(Bricelia)

(Introduction)
"The abuse of power for Gain and destruction."A survey conducted by Transparency
International (TI) in the year 2021 found that India has the highest rate of people take bribe
in the Asian region. The survey titled, ‘Global Corruption Barometer (GCB), Asia’ revealed
that the nation also had the highest rate of people using personal connections to access
public services. The country has a bribe rate of 39 per cent while 46 per cent people use
“familiarity” to get access to services. The report noted that “slow and complicated
bureaucratic process, unnecessary red tape and unclear regulatory frameworks force
citizens to seek out other solutions to access basic services through networks of familiarity
and petty corruption (in India).”
The nation’s quest for economic dynamism which has been severely stifled by chronic
corruption. The country needs to urgently modernise its institutions and end the culture of
rent-seeking and cutting corners if it wants the wheel of its economy to roll seamlessly.
Corruption is both anti-national and anti-poor because the resources meant for poverty
alleviation schemes get sniffed off by dishonest politicians and others in authority. It is
among the most debilitating economic illnesses that afflict large parts of the world. India is
now caught in a situation where many sectors are steeped in endemic corruption, including
those charged with controlling it — from the legislators who write the laws, to the judiciary
which makes them roadworthy and the police which is charged with enforcing them.
Cont..(priya)
In the last four decades, despite several Government programmes for the welfare of the
rural poor, poverty remains endemic. Either the nets were not cast wide or there were too
many holes blown into them. The cruel reality is that much of the public spending does not
reach the poor. Of course, in Financial Year 2022, the current financial year, the Indian
economy is expected to register a recovery. Even if we assume that at the end of the current
financial year, PFCE would grow at the same rate — 6.8% — that it had in the eight years
before Covid, the Financial year 2012 to financial year 2022 annual growth rate would
barely rise above 5%. But what is most revealing is if one forecasts the growth rate between
Financial Year 2017 and Financial Year 2022 based on the same assumption; such a
calculation throws up an annual growth rate of just 3.2%.
Comparing this 3.2% annual growth rate in private consumption expenditure in the past five
years with the preceding years, especially the 8.2% annual growth rate during Financial Year
2005 and Financial year 2011, which was the best phase of GDP growth in India’s history,
shows how India’s consumer demand lost its growth momentum.

(Prerna)
TYPES OF CORRUPTION IN INDIA
Corruption can occur on different scales. Corruption ranges from small favors between a
small number of people (petty corruption),[7] to corruption that affects the government on
a large scale (grand corruption), and corruption that is so prevalent that it is part of the
everyday structure of society, including corruption as one of the symptoms of organized
crime (Systemic corruption).
1) Petty corruption- Petty corruption occurs at a smaller scale and takes place at the
implementation end of public services when public officials meet the public. For example, in
many small places such as registration offices, police stations, state licensing boards, and
many other private and government sectors.
2) Grand corruption- Grand corruption is defined as corruption occurring at the highest
levels of government in a way that requires significant subversion of the political, legal and
economic systems. Such corruption is commonly found in countries with authoritarian or
dictatorial governments but also in those without adequate policing of corruption.The
government system in many countries is divided into the legislative, executive and judicial
branches in an attempt to provide independent services that are less subject to grand
corruption due to their independence from one another. Examples include the Mahatma
Gandhi National Rural Employment Guarantee Act and the National Rural Health Mission.
Other areas of corruption include India's trucking industry which is forced to pay billions of
rupees in bribes annually to numerous regulatory and police stops on interstate highways.
3) Systemic corruption- Systemic corruption (or endemic corruption) is corruption which is
primarily due to the weaknesses of an organization or process. It can be contrasted with
individual officials or agents who act corruptly within the system.Factors which encourage
systemic corruption include conflicting incentives, discretionary powers; monopolistic
powers; lack of transparency; low pay; and a culture of impunity. Specific acts of corruption
include "bribery, extortion, and embezzlement" in a system where "corruption becomes the
rule rather than the exception. Scholars distinguish between centralized and decentralized
systemic corruption, depending on which level of state or government corruption takes
place; in countries such as the Post-Soviet states both types occur. Examples include the
misdirection of company funds into "shadow companies" (and then into the pockets of
corrupt employees), the skimming of foreign aid money, scams, electoral fraud and other
corrupt activity.

(Cyrus)
THE MAJOR LIST OF SCANDALS WHICH HAPPENED RECENTLY IN INDIA IS AS FOLLOWS
1) PMC Bank Scam- According to an FIR filed in the case, HDIL promoters allegedly colluded
with the bank management to draw loans from the bank's Bhandup branch. The bank
officials did not classify these loans as non-performing advances, despite non-payment.
Reports estimate the bank’s overall exposure to the HDIL group at around Rs 6,500 crore, or
over 73 per cent of all of the bank’s advances — and all of this is not being serviced.The
bank also allegedly created fictitious accounts of companies which borrowed small sums of
money, and created fake reports to hide from regulatory supervision. In 2018-19, the bank
had reported a net profit of Rs 99.69 crore in its annual report. The bank showed 3.76 per
cent (or Rs 315 crore) of advances (Rs 8,383 crore) as gross non-performing assets (NPAs),
which was good performance as compared to public-sector banks. However, it is now clear
that the bank presented false financial reports to hide the bad loan mess and the alleged
collusion with HDIL and other companies.

(Vedant)
2) DFHL Scam- The scam is reported to involve a sum of more than Rs. 31,000 crore. The
suspects of this huge financial fraud are claimed to be the primary promoters of Dewan
Housing Finance Corporation Limited (DHFL) and their associated companies. This is an
example of a systematic craft to steal public money in broad daylight. The scam has been
pulled off mainly by sanctioning and paying out funds in unsecured and dubious loans.
These loans amount to thousands of crores of rupees and were provided to dubious shell
companies which were related to DHFL’s own primary stakeholders through their proxies
and associates. Added to that, no security or collateral and the proceeds were utilized for
private asset creation, neither offshore nor in India. Such large loans were disbursed for new
projects to the shell companies, which were newly incorporated, without scrutinizing the
feasibility and viability of those projects. A lot of these shell companies are operating from
the same email addresses and are run by the same group of initial directors. What raises
more concern is the fact that DHFL has hidden the terms of loan and terms of repayment in
the financial statements. They also ensured that most of the shell companies have hidden
the name of the lender – DHFL. By lending to shell companies without due diligence, DHFL
has ensured that the recovery of such dubious loans is impossible since the companies or
their directors themselves do not own any assets. This way the private assets acquired by
the promoters and their associates by using the funds from these dubious loans are
completely ring-fenced from any recovery process. Thus, only public sector banks such as
State Bank of India and Bank of Baroda are the primary losers. The loss amounts to a
staggering sum of over Rs. 11,000 crore and Rs. 4,000 crore, respectively. Other entities that
share the losses are foreign banks and shareholders from among the public or investors of
DHFL.

(Sakshi)
3) UPPCL Employee Provident Fund Scandal- said that Energy Minister Shrikant Sharma had
revealed to Chief Minister Aditynath that a set of officers allegedly connived in transferring
EPF money to a controversial private company, Dewan Housing Finance Corporation Ltd
(DHFL).The minister, in a letter to the CM, also revealed that Alok Kumar had not kept him in
loop while taking the important decision of transferring huge amounts to DHFL.
Various employees unions in the UPPCL had been demanding the removal of Alok Kumar
from his post following the EPF scam in which the employees fund was deposited in DHFL.
The employees union had threatened to go on on a two day statewide strike in case the
state government fails to initiate tough action against the erring officials and also in fulfilling
its commitment to secure the EPF amount held by DHFL. As per the FIR, the officials,
arrested by the police, did not seek written permission from the top heads in the
government, before transferring funds to DHFL, whose promoters Kapil Wadhawan and
Dheeraj Wadhawan were recently grilled by the Enforcement Directorate for their links with
firms linked with Dawood Ibrahim's D-company. Massive funds were transferred to DHFL by
the trust, beginning March 17, 2017, two days before Yogi Adityanath took oath as Chief
Minister. Meanwhile, the UP government has decided that in future, the decision to invest
the money relating to EPF will be taken by the Union government's Employees Provident
Fund Organisation (EPFO). Officials of the state government have admitted that norms were
thrown to the winds while employees trust decided on its own to invest funds in a private
housing company.

(Bricelia)
4) INX Media Case Against Former Union Minister P. Chidambaram - In 2010, the
Enforcement Directorate, a financial crime fighting agency, registered a case under Foreign
Exchange Management Act (FEMA) for diverting foreign direct investment by three
Mauritius-based companies in INX Media to its subsidiaries without prior approval of the
FIPB.The three companies named were New Vernon Private Equity Limited, New Silk Route
(NSR) PE Mauritius, and Dunearn Investment (Mauritius). In 2013 the investigation was
halted without explanation.In May 2014 the investigative wing of the Central Board of Direct
Taxes compiled a tax history of the INX Group and suggested that the Mukerjeas had
laundered Rs. 275.5 crore (Rs. 2.755 billion) via Mauritius into eight INX Group subsidiary
companies between 2007 and 2008.In September 2015 the Mumbai office of the
Enforcement Directorate indicated that it would reopen the 2010 FEMA case under the
Prevention of Money Laundering Act, 2002. In August 2019, the CBI and ED issued a notice
to appear before them. On 21 August, it was reported that P. Chidambaram went missing
after his anticipatory bail plea was refused on same day. He appeared around 24 hours later
at the Congress Party headquarters and made a statement to the press that he has "not
committed any offence in INX Media case" and "will respect the law".His plea for an
anticipatory bail in INX Media case was dismissed by the Delhi High Court on 20 August
2019.The CBI arrested him at his house the next day, in a sequence of events described as
"dramatic" by the media. After being denied entry at the main gate of his house, some CBI
agents reportedly entered the compound through the back gate and others by "scaling the
walls". Eventually they were allowed into the house and the arrest was carried out.

(Priya)
HOW HAS CORRUPTION LEAD INDIAN ECONOMY TO SLOWDOWN
Impact of Corruption on country’s economy= BACKWARDNESS AND POVERTY The Indian
government is reluctant or lacks the desire to eliminate poverty owing to corruption in
India. While the rich are making themselves richer, the poor are becoming poorer. While
promising rehabilitation and cash incentives, corrupt entities in different government
agencies and contractors are draining the fund by numerous methods leaving very little for
end users.
BRAIN DRAIN AND LOSS OF TALENT Corrupt government employees and mediators offer
jobs to unskilled and incapable candidates by taking bribe with poor decision-making from
the management. When good private-sector employees are also confronted with
harassment due to government policies and corruption in India they move to foreign
countries. This is a tremendous loss for the country as a developing nation, which can never
grow without the contribution of talented and creative people.
OBSTACLES FOR BUSINESS Corruption in the public services sector carries with it high risks
to good business. Companies are likely to finalize any procedures or deals with unwanted
red tapes, petty corruption, bribes. That would be a nightmare with fees to ramp up public
utilities, such as police security, water supplies and welfare funding. Likewise, suspicious
payments to government officials only for business license applications prove to be a
significant hindrance to industry. Personally, businesses feel guilty because they have to pay
officials for only having a water or electricity link.

(Prerna)
LOSS OF NATURAL RESOURCES Similarly, illegal fees to government authorities for company
license applications just prove to be a major obstacle for industry. Personally, businesses
feel guilty, because they only have to pay officials to have a water or electricity connection.
This is partly attributed to the lack of oversight and accountability, for example, it is
reported that almost half of the iron ore shipped from the state of Goa was illegally mined.
LOSS OF FAITH IN JUDICIAL SYESTEM In India, there is a high chance of corruption when
coping with India's judiciary, particularly in the lower courts placing the common man under
great stress. Sometimes paid with bribery in return for favourable trial rulings contributes to
citizens having confidence in the judiciary. In addition, prosecution of public servants' abuse
of office is tough, as it requires a minister's authorisation before launching an appeal.
Furthermore, delaying the awarding of judges and creating more courts leads to delay in the
justice process. When it comes to financial constraints, the performance of the justice
system is adversely impacted; the existing backlog of litigation stretches into crores.

(Vedant)
WRONG POLICIES
Here is a list of key policy decisions that affected the Indian economy
The Indian economy has continued to slow post the sudden demonetisation (one of the big
ticket “reforms”) and the roll-out of the ill-conceived Goods and Services Tax (GST) regime.
Investment, exports, private consumption and government expenditure were already
seriously impaired before Covid-19 put the proverbial last nail in the coffin.
1) The Effect of Demonetization- Indeed, Demonetization can be said to have contributed
too much of the slowdown as the Double Whammy of demand collapsing, and supply
bottlenecks mean that there is a broad slowdown across the entire value chain of the
demand and supply dynamics. Thus, what we have is a situation wherein cash has dried up
leading to a slowdown in the economy. One must also take note of the fact that it is not only
private consumption and small enterprises causing the slowdown. Indeed, the Big
Corporates are as much to blame since they are drowning in debt that they accumulated
during the Boom Years of the first decade of the 21st century. It is also a fact that this has
contributed to a freeze on investment by industrial houses and corporates who are now
paying down the debt or postponing debt repayments to ensure that their present cash flow
is sufficient to remain in business.
2) Rollout of GST- Fourth, the fact that the rollout of the GST or the Goods and Services Tax
on a nationwide basis has led to the slowdown cannot be denied. Indeed, GST has
hampered the small businesses more than Demonetization by forcing them to withhold
inventory until they migrate to the GSTN or the GST Network and become compliant with
the numerous rules and regulations that are part of this tax. It can be said that the
implementation of GST is also flawed thereby exacerbating some of the factors that have
contributed to the slowdown.

(Cyrus)
3) Automobile Industry at stagnant- The automobile industry faces a decades lower sales
output. It affects the employees who work on the automobile industry directly or indirectly.
The automobile industry alone employs nearly 37 million people (Aripaka & Tandan 2019),
The purchasing power of the consumers has come down resulting in an unsold five lakh
passenger vehicles and 30 lakh two wheelers. From this, it is clear that how far the
automobile industry have been affected due to the slowdown of the economy The shares of
the automobile industries are falling down due to the economic crisis
4) Amendments to the IBC- The government made major changes to the Insolvency and
Bankruptcy Code (IBC). The amendments to the law would enforce a strict 330-day timeline
for the insolvency resolution process, including any legal challenges, and uphold secured
creditors’ priority right on the sale or liquidation proceeds of bankrupt companies. The
changes are aimed to speed up the bankruptcy resolution process, which is often mired in
litigation.
5) Real estate slowdown- Of all the things that hurt India’s GDP, a slow down in the real
estate and construction sector have had the worst impact of all. The construction and real
estate sector, credited to account for 40 per cent overall jobs, had seen the worst last four
years, with business being slower with each passing year. In the April-June quarter of 2019,
growth in the real estate sector fell to 5.7 per cent, compared to 9.6 per cent in the same
quarter last year. Developers said that their vacant inventories are still large and that their
businesses, too, had shrunk. Government spending on affordable housing and for other real
estate and construction projects is much lesser than what has been announced.The
government had earlier gone slow on infrastructure spends to make headroom for adhering
to the fiscal deficit target for the year. Fiscal deficit was systematically brought down from
6.2 per cent of GDP earlier in 2015 to 3.3 per cent for the financial year 2019-20. This, in
turn, has affected the real estate and the construction sector who rely on government
contract awards for business. “Employment in construction sector has gone down by abut
30 per cent in the last one year. Projects are lesser and wages too, have remained the same
in the last two years.

(Bricelia)
HOW HAVE WRONG POLICIES LEAD TO INDIAN ECONOMY SLOWDOWN?
India’s economic growth is down to a crawl in recent years. The growth rate of gross
domestic product (GDP) had decelerated for three consecutive years starting in 2016-17,
falling to 4 per cent in 2019-20, well before the pandemic struck. What explains the
slowdown? Critics lay the blame on major policy lapses on the part of the Narendra Modi
government:
1)Demonetisation, goods and services tax and the absence of major economic reforms in
the first term of the government. Their contention does not hold water. Most experts
thought demonetisation would deal a body blow to the economy because it meant a huge
drop in money supply. However, a number of studies have established that the impact of
demonetisation on growth was not significant. A paper by economist Gita Gopinath and
others estimated that demonetisation had caused GDP to fall by 2 percentage points in one
quarter but the impact dissipated over the next few months. This translates into an
annualised impact on GDP of 0.5 per cent. An RBI paper estimated the negative impact on
gross value added of 33 basis points. The Economic Survey of 2016-17 estimated an adverse
impact on GDP of 0.25 to 0.5 per cent.
2) The Roll out of GST- The implementation of goods and services tax (GST) was said to have
severely disrupted small-scale businesses as they struggled to comply with the requirements
of data that it imposed. As the chief economic advisor (CEA) has pointed out in a recent
article (Times of India, September 6), the implementation of GST coincided with the time of
demonetisation. Hence any negative impact on economic activity of GST would have been
captured in the studies on demonetisation. 

(Sakshi)
3) Banking crisis- Banks were constrained in their lending by the high level of bad loans.
Companies were constrained in their investment by the high level of debt. The NPA problem
was the legacy of the lending boom of the first decade of the 2000s. It wasn’t entirely the
result of poor lending decisions. Many factors extraneous to the banking sector contributed
to it: The global financial crisis, adverse court judgments, dumping by China, etc. The NPA
problem arose from a combination of bad judgement and bad luck. The bad loan legacy
caused India’s growth to slow down. Its impact was exacerbated by policy errors on the part
of RBI. Starting at 2.95 per cent of assets in 2011-12, NPAs rose to 4.27 per cent in 2014-15
and thereafter to 7.8 per cent in 2015-16 and 11.18 per cent in 2017-18. An NPA level of
4.27 per cent is bad but manageable. A level of 11.8 per cent constitutes a banking
crisis. Provisioning for the higher level of NPAs eroded banks’ capital. As the government
was unable to quickly top up capital at public sector banks (PSBs), their ability to lend was
curtailed. There was a credit crunch whose impact was felt most by Small and Medium
enterprises.
4) Then came the inflation targeting regime of May 2016- The RBI got its inflation forecast
wrong thereafter. The outcome was high real interest rates for over two years. This again
adversely impacted the demand for credit and hence growth. The figures for credit growth
speak for themselves. Between 2008-09 and 2013-14, non-food credit had grown at 14-18
per cent annually. From 2014-15 to 2017-18, credit growth was down to single digits, thanks
to problems on both the supply and demand sides.
5) Insolvency and Bankruptcy Code (IBC) regime, introduced in 2016- The RBI’s stressed
asset framework stipulated that stressed assets be resolved by banks within 180 days, failing
which the assets would have to go through the IBC process. Bankers found the time frame
too short to achieve resolution.The fear of inviting action by investigative agencies meant
that bankers at PSBs had, in any case, little incentive to resolve stressed assets on their own.
Now, with the limited time frame provided by the RBI, bankers came to see the IBC route as
the default option. The IBC mechanism got clogged as a result, there were long delays in
resolution and recoveries often unsatisfactory. Getting rid of bad loans proved as much a
problem as the accumulation of bad loans in the first place. 
(Prerna)
IS CORRUPTION OR WRONG POLICIES THE ROOT CAUSE OF INDIAN ECONOMY TO
SLOWDOWN.
The economy slowed in 2017, due to shocks of "demonetisation" in 2016 and the
introduction of the Goods and Services Tax in 2017. Nearly 60% of India's GDP is driven
by domestic private consumption.The country remains the world's sixth-largest consumer
market. Apart from private consumption, India's GDP is also fueled by government
spending, investment, and exports.
In 2019, India was the world's ninth-largest importer and the twelfth-largest exporter. India
has been a member of the World Trade Organization since 1 January 1995. It ranks 63rd on
the Ease of doing business index and 68th on the Global Competitiveness Report. With 500
million workers, the Indian labour force was the world's second-largest as of 2019.
India has one of the world's highest number of billionaires and extreme income
inequality.Since India has a vast informal economy, barely 2% of Indians pay income taxes.
According to a report corrupt officials in India may be making the country poorer by more
than Rs.90, 000 crores every year, (More than 1% of the GDP, through corruption) These
politicians, corrupt officials and business associates have black money in Swiss banks to the
tune of Rs. 10,000 crores or more depriving the Indian Economy of its path on sustained
growth.

(Cyrus)
Such corruption leads to further bureaucratic delay and inefficiency. Corrupt politicians and
bureaucrats may introduce ways and means to extract more money affecting institutional
efficiency. This would affect growth indirectly. Corruption also results in lower economic
growth for a given level of income. With the reduction in Corruption level in India the
growth rate of GDP might increase by 5 to 7%. As per an estimate the rampant corruption in
India causes loss of growth in terms of investment and employment by Rs.25000 crores.
Corruption in India is an issue that affects the economy of central , state and local
government agencies in many ways. Not only has it kept the economy from reaching new
heights, but rampant corruption has stifled the country's development. The cause of
corruption in India is abundantly justified. The key reasons for this are lack of good
management in the organisation. There is little oversight on various departments and their
work due to mismanagement. This unregulated and unchecked administration gives way to
a small-scale rise in corruption, resulting in corruption on a wide scale. Corruption
contributes to riches and stability decline and is a major negative for India 's future. India
has been seeing rise in the corruption rate over the past ten years, where the nation has lost
billions and billions of dollars of revenue in different schemes, which are the wealth of tax
payers. Because of corruption, often construction ventures require undue time for their
completion. In every field such as sport, technology, medicine, research, economy, defence,
and infrastructure, this leads backwards. Therefore corruption is the root cause of Indian
Economy slowdown.

(Vedant)
(Conclusion)
The long-term growth perspective of the Indian economy remains positive due to its young
population and corresponding low dependency ratio, healthy savings, and investment rates,
increasing globalisation in India and integration into the global economy.
“Corruption is a hydra-headed monster and governments have to make efforts to tackle it
from all sides. This can only happen if all stakeholders work together," the efforts being
taken by the watchdog to create awareness about corruption among people and steps being
implemented to curb the menace have to be intensified to achieve a higher growth rate and
improve the image of the country creating a better environment for investment and
employment. India requires a transparent and effective policy implementation with more
employment and business opportunities to curb corruption and move fast on the path of
growth.