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Nuances of Corruption and Development Mahesh Kumar ChennaiNEXT & Satta Panchayat Iyakkam

Nuances of corruption and development

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Page 1: Nuances of corruption and development

Nuances of Corruption and Development

Mahesh KumarChennaiNEXT & Satta Panchayat Iyakkam

Page 2: Nuances of corruption and development

India’s Current Position

• Human Development Index• Ease of Doing Business Index• Gender Gap Index• Press Freedom Index• Per Capita GDP• Global Innovation Index • Environment Performance Index

Page 3: Nuances of corruption and development

India’s RANK

Page 4: Nuances of corruption and development

Corruption Related Index

• Corruption Perception Index : 85/174• Global Competitiveness Index : 51/139• Index of Economic Freedom 2011 : 124/183• Economic Freedom of the World : 94/ 141• Ease of Doing Business: 132/183

Page 5: Nuances of corruption and development

Global Competitiveness Index

• World Economic Forum• Diversion of Public Funds: 71/139• Trust in Politicians: 88/139• Bribes : 83/139• Ethical behavior of Private Firms: 70/139 • Efficacy of Corporate Boards: 76/139

Page 6: Nuances of corruption and development

History

• Ancient • Mentions in Rig Veda (Around 1500 BCE)• Arthsashtra ( 2nd Century BCE)

• Modern • Singapore • Hong Kong • USA

Page 7: Nuances of corruption and development

Corrupt Indians??

• Amendment to PCA Act • Indians Vs Rest of Country • Indians in other countries

Page 8: Nuances of corruption and development

Corrupt Indians??• Readers Digest Experiment

• 2006: 12 wallets each in 16 cities around the world ( $50) – 2nd best with 9 returned• Except for Hungary, more honest than USA, Russia, England, Brazil, and

Switzerland. • 2007: 30 mobile phones each in 32 cities – India Rank : 5/32

• Rule of 80:10:10• Role of Institutions

• “The proper function of a government is to make it easy for people to do good and difficult for them to do evil” – William Gladstone

Page 9: Nuances of corruption and development

Types of Corruption

• Coercive• Ipaidabribe.com

• 1.23 Lakh reports since 2010• Rs.500 for passport verification or Rs.50000 for eKatha

• Collusive • 2G Scam

Page 10: Nuances of corruption and development

Corruption – Penalty elsewhere

• US - Rod Blagojevich Saga• Governor of Illinois, contribution to his political fund, in exchange

for a seat• arrested – Dec 2008, indictment – Aug 2010• Retrial : April 2011, Conviction – Dec 2011• Impeachment: Jan 2009, barred from public office • 14 years in Jail

• Singapore and Hong – Kong

Page 11: Nuances of corruption and development

Corruption Since Independence

• Areas where reduced • Railways • Telephone• Natural Resource Allocation • Cement, Sugar and Steel • Passport • Income Tax

Page 12: Nuances of corruption and development

Corruption Since Independence

• New Areas started • Permit ( Educational Institutions)• Appointments and Transfers• Real Estate • Auction & Tenders etc• Loans in PSU • PPP

Page 13: Nuances of corruption and development

Poor – Disproportionately affected

• Welfare Measures• PDS

• 46.7% leakage = Rs 48,000 Cr at 2012 , Rs 61,000 Cr at 2015

• NREGA• Average Annual Outaly Rs 40,000 Cr – Similar leakage as PDS – NSS

Survey

Page 14: Nuances of corruption and development

Poor – Disproportionately affected

• Informal Sector• Hafta or Mamool :

• Street Vendors in Delhi : 5000 License for 5 Lakh Vendors• Hafta : 20% to 50% of Revenue • Frequent raids + use of force

• Licensing : Cycle Rickshaw in Delhi • 1 Lakh License for 5 Lakh Vehicle • Bribe – 5 to 20% of Cost ,• Renewal every 3 year – Half of license bribe

Page 15: Nuances of corruption and development

Poor – Disproportionately affected

• Tenders : Jharkand • Good Roads increase rural income by 18% • Expenditure on Roads : 54% Commission • Agriculture Growth – Twice faster in elimination of poverty than

other sectors• Irrigation project : 48% Commission

Page 16: Nuances of corruption and development

BPLCORRUPTION RANK – DEPARTMENT WISE

Page 17: Nuances of corruption and development

SLUMS

Page 18: Nuances of corruption and development

Corruption and Developement

• Bribes – 3% of World GDP • GDP growth and Corruption Co-relation in G20 Countries• Ease of Doing Business Index• Jobs and Indian in next decade

Page 19: Nuances of corruption and development

CORRUPTION - FORMULA

•Corruption = (Monopoly + Discretion) - (Accountability + Integrity + Transparency)

Page 20: Nuances of corruption and development

Equilibrium of Corruption

• Politician • Bureaucrat• People/Voters • Election Expenditure • Politics