Article first published as Widespread Corruption Undermining India’s Economic Gains on Blogcritics
Business is for profit, but there are ethics and principles to be followed.
Doing business in India requires special skills, including a dubious mind and a strong, wicked heart. Ratan Tata, of Tata and sons, has had said that his ambition to get into the aviation business in 1996 was shattered by government bureaucracy. He admitted that he would have had to pay bribes of roughly 15 million Rs (or roughly $3 million). He did not want to do that, so he lost an opportunity. Well, that, in a nutshell, is Indian business.
Of late the business situation has deteriorated greatly, with more and more frauds being exposed. The Satyam computer fraud has reached $2.5 billion. The disgraced former chairman of the Indian outsourcing giant Ramalinga Raju cooked the books and embezzled millions to buy prime real estate in major cities. India hosted the Commonwealth Games 2010 in New Delhi, which revealed a huge corruption scandal in the construction of stadiums, and money-laundering involving a UK firm.
A 2G spectrum financial scandal in the telecommunication and IT ministry under A. Raja is the largest case of political corruption in modern Indian history, amounting to $40 billion lost by the government of India from underpricing. The minister sold the telecom bandwidth on a first come first serve basis to a chosen few vested interests and grossly undervalued it; it should have been put under a transparent auction system.
A few days ago, the Central Bureau of Investigation arrested the CEO of Life Insurance Corporation and three senior executives of public sector banks on allegations of large kickbacks involving a loan scam and trading insider information on companies.
While India is trying to emerge as an economic superpower, these scams and scandals are tearing the ribs of the nation apart. Its reputation as an IT giant and its rising economy are taking a beating. Overseas entrepreneurs will have to think twice before they set foot on Indian soil