These findings confirm the prevalence of the bureaucratic and administrative forms of corruption that take place at the implementation end of politics, where the public meets public officials.
Bureaucratic corruption pervades the Indian administrative system with widespread practices of bribery, nepotism, and misuse of official positions and resources. The Bertelsmann Foundation 2008 report states that India is characterized by a deeply rooted patronage system and pervasive corruption at all levels of the polity and administration.
The country is further characterized by rigid bureaucratic structures, an exclusivist process of decision-making, overly centralized government, poorly-paid civil servants and the absence of effective internal control mechanisms.
Political corruption and corruption scandals involving high ranking officials and ministers periodically hit the headlines, undermining the legitimacy of democratic processes and citizens’ trust in public institutions.
Vulnerable Sectors and Institutions
Public Procurement:
Public procurement is especially vulnerable to corruption in most developing countries. In India, y there is a reasonably good framework of rules and procedures for public procurement that requires t. open tenders available to all qualified firms without discrimination, the use of non-discriminatory tender s documents, public bid openings and selection of the most advantageous tenders, taking all factors into it consideration.
These regulations are apparently poorly enforced, however, as public contracting continues to be marred by major corruption scandals involving high level politicians. In the 2006 World Enterprise Survey, close to 24% of respondent firms confirmed they were expected to make a gift or to secure a government contract.
In addition, companies face different laws in different states, which complicate their operation throughout the country. According to the World Bank Country Procure- Assessment Report 2003, the Indian public procurement system is generally affected by a lack of d consistency as well as low credibility and public confidence in the system.
Corruption is perceived to be worse at the state level than at the federal level, due to the lack of qualified staff and widespread if political interference in state administration. The report further notes that the average bribe to obtain a i, public contract is estimated at 15% of the contract’s value.
Licenses and Public Utilities: 52.2% of the firms surveyed by the above-mentioned 2006 World
Bank Enterprise survey reported being expected to give gifts to secure an operating license. Corruption also affects access to public utilities such as water, phone and electricity. Compared to the 2006 edition of the Global Corruption Barometer, most utilities and departments have fared worse in terms of public process.
Close to 40% of the World Bank Enterprise survey reported paying bribes to get an electrical connection and 27% to get a water connection. According to the Global Corruption Report 2008, citizens believe that corruption is on the rise in these sectors.
Tax and Customs Administration: 52.3% of the firms covered by the World Bank Enterprise survey reported being expected to give gifts in meetings with tax officials. In this sector, rules and procedures are extremely cumbersome; giving tax officials wide discretionary powers to interpret the rules.
Some are suspected of deliberately stalling administrative procedures to induce facilitation payments. Bribes may be paid for an underassessment of incomes or to obtain penalty reductions or tax refunds. According to the 2005 Lt India Corruption Survey, 20% of the respondents admitted having paid bribes to the tax department, while 60% perceived the department to be corrupt.