath and Rs 18.22

lakh from P Rama Koteswara Rao. He then produced 'international money orders' and handed

over demand drafts to them to encash the dollars. However, the customers found the DDs to be

fake and lodged complaints with the police in 1992. He was subsequently acquitted and a police

commissioner said, "No case is pending against him as all the previous cases were disposed of

by the courts."[24]

Khan now faces a whooping Rs 1 L cr fine for acquiring Rs 36000 crores or more in assets[25][26].

[edit]Current enquiry

As of 13 April 2010, a letter rogatory is to be issued by the magistrate’s court in India to the Swiss

police, which will present it to the authorities in Switzerland. The Swiss court will decide whether

the request by the Indian authorities is to be complied with. Ever since the I-T authorities raided

his premises in 2007, it has been speculated that the money allegedly deposited by Mr Khan

in Swiss Banks in fact belonged to politicians and industrialists and that Mr Khan was only

a conduit who facilitated the transfer of the money from India, apparently on a commission

basis.[27]

FACTBOX - Six major corruption scandals in India

NEW DELHI (TrustLaw) – According to global corruption watchdog, Transparency International, corruption in India is endemic and present in most sectors of society.Here are six major corruption scandals involving different sectors of society which have hit the headlines:

SPORTS: The head of India's $4 billion cricket league, Lalit Modi, was suspended from his post in April following graft allegations in a scandal that has also ensnared politicians. Tax authorities are currently probing the three-year-old Indian Premier League, the game's most lucrative tournament, after a junior government minister resigned following allegations of improper influence. While Modi has not been formally charged and denies any wrongdoing, newspapers have said authorities are investigating reports of improprieties in bidding for teams and in negotiating television broadcast rights for the matches.

HEALTH: In January 2008, the World Bank said it had uncovered "serious incidents" of corruption in a review of five health projects in India. A probe by the Bretton Woods

institution found there were "unacceptable indicators of fraud and corruption" in bank-funded projects for HIV/AIDS, malaria and tuberculosis. Funding for the projects, which were launched between 1997 and 2003, totalled over $500 million. The bank review found evidence of bid rigging and other forms of procurement fraud as well as corruption and shoddy auditing.

DEFENCE: The Bofors case has been one of the highest-profile and longest-running criminal investigations in India. In the 1980’s, the then Prime Minister Rajiv Gandhi and several other officials were accused of receiving kickbacks from Swedish arms manufacturer AB Bofors for winning a bid to supply India with 400 howitzers. The scale of the corruption was far worse than any that India had seen before, and directly led to the defeat of Gandhi's ruling Indian National Congress party in the November 1989 general elections.

JUDICIARY: In July 2008, an investigation found 36 judges were guilty of receiving gifts bought with money embezzled from the court treasury in Ghaziabad, a satellite town on the outskirts of the capital. Tens of millions of rupees were siphoned off from the provident funds of employees by the treasury officer who illegally spent the money on furniture, crockery, mobiles, laptops, rail tickets, taxi fares and other items for the judges.

POLITICS: In November 2009, Madhu Koda, the former chief minister of the eastern state of Jharkhand, was arrested in connection with a corruption investigation. Koda is accused of possessing assets disproportionate with his income and for alleged money laundering. He is alleged to have laundered millions of rupees from public coffers during his stint as chief minister of Jharkhand between 2006 and 2008.

CORPORATE: In January 2009, Ramalinga Raju, chairman and founder of India's fourth-largest software company Satyam Computer Services, resigned after revealing years of accounting fraud in the country’s biggest corporate fraud. Raju admitted about $1 billion, or 94 percent of the cash on the company's books was fictitious. "What started as a marginal gap between actual operating profits and the one reflected in the books of accounts continued to grow over the years," said Raju. "It was like riding a tiger, not knowing how to get off without being eaten."

Madhu Koda

Madhu Koda (born January 6, 1971 in Patratu, West Singhbhum) is an Indian politician who was Chief Minister of Jharkhand from 2006 to 2008. He was sworn in as the fifth Chief Minister of Jharkhand on September 18, 2006 and remained in office until he resigned on 23 August 2008; he was succeeded by Shibu Soren. He had eight ministers in his cabinet. Koda is the third independent legislator to assume the office of chief minister of an Indian state, including Bishwanath Das in Orissa in 1971 and S. F. Khonglam in Meghalaya in 2002.

Controversies

[edit] Money-laundering and mining scam

On 10th Oct 2009, he was charged with laundering money worth over Rs. 4000 crores.[7] In nationwide raids by the Enforcement Directorate, assets allegedly worth Rs. 4000 crore — almost a fifth of the annual budget of the state he once ruled — were unearthed.

Among others, these assets were reported to include hotels and three companies in Mumbai, property in Kolkata, a hotel in Thailand, and a coal mine in Liberia.[8] This alleged scam is said to be the second-largest scam uncovered in India in 2009 and gets his name included in the list of controversial Indian businessmen (like Hasan Ali Khan and Harshad Mehta). Minister of State for Home Ajay Maken said that the Central Bureau of Investigation (CBI) may be asked to probe this scam, in addition to Enforcement Directorate (ED) and the Income Tax Department[9].

In the probes, it was found that Maoists received a 30% share of the "Koda plunder"[10]. This has led to staunch criticism of Koda from sections of society, including the oppostition Bharatiya Janata Party. Gujarat Chief Minister Narendra Modi stated Koda was part of a corrupt network of Congress Party who stole money from Jharkhand [11] .

[edit] Life in jail

Madu Koda is spending his time in jail like any other prisoner of the Birsa Munda Central Jail at Hotwar. He remained confined to his room in the upper division ward. Unlike his fellow arrested corrupt politicians who regularly complain of ill health and high blood pressure, Koda was normal. "His behaviour was normal and he did not try to create a scene like his former cabinet colleagues," said a jail official. Koda wakes up around 6.30 in the morning. He later watches news on local TV channels and also goes through newspapers.[12]

While he was in jail, the BJP (Bharatiya Janata Party) said that they will also expose Goa's Madhu Koda during the forthcoming state legislative assembly session.[13][14] BJP also alleged that state support to illegal mining and corruption in Goa’s mining industry had reached ‘unacceptable levels’. Mining for low grade iron ore and manganese is one of the principal industries in the state, fetching nearly Rs.6,000 crore revenue from exporting the ore to countries like China and Japan. The 100 mines in Goa export nearly 30 million tonnes of iron ore annually.[15]

Massive Indian cricket corruption scandal still unfolding

On April 27, 2010 The Board of Control for Cricket in India (BCCI) suspended Indian Premier League (IPL) chief Lalit Modi over corruption allegations.

It was reported that the allegations related to the initial bids for the Rajasthan and Punjab team franchises; the IPL's broadcasting deal; alleged bid rigging for two new franchises that will start next year; the IPL's internet rights and what was described as the behavioural pattern of Mr. Modi.

The BCCI had asked Mr. Modi for a response to the allegation within 15 days. Once the BCCI received a response they promised that they would determine if the suspensions should be dropped or, if necessary, what other course of action should take place. In the meantime Modi was served the third show cause notice by the BCCI, which raised questions over the awarding of the 150-second commercial slot in between balls during IPL 3. Modi has already replied to two earlier notices served to him by the board accusing him of financial irregularities, manipulating the bidding for new franchises and trying to destroy the structure of world and Indian cricket.

Still developingSince Modi’s appeal more accusations have come out, some implicate Modi and some implicate other IPL related officials. At this moment the BCCI has yet to hand down a decision in the case of Lalit Modi. Rumors have swirled that they will hold a special meeting to make an announcement that is expected to fire the suspended head of the IPL. However, the BCCI have denied that any sort of special meeting will take place.

The recent controversy in the IPL has many twists and turns. It is the hope that within the coming weeks there will be answers instead of more questions. Thos answers may be coming because the BCCI has convened a meeting with all 10 IPL franchise representatives on June 24 followed by the League's Governing Council meeting the next day. It is expected that the controversy surrounding Modi and his suspension areto be the focus in these meetings. The meeting with the franchisees has been convened by the BCCI to allow them to get to know the new IPL interim chief Chirayu Amin.

Satyam scandalThe Satyam Computer Services scandal was publicly announced on 7 January 2009, when Chairman Ramalinga Raju confessed that Satyam's accounts had been falsified.

Details

On 7 January 2009, company Chairman Ramalinga Raju resigned after notifying board members and the Securities and Exchange Board of India (SEBI) that Satyam's accounts had been falsified [1][2][3].

Raju confessed that Satyam's balance sheet of 30 September 2008 contained:

inflated figures for cash and bank balances of  5,040 crore (US$1.13 billion) as against  5,361 crore (US$1.21 billion) crore reflected in the books.

an accrued interest of  376 crore (US$84.6 million) which was non-existent. an understated liability of  1,230 crore (US$276.75 million) on account of funds

was arranged by himself. an overstated debtors' position of  490 crore (US$110.25 million) (as against  

2,651 crore (US$596.48 million) in the books).

Raju claimed in the same letter that neither he nor the managing director had benefited financially from the inflated revenues. He claimed that none of the board members had any knowledge of the situation in which the company was placed.[4][5]

He stated that

"What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years. It has attained unmanageable proportions as the size of company operations grew significantly (annualised revenue run rate of  11,276 crore (US$2.54 billion) in the September quarter of 2008 and official reserves of  8,392 crore (US$1.89 billion)). As the promoters held a small percentage of equity, the concern was that poor performance would result in a takeover, thereby exposing the gap. The aborted Maytas acquisition deal was the last attempt to fill the

fictitious assets with real ones. It was like riding a tiger, not knowing how to get off without being eaten.***”

[edit] Aftermath

Raju had appointed a task force to address the Maytas situation in the last few days before revealing the news of the accounting fraud. After the scandal broke, the then-board members elected Ram Mynampati to be Satyam's interim CEO. Mynampati's statement on Satyam's website said:

"We are obviously shocked by the contents of the letter. The senior leaders of Satyam stand united in their commitment to customers, associates, suppliers and all shareholders. We have gathered together at Hyderabad to strategize the way forward in light of this startling revelation."

On 10 January 2009, the Company Law Board decided to bar the current board of Satyam from functioning and appoint 10 nominal directors. "The current board has failed to do what they are supposed to do. The credibility of the IT industry should not be allowed to suffer." said Corporate Affairs Minister Prem Chand Gupta. Chartered accountants regulator ICAI issued show-cause notice to Satyam's auditor PricewaterhouseCoopers (PwC) on the accounts fudging. "We have asked PwC to reply within 21 days," ICAI President Ved Jain said.

On the same day, the Crime Investigation Department (CID) team picked up Vadlamani Srinivas, Satyam's then-CFO, for questioning. He was arrested later and kept in judicial custody [6] .

On 11 January 2009, the government nominated noted banker Deepak Parekh, former NASSCOM chief Kiran Karnik and former SEBI member C Achuthan to Satyam's board.

Analysts in India have termed the Satyam scandal India's own Enron scandal.[7]. Some social commentators see it more as a part of a broader problem relating to India's caste-based, family-owned corporate environment (http://kafila.org/2009/02/13/the-caste-of-a-scam-a-thousand-satyams-in-the-making/).

Immediately following the news, Merrill Lynch now a part of Bank of America and State Farm Insurance terminated its engagement with the company. Also, Credit Suisse suspended its coverage of Satyam.[citation needed]. It was also reported that Satyam's auditing firm PricewaterhouseCoopers will be scrutinized for complicity in this scandal. SEBI, the stock market regulator, also said that, if found guilty, its license to work in India may be revoked.[8][9][10][11][12] Satyam was the 2008 winner of the coveted Golden Peacock Award for Corporate Governance under Risk Management and Compliance Issues,[13] which was stripped from them in the aftermath of the scandal.[14] The New York Stock Exchange has halted trading in Satyam stock as of 7 January 2009.[15] India's National Stock Exchange has announced that it will remove Satyam from its S&P CNX Nifty 50-share index on 12 January.[16] The founder of Satyam was arrested two days after he admitted to falsifying

the firm's accounts. Ramalinga Raju is charged with several offences, including criminal conspiracy, breach of trust, and forgery.

Satyam's shares fell to 11.50 rupees on 10 January 2009, their lowest level since March 1998, compared to a high of 544 rupees in 2008[17]. In New York Stock Exchange Satyam shares peaked in 2008 at US$ 29.10; by March 2009 they were trading around US $1.80.

The Indian Government has stated that it may provide temporary direct or indirect liquidity support to the company. However, whether employment will continue at pre-crisis levels, particularly for new recruits, is questionable [18].

On 14 January 2009, Price Waterhouse, the Indian division of PricewaterhouseCoopers, announced that its reliance on potentially false information provided by the management of Satyam may have rendered its audit reports "inaccurate and unreliable"[19].

On 22 January 2009, CID told in court that the actual number of employees is only 40,000 and not 53,000 as reported earlier and that Mr. Raju had been allegedly withdrawing INR 20 crore rupees every month for paying these 13,000 non-existent employees

TehelkaFrom Wikipedia, the free encyclopediaJump to: navigation, search

Tehelka is an Indian weekly magazine under the editorship of Tarun Tejpal. The publication began in 2000 as a news website, Tehelka.com. In 2001, with an exposé of match-fixing in professional cricket in India, it got public attention, but it was the defense sting, called Operation Westend that got it the international attention, which led to the resignation of Indian Defence Minister.[3

History

In 2001, Tehelka launchced Operation West End to expose the alleged culture of bribery at the Ministry of Defence (India) (MoD). It set up a bogus London-based company, and contacted MoD officials for selling thermal binoculars to the Government of India.[5][3][6] Tehelka claimed to have filmed Bangaru Laxman (the secretary of the ruling party BJP) taking bribe for helping the bogus company in procuring government contracts. During the process, Tehelka also met Jaya Jaitly, the head of Samata Party, and a close aide of the defense minister George Fernandes. It also accused the MoD officials of accepting alcohol and services of the prostitutes.[5] When the scandal broke, there was an outcry, and George Fernandes resigned (although he wasn't accused of taking bribe). Laxman also resigned, while Jaya Jaitly accused Tehelka journalists of being Pakistani agents and raised doubts over the authenticity of the tapes. The tapes were sent to UK for forensic examination, and were confirmed as genuine.[5]

In September 2001, Tehelka's editor-in-chief, Tarun Tejpal, was charged with "immoral trafficking" for offering prostitutes to the MoD officials during the sting operation. The main financial backers of Tehelka were made targets of investigations from the customs, the police and the tax authorities. By 2003, the number of salaried employees in the company had reduced from 120 to 1, and the company was practically ruined.[5] The meager budget of Tehelka, then a startup media firm, was exhausted by legal expenses facing a Commission of Enquiry. According to the Editor Shoma Chaudhury, Tehelka decided to bow out of the new Commission of Enquiry, after Justice Venkatswami was replaced with Justice Phookan

Operation West End

Operation West End was a sting operation aimed to expose the corruption underlying India's large defence contracts. The original investigative piece by Tehelka in 2001 targeted several members of the then ruling coalition, the National Democratic Alliance, headed by Bharatiya Janata Party's Atal Behari Vajpayee. It showed several political figures, as well as army top brass, colluding to take bribes[8] that approached 4% of orders totalling hundreds of crores in order to approve defense contracts.[citation needed]

The minister in charge of Defence, George Fernandes of the Samata Party, resigned after the tapes were made public, but he was reinstated later. Part of the tapes show the treasurer of his party talking about accepting bribes of 1 crore or more from arms dealer ex-Naval officer Lt-Cmdr Suresh Nanda, son of ex-Chief of Naval Staff Admiral S. M. Nanda.

Initially the government, instead of acting on the evidence, accused Tehelka of fabricating allegations.[9] However, five years later, in October 2006, the Central Bureau of Investigation filed charges against George Fernandes, 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.[10]

In March 2008, the Nandas were arrested[11]. Fernandes was interrogated in May 2008[12].

In the Tehelka tapes, the reporter (usually Mathew Samuel) poses as a representative of the fictitious large arms supplier West End. Both editor Tarun Tejpal and editor investigation Aniruddha Bahal did not initially support the sting operation, but agreed after Mathew Samuel initiated the sting. There were a total of 105 tapes shot by Mathew Samuel

Tehelka in media

The Tehelka expose has been documented time and again through various media sources. Veteran Indian journalist, Madhu Trehan, has penned down an entire book on the expose and its aftermath. The book, Tehelka as Metaphor, is a forensic study of the sting

operation and how the Indian government got back by attempting to destroy Tehelka and its investors.

In 2004, Art Silverblatt and Nikolai Zlobin described Tehelka as a "muckraking site" in their book "International Communications: A Media Literacy Approach.