This document discusses different types and impacts of corruption in India. It outlines coercive corruption, where citizens must pay bribes to receive basic government services, and collusive corruption, where public funds are defrauded through illegal acts. While corruption has declined in some areas due to technology and competition, it has expanded into sectors like education, jobs, real estate, and public works. Corruption significantly impacts development by siphoning funds intended for welfare programs and infrastructure that could reduce poverty. A stable cycle has formed where political parties rely on illicit money which public servants then extract from citizens through corrupt acts. Addressing corruption in politics is seen as key to breaking this cycle.

1. Nuances of Corruption and Development
by Mahesh Kumar S T
TYPES OF CORRUPTION:
1. India'srank invariousIndexeslike HumanDevelopmentIndex,Ease of DoingBusinessIndex,
GenderGap Index,PressFreedomIndex,PerCapitaGDP,Global InnovationIndex and
EnvironmentPerformance Index isatthe bottom33%. If publichasto choose a single rootcause
for thisdismal state,theywouldchoose corruption.Thisisnotonlyreflectedbythe masssupport
for the JanLokpal Movement,butalsoreflectedinthe CorruptionPerceptionIndexwhereIndia
ranks 76 outof 167 countrieswitha Score of 38, whereasDenmarkranks1 witha score of 91.
2. Corruptioncan be broadlyclassifiedintotwotypes.Coercive corruptionandCollusiveCorruption.
3. Coercive Corruptionor"Bribe"iswhere a citizenhasto paya sumto get servicesfroma
governmentoffice, forwhichhe is entitledfor.Like gettinga birthcertificate,registeringa
property,electricityconnection,drivinglicenseetc. The citizenshouldhave beennormallyableto
getthisservice fromgovernmentoffice routinely,butwithoutabribe is forcedtorun frompillar
to post.Here the bribe giverisa victim.
4. The illegalityof Corruptionmake itdifficulttoaccuratelyestimatethe scale of the issue.
ipaidabribe.comisaportal where citizenscanreportthe incidence of thempayinga bribe and
alsoof gettingaservice withoutbribe.Ithas1.23 Lakh reportssince 2010, coveringall kindsof
incidence of bribeslike Rs.500for passportverificationorRs.50000 for eKatha [Katha- Equivalent
of Pattain TN].
5. CollusiveCorruptioniswherethe PublicExchequerisdefrauded bythe collusionof bribe giver
withbribe takerandthere is a lossto the exchequer, inextensiontothe public.2G Scam isa
tellingexampleforthistype of corruption.
CORRUPTION: PEOPLE VS INSTITUTIONS
6. The Preventionof CorruptionActis the processof beingamendedandthe Cabinethasgiven
approval fora change whichmakespriorapproval mandatorytoeveninvestigate chargesagainst
all publicservant,thusgivinganomnibusprotection.Andthe bribe giver isgoingtobe punished
witha minimumimprisonmentof three years
7. Thisamendmentwithoutthe distinctionof Coercive VsCollusivecorruption,cruellypunishesthe
victimof Coercive corruptionandalsoensureshe isnotable to seeklegal orinstitutionalrelief
postpayingbribe,due tofear of hisown punishment.
8. Many people take amoral positionthatbribe giverevenincoercive corruptionhascommitteda
crime and doesnotrecognize the institutionalfailuresthatdoesn’tevenguaranteedelivery of
serviceswithoutbribe.Peoplealsosubscribe tothe belief thatIndiansare more corrupt than
citizensof othercountries.It's necessarytoreflectuponthis,becauseNRIsandIndianstravelling
abroad followthe rulesof the respective countriesin the same wayit’sfollowedthere.

2. 9. In 2006 ReadersDigestconductedanexperimenttotestthe honestyof people acrosscities
aroundthe world.Theydropped12 walletsin16 citiesaroundthe world.The contentsof the
walletsare cellphone number,afamilyphoto,coupons,andbusinesscards,plusthe equivalentof
$50. The leftthe walletsinpublicplacesandwatchedtosee whathappened.Indiaranked2nd
bestinthe experimentwith9outof 12 walletsreturned.ExceptforHungary,We were more
honestthanUSA, Russia,England,Brazil,andSwitzerland.
In 2007, the experimentwasrepeatedin32 cities,thistime withmobile phones.Thistime India
came 5 out of 32, prettygood evenwithoutconsideringthatwe are a lowermiddle income
country,while manyof the participantsare upper-middleorhighincome country.
10. Rod BlagojevichwasGovernorof IllinoisState of USA.WhenObama waselectedpresidenthis
senate seatinIllinoisbecamevacantandas governorhe had powerstofill the same.He solicited
contributiontohispolitical fund,inexchange forthe seat.He wasarrestedonCorruptionCharges
on December2008. The state house [assembly] impeachedhiminJan9, 2009 andthe state
senate convictedhiminonJan29, 2009 - He wasremovedfromoffice andbarredfromholding
furtherpublicoffice inthe state.
Aftera jurytrial [judiciary] resultinginindictmentinAug2010 on one chargesand hung juryon
othercharges.A retrial beganonApril 2011 andhe wassentencedto14 yearsinprisonin
December2011. The trial and re-trial completedin3 years! He is still servinghissentence.
11. Contrastabove withhowthe rich, connectedandpowerful cangetawaywithimpunityinIndia.
WilliamGladstone fourtime Prime Minsterof GreatBritaininthe late 19th centurywhoshaped
the country to a significantextentsaid,"The properfunctionof agovernmentistomake iteasy
for people todogoodand difficultforthemtodoevil”.Incentivesand penaltyalterhuman
behavior. Singapore'sIndependentAnti-CorruptionAgencymade itriskiertobe corrupt and
Hong KongadaptingSingapore model,createdIndependentCommissionAgainstCorruption.This
twoinstitutionsreducedthe corruptionverysignificantlyinthiscountries.
CORRUPTION SINCEINDEPENDENCE
12. Contraryto popularperception,corruptionhascome downinmanyareas.
Onlyin1985 initiativestouse technologyinRailwaysReservationstartedandby1989 itwas
expandedtometropolitancities.Before the adventof Computerbasedpassengerreservation
system,StationMastersandTTEs controlledalmostthe entirebookingprocessandwhogotwhat
ticket. Technologyhelpedreduce the corruption.
Gettinga telephoneconnectionwithoutbribe isimpossible foracitizenandhadto waitmonths
togetherbefore gettingone,whenonlyBSNLwasthe onlyservice provideravailable.Thanksto
choice to customerandcompetition,notonlyhave the corruptiongone - butalsothe callshave
become cheaper. ThankstoChoice toCustomerand Competition.
Natural resourcesallocation,hasbecome more transparentatthe Unionlevel,thankstothe
Supreme Courtorderof “bidding”tobe the preferredway.The SpectrumandCoal mineshave
beenallottedtransparentlyandwithadeeppockettothe exchequer.
13. While corruptionhasshrunkinsome areas, it hasexpandedtootherareaslike Permitfor
educational institutions,GovernmentJobappointmentsandtransfers,Real estate,Public
DistributionSystem,EmploymentGuarantee Scheme,PublicWorks,AuctionsandTenders,
Extortionfromunorganizedsector,LoansinPSUbanks,PublicPrivate Partnershipsandsoon.

3. CORRUPTION VS DEVELOPMENT:
14. Corruptiondirectlyaffectslivesof people,particularlypoor whenit’s inwelfare measures.The
Publicdistributionsystemisprone toa leakage of 46.7% according tostudy byformerChairman,
CACP (CommissionforAgricultural CostsandPrices).Itisequivalenttoa lossof Rs.48,000 Crore in
2012. At 2015 itis equivalentto61,000 Crore assumingsame amountof leakage.The
employmentguarantee scheme MNREGA whichhasan annual outlayaroundRs.40,000 crore
since 2009 alsohas similarleakage problem. AnalysisbasedonNSS (National SampleSurvey)
indicatesthatthe leakage couldbe similartoPDS,around45%. Thismoneyisintended forthe
poorestandeventheyare not sparedthe wrath of corruption - Infact theybear the bruntmore.
15. Informal Sector(orUnorganizedSector) isIndia'slargesteconomicsector.There are lakhsof
streetvendorsinDelhi andmillionsacrossIndia.Delhihasonlygiven5000 license forthe roughly
5 Lakh streetvendorsinearly2000s. Haftaor bribe tothe Municipal authoritiesandpolice varies
anywhere from20% to 50% of the revenue.Inadditiontheyare subjectedtofrequentraidsand
use of force.Same withCycle Rickshaw inDelhi,whilethere are roughly5Lakh as perpolice
estimatesitself,only1Lakh licenseswereissued- thattoo afterpressure fromunionandcourts.
The bribe for licensesis5-20%of the costof the vehicle andforrenewal every3years - a bribe
half duringthe initial license.Certainlycreatingartificialscarcityisone wayby whichextortion can
occur.
16. Publicworksandtenders:A WorldBank studyestimatesgoodroadscan increase rural income by
18%. InJharkandan underdevelopedstate,roughly54% of expenditure onroads, ison
commission –accordingto a fieldstudy.
Irrigationcan increase agriculture productionandgrowthinagriculture canreduce poverty at
leasttwice fasterthan growthin any othersector.In irrigationprojectsroughly48% of
expenditure iseatenupbycommission.Povertyreductionthe bestformof developmentis
handicappedbycorruption.
17. A widelyquotedestimate bythe WorldBank (2013) putsthe total amountof bribespaidinboth
developinganddevelopedcountriesin2001/2002 at 1 trilliondollars,about3% of worldGDP at
the time.The G20 nationsGDP growthand corruptiondisplaysstrongerco-relation.A research
paperfrom Universityof Barcelona,confirmsthe commonperception - Ease of doingbusinessis
affectedbycorruption.Indianeedstocreate 1.2 crore jobs a yearfor the nextdecade,for the
youthenteringjobmarketandcorruptionstiflesjobcreation.
DANGEROUSLYSTABLE EQUILIBRIUM OF CORRUPTION:
18. PoliticsinIndiarunsonillegitimatemoneyandcorruptionisthe primarysource of it.It is
estimatedthatforthe 2014 general election30,000 Croresisspent.Fora cycle of 5 years
includingstate electionanywherebetween70,000 to 1 Lakh crore isspenton election.Contesting
electionsisariskierproposition.Candidatesfrommajorpartiesspent5crores perassembly
constituency,forbribingthe voters.Tomake itsustainabletheyhave toseeka10 timesreturn.
The voterwho seesnodifference betweenpartiesornovisibleoutcome thatimpactshislife,
acceptsbribe fromthe Candidate. The political partyseeksbribe inappointmentsand the public
servantinturn recoverthisfromthe public– forminga cycle.Thuscreatinga dangerouslystable
equilibriumof corruption.Unlessthiscentral issueof corruption inpoliticsisaddressed,closing
some avenueswilleventuallyforce new ones.