Menu

Evaluating Strengthening of Anti – Corruption Laws in India

Publications, Research paper

ABSTRACT 

The success of a particular law in a county is judged through its implication. Mere writing it in the book of law is not enough for it to be considered as a victory, it is just a step towards ensuring a triumph over a legal issue in a country that needs to be addressed. This research paper will analyse the strengthening of Anti – Corruption laws in India, starting with enforcement of Prevention of Corruption Act in 1988 to its latest amendments in 2018. Along with this, the paper will also look closely into the factors that affected the execution of these Anti – Corruption Laws and whether there is still some scope for further improvement through the case studies that show successful prosecutions and usage of corrective efforts to evaluate the Act’s impact. Building on these conclusions, the study makes recommendations for future developments and areas for improvement, promoting changes and revisions to fortify the Act and increase institutional capacities for anti-corruption initiatives. Providing an overview of the current status of anti-corruption initiatives in India and outlining a plan for increasing integrity and accountability in the public sector, the report concludes by synthesizing the major conclusions and recommendations. This thorough analysis emphasizes how crucial strong anti-corruption laws and efficient enforcement procedures are to advancing good governance and battling corruption globally. 

KEYWORDS

Legislation for corruption, Anti – Corruption agencies, causes of corruption, gaps in legislation, famous scams

INTRODUCTION 

India moved up from rank 85 in 2022 to 93 out of 180 nations in the Corruption Perceptions Index for 2023. This improvement is the outcome of continuous efforts to make India’s anti-corruption laws stronger. It all started with incorporation of these laws through the Indian Penal Code of 1860 in sections 161 to 165 to fight against corruption by public servants. These apply to all the people who fall under the ambit of a ‘public servant’ as stated under Section 21 of the Indian Penal Code of 1860. Post – independence, due to restrictions and shortages, instances of bribery and corruption of public personnel had escalated significantly throughout the war years, making the measures under the IPC and other laws insufficient to handle them. Therefore, The Prevention of corruption Act of 1947 was put forward to ensure more effective prevention of bribery and corruption. In 1964, a committee was set up that led to the existence of the Central Vigilance Commission and in 2003 statutory status was given to the CVC, making it an independent body to address corruption in central government institutions. In order to develop and implement uniform standards for adjudicating issues involving a lack of transparency and morality in public life, the Commission was deemed necessary. Subsequently, the scope of the 1947 Act was also challenged for being too narrow and The Prevention of Corruption Act of 1988 was enacted to replace the former. The Lokpal and Lokayukta Act of 2013 mandated the establishment of a state-level Lokayukta and a federal Lokpal. These are non-constitutional statutory bodies that investigate allegations of corruption against governmental agencies and organizations as well as other issues and function similar to an “ombudsman”. Regarding the disclosure of assets and liabilities by public employees, the Lokpal and Lokayuktas (Amendment) Bill, 2016 modifies the Lokpal and Lokayuktas Act, 2013. The Bill’s provisions would take effect on the date the 2013 Act entered into force, retrospectively. Several bodies like Central Bureau Investigation (CBI), which was established in 1941 with the goal of looking into cases of bribery and corruption in the War and Supply Department, have developed into the Government of India’s premier investigating and prosecuting agency, with a wide range of functions and specializations. On the other hand, the media and organizations in a civilized society are crucial in bringing attention to and resolving India’s corruption issue through numerous civil society movements, such the demonstrations against corruption led by Anna Hazare. An additional India Against Corruption movement has mobilized public opinion and concurrently exerted significant pressure on the government to implement anti-corruption measures. Investigative media played a crucial part in bringing corruption scandals to light and making influential people answerable. It is undisputed that political parties and their leaders have a significant influence on the level of corruption. In India, bribery, misuse of public funds, and the purchase of votes from undecided voters are common electoral scenes. The relationship between wealth and power sustains a corrupt culture in which politicians are able to put their own interests ahead of the welfare of the general people. Therefore, A multifaceted approach is needed to solve the corruption issue, including institutional strengthening, reforms, and diverse initiatives from the media and civil society.

RESEARCH METHODOLOGY 

In order to deliver an in-depth analysis of the Anti – Corruption measures and their significance, secondary sources were consulted for this descriptive work. The resources are used to analyse the need for the laws which are put into place while keeping in mind the severity of India’s corruption problem and the steps that ought to be taken to make these laws stronger. Newspapers, journals, and websites are a few secondary sources of information that are employed in the research. The paper will also look into various case studies to analyse the execution of the Anti – Corruption laws in India. 

REVIEW OF LITERATURE 

In the second chapter of Government anti-corruption strategies: A cross-cultural approach, Meena Nair discusses “Anti-corruption practices in India”. In this chapter, she talks about the anti-corruption initiatives being carried out in India with the support of civil society and the government. India has a history of introducing a number of anti-corruption laws, some of which were ground-breaking programs. Still, the fact that corruption remains an issue indicates that much more work has to be done. 

FACTORS CONTRIBUTING TO CORRUPTION IN INDIA 

Greed is a powerful motivator of human behaviour that greatly fuels corruption in several important social domains. In order to effectively combat corruption, it is necessary to address the underlying selfishness through strict accountability structures, transparent governance, strong legal frameworks, and cultural transformations towards ethical behaviour. 

Following are the few major contributing factors that result in corruption in India: 

  • The rise in corruption rates is majorly due to the ineffective management and organization. Control and coordination at different organizational levels fail as a result of inadequate or incorrect management and organizational functioning. Mismanagement is caused by ineffective executive and managerial appointment. The only explanation for these ineffective management appointments is corruption. Government representatives have monopolistic power since they are permitted to participate in public activities. These powerful individuals, whether they are government officials or not, abuse their positions of authority and take advantage of them which breeds corruption. 
  • In order to undertake fair business and economic practices, laws and regulations must be followed. By abiding by those guidelines, disagreements can be avoided, greed can be controlled in, and other negative effects can be avoided. This further guarantees that the people or organizations uphold moral principles and behave well. The intentions must be clearly stated in these standards, rules, and regulations. 
  • One of the main causes of the notorious actions of the Indian government and political parties is elections. Rather than helping to reduce corruption, these people spend the most of their time engaging in corrupt activities related to elections. They spend large amount on campaigning rather than using it for welfare which would preferably attract more voters towards them. Politicians go above and beyond the call for favours, eventually deciding to turn to corruption to cover the enormous expenses associated with running for office. Another dishonest tactic used by politicians to sway public opinion is bribery. The public that is illiterate and impoverished is primarily the victim of such influence.
  • Humans are inherently moral beings. An individual acquires these values from the family they were raised in or from the setting in which they received their education. Consequently, both the family and the educational setting have a big impact on shaping a person’s character. Lack of moral principles has an impact on a person’s character and natural growth. The behaviours of those who dishonestly participate in corruption demonstrate its repercussions.
  • In an intensely inflated economy, government officials who receive below-average or inadequate compensation often turn to corruption. Similar compensation issues also exist in private organizations, which contributes to the high level of corruption. These officials’ low pay encourages them to take use of illicit and illegal ways to get money. 
  • Even with the government’s various efforts to curb corruption, it nonetheless occasionally takes on new forms. India has implemented measures to prevent corruption. But passing the statutory measure alone won’t be enough to stop corruption. The real test comes when the time for the execution of these laws is performed. Vigilance and severe punishments can be used to stop the corruption threat. People’s tolerance for corruption, the public’s lack of protest against it, and the lack of a powerful public platform to oppose it all contribute to the spread of corruption. 

ANTI – CORRUPTION LEGISLATION

The Indian Penal Code (IPC), 1860

  • A government employee, an officer in the armed forces, police, navy, or air force, a judge, an officer of the Court of Justice, or any municipal authority formed by a federal or state act are all considered “public servants” under the Indian Penal Code. 
  • Section 169 deals with the illegal purchase or bidding on real estate by governmental employees. A fine, two years in jail, or both could be imposed as punishment for the public servant. The property will be seized if it is bought. 
  • Criminal breach of trust by a public official is covered under Section 409. If found guilty, the public servant faces a maximum sentence of 10 years in prison, a fine, or both.

The Prevention of Corruption Act (PCA), 1988 

  • The concept of “public servant” encompasses not just the categories specified in the Indian Penal Code but also individuals holding office in cooperative organizations that receive government funding, university staff, the Public Service Commission, and bank workers.
  • A public servant faces a minimal punishment of six months and a maximum sentence of five years, together with a fine, if they receive satisfaction for an official act or influence over other public servants above what is legally compensated.
  • The Act also punishes a public servant for using his personal influence over another public servant and for taking pleasure in using illicit means to influence the public.
  • When a public worker engages in business transactions in their official role and accepts a valuable item from a third party without paying for it or pays insufficiently, they will be subject to a minimum six-month sentence, a maximum five-year sentence, and a fine.
  • To bring charges against a public servant, prior approval from the federal or state government is required.

The Benami Transactions (Prohibition) Act,1988

  • With the exception of acquisitions made in the names of one’s wife or unmarried daughter, the Act forbids any benami transaction, or the purchase of property under the false identity of another individual who does not make the payment.
  • Engaging in a benami transaction carries a maximum sentence of three years in prison as well as a fine. 
  • A designated authority may purchase any properties that are deemed to be benami, and no money will be exchanged in exchange. 
  • However, the Benami Transactions (Prohibition) amended Act, 2016 revised the previous Act in order to establish an efficient framework for the prohibition of benami transactions.
  • A transaction performed under a false identity, in which the owner is unable to be traced or is unaware that the property is theirs, or in which the person giving the consideration for the property is not identifiable, now falls under the amended definition of a benami transaction.
  • Additionally, it established an adjudicating authority and an appellate procedure under the act, which made property of benami vulnerable to acquisition or confiscation. 

The Prevention of Money Laundering Act, 2002  

  • According to the Act, anyone who participates in any procedure involving the proceeds of crime and projects those proceeds as uncontaminated property has committed the crime of money laundering. Any property acquired by an individual as a result of criminal conduct connected to specific offenses specified in the Act’s schedule is referred to as “proceeds of crime.” Only after being accused of committing a scheduled offense may someone be charged with money laundering.
  • Money laundering carries a severe sentence of three to seven years in prison as well as a fine of up to Rs 5 lakh. If an individual is found guilty of a crime under the 1985 Narcotics, Drugs, and Psychotropic Substances Act the term might extend to 10 years of imprisonment. 
  • The central government-appointed Adjudicating Authority will determine whether any of the confiscated or attached property has been used for money laundering. Appeals against the Adjudicating Authority’s and any other authority’s orders under the Act shall be heard by an Appellate Tribunal. 
  • All financial institutions, including banks, must keep a log of every single transaction of a certain kind and amount. They must also ensure that all of their clients’ information is accurate and up to date, and they must provide this information to the appropriate authorities.

The Lokpal and Lokayukta Act of 2013

  • The Lokpal and Lokayukta Act of 2013 mandated the establishment of a state-level Lokayukta and a federal Lokpal. These are non-constitutional statutory bodies that investigate allegations of corruption against governmental agencies and organizations as well as other issues and function similar to an “ombudsman”.
  • Regarding the disclosure of assets and liabilities by public employees, the Lokpal and Lokayuktas (Amendment) Bill, 2016 modifies the Lokpal and Lokayuktas Act, 2013.
  • A public official is required by the Lokpal Act to disclose all of his assets and liabilities, as well as those of his partner and dependent children. Within 30 days of taking office, these statements must be submitted to the appropriate authority. 
  • Additionally, by July 31st of each year, the public servant is required to complete a yearly disclosure of these assets and liabilities. 

GOVERNMENT AGENCIES’ ROLE IN ANTI – CORRUPTION

  • The Central Vigilance Commission (CVC), the Central Bureau of Investigation (CBI), and the state Anti-Corruption Bureau (ACB) are the three primary agencies tasked with gathering information, looking into, and prosecuting corruption cases. Under the Ministry of Finance, the Financial Intelligence Unit and the Directorate of Enforcement look into and prosecute cases involving public employees who have laundered money. 
  • The Indian Penal Code, 1860, and the Prevention of Corruption Act, 1988 both permit the CBI and state ACBs to look into instances involving corruption. While state ACBs look into issues within their states, the CBI looks into matters pertaining to the federal government and Union Territories. States are able to send CBI cases. 
  • A statutory organization called the CVC is in charge of overseeing investigations into corruption in government organizations. Under its authority is the CBI. 
  • In each department, the Central Vigilance Officer (CVO) or the CBI may receive case referrals from the CVC. The department authority has the last say over whether to discipline a civil servant, even whether the CVC or CVO advises taking action against a public official.
  • An investigating agency may only begin a prosecution with the prior approval of the federal or state governments. Prosecutors designated by the government handle the prosecution in court.
  • The federal or state governments designate Special Judges to hear every case brought under the Prevention of Corruption Act, 1988.

OTHER ANTI – CORRUPTION INITATIVES 

  • Public Interest Litigation: PILs are an essential instrument for upholding the fundamental rights of individuals denied access to them because of poverty or other circumstances. It also supports judicial oversight of state institutions and operations. PIL seeks to make it easier for regular people to visit the courts and seek justice in legal issues. It is an essential instrument for bringing about social change, advancing the establishment of justice and the rule of law, and defending it. Through raising public awareness through each case, PIL has been crucial in bringing about social and political reform in India as well as in exposing and resolving several concerns impacting the general population. Even the most impoverished citizens of the nation are encouraged to believe that the courts can deliver justice.
  • An essential component of India’s campaign against corruption was the Santhanam Committee Report. Its thorough examination, suggestions, and focus on preventive actions have influenced the Central Vigilance Commission’s work and the nation’s long-term fight against corruption. The nation’s anti-corruption system has evolved as a result of later committees and commissions building on the findings of the Santhanam Committee.
  • The 2005 Right to Information Act mandated the computerization of services, the creation of vigilance committees, and the provision of information sought by citizens by government officials, failing which they would face penal measures. This created opportunities for grievance redress and significantly decreased corruption.

SOME MAJOR SCAMS OF INDIA 

Indian Coal Allocation Scam: Coalgate Scam, commonly known as the Indian Coal Allocation Scam, came to light in 2012 during the UPA government’s tenure. One of the largest con games in Indian history is this one. In a political ploy, the Comptroller and Auditor General (CAG) claimed that the government had unlawfully distributed 194 coal blocks between 2004 and 2009. Although the CAG issued a final report detailing a scheme involving Rs. 1.86 lakh crores, the first estimate of loss was Rs. 10 lakh crores. 

2G Spectrum Scam: In this scam, the government underpaid mobile phone operators for frequency allocation licenses that were utilized in 2008 to launch 2G spectrum subscribers. Telecommunications Minister A. Raja was the primary accused in this scandal. The scandal, according to the Comptroller and Auditor General (CAG), involved Rs. 176000 crores. Consequently, the Supreme Court ordered the revocation of more than 120 permits in 2012.

Nirav Modi PNB Bank Fraud: Among the most famous scams in Indian history is this one. The Brady house brand of PNB was used in this scam. This scandal involved Nirav Modi, Mehul Choksi, and two other officers from Punjab National Bank. Nirav Modi has been implicated in a scheme wherein he obtained Letters of Undertaking (LOU) from PNB without having to pay margin against the loans. It basically means that PNB would be responsible for the full amount owed if the companies were unable to make their loan payments. Around Rs. 11400 Crores were stolen in this scam.

Stamp Paper Scam: The Telgi Scam was the colloquial name for this fraud. Abdul Karim Telgi was charged in 2002 with producing and distributing counterfeit and fraudulent stamp documents to banks and other financial establishments. The scandal was believed to be worth Rs. 20,000 crores.

Harshad Mehta & Ketan Parekh Stock Market Scam: This was the most well-known stock market fraud of 1992. By creating convincingly authentic-looking bogus bank receipts, Harshad Mehta was able to siphon off massive sums of money through the bank and amass a substantial fortune for himself. Several banks extended him big loans on the understanding that they would receive government securities in exchange. Ketan Parekh committed a similar fraud and embezzled almost $30 million from Bank of India.

Vijay Malaya Scam: In India, Vijay Malaya is charged with money laundering and fraud. He had taken out a loan of over Rs 9000 Crores from many banks to keep his now-defunct Kingfisher Airlines afloat. Following this fraud, he fled the nation and took shelter in the United Kingdom.

Saradha Group Financial Scam: One of the most well-known financial frauds in the state of West Bengal in 2013 was this one. Madan Mitra, Sudipto Sen, and Kunal Ghosh were charged with money laundering through a Ponzi scheme known as the Chit Fund. They gathered from more than 1.7 million deposits approximately US $4-6 billion.

SUGGESTIONS & CONCLUSION 

India needs to combat corruption with a broad, multifaceted approach that incorporates institutional, sociological, legal, and cultural reforms. In order to combat new types of corruption, anti-corruption legislation must be updated frequently and strengthened. Effective deterrence of offenders requires harsher punishments and more enforcement. Scammers like Nirav Modi and Vijay Malaya fled the country because the agencies did not act on time. Therefore, strict and quick action by the anti – corruption agencies is required to deal with such problems. 

Investigative processes that are unbiased and comprehensive will be guaranteed by giving anti-corruption organizations like the CBI and the CVC more authority and resources. Additional checks and balances can be established at the federal and state levels by establishing independent oversight bodies. The enhancement of transparency and accountability can be achieved by means of e-governance initiatives, the public disclosure of official’ assets, and digital platforms that reduce the need for human participation in the provision of services. 

The importance of public participation makes it necessary to involve civil society organizations, provide strong protection for whistleblowers, and launch extensive public awareness campaigns informing people about their rights and reporting procedures. Enacting judicial reforms is crucial to enhancing the effectiveness and legitimacy of the legal system, as is the creation of special courts for expediting cases involving corruption. 

Corrupt behaviors can be lessened by addressing the underlying causes of corruption, such as economic disparity and low pay in the public sector. Moreover, India’s anti-corruption initiatives can be strengthened by international collaboration and the adoption of other nations’ best practices. India still faces a serious problem with corruption in spite of past and present efforts. Adopting these comprehensive recommendations will help India maintain equitable growth, build on its successes, and promote a transparent culture. This multifaceted strategy will ensure that the advantages of growth are shared by all individuals and will enhance public confidence in institutions while also promoting sustainable economic and social development.

Siya

Jindal Global Law School