Management Journal for Advanced Research

Introduction

Corruption has been widely recognized for decades as a threat to democracy's integrity. It stifles economic progress and weakens social cohesion in developing countries. According to Transparency International, "corruption is the abuse of entrusted power for private gain." The World Bank defines corruption as "the misuse of public office." In other words, Zakiuddin and Haque (2002) argue that corruption cannot be treated as a discrete and self-contained problem that must be dealt with on its own. That's what they say. "There are numerous variables that go into corruption, including human behaviour and many others that are difficult to detect or quantify."

In light of international initiatives like the OECD Anti-Bribery Convention, the UN Anti-Corruption Convention, the Inter-American Convention Against Corruption (IACAC), the Organization of American States (OAS), and the Council of Europe (CE), which place a heavy emphasis on international business, "corruption" may be treated as merely "bribery". Corruption, on the other hand, is a more general term that includes acts of bribery. It's critical to remember that corruption is more than just a money exchange or a backroom deal. It has a negative impact on the state's public, private, and individual lives, and its culture, politics, and economy.Bribery is only one type of corruption. There are many forms of corruption in our society.

Economic Growth

We've decided to focus on corruption's impact on India's economic growth out of all of the possible outcomes. Economic growth is defined as an increase in the production of economic goods and services when compared to the previous era. Measured in real (adjusted for inflation) or nominal terms, GDP is a nation's total economic output.

Corruption has a significant impact on economic growth since it costs the government a significant amount of money in taxes and fees. As a result, economic investment declines and development expenditures such as education and healthcare decrease, resulting in harm to both economic growth and development. It has a negative impact on the economy to the point that it has been determined that corruption produces more distortion than taxes (Rose-Ackerman 1996).

Figure 1: Reason for corruption in India

Source:https://iasexamportal.com/current-affairs/corruption-in-india-an-analysis

It's common in India for large numbers of people to evade taxes each year. As a result, the government suffers a significant revenue shortfall. A report from the State of Tax Justice (2020) said that India lost $10.3 billion in taxes owing to global tax abuse, which is 0.41 percent of the country's GDP.

Multinational corporations (MNCs) lose more than $10 billion a year in tax abuse, while private individuals lose $200 million a year in tax avoidance. As a result, 44.70 percent of the health budget and 10.68 percent of the education budget have been squandered. Paying the salary of 4,230,656 nurses annually is also an option. $11.3 billion, or 0.4 percent of India's GDP, constitutes 0.1 percent of the worldwide offshore wealth.

Moreover, the survey identifies Mauritius (23.6 percent), Singapore (17.2 percent), and the Netherlands (11.2 percent) as the three countries most responsible for India's vulnerability to outward foreign direct investments. According to this report, corruption appears to be wreaking havoc on the Indian economy.

Corruption and Business

A wide range of discretionary rights are available to public employees, giving them the ability to extort unauthorised payments from businesses and residents alike. The granting of public contracts is notoriously corrupt, particularly at the state level.

The payment of bribes in the healthcare, IT, and military industries has been highlighted by political scandals. The degradation of the government's general efficiency, protection of property rights, ethics, and corruption, as well as undue influence on government and judiciary judgments, has resulted in a more difficult economic environment.

• In an era of rising antagonism between neighbours, delays in military modernization are becoming increasingly common due to corruption in earlier defence purchases. It's a bad sign for national security, to say least.
• Encroachment on ecologically vulnerable areas such as wetland areas by real estate projects in urban areas has resulted in increased vulnerability to natural disasters such as flooding and drought due to corruption.
• An unholy alliance between state and criminals is formed when law enforcement authorities such as police are corrupted. Rather than upholding its constitutional obligation of public service, incompetent government serves its own interests at the expense of people it is supposed to serve.
• Criminals are emboldened by police corruption, which results in underreporting of crimes, while court corruption forces citizens to resort to unethical means of obtaining redress.

Positive Effects

• It aids in reduction of bureaucracy in the overworked and sluggish government apparatus, particularly for enterprises that cannot afford to wait around for long periods of time to receive clearances.
• Officials benefit from "gift culture" by forming networks that can speed up tender processes and, as a result, make job go faster.
• It lowers compliance costs for a wide range of businesses, including small and medium-sized enterprises (SMEs), which would otherwise find it difficult to compete with larger industry. Individuals benefit as well; for example, someone stopped for violating a traffic rule can avoid paying a Rs. 500 fine by paying Rs. 100 instead.
• Many refugees have been spared deportation to countries where they face persecution because of
• People at lower echelons of bureaucracy benefit from

These benefits, however, pale in comparison to the harm that corruption causes to society and economy. Lawlessness is encouraged and regional and communist sentiments rise as a result of inequity, dissatisfaction, and animosity in society.

Property registration and land issues emerged as the most major authorities where citizens had to pay a bribe, with 26% of citizens voting in favour of it in an analysis of corruption in various authorities and departments. Only 13 percent indicated they paid bribes to other officials, including the police and the municipal corporation (13%), the energy board (3%), as well as the transportation office (8%), the tax department (9%), and the water department (5%).

Figure 4: India's corruption

Source: India's Corruption Perceptions Study (2019)

There is widespread corruption in the legal system, particularly in the lower courts. Bribes are exchanged for favorable court outcomes in some cases. The judiciary's effectiveness is harmed by widespread corruption and an already- existing problem of resource constraints. Despite the massive backlog of cases, it takes far longer (1420 days on average) than it should to enforce a contract in this region. Because businesses don't view the court system as a barrier, it has a negative effect on the business climate because they don't see it as a necessity.

Methodology

As a result of the existing literature, we plan to investigate the relationship between corruption and economic growth in India in more detail. For this, we've used scatterplots and correlation to analyze the data. On the other hand, correlation is a statistical measure of how closely two variables move with respect to one another. The correlation coefficient values will represent the linearity of the relationship if it is found to be such. Even if the link is non-linear, a scatterplot is a useful tool for capturing it.

It is very important to break the positive association between economic growth indicator and CPI. Transparent governance and artificial intelligence can be used to curb the menace.

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