Abstract

One of the main features of the Indian economy is the existence of a “big” government. The Indian political system consists of the federal, state, and local governments, as well as a number of different local self-governance organizations. This implies that a single business entity might be governed by a multitude of federal, state, and local laws, such as those pertaining to registration and approvals needed to start and run a business, compliance, reporting requirements, inspections, and the exercise of discretion by different levels of government officials. Furthermore, government-owned businesses dominate a number of industries, including infrastructure and financial services. Any organization wishing to conduct business in India will inevitably have to deal with the government (in all of its manifestations) and government-owned businesses. Indian laws and regulations frequently provide government employees and agencies a great deal of discretion, which can make dealing with the government difficult and time-consuming. Even though there are many strict anti-corruption legislations in India, corruption is still widespread there. Nonetheless, a growing public discontent with corruption and its consequences for the Indian economy has been evident in recent years. Public opinion has been strongly against corruption over the past few years, and prominent cases of corruption have grown to be significant political issues. Transparency International reports that India’s ranking among 180 nations in the Corruption Perceptions Index (or “CPI”) has improved by one spot, to 85 (from 86 in the previous two years). The current Indian administration has also adopted a strict position on matters of corruption and has pushed for the passage of a number of laws intended to combat corruption in India, some of which are detailed below. Most significantly, over the past few years, enforcement agencies have changed their approach and begun vigorously enforcing anti-corruption laws in India against those who engage in corrupt activities as well as their advisors, auditors, and other agents who either condone or deny the existence of such practices. They have received support in their efforts from civil society and the judiciary, which has been actively involved in monitoring corruption cases.

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