With the recent release of Transparency International’s Corruption Perceptions Index for 2018, this is a good time to assess India’s anti-corruption performance in recent years.
In 2018 India rose by three places to 78 on the list of 180 countries, while China ranked 87 and Pakistan 117. This improvement has caused some in India to cheer. But Unlike the CPI, the latest Global Corruption Barometer released by Transparency International in 2017 found that the experience of corruption is much higher in India, with nearly 69 percent of Indians having paid bribes compared to 40 percent in Pakistan and 26 percent in China.
On the World Bank’s ease of doing business index, India has improved substantially. It jumped 57 places between 2014 and 2018 to reach world number 77 on the 2019 index. At the heart of the jump lies radical improvement in “trading across borders” and “issuance of building permits.” both of which have been digitized and taken to single window clearance.
India has also enacted a slew of anti-corruption legislation, including the Prevention of Corruption (Amendment) Act 16 of 2018 (criminalizes bribe giving, creates corporate criminal liability, extends the definition of criminal conduct) and the Benami Transactions (Prohibition) Amendment Act, 2016 (provides for expedited procedures to deal with property held for a beneficial owner where the same is fictitious or untraceable). These bring the Indian law closer to UN Convention on Corruption 2003. There has also been increased prosecution under these legislations in the last few years.
All these measures were based on broad political consensus. However, “demonetization” in 2016 i.e. cancellation and reissuance of 87 percent of India’s currency, has divided the political spectrum. It was seemingly intended to target accumulated “black money.” But critics point out that 99.3 percent of the demonetized notes are back with the Central Bank and India’s cash-to-GDP ratio remains almost the same, so apparently the exercise has failed.
The ruling BJP on the other hand points to improved tax compliance, as evidenced through rising income and corporate tax collection, as a positive effect from demonetization. Thus even if demonetization failed eliminate black money, it might have slowed down its formation.
An area where India still lags is in building appropriate enforcement institutions, or ”anti-corruption infrastructure“ as TI calls it. This weakness can be seen in recent events that further damaged the credibility of the country’s premier investigative agency, the Central Bureau Investigations. The CBI Director and his Deputy brought complaints of corruption against each other before the Chief Vigilance Commissioner, leading to the Director’s sacking and the Deputy’s transfer, and bringing enormous bad publicity to the agency.
Some opposition politicians have alleged that the government is using the CBI to intimidate and coerce its political opponents. In three Indian states governed by the opposition, the authority of the CBI to conduct investigations without state government approval has been revoked. Whatever be the truth of these allegations, weak institutions may slow or derail anti-corruption efforts in India.
Suvrajyoti Gupta, pictured above, is Assistant Professor at O.P. Jindal Global University in Delhi, India, and Assistant Director of the Centre for Alternative Dispute Resolution. His teaching and research interests include dispute resolution, international arbitration and corruption.