Fight against Corruption

The danger of corruption

Corruption is India’s most secular religion. This was the outburst of a blog writer[1] post Adarsh Society Scam was highlighted in October 2010. There is an intimate link between widespread corruption and continued deceleration in nation’s rate of economic growth. Corruption is responsible for financial bankruptcy of the government and consequently its incapability to intervene in critical areas. At the same time corrupt officials do not respond to the situation the way it is required. The mental incapacity adds to the apathetic attitude of the official human resources towards societal needs. Moreover, whatever little capacity exists, the corrupt officials derail the efforts for positive improvements in favour of making money even in distress situations. Corruption is declared to be illegal and is a punishable offence is defined and has been made punishable under Chapter III of the Prevention of Corruption Act, 1988.

Corruption is an abstract term. According to World Bank report 1997[2] abuse of public power for private gains is described as corruption.  But this appears to be too simplistic explanation of corruption.  In fact it is a multi-faceted evil, which gradually kills a system.

Primary source of bribery is black/unaccounted money and wealth acquired through illegal means. Black economy is generated by income in the form of rent, interest and profit. Thus, it is property/wealth in the farm land, capital/enterprises and business from where black money originates. Bribe is offered by those who have command over sizeable property and wealth. Sections deprived of the command of large property have little capacity to pay bribe. Such sections live largely on wage income, including salaries; they are not participant in black economy. Bribe is one of the causes as well as effects of black economy.

Since black economy is largely defined as income from sources which are not reported to the tax authorities, therefore, it is unrecorded and unaccounted income. This form of corruption is very important for the governments. This reduces the tax compliance and the tax collection and thereby results in a fiscal crisis. The widespread system of bribery and tax evasion is an integral part of the same phenomenon.

[1] http://churumuri.wordpress.com/2010/11/01/indias-most-secular-religion-has-to-be-corruption/

[2] The World Development Report by World Bank, as abstracted from Political Corrption in India, an analysis a paper by R.K.Upadhyay, paper No. 219, dated 30.03.2001 presented to South Asia Analysis Group, http://www.southasiaanalysis.org/papers3/paper219.htm

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