ABSTRACT
Currently, white-collar crime is on the rise in India, which has a huge impact on the country’s economic well-being. Bank frauds, tax evasion and economic threats are some of the reasons why white-collar crime has hindered India’s economic growth. Therefore, the government of India needs to take important steps to reduce the rising white-collar crime rate in the country. However, based on previous studies, it is expected that white-collar crime poses a higher risk to a country’s economy compared to regular crime. On the other hand, white collar crime puts the employees at risk by offering an unsafe operation condition. In this research study, a secondary qualitative data collection method has been used to collect and interpret information relevant to the purpose of this study. Thematic analysis has also been included to outline the main findings of this study. Nevertheless, the findings of this study have shown that the economic growth of India has been significantly hindered by white-collar crime. In addition, corruption has also played a significant role in increasing the rate of white crime. While white collar crime has a negative impact on a country’s economic growth, it also has a significant impact on society due to corruption and cybercrime.
Keywords: White Collar crime, India, Bank Fraud, Bribery, Cybercrime, economy, socio economic, Tax evasion.
INTRODUCTION:
Typically, “white collar crimes” include embezzlement, corporate fraud, securities fraud, and money laundering. Furthermore in light of this, white-collar crime might be defined as nonviolent misconduct that most often provides its offenders with financial support.
The crimes listed above may include identity theft, including forgeries, insider trading, fraud, Ponzi schemes, wage theft, and bribery. It can also be said that corporate crime and white-collar crime mostly overlap, and that lowering the rising incidence of this type of crime is essential to putting India’s economic infrastructure back on track. This study will include a brief overview of “white collar crime,” its effects on India’s economy, and the primary cause of the rising incidence of this kind of crime.
Research goals: This study’s objective is to quantify how white-collar crime affects the economy of India. However, the researcher has created certain research objectives that will help the researcher reach the study’s anticipated conclusion in line with the goal of the investigation. The research study aims to investigate the role that white-collar crime plays in impeding India’s economic progress.
- To identify the underlying factors contributing to India’s rising rate of white-collar crime
- To look into ways that India’s rising rate of white-collar crime might be decreased.
- To determine how the government might reduce India’s rate of white-collar crime
Review of the Literature:
The Effects of White-Collar Crimes on India’s Economy
Experts from various fields concur that white-collar crime has a more costly effect on the economy than other forms of common crime. This particular crime has the potential to hurt customers with potentially harmful products, put many employees in risk owing to unsafe working conditions, and possibly even generate pollution-related problems for the community. These specific offences are acknowledged as having a greater negative impact on society than any other daily patterns of routine behaviour. Similar to white collar crimes, financial losses are even more severe and can seriously impair public morals. Generally speaking, it poses a threat to India’s financial system through bank fraud and economic theft among many other things, such as tax evasion.
Nonetheless, it has a negative impact on society as a whole in addition to a nation’s financial situation or the well-being of an individual. The various criminal trends, including bribery, money laundering, and corruption, have all had a negative effect on society. The aforementioned criminality has been a significant obstacle to the development of a progressive nation with improved economic infrastructure. White collar crimes mostly refer to crime patterns that are linked to multiple individuals with higher social rank. The well-known status of criminals that offers improved opportunities with relation to such crime patterns through violating the obligation placed upon them.
In this regard, they have significantly accelerated the pace of change, bringing with them industrialization and the emergence of new technologies. Following the evolution, the Indian economy has suffered greatly as a result of internal systemic flaws that have paved the way for the rise in white-collar crime. The loss of financing costs associated with these white-collar crimes is many times greater than the sum of various other common crimes, which together represent a remarkable loss to the Indian economy. White-collar crime can have a negative effect on a nation’s finances as well as other aspects of the nation Indian culture. Numerous criminal trends, including bribery, corruption, and money laundering, have had a negative, widespread impact on society. As a result, many workers experience financial hardship and make less purchases of goods and services. Furthermore, companies that have been the main targets of this white-collar crime may experience significant losses and be required to file for bankruptcy. However, their creditors never receive payment, their coworkers lose their valuable careers, and those investors typically lose their own money.
The main reasons behind the increasing rate of white-collar crimes
The general belief is that economic instability or greed are the main causes of these kinds of crimes. But these offences are also growing as a result of external pressure or the innate qualities of obtaining much more than several others. Consequently, it can be said that a variety of factors may contribute to the occurrence of this pattern of crime, and that white-collar crime is currently on the rise in India. One of the main causes of white-collar crime may be a lack of awareness on the part of several individuals. White-collar crime differs from other traditional crimes in that its victims are often the general population, despite the fact that they are the ones who suffer the most from it.
On the other hand, the public may be committing these crimes due to need, which is another aspect of them either to support their family or to appease their own ego. Even when persons with better social rank have adequate financial support, they nevertheless commit these kinds of crimes occasionally out of pure greed. Conversely, white collar crime is typically the result of an individual’s desire to outperform their competitors. White collar crimes including bribery, forgery, and fraud have always been committed by businesspeople hoping to outperform their competitors in terms of success. In addition, technical factors may also be a contributing factor in the incidence of white-collar crimes.
The role of Government in reducing the increasing rate of white-collar crime in India
White collar crime has been sufficiently common in India for a certain amount of time, and it is growing quickly like a wildfire in various social contexts. Nonetheless, the primary species of this kind of crime can be regarded as corruption, which has long been the subject of the most discussion in a variety of contexts, including the political, social, and economic. It can also be seen that no meaningful steps have been taken to reduce this threat. The Indian government must enforce stricter laws against these types of offenders in addition to stepping up specific governance.
In light of this, all sectors must work together to lower the likelihood of frauds in India with relation to their advancement, including their country. There haven’t been many laws passed in India to lessen the rising number of white-collar crime cases. The government has developed a number of legislative patterns to help identify these kinds of offences. The laws include the Companies Act of 1960, the Prevention of Corruption Act of 1988, the IT Act of 2005, the Commodities Act of 1955, and the Prevention of Money Laundering Act of 2002. Each of these laws stipulates a mandatory penalty for the offences committed. White-collar crimes are essential crimes that have the potential to damage the economy’s whole infrastructure. White-collar criminals are the focus of most court treatment, and trial courts in India are frequently slow to acknowledge the seriousness of these crimes.
The research study’s gap
One of the main weaknesses in this research study is the absence of primary and numerical data. Separately from that, the previous researchers were unable to derive a crucial synopsis of the goal of this investigation. Furthermore, the effect that white-collar crime has on India’s economy has not been succinctly discussed. Consequently, this has hindered the researcher’s ability to obtain adequate and trustworthy data that may have helped the researcher reach the desired conclusion for this research study.
Effects of White Collar Crime on Society
White-collar crimes are harmful to society, because such crimes are committed by people who should be held up as moral examples and who should behave responsibly. This is how society gets polluted. When the former director of Andhra Bank and the executives of Gujarat’s pharmaceutical company Sterling Biotech were arrested for their involvement in the 5000 million dollar fraud case. They withdrew money from the bank accounts of several benami companies. It was a big scam that scared people. Punjab National Bank (PNB) also found fraudulent transactions worth Rs 11,346 crore in its Mumbai branch in 2018. Business World reported that the employees there forged buyer’s credit (LoU – letter of understanding) for Nirav mod and Gitanjali group company.
RESEARCH METHODOLOGY:
A crucial component of any research study is the materials and methodologies used direct impact on the outcome of the investigation. In addition, in order to get and examine data from secondary sources of information, the researcher has chosen to employ a secondary method of data collection. This data was collected using a secondary qualitative technique, and the researcher sourced it from papers that had been published in the last five years. Other than that, the sources were from websites, publications, peer-reviewed journals, ProQuest, and Google Scholar. However, as the researcher has interpreted the data by developing themes related to the study’s objectives, thematic analysis has been used for this investigation.
RESULT:
India’s white-collar crime
Until now, the term “white-collar crime” has not been used in the criminal codes of India. However, the concept of “white collar crime” is not new in Indian criminal law. Since its conception, it has been used in the popular sense for a wide range of crimes, including corporate criminality, environmental crimes committed by businesses, crimes pertaining to occupations or professions, crimes involving tax evasion, and crimes involving intellectual property rights. Furthermore, advances in science and technology have contributed to the development of “mass society,” which is composed of an elite governing class and a sizable working class. Monopolies, an elite management class, and intricate institutional structures have resulted from this. The smooth operation of the new social, political, and economic systems depends on rigorous adherence to ethical behaviour. Furthermore, because many facets of society are not aware of this necessity, white-collar and economic crimes are increasing, which makes it harder to implement laws that aren’t sufficiently deterrent. This kind of crime has a higher risk because it not only results in larger financial losses but also irreversible harm to the public’s morality. In 1966, the Law Commission of India suggested that a few social and economic offences be included in the Indian Penal Code.
A proposal to add certain social and economic offences in the Indian Penal Code was contained in the report of the 29th Law Commission India. The law commission’s conclusions indicate that the Santhanam Committee’s report placed a significant emphasis on white-collar crime. To be clear, “economic crimes” was not replaced or synonymized with “white-collar crime” by the Santhanam Committee. Rather than incorporating “white-collar crimes,” the Indian Law Commission opted to employ the phrase “economic crimes”. In the law panel’s final report, it addressed several issues related to “white collar crime.” Sutherland defines white-collar crime as a crime done throughout the course of a high social standing individual’s employment. The phrase “white-collar crime” was used to refer to offences carried out with the accuser’s occupation, job, calling, or office. But even when someone of high reputation and social standing committed murder, adultery, or alcoholism, the word did not include those crimes because they had nothing to do with their line of work. In India, there is a broad range in the severity of sanctions enforced for business and economic crimes. Here, anecdotal evidence is employed; however, as official scientific investigations in this field are lacking, precise quantities or incidents are not available. IPC penalties don’t have to be repeated here, but it’s important to understand that the range of sanctions and judges’ Selection and quantification discretion are on the high side, which results in “unjust” or “disparity” sentences for similar or identical offences. One such example is the recent decriminalisation of corporate crimes under the Companies Act, 2013, and acceptable avenues for further investigation into this issue, including the possibility of monetary penalties, include tax laws and consumer lawsuits. Most special legislation are boilable and compoundable, even though some, like the ones mentioned above, contain provisions for imprisonment.
Based on the research study’s findings, it has been projected that the growing
The Indian economy has been severely impacted by the high rate of white-collar crime. On the other side, India’s progress has also been hampered by corruption and unstable economies. In addition, the corporate sectors in India are having trouble capitalising because there is a dearth of investment in the capital market as a result of the addition of white-collar crime. Furthermore, the addition of white-collar crimes puts India’s economy in danger by enforcing bank fraud, economic theft, and tax evasion. Furthermore, it has a big effect on society because of the harm that different crimes like corruption, money laundering, and bribery have done to people’s wellbeing of society.
Report on White Collar Crime in India
- Das Commission Report, 1964
R. P. In Kapoor v/s Pratap Singh Kairon, Pratap Singh Kairon, who was the Chief Minister of Punjab, was accused of using his wealth to flaunt his high position and also that of his family at the expense of the state. The commission acquitted him on the grounds that a father cannot be held responsible for the actions of his grown children. The commission explained that the son cannot be prevented from doing the business of his choice, except that the son cannot use his father’s political position and power to exploit others. Consequently, the court rejected the application.
- The Report by Santhanam Committee
The 29th Law Commission report, published in 1972, stated that the Santhanam Committee was the first organisation to recognise the seriousness of the crimes perpetrated by persons of high social standards. The Santhanam Committee discussed the causes of white collar crime’s ubiquity in India in its report on the prevention of corruption. The main cause of the rise in white collar crimes has been attributed to scientific temperament and technological innovation. A small group of elite individuals who comprise the monopoly are in charge of regulating these vast numbers of people with advanced dispositions. In this highly technologically and scientifically evolved period, it is necessary to force these masses to follow the guidelines set forth by the elites in order to govern them. Those who don’t end up doing so wind up being the ones committing white collar crimes. The committee expressed concern about the serious harm that these crimes can do to public morals. Because white collar crimes are so complicated and so few people are aware of them, only professionals are able to identify them and take precautions to avoid becoming victims of them.
RECOMMENDATION:
- The Indian government is implementing various laws, including income tax 1961, the Information Technology Act of 2005, and the Money Laundering Prevention Act of 2002 to reduce the likelihood of white-collar crime.
- In India, white-collar crimes continue to rise significantly in spite of the implications of these laws.
- Previous studies have also noted that the introduction of efficient laws and regulations by a nation’s government can readily lower the rising rate of white collar crime. Establishing an efficient tax system can also lower the rate of tax evasion, which can readily assist a nation in undermining the rise in white collar crime.
- To further India’s growth, the government must be more successful in undermining the threat posed by white-collar crime.
CONCLUSION
A rise in white-collar crime has had a negative impact on India’s economic health recently. India’s economic risks have been blamed on tax evasion, bank fraud, and infrastructure-related economic risks in the nation.
Several researchers have demonstrated that white-collar crime is more costly to the economy than other types of criminal activities. It has a detrimental effect on society in addition to a nation’s or an individual’s financial circumstances. Money laundering, bribery, and corruption are just a handful of the crimes that have severely impacted society.
Nonetheless, it is easy to draw the conclusion from the study’s findings that white collar crime has seriously hampered India’s evolutionary process.
Reference
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BY – DARPAN BASRA
ASIAN LAW COLLEGE, NOIDA