STATESMAN NEWS SERVICE
Bangalore, 22 July
The corporates in India and abroad are apprehensive about the poor image that the country is gaining as a corrupt nation which, in turn, can affect the flow of foreign direct investment.
In addition, the stigma is forcing potential investors to have a rethink on their India-entry strategy besides creating an unfair competition.
The sectors most vulnerable to corruption include the government and state-run undertakings, infrastructure and real estate, metals and mining, aerospace and defence in addition to power and utilities segments.
These are the findings of a survey conducted by the Federation of Indian Chambers of Commerce and Industry and Ernst and Young between March and May 2013. The survey covered over 200 corporates from India and abroad, comprising the media, entertainment, banking, internal audit and finance, vigilance and risk management segments.
The respondents comprised a mix of domestic and multinational firms in the USA and the UK. Their annual incomes range from Rs 50 billion to Rs 100 billion. The report, which was released here today, reveals that corruption, real or perceived, is having a detrimental impact on the country’s economy with 83 per cent of the respondents feeling that the recent scams would impact the flow of FDI.
The Ficci survey reveals that 77 per cent of the respondents felt that it was the responsibility of the managing directors to handle the bribery and corruption related issues in the organisations.
A huge section of the respondents were aware of unethical business conduct, including irregular accounting to hide bribery and corruption, gifts being given to agents and third parties being used to pay bribes.
An equal number felt that it was the lack of will to obtain licences and approvals the “right way” which led to bribery and corruption.
Admittedly, the government has proposed amendments in existing acts with some Bills even aiming to check corruption in the private sector. Yet, enforcement of laws is equally important to arrest this inimical growth, the Ficci survey noted. More so, as 89 per cent of the respondents felt that inadequate enforcement of laws was resulting in the spread of bribery and corruption in the country.
Titled as "Bribery and corruption: Ground reality in India", the survey points out that while several positive factors, including the huge domestic market and a favourable demographic profile, have attracted the global investor to the country, India has a long way to go in terms of ease of doing business.”