Page 36 - BANKING FINANCE February 2024

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The Corruption Perceptions Index (CPI) released by Social and Economic Cost of Corruption:
Transparency International is the most widely used global
Disregard for Officials
corruption ranking in the world. It measures how corrupt
each country's public sector is perceived to be, according Lack of Respect Faith and Trust in Government
to experts and business people. As per Corruption Perception A Decrease in Foreign Investment
Index (CPI) 2023, India is on 85th rank out of 180 country
Delay in Growth
with score of 40 out of 100.
Funds allocated for infrastructure projects often get
syphoned off and stop development
Causes of Corruption:
Rise of the underground economy
Lack of Transparency
Inequal distribution of Income
Lack of accountability
Change in Consumption Pattern
Actions and decisions are shielded from public scrutiny
Increasing Inflation
Weak Institutions and ineffective legal frameworks
Lack of investment activity
A perception of impunity due to the inadequate
punishment of corrupt individuals Low Tax collection for government causing fiscal deficit
Low Salaries and Incentives to Public officials Adverse Impact on economic reforms

Bureaucratic Red Tape
Legal and Regulatory Frameworks for
Complex economic environment, involves various
licences, permits, and approvals Fighting Corruption in India

Political interference in administrative matters Prevention of Corruption Act, 1988 amended in 2018
Cultural acceptance of corrupt behaviour in certain Prevention of Money Laundering Act, 2002
contexts, The Companies Act, 2013
Lack of Whistle blower Protection The Indian Penal Code, 1860
Social Inequality Benami Transactions (Prohibition) Act, 1988

Administrative Delay in the clearance of files Lokpal and Lokayuktas Act, 2013
Colonial Legacy of Unchallenged Authority Criminal Law (Amendment) Act, 1952
Discretionary power to officials Central Vigilance Commission

Fight against corruption:
Fight against corruption involves a combination of tactics and
strategies to reduce the risk of corruption and improve
public trust.
Strong and effective legal framework: It includes laws,
regulations, and policies that are enforced by an
independent and impartial judiciary. These laws must
strive to address all types of corrupt activities, including
bribery, embezzlement, and conflicts of interest.

Strong institutions and systems of checks and
balances: It includes establishing independent anti-
corruption bodies to monitor and investigate cases of
suspected corruption.

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