Contributing the letter I to the widely cited BRIC acronym, India is a country with indisputably vast economic potential. With a population of 1.3 billion people, India is the world’s largest democracy and since 1991, its economic growth ranks within the top 10% of countries worldwide. The emergence of a sizeable middle class (with the demands and heightened expectations that this brings); the desire to expand the scope of beneficiaries of national economic growth to all corners of the country; and the need for vast improvements in infrastructure, present considerable business opportunities and scope for investment. What’s more, around half of India’s increasingly educated and ambitious population is under 25 years old, meaning a wealth of human capital with the energy and enthusiasm to strive for effective change.
Perhaps unsurprisingly however, India is not problem-free. If the country is to unlock its potential and realise its prophesised status as a global economic power, it must work on knocking down a number of barriers still standing in its way. India must address its deficit in terms of infrastructure adequacy, its overly bureaucratic business environment and its problems relating to corruption. For example, India must make significant improvements to its fundamental public services, such as healthcare, education, transport, power and water supply. According to the World Bank, ‘an estimated 300 million people are not connected to the national electrical grid, and those who are face frequent disruptions.’
Despite the challenges that such an infrastructure deficit brings, it also presents outstanding investment opportunities.
However, for this to materialise, India’s investment climate must undergo significant improvements. The 2018 World Bank’s ‘Doing Business Report’ – a report analysing the ease of doing business in selected countries - ranks India at position 100 out of 190 countries. The report names also several measures undertaken by the Indian government to facilitate starting a business fast and easier, mostly through digital tools. These online tools were introduced to reduce bureaucracy, which presents opportunities for corruption. In 2017, Transparency International’s Corruption Perception Index gives India a score of 40 out of 100.
According to the 2017 Global Corruption Barometer, people in India were most positive about their governments’ efforts, with over a half saying they were doing well. 41% of respondents felt that corruption had increased in India over the past year (30% less than in 2013) and 35% (33% less than in 2013) felt that the government’s actions against corruption had been ineffective. The TRACE Matrix 2017, which measures business bribery risk on the basis of the risk score of Business Interactions with the Government, Anti-bribery Laws and Enforcement, Government and Civil Service Transparency and Capacity for Civil Society Oversight, ranked India at 88/200. The devastating effects of these problems in the context of a country with such potential are indicated by the Human Development Index 2016, which ranks India at 131/188 (with no change from the previous year), indicating only medium human development.
India is, however, taking steps to address the problem. In 2013, the Prevention of Corruption (Amendment) Bill was announced, with provisions aiming to hold commercial organisations liable for failing to prevent bribery by associated persons – a provision resembling that made famous by the UK’s Bribery Act. The Government introduced the Bill on April 4, 2018.2015 also saw the enactment of the Black Money and Imposition of Tax Act, which regulates the concealment of income and assets abroad of Indian residents. It is also reported that the government plans to make it an offence under Indian law to bribe a foreign public official.
|Population:||about 1.3 billion inhabitants||GDP per capita:||1,709.6 US$ (2016)|
|Form of government:||Parliamentary democracy||TI CPI rank:||81 out of 180 (2017)|
|GDP:||2,264 billion US$ (2016)||Score:||40/100 (2017)|
The Alliance for Integrity has been active since 2013 in India. India was the first country where the Alliance for Integrity was active in. The activities in India already started in November 2013 with a pilot phase that lasted a year. During that pilot phase the Alliance for Integrity, in cooperation with the Confederation of Indian Industry and the Federation of German Industries, conducted a survey among senior management with experience in anti-corruption compliance, of companies operating in India. Read the whole survey. Moreover, compliance trainings were conducted throughout the year. The Alliance for Integrity in India is located in New Delhi. Beside the tasks of all the country offices, such as awareness raising and capacity building, the initiative aims to develop a compliance handbook for senior management which will be presented later in 2016.
The Advisory Group India was established in November 2015. The Advisory Group India is comprised of the following members: