Global Consultancy Firm KPMG’s Report on Bribery & Corruption in India

Global consultancy firm KPMG on 14 March 2011 released a report on bribery and corruption in India. According to report real estate was found to be the most corrupt sector, followed by telecom. The firm attributed reason for corruption to higher government and political intervention in these sectors.  The report was published in the backdrop of multiple enforcement agencies are probing corporate-politician-bureaucrat nexus in several government procurements and allocation of telecom licences. As per the report large capital investments, multi-level approvals, complex processes and huge projects provide for immense opportunity for corruption in these sectors.

The report cautioned against possible leakages in expenditure on infrastructure development, estimated at $1 trillion between 2012 and 2017. A significant portion of $1 trillion will be for development of real estate and construction. Almost 30% of this expenditure is expected to be funded through public-private partnership which further increases the scope for payoffs. The report stated that the main reasons that could be attributed to providing bribes includes obtaining routine administrative approvals, obtaining and retaining business and covering up inconsistencies in quality of work and documentation.

According to CEOs of some major Indian entities told the KPMG survey that the prime reason for paying bribes was to win or obtain business and to get routine administrative approval from government agencies.

 The report warned that unless checked, corruption may hinder growth prospects and the projected GDP growth of 9% may not be possible. Also it could result in lesser foreign direct investment (FDI) into the country, negative impact on the performance of capital markets and a volatile political and economic environment.