Nuances of corruption and development

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Nuances of Corruption and Development

Nuances of Corruption and DevelopmentMahesh KumarChennaiNEXT & Satta Panchayat Iyakkam

Indias Current PositionHuman Development IndexEase of Doing Business IndexGender Gap Index Press Freedom IndexPer Capita GDPGlobal Innovation Index Environment Performance Index

Indias RANK

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

Global Competitiveness IndexWorld Economic ForumDiversion of Public Funds: 71/139Trust in Politicians: 88/139Bribes : 83/139Ethical behavior of Private Firms: 70/139 Efficacy of Corporate Boards: 76/139

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

Modern Singapore Hong Kong USA

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

Corrupt Indians??Readers Digest Experiment 2006: 12 wallets each in 16 cities around the world ( $50) 2nd best with 9 returnedExcept 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 80:10:10Role 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

Types of CorruptionCoerciveIpaidabribe.com1.23 Lakh reports since 2010Rs.500 for passport verification or Rs.50000 for eKatha

Collusive 2G Scam

Corruption Penalty elsewhereUS - Rod Blagojevich SagaGovernor of Illinois, contribution to his political fund, in exchange for a seatarrested Dec 2008, indictment Aug 2010Retrial : April 2011, Conviction Dec 2011Impeachment: Jan 2009, barred from public office 14 years in JailSingapore and Hong Kong

Corruption Since IndependenceAreas where reduced Railways TelephoneNatural Resource Allocation Cement, Sugar and Steel Passport Income Tax

Corruption Since Independence

New Areas started Permit ( Educational Institutions)Appointments and TransfersReal Estate Auction & Tenders etcLoans in PSU PPP

Poor Disproportionately affectedWelfare MeasuresPDS46.7% leakage = Rs 48,000 Cr at 2012 , Rs 61,000 Cr at 2015NREGAAverage Annual Outaly Rs 40,000 Cr Similar leakage as PDS NSS Survey

Poor Disproportionately affectedInformal SectorHafta or Mamool : Street Vendors in Delhi : 5000 License for 5 Lakh VendorsHafta : 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

Poor Disproportionately affectedTenders : Jharkand Good Roads increase rural income by 18% Expenditure on Roads : 54% Commission Agriculture Growth Twice faster in elimination of poverty than other sectorsIrrigation project : 48% Commission




Corruption and DevelopementBribes 3% of World GDP GDP growth and Corruption Co-relation in G20 CountriesEase of Doing Business IndexJobs and Indian in next decade

CORRUPTION - FORMULACorruption = (Monopoly + Discretion) - (Accountability + Integrity + Transparency)

Equilibrium of CorruptionPolitician BureaucratPeople/Voters Election Expenditure Politics