Prepared By: Praveen Venugopal

MBA, BIMS

CORRUPTION

What is Corruption?

Misuse of public power for private gains.

- A form of dishonest or unethical conduct by a person entrusted with a position of authority, often to acquire personal benefit.

Corruption cont…Selfishness and greed are at the root of itIt also implies lack of integrity and honesty.

A corrupt society is characterized by immorality and lack of fear or respect for the law.

When it stops valuing integrity, virtue or moral principles it starts decaying.

Corruption is the abuse of public power for private gain. Corruption comes under many different guises: bribery, misappropriations of public goods, nepotism (favoring family members for jobs and contracts), and influencing the formulation of laws or

regulations for private gain.

An act of bribery or misuse of public position or power for the fulfilment of selfish motives or to gain personal gratifications. It has also been defined as "Misuse of authority as a result of consideration of personal gain which need not be monetary".

Corruption is wrongdoing on the part of an authority or powerful party through means that are illegitimate, immoral, or incompatible with ethical standards. Corruption often from patronage and is associated with bribery.

Corruption

Ethical values

“Ethical values in general have drastically come down and society has become permissive and accepts corruption as normal.” - CFO of a leading pharmaceutical company

“Corruption threatens the integrity of markets, undermines fair competition, distorts resource allocation, destroys public trust and undermines the rule of law”.

– G-20 Summit, Seoul

A corrupt society stops valuing integrity, virtue or moral principles.

“Corruption = Monopoly + Discretion – ”Accountability”

Corruption tends to increase when an organization or person has monopoly (M) powerover a good or service, which generates income, has the discretion (D) on its allocation,and is not accountable (A).

CAUSES OF CORRUPTION

1. Personal greed2. Decline of personal ethical sensitivity3. No sense of service when working in public

or private institutions.4. Low awareness or lack of courage to

denounce corrupt behaviour5. Lack of effective management and

organization of administrative mechanism

6. Low Pay scales/ Wages7. Low Job opportunities8. Lack of Strict and fast punishments9. Lack of ill fame10. Lack of Unity in public11. Lack of accountability12.Option of many political parties

there are two forms of corruption:

Administrative Corruption: Corruption that alters the implementation of policies, such as

getting a license even if you don’t qualify for it.

Political Corruption: Corruption that influences the formulation of laws, regulations, and policies, such as revoking all licenses, and gaining the sole right to operate some public utility with monopoly.

Extortion

Embezzlement

ScamsFraud

Bribery

Forms of Corruption

EXTORTION one-sided where in the

public servant extorts bribe from the beneficiary on the pretext of the threat of denial of service.

Extortionary Corruption can be defined as corruption where money has to be paid to acquire services that are legitimately due and honestly entitled.

Extortion (also called

 blackmail, shakedown, outwresting) is a criminal offence of unlawfully obtaining money, property, or services from a person, entity, or institution, through coercion.

BRIBERY Act of giving money, goods or other forms of recompense to a recipient in exchange for an alteration of their behaviour (to the benefit/interest of the giver) that the recipient would otherwise not alter.

EMBEZZLEMENT Act of withholding

assets for the purpose of conversion (theft) of such assets, by one or more persons to whom the assets were entrusted, either to be held or to be used for specific purposes.

SCAMS A fraudulent scheme performed by a

dishonest individual, group, or company in an attempt obtain money or something else of value.

Scams traditionally resided in confidence tricks, where an individual would misrepresent themselves as someone with skill or authority, i.e. a doctor, lawyer, investor.

Corruption in INDIA India has earned a place

among the THREE most corrupt countries in the world. Corruption in India is a consequence of the nexus between Bureaucracy, politics and criminals.

C K Prahalad estimated that almost Rs. 2.5 lakh

crore is earned by politicians over a 5 year term.

Impact of corruption on India’s GDP growth

Source: KPMG’s Bribery and Corruption Survey 2011

What should corporate do?

Corporate should realize that corruption is not merely moral issue but actually an economic one. Corporate should at least pay due taxes. Corporate should use international instruments to check corruption in the nation.

What should common people do?

Common people should use RTI to expose corruption. With informed collective assertion, common people can over years transform the extent of corruption in India. Common people should elect clean politicians.

THANK YOU