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Washington:
Even as India's economic growth continues, the poor continue to
stay poor with rampant corruption siphoning out over $125 billion
in illicit capital flight between 2000-2008, according to a
Washington think tank.
Noting that "much of the funds flowing out are generated at home
within India and then sent illegally abroad," an upcoming report
from Global Financial Integrity (GFI) says, "So the growth of
corruption and India's underground economy contributes
significantly to illicit financial flows from the country."
"Corruption is rampant in India as it is in almost all developing
countries. Both corrupt political and corporate officers manage to
siphon off funds - intended to aid the people of India - off to
political and private sector elite," noted the research arm of the
Centre for International Policy (CIP)
"Recent efforts in India to challenge this corrupt affront on
humanity have been met with severe violence," Junior GFI Economist
Karly Curcio said in a blog post on the report on illicit
financial flows (IFF) from India and explaining linkages between
IFFs, poverty, corruption, and crime.
"As India develops economically and builds better infrastructure,
one would think that all Indian citizens would see an increased
standard of living and that the income inequality levels would
fall," says the blog post following a news report about recent
violent crimes in India against whistleblowers.
"However, the gini coefficient, which measures income inequality,
has actually increased over the time period measured, 2000-2005,
from 0.32 to 0.37 on a scale of 0 to 1, with 1 being the highest
income inequality," Curcio wrote.
Noting that "in India - as in other currently developing countries
- that as the economy grows, so do illicit flows, she wrote: "This
positive correlation exhibits the increased incentives to conduct
illicit flows, mostly because more money is flowing within the
system to steal away and constant greed is tapping into that
pool."
India Ranks 84 out of 180 countries in Transparency
International's 2009 Corruptions Perceptions Index ranking.
"As corruption continues to plague both the country and its
ability to develop free and fair institutions to monitor and
charge corrupt officials, the majority of India's economic growth
will never make it to the people of India who desperately need it
the most," Curcio warns.
India's legislative efforts to protect whistleblowers and those
who work to fight corruption is a step in the right direction,
however more must be done, she says calling for global efforts to
make it harder to move illicit funds around the world.
These efforts include increasing financial transparency, as well
as stronger work by developed-country governments to crack down on
their home banks accepting these laundered, illicit funds, Curcio
said.
(Arun Kumar can be contacted at arun.kumar@ians.in)
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