This document discusses the nature and causes of corruption and black money in India. It defines corruption as the abuse of public power for private gain. Administrative and political corruption are described. Important causes of corruption in India include changes in ethical values, tolerance of corruption, a large population and illiteracy, complex laws and procedures, self-interested political elites, and low civil servant salaries. The consequences of corruption include lack of quality services, injustice, disrespect for authority, lack of development and decreased foreign investment. Black money is defined as undisclosed income and assets on which taxes have not been paid. Sources of black money and its effects on the economy are outlined. Some major corruption scams in India are briefly described. Remedies to

2. WHAT IS CORRUPTION ?
NATURE OF CORRUPTIONS
IMPORTANT CAUSES OF CORRUPTION IN INDIA
CONSEQUENCE OF CORRUPTION
SOURCE OF BLACK MONEY
EFFECTS OF BLACK MONEY
REMEDIES TO MINIMIZE BLACK MONEY AND CORRUPTION
WHAT IS BUREAUCRACY
Source of Black Money
CORRUPTION IN INDIA
SOME MAJOR SCAMS IN INDIA
REFERENCE

3. The word corruption means destruction, ruining or spoiling
a society or nation. 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.
Definition of corruption is given by the world bank - “abuse of
public power for private benefit” .

4. 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.

5. Corruption is caused as well as increased because of the
change in the value system and ethical qualities of men who
administer
Tolerance of people towards corruption and the absence of a
strong public forum to oppose corruption allow corruption to
reign our people.
Vast size of population coupled with widespread illiteracy
and the poor economic infrastructure lead to endemic
corruption in public life.
Complex laws and procedures deter common people from
seeking help from the government.

6. Emergence of a political elite which believes in interest oriented
rather than nation oriented programmes and policies.
Artificial scarcity created by people with malevolent intention
wrecks the fabrics of the economy.
In a highly inflationary economy, low salaries of government
officials compel them to resort to corruption. Graduates from
Indian institutes of management with no experience draw a far
handsome salary than what government secretaries draw.
Big industrialists fund politicians to meet high cost of election
and ultimately to seek personal favour. Bribery to politicians
buys influences and bribery by politicians buys votes. In order to
get elected, politicians bribe poor, illiterate people.

7. Lack of quality in services
Lack of proper justice
Disregard for officials
Lack of respect for rulers
Decrease in foreign investment
Lack of faith and trust on the person & governments
Lack of development

8. The term black money usually refer to any income on which the
taxes imposed by government or public authorities have not been
paid.
Black money can also be defined as assets or resources that have
neither been reported to the public authorities at the time of their
generation nor disclosed at any point of time during their
possession.

9. (a) Income-tax evasion
(b) Corporation tax evasion
(c) Excise duty evasion
(d) Customs duty evasion
(e) Black income from exports
(f) Evasion of state taxes.
(g) Bribes, illegal commissions.
(h) Goods supply to black market
(i) Unaccounted stock-market profit
(j) Interest earned from unorganised credit markets.

10. False Information about the Economy
Impact on Fiscal System
Create Inequalities
Misguiding on Resource Allocation
Implications for Monetary Policy

11.  To cancel the currency notes of 500 and 1000 and creates hard
and fast rules
 It is necessary to inform, that after purchasing of gold and
immovable property and while transfer ring such property
whether income tax is paid or otherwise.
 It has been made compulsory to declare and give information
regarding corruption made while dig ging, natural property and
mines.
 It is made compulsory, to impose income tax and pay it on the
income earned from the foreign coun tries.
 It is necessary to revise tax procedure and where there are
loopholes from laws should be blocked.

12.  Specific fixed deposit plan of 1981 should be again started, and
block money should be brought under the production purposes.
 The Government should expand and propagate the banking
business and all transaction should be made through bank only.
 In order to protect the social and moral values of the people and
all should help for all round develop ment of the country.
 The information of double tax plan contract should be given to
the people and the black money which is in the foreign countries
should try to bring back and the countries with whom contract
has been made by exchanging the information should try for
stoppage of black money.
 There should be raid through the income tax department all these
who are from high income group and who are doubtful tax
evaders.

13. A system of government in which most of the
important decisions are taken by state officials
rather than by elected representatives.
Bureaucratic administration means
fundamentally domination through
knowledge
— Max Weber

14.  Corruption is widespread in India. India has been ranked 94th out
of 176 countries in Transparency International's 2012 corruption
perception index (CPI). Corruption has taken the role of a
pervasive aspect of Indian Politics and Bureaucracy.
 In Indian civilization, corruption have caused maximum suffering
to the humankind. In ancient Indian history the great Indian
philosopher Kautilya says “just as it is not possible, not to taste
honey or poison put on the surface of the tongue, so it is not
possible for the government servant dealing with money not to
taste it in however small a quantity.”
 On the difficulties of corruption detection Kautilya says “just as
a fish moving under water cannot possibly be found out either as
drinking or not drinking water, so government servant employed
in the government works cannot be found out taking money.”

15. 1. Mega Black Money
Laundering Scam :-
Cost Rs.: 70,000 Crores
Face of the Scam: Hassan
Ali Khan, Suersh Kalmadi
 This scam of ultra high
magnitude came into lime
light when Indian
businessman was arrested
on money laundering
charges which was to the
tune of Rs. 39,120 crores.

16. 2. CWG Scam:
Cost Rs.: 70,000 crores
Face of the Scam: Suresh
Kalmadi
.
Allegations of corruption over
the 2010 Commonwealth
games in Delhi are being
investigated by several bodies
including the CBI and a
special committee set up by
the Prime Minister.
Allegations of corruption
spanned a broad spectrum
including issuing of contracts
and purchase of equipment –
from treadmills to toilet rolls.
0
10000
20000
30000
40000
50000
60000
70000
2002 UK 2006
AUSTRAI
2010
INDIA
2014 UK

17. 3. 2G Spectrum
Scam
Cost: Rs 176,000 crore
Face of the Scam: A.
Raja & M. K.
Kanimozhi
 Telecoms Minister
Andimuthu Raja was
sacked after a report by
India's state auditor
said his ministry sold
licenses and spectrum
below market prices,
depriving the
government of up to
USD 39 billion in
revenues.

18. 4. Adarsh Housing Scam
Cost: Rs 18,978 crores Face of the
Scam: Ashok Chavan and Politicians
Ashok Chavan
5. Scorpene Submarine Scam
Cost: Rs 18,978 crores
Face of the Scam: Ravi Shankaran
6. Madhu Koda
 Scam Cost: Rs. 4,000 crores
 Face of the Scam: Madhu Koda

19. 7. Stamp Paper Scam:
Cost: Rs 20,000 crores
Face of the Scam: Abdul Karim Telgi
8. Bofors Scam:
Cost: Rs. 400 million
Face of the Scam: Ottavio Quattrocchi
9. Fodder Scam
Cost: Rs. 950 crores
Face of the Scam: Lalu Prasad Yadav

20. 10. Hawala Scam :
 Cost: Rs. 80 crores
 Face of the Scam: L.K
Advani /
P V Narsimha Rao
11. Satyam Scam :
 Cost: Rs. 14,000 crores
 Face of the Scam:
 B. Ramalinga Raju
12. Stock Market Scam:
 Cost: Rs. 3,500 crores
 Face of the Scam: Harshad
Mehta (“Big Bull”)

21. Johann Graf Lambsdorff – “Consequences and Causes of
Corruption – What do We Know from a Cross-Section of
Countries?”
Dr.Jaywant & S.Bhoyar – “Black Money and Corruption; Causes
and Remedies”
Smriti Chand Money – “Black Money in India: Different Sources
and Effect of Black Money”
Jeevan Singh Rajak – “Corruption in India: Nature, Causes,
Consequences and Cure”
Report of Transparency International 2012
Ministry of finance department of revenue central board of direct
taxes New Delhi.-“WHITE PAPER ON BLACK MONEY” –
May 2012

22. THANK YOU