Corruption in India(1)

7/31/2019 Corruption in India(1)

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Corruption in India: Existing Laws and Provisionsin India to tackle CorruptionVidya Mishra What is Corruption ? In spite of its prominence through the ages, corruption remains difficult todefine. In India, even in 4th century B.C. Corruption had been a key theme as reflected inKautilyas Arthashastra, an ancient Hindu treatise on statecraft, economic policy and militarystrategy penned during the time.The U. N. Convention against Corruption (adopted 9 December 2003, entered into force 14 December 2005) GA Res 58/4 defines Corruption is an insidiousplague that has a wide range of corrosive effects on societies. It undermines democracy and therule of law, leads to violations of human rights, distorts markets, erodes the quality of life andallows organised crime, terrorism and other threats to human security to flourish. In spite of itsprominence through the ages, corruption remains difficult to define. A multifaceted concept,there is no universally accepted definition of corruption and there has been disagreement as to

what specific acts constitute corruption as a construct. A thorny18 and loaded term, it has beensaid that corruption is like an elephant though it may be difficult to describe, it is generally notdifficult to recognise when observed. A standard and oft-cited definition of corruption anduniversally accepted is that it is constituted by a n act in which the power of public office is usedfor personal gain.As per the Transparency International (TI); Corruption is operationally definedas the misuse of entrusted power for private gain or the use of public office for private gain. Inother words, use of official position, rank or status by an office bearer for his/her own personalbenefit. Therefore the corrupt behaviour would include, bribery, fraud, stealing the publicresources, partiality/favouritism, seizure of public assets for private use, etc. TransparencyInternational (TI) further differentiates between according to rule corruption and against therule 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, onthe other hand, is a bribe paid to obtain service. 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 (CorruptionPerceptions Index 2009, India is worse than many countries in Asia and Africa such asBotswana, Ghana, Namibia, Taiwan, Korea, Bhutan, and China. In the world competitivenessscoreboard, which is the assessment of several factors, e.g. Government system, Businessefficiency, infrastructure, etc., it is dragging only at 31st position.Main cause of corruption

Although there are many causes of corruption but based upon several research, surveys andstudies, 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 andpoliticians.- Attitudes or circumstances that make average people disregard the law.- Thechange in the value system and ethical qualities of people. The moral and ethics have declinedand most people give more importance to money than excellence.- Bribe may provide aconvenient means of getting work done or avoid any punishment.- Bad incentives, such as anyemployee not earning enough to live on; so he supplements his income with bribes.- Tolerance


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of people towards corruption.- Absence of strong public forum or civil society to opposecorruption, etc.Important Corruption Scandals in Independent India The history of political corruption in post-Independence India began with the Jeep scandal in1948, involving V.K.Krishna Menon, the then High Commissioner for India in London. Contrary

to the demand of the opposition for judicial inquiry as suggested by the Inquiry Committee ledby Ananthsayanam Ayyangar, the then Government announced on September 30, 1955 thatthe Jeep scandal case was closed. Union Minister G.B.Pant declared that as far asGovernment was concerned it has made up its mind to close the matter. If the opposition wasnot satisfied they can make it an election issue. Soon after on February 3 1956, KrishnaMenon was inducted into the Nehru cabinet as Minister Without Portfolio. Corruption chargesin cases like Mudgal case (1951), Mundra deals (1957-58), Malaviya Sirajuddin scandal(1963), and Pratap Singh Kairon case (1963) were levelled against the Congress ministers andChief Ministers. Congress as a party had suffered the crisis of credibility but no Prime Minister resigned. Apparently, Nehrus tolerance of corruption among his ministers legitimized thismalady, his daughter Indira Gandhi institutionalized it. By holding the post of party Presidentas well as the Prime Minister she was herself controlling the party funds, which gave birth to themoney power in politics. Corruption cases like Sugar Import scam (Kalpanath Rai) 1994,Telcom scam (Sukhram) 1996, Fairfax, HBJ Pipeline, and HDW Submarine deal came upsince then. The famous Bofors deal is well known. Narsimha Rao was the first Prime Minister being prosecuted in corruption charges. Cases like Harshad Mehta security scam (1992),JMM bribery case (1995), Hawala scam and Urea scam (1996) also came up during the periodof Narsimha Rao Government, making it as the most corrupt Government in the country. It wasthought that perhaps, with the end of Narsimha Rao Government, there would be some dip inthe level of political corruption. At least, the Congress Government in future would be careful tothe issues of political corruption.BJP was projecting itself as a party with difference. However, aspate of corruption cases also tarnished its image. Tehelka scam (2001) along with KetanParekh Scam (2001) and Telgi scam (2003) exposed the NDA Government as being no lesscorrupt than the Congress. But, the Congress Government since 2004 made a promise of

clean Government to the people. Sonia Gandhi, who always quoted her husband Rajiv Gandhisconcern for corruption in governance where apparently 15 paise out of one rupee reached thebeneficiaries, took the leadership of the party, renounced the offer for Prime Ministership andput Manmohan Singh in the command against several hopefuls, not surely on the strength of his political experience, but certainly on the strength of his impeccable integrity and probity.Barring the Oil-for-Food Scandal (2005) involving Natwar Singh, where he had to be dropped

from the cabinet, no serious scandal threatened the UPA I Government. But things arecertainly different this time around. A spate of corruption issues has exposed the Government.

The latest and so far the biggest one is the 2G scam. This scam is unfathomable. No one knowsthe extent of rot. CAG report has come out with certain findings, but certainly not the lastword.Recent scams have highlighted how both the scale and spread of corruption in India havegrown sums like Rs 1,76,000 crore are being bandied about while politicians, bureaucrats,businessmen, the media, the judiciary and senior armed forces officers have all been tainted inone scam or the other. Most worryingly, there is little to suggest that the guilty will be punished.However, weeding out corruption today is a major challenge before Indian society. India is alarge country with a population of over a billion people. It is the second most populous country in


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the world after China. It is one of the fastest growing economies in the world and is attractinghuge investments from developed countries. In spite of the healthy growth indices, a vastpopulation still lives in poverty and does not have access to basic sanitation, healthcare andeducation. The countrys progress is seriously hampered by all pervasive corruption. It ispreventing the benefits of development from reaching the deprived sections of society. Weeding

out corruption today is a major challenge before Indian society. The lawmakers of India havealways been conscious of this problem. The British enacted the first codified law, The IndianPenal Code, in 1860. It had a chapter dealing with offences committed by public servantsinvolving corruption and corrupt practices. Later, a special piece of legislation was enacted, i.e.The Prevention of Corruption Act 1947, to deal specifically with the problem of corruption inpublic life. Amendments were made from time to time to keep pace with the changing times.Later on, in 1988, it was replaced by a more comprehensive and broad piece of legislation The Prevention of Corruption Act 1988. Apart from this Act, India is a signatory to the UnitedNations Convention against Corruption (UNCAC). It has signed Extradition and Mutual Legal

Assistance Treaties in Criminal Matters with a number of countries to ensure mutual co-operation in matters pertaining to investigation of corruption and other criminal cases. Co-operation is sought from other countries under these treaties through the instrument of LettersRogatory (LRs).LAWS AND PROVISIONS IN INDIA TO TACKLE CORRUPTION (i) The Prevention of Corruption Act, 1988 The Prevention of Corruption Act 1988 (hereinafter referred to as the Corruption Act) was enacted to consolidate different anti -corruptionprovisions from various pieces of legislation under one umbrella and to make them moreeffective. The Corruption Act, inter alia, widened the scope of the definition of a public servant;enhanced penalties provided for offences in earlier laws; incorporated the provisions of freezingof suspected property during trial; mandated trial on a day-to-day basis, prohibited the grant of stay on trial; etc. The Corruption Act is the main law for dealing with offences pertaining tocorruption in India, however many avenues of corruption cannot be dealt with under thePrevention of Corruption Act, 1988.(ii) India and the United Nations Convention against Corruption 2003 (UNCAC) India haswelcomed the UNCAC, which provides for international co-operation and mutual legalassistance in investigating cases of corruption and recovery of assets. India signed the UNCACin December 2005. By signing the Convention India has reiterated its resolve to strengtheninternational co-operation as envisaged in the Convention. It is in the process of enactment of requisite enabling legislations by the concerned Ministries or Departments before ratifiying theConvention. Once ratified, the Convention will boost Indias effort and commitment to fightcorruption at both domestic and international level.(iii) The Prevention of Money Laundering Act 2002 (Article 23 of the UNCAC) Many public

servants are able to hold their ill-gotten wealth in foreign countries, which they subsequentlytransfer to their homeland through money laundering, disguising them as funds, apparently froma legal source. This Act empowers the Directorate of Enforcement, India, and FinancialIntelligence Unit, India, both agencies of the Government of India, to investigate and prosecutesuch persons under the said Act.(iv) The Foreign Exchange Management Act 1999 Middlemen or touts, who take huge commissions for brokering deals pertaining to purchasesfrom foreign suppliers, often transfer such money in foreign currencies, claiming it to be the


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proceeds of some business abroad. This Act empowers the Directorate of Enforcement, India toinvestigate and prosecute such persons under the said act.(v) The Right to Information Act 2005 It is a well-known fact that too much secrecy in public administration breeds corruption. TheRight to Information Act aims at ensuring efficiency, transparency and accountability in public

life. This Act requires all public authorities, except the ones that handle work relating to nationalsecurity, to publish all information about their functioning at regular intervals through variousmeans of communication, including the Internet. Now any person can seek any information fromthe concerned public authority just by filing an application at almost at no cost. The publicauthority has to reply to the application compulsorily within 30 days. If the information sought isdenied, the applicant has a right to agitate further before the appellate authorities under this Act.This can indeed be described as a revolutionary step towards the eradication of corruption frompublic life.(vi) India and the United Nations Convention against Corruption 2003 (UNCAC) India has welcomed the UNCAC, which provides for international co-operation and mutual legalassistance in investigating cases of corruption and recovery of assets. India signed the UNCACin December 2005. By signing the Convention India has reiterated its resolve to strengtheninternational co-operation as envisaged in the Convention. It is in the process of enactment of requisite enabling legislations by the concerned Ministries or Departments before ratifiying theConvention. Once r atified, the Convention will boost Indias effort and commitment to fightcorruption at both domestic and international level.(vii) Cases referred by the Central Vigilance Commission (CVC) and the Chief VigilanceOfficers (CVOs) of other Government Departments The Central Vigilance Commission is a statutory body which monitors corruption ingovernmental departments. It supervises the work of Chief Vigilance Officers of all thedepartments of government and issues guidelines to them. The CVC also receives complaintsfrom the general public about corruption. It refers such complaints to the CBI for verification andinvestigation if found to contain verifiable allegations. The CVOs are in-house supervisors of government departments who monitor the conduct of personnel and enquire into complaintsagainst them pertaining to corruption. If upon enquiry they conclude that a criminal case under the Corruption Act appears to have been made out, they refer the case to the CBI for investigation.(viii) Use of Telephonic/Electronic Surveillance The legal provisions relating to telephonic or electronic surveillance under the Indian Telegraph

Act 1885 are effectively used by the CBI to gather accurate information about corrupt activitiesof the public servants. After ascertaining details about various phone numbers and emailidentifications used by the public servant, permission of the competent authority is taken to put

the same under surveillance. Information gathered during such surveillance has beensuccessfully used in exposing big scams.(ix) Freezing, Seizure and Confiscation of Properties - The Criminal Law (Amendment)Ordinance, 1944 (Article 31 of UNCAC) This is an important law on freezing, seizure and confiscation of properties which are proceedsof crime, including offences under the Corruption Act. Such properties identified duringinvestigation can be frozen under this law. Properties can remain frozen till disposal of the case


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by the court after completion of the investigation. If the alleged offence is proved in the court of law and the property is proved to be the proceeds of crime, the court will order its confiscation.(x) Criminal Procedure Code 1973 together with Mutual Legal Assistance Treaties (MLAT)in Criminal Matters and Extradition Treaties Sec. 166 A and 166 B of the above code empower the crime investigation agencies of India to

make requests to other countries as well as to entertain requests from other countries to render assistance in the investigation of crime registered in the respective countries. Such letters of request are popularly known as Letters Rogatory. Such Letters Rogatory are executed on thebasis of Mutual Legal Assistance Treaties and Extradition Treaties India has signed with other countries. To date India has Mutual Legal Assistance Treaties in Criminal Matters with 20countries and Extradition Treaties with 25 countries. The Mutual Legal Assistance Treatiesinvariably have a chapter on asset recovery and sharing the same. With other countries,international co-operation is sought on the basis of guarantee of reciprocity.PROBLEMS AND CHALLENGES Despite adequate laws to fight corruption in the public sector, it is still one of the biggestmenaces Indian society is facing today to tackle corruption prevalent in our society. The Indiancriminal justice system has been facing many problems and challenges in its fight againstcorruption, some of which are highlighted below:-(a) No Law to tackle Corruption in the Private Sector The Prevention of Corruption Act 1988 is the existing law in India dealing with offences relatingto corruption. This law, however, was essentially enacted to take care of corruption cases in thepublic sector and by public servants, whereas in fact, there is widespread corruption in theprivate sector also which seriously hampers the overall growth and development of thecountry.After the liberalization of the Indian economy in the early 1990s, the private sector hasexpanded greatly. T he problem of corruption in the private sector is increasing with theexpansion of the private sector. Today it has assumed alarming proportions. It has become thesingle biggest menace to Indian society. Efforts areunderway to enact laws to deal withcorruption in the private sector as envisaged in the UNCAC.(b) Inherent Delays in the Criminal Justice System The system is painfully slow and punishments are not swift. As explained earlier, sec. 19 of theCorruption Act requires prior permission of the authority competent to remove a public servantfrom his or her post before launching prosecution against him or her in court. This often delaysthe launch of a prosecution. Upon receiving reports from the investigating agencies seekingapproval for a prosecution, the concerned authorities often take considerable time to grant suchpermission. Also, permission is sometimes denied onpolitical and other grounds. The Corruption

Act provides for trial of corruption cases under the act exclusively by the Special Judges. Thenumber of Special Judges is highly insufficient compared to the number of corruption cases filed

in their courts. As a result, these courts are overburdened and there is a large discrepancy inthe number of cases disposed by the investigating agencies and the number of cases disposedby the courts, adding to the backlogeach year. During trial of offences, adjournments are oftentaken or granted on various grounds. Further, the proceedings in the trial court are challengedat various stages by parties filing petitions in the same court as well as in higher courts. Appealsand revisions filed in higher courts against the order of the trial court often take years to beconcluded.(c) Hostile Witnesses


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In order to convict a corrupt public servant, the prosecution has to prove its case beyond doubt.This is a strict legal requirement as per the Indian Evidence Act, the general law on evidence inIndia. There is no exception to this requirement even for corruption cases. Prosecution has todepend heavily on the testimony of witnesses to prove its case beyond doubt. However,witnesses often do not support the prosecution case because of influence, allurement and

intimidation from the other side. There is no witness protection scheme, nor are there provisionsfor quick and effective action against witnesses who become hostile. As a result, witnessesfrequently become unco-operative and spoil the prosecution case. Punishments are, therefore,not swift and effective under the Corruption Act and dont deter corrupt public servants. (d) Ineffective Asset Recovery Though there are legal provisions for confiscation and recovery of property acquired asproceeds of crime, such recovery is not easy. Corrupt public servants often acquire propertieswith the proceeds of crime in the names of their friends, relatives, family members and other acquaintances. Therefore, it is not easy to prove in court that such properties are the proceedsof crime. Such properties are quite often held offshore under strict privacy laws and it is noteasy to trace and recover them, especially in the absence of desired international co-operation.CONCLUSION Corruption is found to be one of the most damaging consequences of poor governance andpoverty, classified by lack of efficiency, transparency and accountability. Corruption diminishesinvestment and suppresses economic growth and development and also reduces theeffectiveness of public administration. It diverts the public resources towards corrupt politiciansand officials and away from the needy and poor people. So, corruption can be considered anti-poor and anti-development. Though there are adequate laws in India to fight corruption, theyhave been made ineffective. Corruption is still one of the biggest impediments to extending thebenefits of development and progress to the poorest of the poor. The Indian criminal justicesystem is facing many problems and challenges in its fight against corruption. At present, thereis no law to deal with corruption in the private sector, which has grown in leaps and bounds inlast two decades, as envisaged in the UNCAC. Offenders take advantage of the very strictrequirements of Indian courts to prove every point beyond doubt. The system suffers frominherent delays; as a result punishment is not swift. Corruption is considered a high profit -lowrisk activity by corrupt public servants. Recoveries of assets, which are proceeds of crime,remain a big challenge. Such assets are often held offshore and getting them back is aHerculean task, especially in the absence of desired international co-operation. Many peoplethink that only government has responsibility for eliminating corruption and we often blame thegovernment; however in view of the level of corruption and the existing framework that we havein India, it is very clear that government alone cannot stop corruption. Civil society institutionstoo have a responsibility and duty to fight against corruption and take some actions to promote

honesty and integrity. 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 differentapproaches 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 andactive participation of media, civic associations, voluntary groups, teachers, students, socialworkers, etc. In addition to the ongoing initiatives such as Citizens Charte rs, RTI Act, socialaudit, e-governance, lokayukta, etc., which needs some improvement and harmonized


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approach across all states? The central government is considering the introduction of a newLok Pal Bill to put in place a mechanism to tackle corruptio n. Currently, public servants (suchas government employees, judges, armed forces, police) can be prosecuted for corruptionunder the Indian Penal Code, 1860 and the Prevention of Corruption Act, 1988. However, theCode of Criminal Procedure and the Act require the investigating agency (such as CBI) to get

prior sanction of the central or state government before it can initiate the prosecution process ina court. The Lok Pal Bill was introduced for the first time in 1968 but it lapsed with thedissolution of the Lok Sabha. It was introduced seven more times in Parliament, the last time in2001. However, the Bill lapsed each time except in 1985 when it was withdrawn. At the statelevel, so far 18 states have created the institution of the Lokayukta through the Lokayukta Actsbut loopholes in the Lokayukta Act and the threat of strong punishment for frivolouscomplaints have discouraged people from stepping forward to report corruption and made theseinstitutions helpless.

Corruption in India(1)

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