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Corruption-free India

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					Story of India‘s 60 Years
 LOK PAL AND LOK AYUKTA
It was proposed to set up the institution of Lok Pal
and Lok Ayukta to fight corruption in administration
and public life. As many as five Bills (Bills of 1971,
1977, 1985, 1989, 1991) were introduced. There was
no success in passing the Lok Pal Bills .
 There was no agreement on (a) the inclusion of the office of
PM in the definition of ―public servant,‖ (b) the definition of
―criminal misconduct,'' and c) the constitutional status of the
institution. Meanwhile from 1970 to 1985 as many as 10
States passed the Lok Ayukta laws.

        April, 9, 2011 . ANNA HAZARE WINS ANTI-
        GRAFT BILL DEMANDS, ENDS HUNGER STRIKE
        LOKPAL BILL WAS INTRODUCED 8 TIMES
             UNSUCCESSFULLY EARLIER
The adoption of the Lokpal bill [LKPB] alone will not
  end the menace of corruption but it will help fill the
  lacunae in our system. N. Vittal

“As of now, we have a deadline to the LKPB: June 30 &
  Aug 15. We can’t say whether these deadlines will
  be met.”
  INDIA’S POPULATION IS A PARADOX:

• India enjoys a large balanced demographics
  in terms of age (54% of the population is
  below 25 years of age)
• It is imbalanced in terms of income inequality
  and gender.
• India faces tasks of: feeding, educating,
  training and employing its youth.
     COSTS AND RISKS FOR POLICY MAKERS
             - IN THE SHORT TERM

The pace of

• upward mobility,

• urbanization and

• industrialization

poses significant adjustment costs and risks to
policy makers
         IN THE LONG TERM, INDIA FACES THE
              CHALLENGE OF MANAGING
• Aging population with inadequate care taking
  facilities

• Skewed demographic picture with lack of
  harmony that a joint family brings

• Potential social and public health problem.
The strategy adopted by the Government to tackle the
menace of illicit funds is five-fold. This consists of:
i)   Joining Global crusade against ‗black money‘;
ii) Creating an appropriate legislative framework;
iii) Setting up institutions for dealing with Illicit Funds;
iv) Developing systems for implementation; and
v) Imparting skills to the manpower for effective action.


          Illicit Funds: The Government‘s Strategy
                         (India Current Affairs)
THE CLOUDS INTERRUPTING SUNSHINE
The history of corruption in post-Independence India starts with
the Jeep scandal in 1948, when a transaction concerning
purchase of jeeps for the army needed for Kashmir operation
was entered into by V.K.Krishna Menon, the then High
Commissioner for India in London with a foreign firm without
observing normal procedure. Further Corruption charges in
cases were Mudgal case (1951), Mundra deals (1957-58),
Malaviya-Sirajuddin scandal (1963), and Pratap Singh Kairon
case (1963)




                    LIC scam & Jeep scam
Nehru‘s tolerance of corruption among his ministers legitimized
this malady; Indira Gandhi institutionalized it as she held both
the posts of the Prime Minister and party president and
controlled the party funds, which gave birth to the money power
in politics. The famous V. P. Malhotra (Chief Cashier of State
Bank of India) case in which he got a telephone call believing
from Indira Gandhi to pay Rs,60 lakhs to one Nagarwal remained
a mystery. Corruption cases like Fairfax, HBJ Pipeline, and HDW
Submarine deal came up since then.
 Narsimha Rao was the first Prime Minister being
prosecuted in corruption charges. Cases like Rs.2500
crore -Airbus A-320 deal with France involving kickback
(1990), Harshad Mehta security scam (1992), Gold Star
Steel and Alloys controversy (1992), JMM bribery case,
Hawala scam of Rs. 65 crore and Urea scam (1996)
came during the period of Narsimha Rao Government.
THE SANTHANAM Committee Report 1964 defined
corruption as a complex problem having roots and
ramifications in society as a whole. In its widest
connotation, corruption includes improper or selfish
exercise of power and influence attached to a public
office.
During the post-independence period, several cases
of economic corruption have come to public notice
due to the vigilant press, efforts of public spirited
persons and a proactive judiciary.


  How effective are our laws to combat
              corruption?
The Bofors gun, Airbus deal, ABB loco deal, Jain
hawala racket, sugar scam, telecom scam, securities
scam, urea scam and fodder scam in Bihar were a few
instances. The scams which surfaced were only the
tip of the iceberg.
A majority of the scams related to “public expenditure''
by the Central and State Governments. The basic
criteria in detecting corruption in public expenditure
was the prevalent market value of item purchased,
though such a yardstick presents certain difficulties in
detecting corruption in defence purchases.
The cases of corruption in the collection of
“public revenues'' and arrears thereof are not
detected on a significant scale. It is not
anybody's case that there is no corruption in the
realisation of “public revenues,'' the direct and
indirect taxes.
Defaulting on bank loans is a penal offence
without provision of attachment of properties.
Yet another corruption is and money laundering
in the banking sector. The securities scam
alone involved a loss of Rs. 1,28,534 crores
according to the JPC which probed the matter.
Former Jharkhand Chief Minister Madhu Koda has
been booked by the Enforcement Directorate under
the Prevention of Money Laundering Act for allegedly
diverting state funds and making huge investments
abroad.
Senior officials of the ED said Koda, who ironically is
the first Chief Minister to be booked under PMLA, is
alleged to have made huge investments abroad
besides those in India.



                  ED books former Jharkhand CM
                    Madhu Koda under PMLA
The Hawala case to the tune of $18 million bribery
scandal, which came in the open in 1996, involved
payments allegedly received by country‘s leading
politicians through hawala brokers. From the list of
those accused also included Lal Krishna Advani who
was then the Leader of Opposition.
 It gave a feeling of open loot all around the public,
involving all the major political players being accused of
having accepted bribes and also alleged connections
about payments being channelled to Hizbul Mujahideen
militants in Kashmir
If you haven‘t heard of Bihar‘s fodder scam of 1996, you
might still be able to recognize it by the name of ―Chara
Ghotala ,‖ as it is popularly known. In this corruption
scandal worth Rs.900 crore, an unholy nexus was traced
involved in fabrication of ―vast herds of fictitious
livestock‖ for which fodder, medicine and animal
husbandry equipment was supposedly procured



                           The Top Scams in India
It imposes financial institutions obligation to
verify identities of clients, maintain records and
furnish information to FIU-IND. It gives punitive
power against 'ML'.
ANTI MONEY LAUNDERING REGIME IN INDIA




  NDPSA-1985, UAPA -2004, PMLA - 2005
Stock Market Scam
Although not corruption scams, these have affected
many people. There is no way that the investor
community could forget the unfortunate Rs. 4000 crore
Harshad Mehta scam and over Rs. 1000 crore Ketan
Parekh scam which eroded the shareholders wealth in
form of big market jolt.


                           Harshad Mehta & Ketan Parekh
                                Stock Market Scam
Income tax arrears in 1993 stood at Rs. 6,000 crores.
This is in respect of assessed tax. Under-assessed tax
accounts for some thousands of crores of tax losses. So
is the case in relation to indirect taxes - central excise
duties. Another angle of revenue loss relates to non-
recovery of bank loans from the industrialists
accounting for nearly Rs. 50,000 crores.
 2G Spectrum Scam
This scam involved the process of allocating
unified access service licenses. At the heart of this
Rs.1.76-lakh crore worth of scam is the former
Telecom minister A Raja – who according to the
CAG, has evaded norms at every level as he carried
out the dubious 2G license awards in 2008 at a
throw-away price which were pegged at 2001
prices.



                   The Top Scams in India
 Commonwealth Games Scam: It is estimated that out of
Rs. 70000 crore spent on the Games, only half the said
amount was spent on Indian sportspersons.
The Central Vigilance Commission, involved in probing
the alleged corruption in various Commonwealth Games-
related projects, has found discrepancies in tenders –
like payment to non-existent parties, willful delays in
execution of contracts, over-inflated price and bungling in
purchase of equipment through tendering – and
misappropriation of funds



                            The Top Scams in India
Abdul Karim Telgi forged in printing duplicate stamp
papers and sold them to banks and other institutions. The
fake stamp and stamp paper case penetrated 12 states
and was estimated at a whooping Rs. 20000 crore plus.
The Telgi clearly had a lot of support from government
departments that were responsible for the production and
sale of high security stamps.



                                The Top Scams in India
Satyam is the biggest fraud in the corporate history to the
tune of Rs. 14000 crore. The company‘s disgraced
former chairman Ramalinga Raju for a decade fudged
the books of accounts for several years and inflating
revenues and profit figures of Satyam. Finally, the
company was taken over by the Tech Mahindra which has
done wonderfully well to revive the brand Satyam.



                            The Top Scams in India
The chief minister of Maharashtra has resigned over his
alleged role in a scam involving homes for war widows.
Ashok Chavan was ordered by the ruling Congress party
to tender his resignation.
Mr Chavan's relatives, army officers and bureaucrats are
among those who allegedly acquired apartments in the
Adarsh Cooperative Housing Society in Mumbai's
upmarket Colaba area. The housing society in Mumbai
was originally planned as a six- storey building for war
widows. But it was changed to a 31-storey building
allegedly without the requisite environmental clearances.
IPL Scam
The recent scam in IPL and embezzlement with
respect to bidding for various franchisees. The
scandal already claimed the portfolios of two big-
wigs in the form of Shashi Tharoor and former
IPL chief Lalit Modi.
WASHINGTON: Indian students , mostly from Andhra Pradesh ,
face the prospect of deportation from the US after authorities
raided and shut down the Tri-Valley University in Pleasanton, a
major suburb in San Francisco Bay Area, on charges of a massive
immigration fraud . It has been charged by federal investigating
authorities with being part of an effort to defraud, misuse visa
permits and indulge in money laundering and other crimes.
According to a federal complaint filed in a California court, the
University, which was raided and shut down last week, helped
foreign nationals illegally acquire immigration status. The
university is said to have 1,555 students. As many as 95 per cent
of these students are Indian nationals, the complaint said.



                                    25 Jan, 2011, PTI
                       Immigration fraud: Hundreds of Indian
                         students may be deported from US
Over one hundred thousand farmers took their
lives across certain regions of India in the past 10
years. The tragedy is that no one is keen to come
to grips with the reasons that led to this never-
ending saga of human suffering. A well-known
German newspaper said: ―The ‗mover and shaker'
Indians are engrossed in themselves, busy
fulfilling their dreams. To them, the 25 per cent of
the world's poor living in India are non-existent.‖




                               Child labour
An op-ed article in a Bavarian newspaper
said: ―Indians assume that the law will take its
course. But, in the Indian style ‗rule of law',
time is ‗eternal' and it could take another 20
years before the guilty is brought to justice.
TAX HAVENS, BLACK MONEY AND
     FINANCIAL FLOW OUTS
Some 70 odd small territories in different locations of
the world endeavor to attract investment from outside
their border offering financial secrecy laws. These are
commonly known as ―tax havens‖, because they also
impose little or no tax on income from sources outside.
So tax havens are ideal lodges for black money of many
countries.
Campaigns against dirty money as high security
risk commenced with the pathbreaking research
done by Raymond W Baker, a Harvard MBA
and a Brookings scholar. He published his
research as a book
Capitalism‘s Achilles Heel: Dirty Money and How
to Renew the Free- Market System.
 The book was published in 2005.
• Global Financial Integrity (GFI), a global
  watchdog headed by Baker to curtail illicit
  money flows, has recently brought out detailed
  estimates of the black wealth hoarded in secret
  havens from different countries.
• GFI research shows that during the period
  2002 to 2006, annually $27.3 billion was
  stashed away from India, making a total of
  $137.5 billion for the five-year period.
Global Financial Integrity
1319 18th Street NW, Suite 200
Washington, D.C. 20036
USA
Phone: +1 202.293.0740
Fax: +1 202.293.1720
Email: gfip@gfip.org
Map/Directions
Nearest Metro: Red Line to Dupont Circle (South
Exit).



                      Contact Us
India has lost nearly a half-trillion dollars in illegal
financial flows out of the country, says a new
study by Global Financial Integrity. So massive
are these illegal outflows, says the study, that the
―total capital flight represents approximately 16.6
per cent of India's GDP as of year-end 2008.‖
The report says, ―the figure represents a
staggering loss of capital.‖ Illegal flight of
capital, it says,
• ―worsens income distribution,
• reduces the effectiveness of external aid, and
•   hampers economic development.‖
                             The study
The GFI study is titled ―The Drivers and Dynamics of Illicit
Financial Flows from India: 1948-2008.‖ Authored by Dr.
Kar, formerly a senior economist at the International
Monetary Fund (IMF) and now Lead Economist at the GFI.
It defines ‗illicit flows' as ―comprised of funds that are
illegally earned, transferred, or utilised — if laws were
broken in the origin, movement, or use of the funds then
they are illicit.‖ Such fund transfers are not recorded in the
country of origin for they typically violate that nation's laws
and banking regulations.
In their website, a detailed report is available (Illicit
Financial Flows from Developing Countries: 2002-2006,
authors Dev Kar and Devon-Cartwright Smith — A project
of Ford Foundation). Page 30 of the full report gives a
clearer picture for India.
(http://www.gfip.org/storage/gfip/executive%20-
%20final%20 version%201-5-09.pdf)
Many thought the launch of market reforms in the
early 1990s and the end of license raj would
reduce corruption. Instead, with the creation of
additional wealth and circulation of more money in
the economy, what one witnessed was an increase
in scale of corruption.
Though the country has grown impressively since
the reforms began, the growth would have been
even more remarkable had corruption been not a
factor.
“I would go to the length of giving the whole congress a decent
burial, rather than put up with the corruption that is rampant.” —
Mahatma Gandhi May 1939 .
This was the outburst of Mahatma Gandhi against rampant
corruption in Congress ministries formed under 1935 Act in six
states in the year 1937. The disciples of Gandhi however,
ignored his concern over corruption in post-Independence India,
when they came to power. Politicians are fully aware of the
corruption and nepotism as the main reasons behind the fall of
Roman empire, the French Revolution, October Revolution in
Russia, fall of Chiang Kai-Shek Government on the mainland of
China and even the defeat of the mighty Congress party in India.
• Misappropriation of public funds and
• acquisition of ill-gotten wealth are clearly
  illegal.
However, subtler forms of
• non-material corruption,
• coupled with abuse of power and misuse of
  privilege,
   are equally prevalent but not often debated.


                     We still can expect reform and get
                     the benefits of corruption-free, good
                     governance in our lifetime.
• Capitalism, globalisation and liberalisation have
    increased the pressure to succeed, achieve
    targets and acquire wealth quickly.
•   The abuse of public power, office and resources for
    personal gain is common.
•   We still can expect reform and get the benefits of
    corruption-free, good governance in our lifetime.
Corruption in any organization or society depends on three factors.
The first is the individual sense of values. The second is the value
cherished by society and the third, of course, is the system of
governance. Thanks to modernization and the tremendous impact
of satellite television and the media and the policy of liberalization,
we are seeing the vigorous growth of the consumer culture.
Lifestyle has become very important. What we can do is to at least
see that certain basic values like integrity, honesty and
compassion are inculcated.
Basis In Self-Sacrifice
Swaraj can be maintained only where there is a
majority of loyal and patriotic people to whom the
good of the nation is paramount above all other
considerations what-ever including their personal
profit.          M K G (YI, 28-7-1921, p.238)
If Swaraj was not meant to civilize us,
and to purify and stabilize our civilization,
it would be worth nothing. The very
essence of our civilization is that we give
a paramount place to morality in all our
affairs, public or private.
(MKG, YI, 23-1-1930, p. 26)

				
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