2. CONTENT
S
o Introduction
o Prevention of Corruption Act 1988
o Crony Capitalism
o Corruption in corporate sector
o The Dark Side of Finance: Evading
Taxes
o Unethical Trade Strategies
3. I N T R O D U C T I O N
Corruption is like a web of deceit that
silently engulfs the foundations of trust in
any society. Imagine a town where public
funds meant for building schools,
hospitals, and roads are diverted into the
pockets of a few individuals. See how this
harms the dreams and aspirations of the
people. Corruption is not just about the
act; it's about the broken promises, the
missed opportunities, and the erosion of
faith in fairness.
What is Corruption?
4. T Y P E S O F
C O R R U P T I O N
o Bribery: The act of offering, giving, receiving, or
soliciting something of value to influence the actions of
an official or person in authority.
o Embezzlement: Misappropriating or stealing funds or
assets that have been entrusted to someone's care, often
within organizations or businesses.
o Nepotism: Favoritism shown to family members or close
friends, often in the context of hiring, promotion, or
decision-making.
o Cronyism: Favoritism shown towards friends and
associates, often leading to biased decisions or unfair
advantages.
o Money Laundering: Concealing the origins of illegally
obtained money by making it appear as if it came from
legitimate sources.
5. TYPES OF
CORRUPTION
Political Corruption: Corruption within political systems,
including actions such as abuse of power, electoral fraud,
and manipulation of policies for personal or political gain.
Police Corruption: Dishonest or unethical behavior by law
enforcement officers, which can include accepting bribes,
abusing authority, or engaging in criminal activities.
Organizational Corruption: Corruption within private
companies, non-governmental organizations (NGOs), or
other entities, often involving unethical practices, fraud, or
manipulation of resources.
Corruption of Information: Manipulation or distortion of
information or data for personal, political, or financial
gain.
6. Causes Of
Cor r uption
o Low levels of economic development and high
levels of poverty.
o Unintended consequences of economic
liberalization.
o Low Pay and Economic Inequality.
o Unintended consequences of foreign Direct
Investment.
o Weak Institutions
o Lack of accountability and transparency
o Inadequate Education and Awareness.
o Democracy ( or a lack of democracy ! )
o Offshore banking, tax havens and money
laundering.
o International Organized crime.
7. C O N S E Q U E N C
E S O F
C O R R U P T I O N
?
o Hampers Economic growth and development.
o Jeopardizes poverty reduction.
o Increases cost of services, especially for the poor.
o Weakens Democracy.
o Contributes to conflicts.
o Reduces the effectiveness of Aid.
o Weakens public support for Aid.
o Reduces trust in Government and across society.
8. P R E V E N T I O N O F
C O R R U P T I O N A C T, 1 9 8 8
1.)It is an act of the parliament of India.
2.)This act was enacted to combat corruption in -
* Government agencies.
* Public sector business in India.
3.)In Section 2 of the PC Act, 1988 defines “Public Servant” broadly.
8
9. P R E V E N T I O N O F C O R R U P T I O N A C T , 1 9 8 8
9
Under Section 2(c) of P
.C. Act -
It says “ any person” who is :
• In the service or pay of the Government or remunerated by the Government;
• In the service or pay of a Local Authority;
• In the service or pay of a corporation established by or under a Central, Provincial or State Act;
• Any Judge, delivering adjudicating functions;
• Any arbitrator ;
10. C A S E S T U D Y
10
1.) Jharkhand Mukti Morcha Bribery Scandal (1993)
P.V. Narsimha Rao was accused.
2.) Fodder Scam(1996)
Former Bihar CM Lalu Prasad Yadav was Accused.
3.) Augusta Westland(2013)
Helicopter Scam
4.) Rotomac Scam
11. ANTI - CORRUPTION BILL 2018
11
1.)In this bill, the bribe giver has also brought under this purview.
2.)New provisions-
*To check corruption and protect honest employees.
*Before running a case of corruption against a public servant, permission
has to be taken from Lokpal(if Central government employee) and
Lokayuktas (if State government employee).
3.)The bribe giver will be given 7 days to present his case.
12. A P P O I N T I N G S P E C I A L J U D G E S
12
1. The Central and the State Governments are empowered to appoint Special Judges
by placing a notification in the Official Gazette.
2. A person shall not be qualified for appointment as a Special Judge under this act
unless he is or has been a Session Judge or an Additional Session Judge or an Assistant
Judge.
3. Special Judge appointed under criminal law amendment act,1952 shall be deemed to
be a special judge appointed as special judge of P.C. Act,1988.
15. MEANING
15
There are four factors of
production - land, labour,
capital, and the entrepreneur.
The fourth factor of
production (FOP) I.E the
entrepreneur is responsible
for many industrial revolutions
in the world. But worth
mentioning, the success of the
entrepreneur depends on the
political support of the
government of the concerned
country.
Crony capitalism means a
capitalist society in which the
success of the business
depends on the nexus
between a political class and
business class rather a free
market and the rule of law.
16. EXAMPLE
16
In India, the government’s
aggressive disinvestment
policy has been criticized as
crony capitalism.
Recently, the State Bank of
India (SBI) shared data
reporting that Donations to
political parties through
electoral bonds (EBs) have
crossed the Rs 10,000-crore
mark.
17. F O R T H E C O R P O R A T E
T O T H E C O R P O R A T E
B Y T H E C O R P O R A T E
17
• According to The Economist, India’s
share of billionaire wealth derived
from crony sectors rose from 29% to
43% between 2016 and 2021.
• In the Crony
Capitalism Index 2021 published
by The Economist; India was ranked
at 7th position where crony sector
wealth accounted for 8%
of Gross Domestic Product (GDP) of
the country.
19. SOLUTIONS
19
There is a need
for effective regulation of
political financing along
with bold reforms to break
the vicious cycle
of corruption and erosion
of quality of democratic
polity.
It is crucial to plug the
loopholes in the current
laws to make the entire
governance machinery
more accountable and
transparent.
Towards Corporate Ethical
Responsibility: India can
promote responsible
business practices by
implementing measures to
ensure that businesses act
ethically and sustainably, in
lines of corporate social
responsibility and
sustainability initiatives.
20. .
" O N E O F T H E G R E A T E S T D A N G E R S T O T H E G R O W T H
O F D E V E L O P I N G C O U N T R I E S I S T H E M I D D L E I N C O M E
T R A P , W H E R E C R O N Y C A P I T A L I S M C R E A T E S
O L I G A R C H I E S T H A T S L O W D O W N G R O W T H . I F T H E
D E B A T E D U R I N G T H E E L E C T I O N S I S A N Y P O I N T E R ,
T H I S I S A V E R Y R E A L C O N C E R N O F T H E P U B L I C I N
I N D I A T O D A Y "
RAGHURAM RAJAN(FORMER RBI GOVERNOR)
21. C O R R U P T I O N I N
C O R P O R AT E
S E C TO R
Corporate corruption is a global
phenomenon that has been getting space
routinely in both print and electronic
media. In India, corporate corruption has
permeated in every sphere of activity and it
poses threats to the social, political and
economic fabric of the country.
22. SATYAM SCANDAL
o This scam came into light by a confession letter
written by the chairman of Satyam Computer
services limited published in Times of India.
The letter confessed to manipulating his books
of account by overstating the assets and
understanding liabilities.
22
23. SATYAM SCANDAL
1987-88
B. Ramalinga Raju
started the Satyam
Computers. He also
stated Maytas Infra
and Maytas
properties.
1991-92
The Company got
listed on the BSE
and in 2001 it got
listed on New York
Stock Exchange.
1999
At this time the
promoters
shareholding in
Satyam was 24%
which dropped to
2% by the end of
2008.
2009
The Scam came into
light and both the
brothers were
arrested. Then after
the government
sold the company to
Tech Mahindra.
2013
The company
name Mahindra
Satyam was
merged with
Tech Mahindra..
24. 2- G SCAM
o In 2008, the government came under scrutiny
when it was alleged that they had undercharged
mobile telephone companies for frequency
allocation licenses that were used to create 2G
spectrum subscriptions, and at the center of this
controversy was the former Telecom minister A.
Raja himself.
o The CAG had stated that “the difference between
the money collected and that mandated to be
collected was Rs. 1.76 trillion.” (Rs. 1,76,000
crore).
25. 2- G SCAM
2007
Process of allotment
of 2-G spectrum
was initiated by the
department of
telecom.
2008
Spectrum was allotted
to Swan telecom,
Unitech and Tata
Teleservices which
again sold these
spectrum to Etisalat,
Telenor and DoCoMo
company at higher
rates.
2009
Central Vigilance
Commission directs
the CBI to investigate
the matter. A Raja
resigns as telecom
minister.
2011
A Raja was sent
to Tihar jail
under judicial
custody.
2012
The Supreme court
cancelled all the
spectrum licenses
allocated to the
companies as it was
convinced of
procedural
irregularities.
26. PREVENTIO
N
1. The top investigating agencies of the country
like the CBI, Enforcement Directorate, income
tax department needs strengthening by way
of implementing strong regulating policies.
2. By including strict laws into the systems.
3. Fast track courts and tribunals should be set
in all parts of the country for the early
disposal of the cases.
4. The electronic and print media should be
utilized in the right way to spread awareness
about these crimes.
28. Introduction
Corruption in trade places,
whether in government or private
sectors, poses a significant
threat to economic stability, and
ethical business practices.
This issue can result in adverse
consequences for both the public
and private entities involved.
we will explore the demerits of
corruption in both government
and private trade sectors and
propose solutions to mitigate this
pervasive problem.
29. ● Government Sector
Corruption:
Public Funds: Corruption in government
often involves the misuse or misappropriation of
public funds
Public Services: It can hinder the effective delivery
of public services, such as healthcare, education
etc.
Political Influence: Politicians and public officials
may engage in corruption to gain political power.
Bureaucracy: Corruption in government can be
deeply rooted in bureaucratic processes, where
officials demand bribes for services or approvals.
Transparency: There is often no transparency and
accountability mechanisms in place, such as
audits, investigations, and oversight agencies to
combat corruption.
Corruption in Govt and Private sector
● Corruption in Private Sector:
Profit Motive: Corruption in the private sector is
primarily driven by profit motives, where individuals
or companies engage in unethical practices to gain a
competitive advantage or increase their earnings.
Market Competition: Private sector corruption can
distort market competition, as companies may
engage in bribery
Regulatory Compliance: Corruption in the private
sector can involve violations of industry regulations,
consumer protection laws, and environmental
standards.
Internal Controls: Companies may lack sufficient
internal controls and compliance mechanisms to
detect and prevent corrupt practices within their
organizations.
Public Perception: Corruption in the private sector
can damage a company's reputation, leading to loss
of trust from consumers, investors, and stakeholders.
31. Govt Sector and private
sector
10%
Transparency and
Accountability
Digitalization
and E-
Governance
%
Strengthen Anti-
Corruption Laws
Whistleblower
Protection
Merit-Based
Recruitment
and
Promotions3
0%
32. Anti Corruption Agencies:
United Nations
Office on Drugs
and Crime
(UNODC): ●While not exclusively an anti-corruption agency, the
WTO addresses corruption's impact on international
trade. It encourages member countries to implement
transparent and corruption-free trade practices and
provides a platform for resolving trade disputes
related to corruption.
World Trade
Organization
(WTO)
● Interpol assists in combating corruption-related
crimes that may affect international trade,
such as money laundering and the movement
of illicit funds. It facilitates cooperation among
law enforcement agencies across borders to
investigate and combat corruption.
Interpol
●UNODC works to combat corruption and
bribery, including in international trade. It
provides guidance on anti-corruption
measures, facilitates international cooperation,
and assists countries in implementing anti-
corruption policies.
33. Independent Anti-Corruption Agencies
should set up.
Media should not be influence by
organization.
Tie with International Cooperations
Public Awareness Campaigns
Regular Auditing and Monitoring
Legal reforms and Leadership
Other ways to resolve corruption
34. The Dark Side Of
Finance: Tax Evasion
When a person or company purposefully
fails to pay their fair share of taxes, this is
known as tax evasion. It involves making
up or concealing income, inflating
deductions without proper justification,
omitting to declare cash transactions, etc.
Tax evasion is a severe offence that can
result in jail time and other legal
repercussions.
35. ● Failing to pay the due
● Smuggling
● Submitting false tax returns
● Inaccurate financial statements
● Using fake documents to claim exemption
● Not reporting income
● Bribery
● Storing wealth outside the country
Common Methods of Tax Evasion
36. Cause of Tax Evasion in India
● Low educational level of the population.
● Lack of simplicity and accuracy in the
tax legislation.
● Inflation.
● Tax pressure and high rates
● A significant informal economy
● Permanent regularization regimes
(moratoriums, whitewashing, etc.)
● Possibility of failing to comply without
greater risks.
37. Effect of Tax Evasion in India
● Taxes make up the vast majority of the
income for the Indian government.
● Tax evasion is the cause of economic
inequality, which explains why some people
are getting richer while others are getting
poorer.
● Government initiatives and reform initiatives
must be dropped, which affects welfare
programmes.
● Black money causes inflation and value
erosion.
38. Limitation of Tax Structure
● High rate of taxation
● Failure to curb bribery
● Lack of simplified procedures
● Existence of large number of taxes
● Complex tax laws and loopholes to avoid tax in
laws
● Lack of organized and systematic Administration
structure
● Frequent changes in Government and Political
instability
● Frequent changes in tax policies
● Deficiencies in implementing Penalty Provisions.
39. ● Reduction of Tax Rates by Government
● Simplified Tax Laws and Procedures
● Well Organized and Autonomous Administration Structure
● Increase Awareness among Taxpayers
● Corruption free Officials and Taxpayers
● Strong Penalties for non-compliance
● Sense of responsibility among the taxpayers
● Use of Media
Measures to Avoid Tax Evasion
