Quantum of Corruption Money Earned by Public Officials

In a new book called “Corruption in India: The DNA and RNA”, authors Bibek Debroy and Laveesh Bhandari have estimated that India’s public servants loot Rs.92,122 crore ($18.42 billion), or 1.26% of the GDP due to corruption. They have used data from Central Statistical Organisation (CSO) to arrive at the figure.

The three main areas of the bribery loot are: transport industry, real estate and “other public services”.

They have arrived at a figure of Rs.14,594 crore ($2.92 billion) for the loot in the “other public services”. That may be completely off. For example just for National Rural Employment Guarantee Act (NREGA) programs, the money given out is $22 billion a year. And, the effectiveness of these programs in terms of Households receiving employment is roughly 3%.

Even if we take an effectiveness of 30% (which is WAY too much), we are talking of $15 billion just from ONE program! There are a number of such programs.

Lets take a look at the Real Estate area now. The numbers may be as bad. As per some estimates, just the various approvals add 20-30% to the builders cost in Mumbai itself.

Just as an indicator, we know that about $16 billion have been invested from 2006 until 2011 – roughly 5 years.

According to a report by Jones Lang LaSalle (JLL), about US$ 15.8 billion has been invested from 2006 till date on various types of assets in the real estate sector in the country. Of which, US$ 2.7 billion went to residential projects and US$ 2.4 billion to township projects. A sum of US$ 2.3 billion went to commercial projects, US$ 2.1 billion to mixed use and US$ 961.4 million to special economic zones (SEZs). During the current year, PEs invested US$ 320 million in commercial, US$ 65 million in mixed use, US$ 44 million in residential, US$ 190 million in SEZs and US$ 122 million in township projects.

This is the investment that is counted and documented. A lot of work happens undocumented in the black market. In fact, one can see in cities like that Delhi that 70-95% of the properties are sold and bought with black money – unaccounted for.

Let us take a conservative estimate that only 50% is unaccounted. Then we are talking of about $32-35 billion in 5 years – or $6-8 billion a year. We are talking of just the approvals taking 20-30% away in bribes. That may be $1.5 billion a year!

The book puts the entire corruption money around the country to be around $2.5 billion, which seems to be closer to ball-park.

Real estate and related business services involving registration of property and stamp duties account for Rs.12,534 crore ($2.5 billion) in corruption.

The other areas of corrupt money are also pretty large.

Bribery at multiple checkpoints and by revenue officials, police and customs in the transport sector generate Rs.11,267 crore ($2.25 billion) in corruption, the authors say. The book estimates bribery amount from illegal mining, theft from public mines and licensing at Rs.9,578 crore ($1.91 billion).

This is followed by corruption in government procurement (Rs.9,144 crore or $1.82 billion). Bribe taking by inspectors, police and local bodies in unregistered manufacturing totals Rs.6,600 crore ($1.32 billion).

It is their statement on the state of corruption that is extremely damning.

Undoubtedly corruption has taken over India. It rules over the country with its stranglehold in every aspect of the state and consequently in all aspects of life of citizens.

(Image courtesy: Economist)

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  • Atul

    A group of people self declaired civil society Tean Ann has created a
    condition againest indian state,which has long lasting effect on Indian polity.
    Team Ann says that they have framed a lokpal bill so called Jan lokpal
    bill,that bill is most suited to the india. Now question arise whether the
    provisions of Jan Lokpal Bill are as siutable as they can not put under debat
    in Parliament. What are the contensious provision of jan lokpal and what are
    their effect on Indian State. Now it needs to be analyse:

    Prime Minister: PM can be investigated with permission of
    seven member Lokpal bench. I think it is not so,because Primister is
    elected by 120 crore people of india. Since we have adopted the Parliamentary
    system of democracy.Members of Parliament are being elected by the people of
    India and these Member of Parliament elects the Priminister of India. So until
    Parliamentary System of Government is present in India,thruogh Parliament
    Priminister is Supreme.By Questioning the supremacy of Priminister we are
    questioning the Supremacy of constitution. How one can belief that if
    Priminister of India is dishonest then lokpal will not be dishonest. Othewise
    if we have to faith some one.Why that is not Priminister,Why that is Lokpal.

    Judiciary Judiciary Can be investigated, though high level
    members may be investigated only with permission of a seven member Lokpal
    bench: it means Lokpal is above the Judiciary. 3 crore 27 laks cases are
    pending before Judiciary. When we put Judiciary under Lokpal Due to fear of
    prosecution no Judge will decide any case. No decision no mistake no
    prosecution by Lokpal.From Supreme Court to lower courts there are thousands of
    Judges. The problem of Judiciary is not the corruption problem is delay in
    decision. If judiciary will be brought under Lokpal certainly decisions will be
    delayed due to fear.

    Conduct of Member of Parliament Conduct of Member of
    Parliament can be investigated with permission of seven member Lokpal bench: Suppose
    any member has put a bill which is in favour of a larger group and adversly
    affecting to a small segment of the society. If that group makes a complaint
    against that MP that MP has ulterior motive to benefit a group of people so
    Lokpal should start prosecution againt that MP. How you expect that MPs will
    perform their duties in Parliament.

    Lower Bureaucracy: all public servants would be
    included: Jan Lokpal is adopting the Singapur modle.The population of
    Singapur is lesser tkan that total number of central government employees.
    Regarding lower bureaucracy it need to be reconsider. There is a Hindi proverb”Eakai
    sade sab sadhe;Sab sade sab jai” .If you will punish to a central
    minister or secretery of central government,lower employees will automatically
    stop corruption.Instead of punishing 100 lekhpal,gram secretery,punish a
    collector of a district,lekhpal will automatically stop corruption.If district
    collector has no interest in corruption why he will protect to his sub ordinates.
    I have seen a film. In that film when teacher came to the class students starts
    hooting,one teacher leave the class another also leave the class after beating
    one two student. No teacher was ready to teach the class. Ultimatly a teacher
    agree to teach the class. When he reached the class students started hooting,
    teacher did not showed any response to the hooting. He continued  teaching
    keeping in mind which student is master mind of this activity. Ultimately he
    came to know that son of chairman of the college is master mind behind whole
    drama.He gone to that student and put two hand on his mouth.Whole class had pin
    drop silence. It is almost impossible to tackle the corruption from Pradha to
    Pradhan Mantri. Check the corruption at top level, lower corruption will
    automatically stop.As I have stated earlier  3 crore 27 lacks cases are
    pending before judiciary.Due to abundence of cases of least importance cses of
    higher importance remain neglected. Similarly if whole employees will be put
    under Lokpal,corruption at apex level can not be controlled.

    As Jan Lokpal says Lokpal should have power to entertain complaints against
    any one can enquire the case and start prosecution and sentense punishment. It
    means Lokpal is omnipotent. He can do any thing.When constitution was laid
    down,three wings of government were framed. Legislative to frame laws,executive
    to execute laws and judiciary to keep eyes on act of legislative and executive.
    But if Judiciary cross its limit parliament has power to check the Judiciary.
    But when Lokpal will cross the limit who will check Lokpal. I want to tell you
    a story. In a village there was a farmer. he had a warehouse to store wheat and
    rice. that warehouse became infested with rats. Farmer start thinking how these
    rats can be controlled. he had three options one he can use poison,can use
    mouse trape, or can kill the rat by beating by sticks. Instead of using these
    measures he put a snake to remove the rats. After some days rats had been
    finished. One day when farmer gone inside the warehouse to collect bag of rice,
    that snake bite the farmer and farmer was dead. Wheater we are not heading
    toward rearing snake to kill rats.

    I have seen the film Gazni. When Mr Aamir Khan says that there is thin line
    of division between cofidence ond ahankar. When I say I can do it.It is my
    confidence but when I say that only I can do it .It is my Ahankar. Only my
    Lokpal is Right.I think it cames under second cotegory. Rules are framed in
    Parliament not on road. Pl dont destroy the contitutional system. otherwise it
    will be painfull to whole of India not only to Congress.

  • morris

    Hey Atul, PM is not elected by 120 crore people.  PM happens to be the leader of the party that has support of the house. It is the party that elects the leader.  Not the people at large. In this case Leader is Sonya Gandhi.  And she alone chose Singh.  I think Singh has not been elected for any position period.