HomePersonal FinanceCorruption, Scam & Black money - India’s reality

Corruption, Scam & Black money – India’s reality


Since last few days corruption and scams has became prime point for discussion. Coal scam, 2G scam and common wealth game scam has cause impression that India is center for corruption, scams & black money.

According to World Bank research report India’s present parallel economy is 30% of GDP. Black money is causing negative impact on GDP and government income through tax.

Economic transaction for which no records are kept is called as part of parallel economy or black economy.  World Bank research team has conducted survey for parallel economy in 162 countries, according this survey in 1999 Indian parallel economy was 22.9 % of GDP which has grown to 25% in 2006. Today it is expected 30% of GDP. Last year report is submitted to government which is likely to be discussed in budget 2013.

According to last year survey conducted by Indian government black money count in India is 10 lakh crore which is 10% of GDP.  All this is due to corruption.

Corruption can happen anywhere. When politicians put their own interests above those of the public or when officials demand money and favours from citizens for services that should be free. Corruption is not just an envelope filled with money though these people make decisions that affect our lives.

Corruption translates into human suffering, with poor families being extorted for bribes to see doctors or to get passport or to get access to clean drinking water. It leads to failure in the delivery of basic services like education or healthcare. It derails the building of essential infrastructure, as corrupt leaders skim funds.

We know corruption is a problem around the world. But how bad is it and what can be done? The Corruption Perceptions Index by Transparency International measures the perceived levels of public sector corruption in countries worldwide.

According to this transparency index corruption in India has increased drastically in period from 2004 to 2007. From 2008 to 2011 it has reduced but in 2012 again this index has gone up. This index is prepared by asking level of corruption from local public.

As large amount of corruption is exposed by various scams in India, team of Anna hazare & Baba Ramdev has done protest in 2012 many citizen of India has joined movement of India against corruption. But ultimate result is zero. We are back to square. Corruption, Scam and black money is still reality of India.

Corruption amounts to a dirty tax, and the poor and most vulnerable are its primary victims.

How we can counter corruption?

  • Governments need to integrate anti-corruption actions into all aspects of decision-making. They must priorities better rules on lobbying and political financing, make public spending and contracting more transparent, and make public bodies more accountable.
  • Government should formulate reporting mechanism for corruption. Person should get awarded by reporting corruption. Government should take a tougher stance against corruption and to person for abuse of power.
  • Government can also formulate Integrity Awards & recognize the courage and determination of the many individuals and organizations for fighting against corruption in India.
  • At individual level everyone should note down every transaction and bring it on record. One should avoid dealing in cash. One should pay income tax honestly.
  • Government should make note of every transaction and must ask question to individual for hidden transactions.

Remember: Corruption is the abuse of entrusted power for private gain. It hurts everyone who depends on the integrity of people in a position of authority.

Shitanshu Kapadia
Shitanshu Kapadia
Hi, I am Shitanshu founder of moneyexcel.com. I am engaged in blogging & Digital Marketing for 10 years. The purpose of this blog is to share my experience, knowledge and help people in managing money. Please note that the views expressed on this Blog are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment , tax, financial advice or legal opinion. Please consult a qualified financial planner and do your own due diligence before making any investment decision.