mIntro: India is on verge of becoming an economic superpower.

1
main issue causing India to bleed from the inside Out:
Corruption.
o Thesis: India is facing much political corruption and police
corruption, that unless stopped give India a self-maintained
culture of corruption which threatens Indias rise to an

economic power.
Corruption in India-What is it
o As of December 2009, 120 of India's 523 parliameeent
members were accused of crimes. (The Economist 2009).
o Several Horror Stories, man beaten and shocked to death
after refusing to pay for mayors birthday celebration.
Mafia intertwined with government- Women investigated
local mafia unit- and was arrested for a completely
different thing by governor in less than 40 minutes from
when he heard about it. (Verma 2015)
o The corruption rate of India is double the world average
with over 54% of Indians report paying bribes. (Sinha 2013)
o There is much debate to what is the most corrupt
government duty (police, parliament, etc.) as police
corruption is the most visible but there is a lot of behind

the scenes law-making corruption. (Sinha 2013)

Economic Problems
o Trucks
4.66% GDP= Road Transfer (Transparency International
2007)

The number of trips performed by a truck could increase

by 40%, if forced delays are avoided. (Transparency

International 2007)
60% of forced delays to truck drivers are for extorting
money by police and other agencies. (Transparency

International 2007)
Truckers pay US 4.5 billion per year and it is estimated
that India loses 50 billion dollars to all forms of

corruption annually. (Transparency International 2007)

o According to KPMG "high-level corruption and scams are
now threatening to derail the country's it is credibility and

[its] economic boom."

Why India needs to take definitive action
o 45% of Indian people said common man cant make a
difference. (Sinha 2013)

Corruption: A Hindrance for India and its Future

By Jack Waitz
As of right now, many experts believe that India is a country
primed to become an economic superpower. India has growth
opportunities in industries such as energy and the Internet, with big
international markets. It has a large population ready to anchor a large
workforce. But what could potentially hamper India from erupting onto
the world scene? What could make India bleed from the inside out?
Corruption. My definition of corruption for this paper is: taking bribes or
money for yourself or others illegally. India has a daunting corruption
problem with corruption embedded in its policing methods and
accepted in politics. Indias corruption problem is incredibly high
compared to other powerful countries worldwide, is unfortunately selfperpetuating , and threatens to end Indias economic boom.
India is one of the most corrupt places in the world. As of
December 2009, 120 of India's 523 parliament members were accused
of crimes (The Economist 2009). Not only is this number outstanding in
itself, but it shows how grave the Indian corruption situation is. If the
people in charge, the people who are supposed to be spearheading the
fight against corruption, are corrupt themselves, it cycles corruption
around and around. If honest politicians see that they can only make
the same pay as their peers by taking bribes, why wouldnt they take
bribes? Unfortunately, peoples moral standards are based upon the

standards around them, and people are selfish. This is why corruption
exists in the first place-people try to exploit situations however they
can.
In India, for years, because corruption has always been around,
people are used to corruption and therefore are less morally opposed
to it. As a result of this, the corruption rate of India is exactly double
the world average; over 54% of Indians say they paid bribes. (Sinha
2013). Corruption in India isnt a victimless problem, Yet, because of
Indian culture, politicians and policemen dont think about other people
when acting corruptly. Sure, a poor policeman might help support
his/her family by extorting money from a food vendor through the
creation of fake fees they had to pay. But for every policeman it helps,
it hurts many more people: i.e. the vendor, his family, and the other
people who are affected by the policemans example. Sadly though,
corruption in India goes beyond just bribes. Recently, a well-known
public engineer in Uttar Pradesh refused to pay money for his mayors
birthday party. He was then beaten and shocked to death. (Verma
2015). Also in UP, a female policeman investigated a local mafia, and
found enough evidence to show they existed, in court. Later, the
governor, as soon as he heard about it, bragged that he got the
woman arrested in less than 45 minutes, on camera, for completely
absurd charges (Verma 2015). With such horrible things happening to

people, one would think that Indian people would be outraged by acts
of police brutality. But in the majority, theyre not.
One main danger of corruption, especially Indian corruption, is
that its self-perpetuating. That is, unless someone affirmatively takes
a stance against corruption, corruption will keep breeding itself. This
paper briefly touched upon this before. When people see corruption,
they then think about how they have to compete, and keep up with the
income flow that the corrupt person is getting from taking bribes. Then
they have a shift in their moral compasses. Instead of thinking about
how illegal bribes are, they think about the money they could have for
themselves and their families if they acted corruptly themselves. Its
like a rolling snowball, in India corruption will get larger and larger,
unless people affirmatively think that they can make a difference by
not acting corrupt themselves. However, 45% of Indian people said the
common man cant make a difference (Sinha 2013), and an EY study
found that the majority of Indian people were aware of corruption but
appeared to do nothing about it (EY Firm 2013). Even against the
majority that thinks that corruption can be stopped if they change their
behavior, those that think the opposite most likely wont budge,
because as previously mentioned, theyll want to keep up with
everyone else whose taking money illegally and not following the law.
In fact, theyll most likely become corrupt themselves (through
stealing, and other methods). Once the 55% that wants change sees

that happen, itll become harder for them to think that the common
man makes a difference; in fact, theyll have more pressure on them to
start illegally working/running their business. All theyll have over the
minority is the moral high ground.
Another way corruption perpetuates itself is that it robs people of
their money (to be touched upon later), which makes them more likely
to resort to corruption to get back that money. In other cases, the
Indian government underpays workers, leaving them little options
other than corruption to make more money. For instance, the average
Indian constable makes at least 100 USD after 6 commissions or at the
highest 324.394 USD (Police Exam India 2012). With those incredibly
low salary numbers, it is no wonder why police officers resort to
corruption. The same theory applies to government officials who
believe their salary just isnt enough. They resort to corruption to help
pay for themselves.
Though corruption is obviously morally wrong, the main danger
of corruption is the danger it poses to the economy of India. Take the
example of the trucking industry, an industry comprised of many
young entrepreneurial companies. Trucking is 4.66% of Indias GDP
(Transparency International 2007). However, frequently trucks are
stopped and forced to pay bribes to policemen to pass stops. Even
worse is when policemen make their own currency that truckers have
to buy from them, and that truckers have to pay to them at forced

stops (Murthy 2009). The problem in this case with corruption is the
time it wastes, and how much truckers have to pay. It is estimated that
the number of trips a truck could make would increase by 40% in the
absence of corruption (Transparency International 2007). Truckers
annually pay approximately 4.5 billion USD to police officers because of
corruption (12,328,767 million per day), and this isnt even how much
the trucking industry loses, as they lose more money because of
wasted time (Transparency International 2007). All in all India loses an
estimated 50 billion USD to corruption (KPMG 2011) yearly. Not only is
losing 50 billion dollars a horrible, but it is especially hurtful to a
growing economy that needs all that cash it can get. Furthermore,
corruption also tarnishes Indias reputation. Potential investors in more
corrupt regions, in certain sectors are much more likely to undervalue
companies (EY Firm 2013). Foreign investment and cash flow are some
of the most important things an economy can have. Though this isnt
doom-saying the Indian economy, corruption should be a big concern
for the Indias future economy. A recent study by KPMG, a large
international law firm put it succinctly, by saying, high-level corruption
and scams are now threatening to derail the country's credibility and
economic boom. (KPMG 2011).
If the corrupt Indian government itself decides it wants to reform,
and if it wants to create a positive legacy for itself, it doesnt have to
look far. In fact all it has to do is study what is already happening in

India. KPMG and EY stated the real estate, telecommunication, and

government social defense are the most corrupt sectors of the Indian
economy. However, the private defense, information technology, and
energy sectors of the economy are the least corrupt (KPMG 2011) (EY
Firm 2013). Whats the common theme here? The least corrupt
industries are the most competitive ones, and the most corrupt ones
are the least competitive. All India has to do is find ways to make
industry more competitive. They can give tax deductions to startup
businesses. They can incentivise real estate dealers for their
performance; temporarily privatize as much industry as possible; or
raise salaries for police officers and government officials. Some parts of
India have done this and changed. The rest of India should follow.
India is at a tipping point in its history. From here, there are two
paths: one leading towards a booming 21st century economy; and the
other leading nowhere, in a downward spiral of corruption. Change in
India has happened in certain states with good leadership, and the rest
of India can follow. All thats left now is whether the Indian government
will take notice of the threat that corruption is posing to their economy.
Will they fight against something so clearly wrong and illegal?
Whatever they do will have reverberations on all other developing
countries, and have major economic effects for the rest of the world.

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