The Malaise of Corruption Facing the society
- Shakti Singh & Geeta Rani
*Assistant Professor, Deptt. of Commerce, M.D.U. Rohtak. ** Assistant Professor, M.K.J.K. College, Rohtak.
ABSTRACT Corruption is prevalent in every walk of life in India which has made huge damage to the different structures of the nation. Of course, it is a world-wide phenomenon. It has existed for ages. The basic obstacle of organizational, social, political and economic progress is corruption. There is a high NEGATIVE correlation between economic growth and corruption. Sometimes it is a stumbling block in the progress of the nation. India is facing a paradoxical situation i.e. rising India, shining India, inclusive growth, autocratic market, haves and have nots, rising corruption, starving people, undernourished children and mothers etc, represent a paradoxical scenario. The paper aims at throwing light on different forms of corruption like political, economic, moral, social and organizational and providing suggestions to tackle it.
Keywords: Corruption, Structure, Economic growth
The examination of justification for variances in wealth and poverty among nations is an ultimate question in economic and political inquiry. Poverty encompasses a range of issues, including health, housing, education, nutrition and life expectancy and across all perspectives throughout the duration of life. If we look for the reason of these variances then the word
'Structural 'Structural Violence' Violence' originates somewhere. The word violence means 'intense force' or 'unwarranted exertion of force or power'. Violence can be an unsatisfactory access to resources, political power, education, health care and social systems. Structural Violence means any constraints or violence caused by societal, political, economic and legal mechanisms. But this type of violence is often overlooked. This situation leads to an economy to an imbalance between what the country, a person, a region produces and what is received in return. The failure to attain national wealth and poverty is basically the result of this type of superfluous effort of power that often leads to unnecessary control and resulting into high corruption. So, Structural Violence indicates corruption somewhere. Further, Corruption not only causes poverty alone but also affects the financial market, foreign direct investment, social justice, employment, economic growth, spiritual and regional balances etc. There are many different ways in which corruption can be defined but the best operational definition is an “accomplishment of a public representative for private gain”.
Waldman (1974), defined corruption in the senses of “public officials who misuse their authority, power or position and as a result violate some existing legal norms of its country. These corrupt acts are usually done in secret and for personal gain in wealth, status, family, friends or religious groups”. Corruption can be classifieds in different classes such as:
Political (bribe taken by government officials and bureaucrats, excessive power used for
personal gain, illegal property and money in leader's account, nepotism, abuse of power, extortion etc.)
Social (crime, greed, power, robbery, urge for luxury, bribe, egoistic attitude among individuals, conflict of interest etc.)
Corruption among organizations (taking and giving bribe to maintain the projects, illicit gain, unexpected wages, wipe out important information, tax evasion, non-disclosure practices, extreme wastage of resources, money laundering, white collar crime etc.)
Moral (spiritual, ethics, soul, human nature, honour etc.)
Economic (unequal or less allocation of resources in goods and services, black money, charge extra money from consumers, insider trading etc.)
Pascal (1962) , stated that today the situation of corruption arising more and more only because human being has lost the presence of god. Pascal represents corruption as the fall of humanity. So, today corruption can't be defined only to the “bribe given to government” which is a common interpretation. The outcomes of corruption may be associated with less taxes, loss of revenue, lack of investment, loss of faith in law, decline in life expectancy and growth of poor people etc.
Every day, most of us must have been an eyewitness to or a victim of the corruption flourishing in different parts of the country. It could be in the form of bribery given for employment, an officer taking bribe for transferring your file to the next department or even yourself offering bribe to a traffic police on breaking a signal etc. Corruption has become a fact of life of every individual in India and has become a global phenomenon worldwide also. If we describe the functioning of our country then we mention it as a democratic country. But, India is being stripped of its democracy day by day because of corrupt activities. Ccorruption has come like an evil which is stealing food from the plates of the people, employment from the hands of calibered candidates, livelihood from the hands of honest and hard working people, taking away the human rights and dignity and convincing the people that it's all for their own good. These entire situations show the presence of structural violence within the country. It refers to a form of violence where some social structure or social institution purportedly harms people by preventing them from meeting their basic needs. The violence can be due to bad political, social, economic and moral conditions. And all these situations together make corruption to prevail in a country. These components of structural violence can be classifieds in following terms:
Political corruption means the use of power by government officials for illicit and secret gain. An illegal act by an elected official comprises political corruption only if their proceedings are directly related to their authorized responsibilities. Connection between bureaucrats, politicians and criminals is the main cause of corruption in every country. The bureaucrats always follow the political orders and don't take any strict action against those criminals. As a result, terrorism takes birth from these criminals. Weak legal system of a country raises corruption. The laws that are neither made timely nor applied suitably and complex laws that need multiple interpretations and reforms consequently reduce the effectiveness of these laws. According to an index shown by Transparency International, a global civic organization leading the fight against corruption, presented that India ranked 94 among 176 territories around the world. The index of Transparency International has been made by considering all the areas in which corruption takes place like education, politics, agriculture, manufacturing, employment etc. India does not
have any particular commandments to avert corruption. The scope of ambiguity creates an advantageous arena. Until people react strongly by discarding crooked people in elections, one should not look forward to have a lot from the system.
There have been ' big- t i cket corruptions' in the Indian economy such as Bofors (1989), Harshad Mehta (1992), palmolein oil imports in Kerala (1992), fodder in Bihar (1996), the Barak missile (2001), cash for votes (2008), Satyam (2008), Madhu Koda and mining (2009), 2G Spectrum (2010), Commonwealth Games (2010), Adarsh Housing Society (2010), JBT Teacher's recruitment scam in Haryana (2013) and the latest scam in education i.e. Answer sheet Scam in M.D.U, Rohtak . These Scams were of the biggest in their domain. Hence, corruption has become a permanent sin for India because the big-ticket corruptions have increased continuously.
Moral corruption includes the corruption of principles, conventions and normal human desires. Poor functioning of the countries has tightened the relationship of corruption and people. Lack of ethical qualities and morality among administrators and politicians, illiteracy among multifarious laws and lack of actions to eradicate corruption depress the people for taking steps against corruption. Aristotle (1943) made a link between corruption and unethical behavior. He explained that a man acts in an unethical way when he becomes a slave of his emotions, mind and thinking i.e jealousy, anger, hate, egoism; revenge etc. and only in that situation a person breaks law and corruption prevails . It is termed as perpetration of immoral behavior or corruption. Pascal (1982) also has made a link between corruption and unethical behaviour of humans. Some researchers also argue that government plays a vital role in vanishing of the moral values of the people.
The values, attitude, beliefs, principles and other ethics shared between manager and employees together make an organizational culture. The policies and rules formulated by a company affects the street level officials a lot. According to some researchers, the street level officials are the grassroots of corruption in organization while others argue that top levels cause corruption within the organization. Former believes that the employees who are working at base level and wish to have equal economic status as their upper officials have, they get indulged in corrupt as well as illegal activities. While the later believes that the two levels below top level i.e. middle and lower levels have to accomplish or direct their work according to the coercion or direction of their top officials. So, sometimes the top bodies try to conceal the norms and policies of organization by imposing their powers on middle and lower subordinates, in this way both subordinates unwillingly get indulged in corrupt activities. The informal role played by a manager in the form of leadership, motivation, recruitment, selection also generates undesired criminal activities within the employees like not to take feedback, not accepting improvement of rules, not abiding by laws and acts for women and child labour, not paying satisfactory wages etc.
Another reason of corruption in organization is because of globalization. Any company can open its branch or subsidiary in another country for expanding its business. But companies perform unethical and corrupt acts in these subsidiaries only to gain extra profit in the market. Companies also supress the important information or provide wrong information to its stakeholders in order to make huge gains. Besides all these reasons, the weak legal system of organization possibly directs it on corrupt lines. Hence, all these bad acts together make corruption rampant in an organization.
Businesses can play a crucial role in reduction of structural violence of the society by developing a culture and structure that maximize the positive and minimize the negative impact in the society.
Developed financial market can facilitate growth by increasing pool of funds, reducing the risk and facilitating the pool of funds from savers to investors. Economic development of a country requires substantial amount of infrastructure, goods and services along with foreign flow of goods and capital. Financial market plays a crucial role in capital formation in the economy. There are so many participants in the financial market like investors, financial institutions, mutual funds, Life Insurance Corporation, government, money market instruments etc. For the purpose of the development of this market reforms and regulations are necessary. In the present scenario, for the purpose of corporate control and financial elite in financial market, the economists believe that foreign flow of goods and capital is necessary. But corruption is the force which is a hurdle in the economic development of the countries. Government is also a participatory of the corporations in the form of rules and regulations formulated for the organizations. So, the economists considered political corruption as one of the major hurdle for the development.
Kholdy, Sohrabian (2008) , concluded that corruption is the major barrier in the flow of FDI in a country. Foreign countries have fear of the loss and misuse of money in the country like India. In India, political and financial corruption results into low capital formation than that of other countries. The problem of economic growth and failure to achieve national wealth is the result of accumulation of power, lack of strong applicability of law and unnecessary controls which lead to concentration of power and eventually rope in widespread corruption. The stronger desire for control, ownership and power paves a way of corruption for an organization. The flow of goods, services and finance doesn't flourish in the right way or for the purpose for which all these sources should be used. The economy can make balanced economic development and can be developed only by using the limited resources in a proper manner and in right direction.
Social corruption is the violence in the society or when the individuals deprive each other from their necessities then the society faces social corruption. A nation basically becomes corrupt only by the individuals who live in that nation. No, law can stop universal corruption because the corruption arises somewhere from the mind, thinking, relationship of individuals within society, religion and rituals which a person has. Laws and norms are made for the crime made by the individuals but no where any law has been framed till now for the individual's corrupt mind which directs a person to do corrupt act. When there is no honesty, no one can expect any good results from there. According to some researchers, today it has become more difficult for a nation to remove corruption from the society because society has the relation with all other parties like government, financial market, organization etc.
The kind of education that is being imparted to the citizens for better future, is a waste. It is the moral framework which is responsible for the extension of corruption. When a modest human being sees the officers, the boards, the lawgivers and law keepers doing fraudulent activities, then he/she will have very limited chances of not doing corrupt activities. Police is one of the serious examples of rampant corruption which we look in our daily life. If the protectors of law misuse this law by making extra money under the table or a gangster in police uniform, then no solution is left for the common man.
CONCLUSION AND SUGGESTIONS
Haguette Labelle , chair person of Transparency International expressed about corruption that “we must ensure that there are real consequences to corruption. “No to impunity” cannot just be a slogan. It must be carried out with all our combined strength and inspire citizens to speak up and to no longer tolerate corruption.” These lines suggest that the society will have to formulate a strong strategy to fight corruption. A panacea for the epidemic like corruption is to maintain norms and ideals of honesty that lies within us. Official procedure should follow an amicable attitude towards citizens and should be accountable and transparent. Lokpals and Vigilance Commissions should be more authoritative and of sovereign nature so as to provide quick and fair dealing. People should be aware about their right to question the elected representatives. More and more public areas should be brought under Right to Information, which can authorize the citizens to seek more and more information. Indian laws on corruption have been changing over time such as RTI act which people have to be aware of.
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6. Lottery Business 7. Gambling and Betting 8. Business of Chit Fund 9. Agriculture (excluding Floriculture, Horticulture, Development of seeds, Animal Husbandry, Pisciculture and cultivation of vegetables, mushrooms, etc. under controlled conditions and services related to agro and allied sectors) and Plantation activities (other than Tea Plantations) . 10. Housing and Real Estate business. 11. Trading in Transferable Development Rights (TDRs). 12. Manufacture of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes.
Countrywise FDI inflows from APRIL 2000 to February 2012.
OBJECTIVE OF STUDY
To study the trend and pattern of FDI inflows to India. To understand the need for FDI in India. To exhibit the sector-wise & year-wise analysis of FDI in India.
This research is a descriptive study in nature. The study is based on secondary data which was collected from various journals, magazines, and websites particularly from the Department of Industrial Policy & Promotion, Ministry of Commerce and Industry etc.
Post-Liberalization Period: A major shift occurred when India embarked upon economic liberalization and reforms program in 1991 aiming to raise its growth potential and integrating with the world economy. Industrial policy reforms gradually removed restrictions on investment projects and business expansion on the one hand and allowed increased access to foreign technology and funding on the other. A series of measures that were directed towards liberalizing foreign investment included: (i) introduction of dual route of approval of FDI – RBI's automatic route and Government's approval (SIA/FIPB) route, (ii) automatic permission for technology agreements in high priority industries and removal of restriction of FDI in low technology areas as well as liberalization of technology imports, ( iii) permission to Non-resident Indians (NRIs) and Overseas Corporate Bodies (OCBs) to invest up to 100 per cent in high priorities sectors, (iv) hike in the foreign equity participation limits to 51 per cent for existing companies and liberalization of the use of foreign 'brand names' and (v) signing the Convention of Multilateral Investment Guarantee Agency (MIGA) for protection of foreign investments. These efforts were boosted by the enactment of Foreign Exchange Management Act (FEMA), 1999 [that replaced the Foreign Exchange Regulation Act (FERA), 1973] which was less stringent. This along with the sequential financial sector reforms paved way for greater capital account liberalization in India.
Investment proposals falling under the automatic route and matters related to FEMAare dealt with by the RBI, while the Government handles investment through approval route and issues that relate to FDI policy per se through its three institutions, viz., the Foreign Investment Promotion Board (FIPB), the Secretariat for Industrial Assistance (SIA) and the Foreign Investment Implementation Authority (FIIA).
FDI under the automatic route does not require any prior approval either by the Government or the Reserve Bank. The investors are only required to notify the concerned regional office of the RBI within 30 days of receipt of inward remittances and file the required documents with that office within 30 days of issuance of shares to foreign investors. Under the approval route, the proposals are considered in a time-bound and transparent manner by the FIPB. Approvals of composite proposals involving foreign investment/ foreign technical collaboration are also granted on the recommendations of the FIPB. Current FDI policy in terms of sector specific limits has been summarized inTable below:
Reasons for FDI slowdown – An Econometric Evidence
The review of theoretical and select empirical literature reveals that FDI flows are driven by both pull and push factors. While pull factors that reflect the macroeconomic parameters could be influenced by the policies followed by the host country, push factors essentially represent global economic situation and remain beyond the control of economies receiving these flows.
ANALYSIS OF FDI IN FLOWS AND INTERPRETATION
Table 1 shows the amount of FDI inflows from April 2011 to February, 2012. It shows the amount in Rs crore and in US $ mn. The highest FDI inflows in the country is in the month of June 2011 i.e. 25371 in Rs crores and 5656 in US$ mn. Other months show the fluctuating trend.
1) SECTORS ATTRACTING HIGHEST FDI INFLOWS IN INDIA Interpretation
Table 2 shows the favorite and leading sectors for FDI in India. According to FDI report Service sector is the favorite sector with highest FDI inflow of 20%. After service sector Telecommunication and Computer Hardware & Software is the next favorite sector with 8% and 7% of total inflows respectively. There is a good prospect for investors in other sectors also like housing sector and power sector. 2) STATEMENT ON COUNTRY-WISE FDI INFLOWS FROM APRIL, 2000 TO FEBRUARY, 2012 Interpretation
Table 3 depicts the country having the highest FDI in India. The report shows that the MAURITIUS has the highest foreign investment in India with 39.25%. After Mauritius, Singapore and Japan invest the highest FDI in India with 10.46% and 7.53% respectively. U.S.A also gets 4th position in FDI in India.
Table 4 shows the total amount of FDI inflows in India during the last 10 years i.e 2000 to 2012. The FDI inflow in 2000-2001 was Rs. 10,733 crore whic rose in 2001-02 to Rs. 18,654 crore. It shows good results in the FDI inflows in india. There were little bit ups and downs in FDI inflows upto 2005-06, but after that there was agreat hike in the year 2007-08 i.e Rs. 98,642crore rupees as compared to earlier years. In 2008-2009 there was a huge investment in FDI to the tune of Rs. 142,829 crore and so on. So we can say that the foreign investment has been on the rise in India.
FDI is an important stimulus for the economic growth of India. FDI has shown a tremendous growth in second decade (2000 -2011) that is three times then the first decade of FDI in services sector. Service sector is first and banking and insurance sectors are second segments which have picked the growth in second decade of reforms. FDI creates high perk jobs for skilled employees in the Indian service sector. Mauritius and Singapore are the 2 top countries which have maximum FDI in India. FDI plays an important role in the development of infrastructure because many countries invest in the infrastructure sector and service and banking finance sectors. Atomic Energy and Railway Transport are important life lines of a country. Therefore India also restricted FDI in these sectors. After above analysis , we can say that FDI has good future in the growth of Retailing and Real estate sectors in India.
It can be observed from the above analysis that at the sectoral level of the Indian economy, FDI has helped to raise the output, productivity and employment in some sectors especially in service sector. Indian service sector is generating the proper employment options for skilled workers with high perks. On the other side banking and insurance sectors help in providing the strength to the Indian economy and develop the foreign exchange system in country. So, we can conclude that FDI always helps to create employment in the country and also supports the small scale industries. It helps the country to put
a world wide impression that India is progressing through liberalization and globalization.
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Table 1. FDI INFLOWS (MONTH-WISE) DURING THE FINANCIAL YEAR 2011-12
Source: As per DIPP's FDI data base
Table 4. FDI INFLOWS IN INDIA