What do we mean by corruption?

• Simply the misuse of public property for private gain, as defined by the World Bank. It ranges from embezzlement of public money to abuse of power (e.g. asking for bribes).

Corruption in India affects all levels of the society but it’s in the administrative one that the biggest damage is done to the people and comes to exacerbate (make worst) poverty. 

Corruption in India is an issue that adversely affects its economy. 

• Corruption in the Indian society has prevailed from time immemorial in one form or the other. 
• The basic inception of corruption started with our opportunistic leaders who have already done greater damage to our nation.
• Corruption in India is a result of the connection between bureaucrats, politicians and criminals. 
• Earlier, bribes were paid for getting wrong things done, but now bribe is paid for getting right things done at right time.
• Further, corruption has become something respectable in India, because respectable people are involved in it. Social corruption like less weighing of products, adulteration in edible items, and bribery of various kind have incessantly prevailed in the society.

What is Corruption?
• The Transparency International defines corruption as “misuse of public power for private benefit”.
• Corruption is an insidious plague that has a wide range of corrosive effects on societies. It undermines democracy and the rule of law, leads to violations of human rights, distorts markets, erodes the quality of life and allows organized crime, terrorism and other threats to human security to flourish .
• Sectors:
1. Political Corruption (Bribes, nepotism)
2. Judicial Corruption- (Bribery, improper justice)
3. In educational system- (Not offering admission based on merit)
4. Religion- (Eg., Sale of Indulgences)
• Corruption allocates resources and opportunities in ways that are unfair and inefficient. ​Transparency International, a global NGO committed to combating corruption, defines corrupt practices as: the offering, promising, accepting or soliciting of an inducement for an action which is illegal or a breach of trust. Yet corruption is found in every country, and it is widespread in some

•Ethical Values

• The mere fact that both the payer and the recipient of bribes want to keep their behavior secret (and often succeed in doing so as well) shows that such behavior is generally considered to be improper. Many consider corruption to be an ethical problem, a behavioral problem. And refer to it as being ‘sinful’, a ‘wrongdoing’. It is a problem to be solved by means of personal ‘reform’.
• A striking aspect in recent developments in trade and industry (and in society at large) is the fact that ethics has become important to corporate behavior again.
• Standards and values are seen as essential conditions and characteristics for the good quality of citizenship, entrepreneurship and governance. The concepts ‘people, planet and profit’ are now cherished all over the world in enterprises and often referred to in their annual reports.
• They emphasize the fact that in a business-enterprise it is not only pursuit of ‘profit’ that counts, but that businesses should also take into account the interests of ‘people’ in our society (people, their personnel, executive staff, shareholders, clients, neighbours, etc.) and also the physical world surrounding us, our ‘planet’, introducing economical management of raw materials and
energy, concern about possible climate, prevention of waste, processing of waste.
 ORIGIN OF CORRUPTION IN INDIA

• British Govt. taking over property and handing it over to the “loyal Indians” (in return for money and gifts) – starting point for unethical revenue and bribery in India.

• After independence – greasing the palms of the politicians – licence to start an industry – control over production, distribution and consumption – red tapism and corruption.

• Added to this –ignorance about one’s rights and privileges even after bribing the concerned staff.

PROCESS OF CORRUPTION
• The person giving the bribe – knows that the person receiving the bribe is gullible, needy, someone accustomed to this illegal practice – direct or indirect – accept it; reject it or conditional
acceptance.

• The person receiving the bribe –adopt strategies –force and coerce the victim or deploy fear psychosis, drop hints or hinder the work of the person who is likely to pay the bribe

• Intermediary – can get the work done (for a particular sum of money including his/her commission).

ANALYSIS OF CORRUPTION IN INDIA

• MNCs – pay for the election expenditure –interfere with the election process –licensing, allotment of land, supply for electricity, and selection of logistics and labour.

• Certain projects that are more profitable will be favoured by the politicians than others (bribes/favouritism are common under these circumstances).

• GOVERNMENT MONOPOLY –issue of driving licenses, passport, community certificates, NOC for buildings, registration certificates, employment offices – POOR WHO SUFFER.
SCAMS= corruption in INDIA
• Out of the 539 winners analysed in Lok Sabha 2019, 233 MPs have declared criminal cases against themselves., under India's First Information Report procedure
wherein anyone can allege another of committing a crime.
• Many of the biggest scandals since 2010 have involved very high level government officials, including Cabinet Ministers and Chief Ministers, such as in the 
– 2G spectrum scam (₹1.7 lakh crore (US$25 billion)),
– The 2010 Commonwealth Games scam (₹70,000 crore (US$10 billion)),
– The Adarsh Housing Society scam,
– The Coal Mining Scam (₹1.86 lakh crore (US$28 billion)),
– The Mining Scandal in Karnataka and the Cash for Vote scam.
• 1 Coal Allotment Scam (Cost – 186000 Crores)
• 2 2 G Spectrum Scam (Cost – 176000 Crores)
• 3 Commonwealth Games (CWG) Scam (Cost – 70000 Crores)
• 4 Mega black money laundering Scam (Cost – 70000 Crores)
• 5 Adarsh Housing Scam (Cost – 18978 Crores)
• 6 Stamp Paper Scam (Cost – 20000 Crores)
• 7 Boforce Scam (Cost – 400 Million)
• 8 Fodder Scam (Cost – 950 Crores)
• 9 Hawala Scam (Cost – 8000 Crores)
• 10 Satyam Scam (Cost – 14000 Crores)
• 11 Stock Market Scam (Cost – 3500 Crores)
• 12 Madhu Koda Scam (Cost – 4000 Crores)
 Major Factors Responsible For Corruption:
• The most important factor is the nature of the human being. People in general, have a great thirst for luxuries and comforts and as a result of which they get themselves involved in
all unscrupulous activities that result in monetary or material benefits.
• Moral and spiritual values are not given utmost importance in educational system, which is highly responsible for the deterioration of the society.
• The salary paid to employees is very less and as a result of which they are forced to earn money by illegal ways.
• The punishments imposed on the criminals are inadequate. The political leaders have spoiled the society completely. They lead a luxurious life and do not even care about the
society.
• People of India are not awakened and enlightened. They fear to raise their voice against anti-social elements prevailing in the society.
Impacts of Corruption
1. Lack of quality in services: In a system with corruption there is no quality of service. To demand quality one might need to pay for it.
2. Poor Health and hygiene: In countries with more corruption one can notice more health problems among people.
3. Lack of faith and trust on the governments: People vote to a ruler based on their faith in him/ her. But if found to be involved in corruption people lose faith in them and may not
vote next time.
4. Delay in growth: Due to desire to mint money and other unlawful benefits, the official who need to pass the clearances for projects or industries delay the process.
Measures To Control Corruption:
• Right to Information Act (RTI) gives one all the required information about the Government, such as what the Government is doing with our tax payments.
• Under this act, one has the right to ask the Government on any problem which one faces. There is a Public Information Officer (PIO) wanted by the citizens and providing them with
the relevant information on payment of a nominal fee to the PIO.
• If the PIO refuses to accept the application or if the applicant does not receive the required information on time then the applicant can make a complaint to the respective
information commission, which has the power to impose a penalty up to Rs.25, 000 on the errant PIO.
• Another potent check on corruption is Central Vigilance Commission (CVC). It was setup by the Government to advise and guide Central Government agencies in the areas of
vigilance. If there are any cases of corruption the responsibility of creating more awareness among people regarding the consequences of giving and taking of bribes and corruption.
• Establishment of special courts for speedy justice can be a huge positive aspect. Much time should not elapse between the registration of a case and the delivery of judgment.
• Strong and stringent laws need to be enacted which gives no room for the guilty to escape.
• In many cases, the employees opt for corrupt means out of compulsion and not by choice. Some people are of the opinion that the wages paid are insufficient to feed their families.
If they are paid better, they would not be forced to accept bribe.
• The one thing that needs to be ensured is proper, impartial, and unbiased use of various anti-social regulations to take strong, deterrent, and timely legal action against the
offenders, irrespective of their political influences or money power. Firm and strong steps are needed to curb the menace and an atmosphere has to created where the good,
patriotic, intellectuals come forward to serve the country with pride, virtue, and honesty for the welfare of the people of India.
• Corruption in India: a cause of instability & inequalities
Poverty and corruption are linked.
• And corruption in India is quite the thing.
• In 2003, only 15% of the government's anti-poverty funds reached the poor. Anti-corruption laws have existed since 1968, supported by agencies such as the Central Bureau of
Investigation and the Central Vigilance Commission and yet… failure has been the common point of these efforts.
• The agencies lack independence and power.
• India's anti-poverty programmes primarily constitute programmes of wage employment, self employment and nutritional support. These programmes, many of them initiated
during the Sixth Plan period, are sponsored and primarily funded by the Central Government, sometimes with matching funds provided by State Governments.

The index uses a scale of 0 to 100, where 0 is highly corrupt and 100 is very clean.
In 2016, India was ranked 79th out of 176 countries in Transparency International's Corruption Perceptions Index,
2018: 81
 Main Causes of Corruption
• 1. Low Pay scales/ Wages: Most of the employees in government sector are paid low wages and salaries. Hence some employees revert to corruption for more
financial benefits.
•  Low Job opportunities. This is another cause of corruption. Due to lack of job opportunities at will, there are many people who like to go for corruption mode to get
the job offer. They will be ready to pay lump some amounts for the job offer to the higher officials or politicians.
• 3. Lack of Strict and fast punishments: Even if some one is found guilty or even caught red-handed by the anti-corruption officials or media, the convicts get less
punishment.
• 4. Lack of ill fame: If a person is found to be corrupt or has done some unacceptable misconduct, he or she has to be avoided and not be respected. But in India those
with corruption and other offense related history are given prominent positions like the member of parliament or even higher posts. Instead of being disrespected
they are respected.
• 5. Lack of Unity in public: Public openly criticize corruption but interestingly there is no unity among the public to stop corruption.

• 6. Lack of transparency in affairs and deals: Many seat selection processes like in education, contracts for job, employee income reports (wealth possession), etc lack
transparency. For this purpose, there is a new act namely RTI : right to information, but the act is not strong enough to prevent malpractices.

• 7. Lack of Independent detective agency: India has no independent detective agency which can investigate with full power and freedom to expose the corrupt
individuals. The existing agencies like Central Bureau of investigation are named by The Supreme Court of India as a "caged parrot which indicates how free these
investigating agencies to work.

• Option of many political parties: In India anyone can establish a political party. So there are many political parties in India. If the political party wins, then the
members in it will desire to expand the party to all over the country. To do so, they need enough financial reserves. For this, once they come into power, they opt for
corrupt means to make the wealth needed to expand the party.
• Lack of enough powers to the judicial system and other independent organization.  Like the election commission cannot ban a politician from contesting in case they
make a mistake or do not comply with the rules during election campaign (like distributing money to people etc). Similarly, the judicial system has low options to
punish some one who is found to be criminal
• Lack of accountability: In government there is a big trend of corruption. This is because of lack of accountability. The employee’s on government offices do not
perform to their par excellence. 
• Encouragement of unhealthy competition: Competition in business is a good sign for quality of service to be delivered. But in India there is encouragement of
unhealthy competition.
 Indian black money in Switzerland
• India was ranked 37th by money held by its citizens in Swiss banks in 2004 but then improved its ranking by slipping to 61st position in 2015 and further improved its
position by slipping to 75th position in 2016.

• Some reports claim a total of US$1.06 – $1.4 trillions is held illegally in Switzerland. ... In March 2018, it was revealed that the amount of Indian black money currently
present in Swiss and other offshore banks is estimated to be ₹300 lakh crores or US$1.5 trillion.

• While some news reports claimed that data provided by the Swiss Banking Association Report (2006) showed India has more black money than the rest of the world
combined, a more recent report quoted the SBA's Head of International Communications as saying that no such official Swiss Banking Association statistics exist.

Domestic black money

• Indian companies are reportedly misusing public trusts for money laundering. India has no centralised repository – like the registrar of companies for corporates – of
information on public trusts.
• 2016 Evasion attempts after note ban
• Gold purchases: In Gujarat, Delhi and many other major cities, sales of gold increased on 9 November, with an increased 20 to 30% premium surging the price as much
as ₹45,000 (US$670) from the ruling price of ₹31,900 (US$470) per 10 grams (0.35 oz).
• Donations
• Authorities of Sri Jalakanteswarar temple at Vellore discovered cash worth ₹4.4 million (US$65,000) from the temple Hundi.
• Multiple bank transactions
• There have also been reports of people circumventing the restrictions imposed on exchange transactions and also attempting to convert black money into white by
making multiple transactions at different bank branches. People were also getting rid of large amounts of banned currency by sending people in groups to exchange
their money at banks.
 Anti-corruption laws in India
• Public servants in India can be penalised for corruption under the
• Indian Penal Code, 1860
• Prosecution section of Income Tax Act, 1961
• The Prevention of Corruption Act, 1988
• The Benami Transactions (Prohibition) Act, 1988 to prohibit benami transactions.
• Prevention of Money Laundering Act, 2002
• India is also a signatory to the United Nations Convention against Corruption since 2005 (ratified 2011). The Convention covers a wide range of acts of corruption and also
proposes certain preventive policies.
• The Lokpal and Lokayuktas Act, 2013 which came into force from 16 January 2014, seeks to provide for the establishment of the institution of  Lokpal to inquire into allegations of
corruption against certain public functionaries in India.
• Whistle Blowers Protection Act, 2011, which provides a mechanism to investigate alleged corruption and misuse of power by public servants and also protect anyone who
exposes alleged wrongdoing in government bodies, projects and offices, has received the assent of the  President of India on 9 May 2014, and (as of 2 August) is pending for
notification by the Central Government.

• At present there are no legal provisions to check graft in the private sector in India. Government has proposed amendments in existing acts and certain new bills for checking
corruption in private sector.

• Big-ticket corruption is mainly witnessed in the operations of large commercial or corporate entities. In order to prevent bribery on supply side, it is proposed that key managerial
personnel of companies' and also the company shall be held liable for offering bribes to gain undue benefits.
• Civic anti-corruption organisations
• A variety of organisations have been created in India to actively fight against corrupt government and business practices. Notable organisations include:
• [Bharat Swabhiman Trust],established by Ramdev, has campaigned against black money and corruption for a decade.
• 5th Pillar is most known for the creation of the zero rupee note, a valueless note designed to be given to corrupt officials when they request bribes.
• India Against Corruption was a popular movement active during 2011-12 that received much media attention. Among its prominent public faces were  Arvind Kejriwal, Kiran Bedi
 and Anna Hazare. Kejriwal went on to form the Aam Aadmi Party and Hazare established Jan Tantra Morcha.
• Jaago Re! One Billion Votes was an organisation founded by Tata Tea and Janaagraha to increase youth voter registration. They have since expanded their work to include other
social issues, including corruption.
• Association for Social Transparency, Rights and Action (ASTRA) is an NGO focused on grass-roots work to fight corruption in Karnataka.
• The Lok Satta Movement, has transformed itself from a civil organisation to a full-fledged political party, the Lok Satta Party. The party has fielded candidates in Andhra Pradesh,
Tamil Nadu, and Bangalore. In 2009, it obtained its first elected post, when Jayaprakash Narayan won the election for the Kukatpally Assembly Constituency in Andhra Pradesh.
 5th Pillar
Spreading awareness: 5th Pillar’s Vijay Anand with the
zero-rupee notes. He urges people to fight corruption by
offering the notes, which contain the promise to neither
accept nor pay a bribe, to government officials.

A zero rupee note is a banknote imitation issued in India as a means of helping to fight systemic political corruption (with a
written pledge not to pay or accept bribes). The notes are "paid" in protest by angry citizens to government functionaries who
solicit bribes in return for services which are supposed to be free. Zero rupee notes, which are made to resemble the regular
50 rupee banknote of India, are the creation of a non-governmental organization known as 5th Pillar which has, since their
inception in 2007, distributed over 2.5 million notes as of August 2014. The notes remain in current use and thousands of
notes are distributed every month

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 GLOBAL YOUTH ANTI-CORRUPTION ACT

• Youth groups from around the world have joined together to fight corruption in their countries. Members share experiences, ideas and resources via an online social network, video
conferencing and face-to-face events.

• GYAC also works with musicians to create global songs against corruption and supports journalists in their fight for greater transparency and accountability.
“YOUNG PEOPLE ACT AGAINST CORRUPTION”
• 50 volunteers or so – National Center for Transparency and Human Rights and Youth Peer Educators (Y-PEER Moldova) – shopping mall “MOLDOVA” – show for Zero tolerance to
corruption – distributed bracelets “NO TO BRIBE” –visitors in the shopping mall
• Border police –Chisinau International Airport & Tudor – border checkpoints
• Students provided information about the penalties for bribing officials and the procedures to be followed for reporting corrupt practices
 UNFAIR TRADE PRACTICES

• An unfair trade practice consists of using various deceptive, fraudulent or unethical methods to obtain business.
• Unfair trade practices include misrepresentation, false advertising, tied selling and other acts that are declared unlawful by statute.
• Dumping
– selling a product in a foreign country at a price that is lower than the price charged by the same firm in its home market or at a price below costs of production.
• Export Subsidies
– using taxpayers’ money to give low-interest loans to either exporters or their foreign customers or make direct payments to exporters.

Types of Dumping. . .
• Sporadic Dumping;
• Predatory Dumping;
• Seasonal Dumping;
• Persistent Dumping.

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 Export Subsidies. . .

An export subsidy is a direct (or indirect) payment from a country’s government to one or more of its export industries. This payment is usually related to the level of exports, and thereby enables exporters to charge a price that is
lower than would otherwise be charged. With lower prices, exporters are then able to gain a larger share of the world market.
In the U.S., there are a few institutions of the federal government that aid the efforts of U.S. exporters.
The Export-Import Bank, Eximbank, was established in 1945 as an independent government agency. The role of Eximbank is to provide export financing for U.S. firms that is competitive with that available in the major industrial
countries. The Eximbank offers several different programs to meet the financing needs of U.S. exporters and foreign importers. For large purchases requiring a long period of repayment, direct loans are made to foreign importers.
UNFAIR TRADE PRACTICES IN PRODUCTION
• Food –oil/taste enhancers –safety tests (???)

• Fruit pulp manufacturing –chemicals may be added

• Improper environment
Now lets talk about INDIA…
How unfair trade practice in India?
An unfair trade practice means a trade practice, which, for the purpose of promoting any sale, use or supply of any goods or services, adopts unfair method, or unfair or deceptive practice. Unfair practices may be categorised as under:
1. False Representation
2. False offer of bargain price
3. Free gifts offer and prize schemes
4. Non-compliance of prescribed standards
5. Hoarding, destruction, etc.
FALSE REPRESENTATION. . .
The practice of making any oral or written statement or representation which:
 Falsely suggests that the goods are of a particular standard quality, quantity, grade, composition, style or model
 Falsely suggests that the services are of a particular standard, quantity or grade;
 Falsely suggests any re-built, second-hand renovated, reconditioned or old goods as new goods;
 Represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits which they do not have;
 Represents that the seller or the supplier has a sponsorship or approval or affiliation which he does not have;
 Makes a false or misleading representation concerning the need for, or the usefulness of, any goods or services;
 Gives any warranty or guarantee of the performance, efficacy or length of life of the goods, that is not based on an adequate or proper test;
 Makes to the public a representation in the form that purports to be-
a warranty or guarantee of the goods or services,
 a promise to replace, maintain or repair the goods until it has achieved a specified result,
 if such representation is materially misleading or there is no reasonable prospect that such warranty, guarantee or promise will be fulfilled
 Materially misleads about the prices at which such goods or services are available in the market; or
 Gives false or misleading facts disparaging the goods, services or trade of another person.
 FALSE OFFER OF BARGAIN PRICE. . .

Where an advertisement is published in a newspaper or otherwise, whereby goods or services are offered at a bargain price when in fact there is no intention that the same may be offered at that
price, for a reasonable period or reasonable quantity, it shall amount to an unfair trade practice.
The ‘bargain price’, for this purpose means-
• the price stated in the advertisement in such manner as suggests that it is lesser than the ordinary price, or
• the price which any person coming across the advertisement would believe to be better than the price at which such goods are ordinarily sold.

But in reality they are providing us with the same

thing, in its actual price which that product holds.
FREE GIFTS OFFER AND PRIZE SCHEMES. . .
The unfair trade practices under this category are:
• Offering any gifts, prizes or other items along with the goods when the real intention is different, or
• Creating impression that something is being offered free alongwith the goods, when in fact the price is wholly or partly covered by the price of the article sold, or
• Offering some prizes to the buyers by the conduct of any contest, lottery or game of chance or skill, with real intention to promote sales or business.
NON-COMPLIANCE OF PRESCRIBED STANDARDS. . .
Any sale or supply of goods, for use by consumers, knowing or having reason to believe that the goods do not comply with the standards prescribed by some competent authority, in relation to their
performance, composition, contents, design, construction, finishing or packing, as are necessary to prevent or reduce the risk of injury to the person using such goods, shall amount to an unfair trade
practice.
HOARDING, DESTRUCTION, ETC. . .
Any practice that permits the hoarding or destruction of goods, or refusal to sell the goods or provide any services, with an intention to raise the cost of those or other similar goods or services, shall
be an unfair trade practice.
INQUIRY INTO UNFAIR TRADE PRACTICES. . .
The Commission may inquire into
Any unfair trade practice
• Upon receiving a complaint from any trade association, consumer or a registered consumer association, or
• Upon reference made to it by the Central Government or State Government
• Upon an application to it by the Director General or
• Upon its own knowledge or information.
RELIEF AVAILABLE. . .
After making an inquiry into the unfair trade practice if the Commission is of the opinion that the practice is prejudicial to the pubic interest, or to the interest of any consumer it may direct that -
• The practice shall be discontinued or shall not be repeated;
• The agreement relating thereto shall be void in respect of such unfair trade practice or shall stand modified.
 RELIEF AVAILABLE. . .(continued)

• Any information, statement or advertisement relating to such unfair trade practice shall be disclosed, issued or published as may be specified
• The Commission may permit the party to carry on any trade practice to take steps to ensure that it is no longer prejudicial to the public interest or to the interest of the consumer.
However no order shall be made in respect a trade practice which is expressly authorised by any law in force.
The Commission is empowered to direct publication of corrective advertisement and disclosure of additional information while passing orders relating to unfair trade practices.
Street food is a hit with Delhiites, who often ignore unhygienic conditions to grab their favourite snack. (Picture for representation only.)
Unfair trade practices in marketing and advertisement
• False advertisements -fairness cream; shampoo and dandruff.

• Date of manufacture and the date of expiry

• Locally manufactured cough syrups –prescribed by unethical doctors – spurious medicines.

Unfair trade practices in Professionals
• Medical education – capitation fees –production of doctors without the necessary skill sets vs unscruplous doctors –prescribing unwanted tests, starting their own pharmacy and
scan centers.

• We are in the business of education, where education is a business –flow of foreign capital/privatization of colleges and Universities –ethical vs unethical activities.

• Auditors –should not help clients in falsification of accounts; lawyers –fighting a case for a known criminal; teacher (teaching compassion, honesty, integrity and patience)
 FALSE OFFER OF THE BARGAIN PRICE

FREE GIFT OFFER

CAVIN KARE OWNER – CK RANGANATHAN – if you bring 5 shampoo sachets – one chik shampoo free –then the rules were changed – 5 CHIK
SHAMPOO SACHETS – ONE CHIK SHAMPOO FREE.

Sometimes –unscrupulous businessman –hike up the prize of the original product so that the price of the gift is also taken care off.

Offer prizes -Contest, lottery or a game of skill –lure the customer.

Non-compliance of Prescribed Standards

Exploitation of Labor
Wages to be paid as per the existing norms

Bonded labour a no-no (restaurants and small business establishments)

FOOD SAFETY AND STANDARDS ACT

 FOOD SAFETY AND STANDARDS ACT

Hoarding–artificial scarcity
VOLUNTARY STANDARDS
BUREAU OF INDIAN STANDARDS –

standardization of processed foods and standardization of raw agricultural produce is under the purview
of the Directorate of Marketing and Inspection.
MANAGEMENT SYSTEMS FOR QUALITY AND FOOD SAFETY
Consumer Protection Act -1986 – enacted in 1986 to protect interests of consumers in India.
Provides for the establishment of consumer councils –settlement of disputes
 CONSUMER COURT
Govt. set up for grievance redressal.
Protect consumer rights – adequate proof required

GLOBALISATION IN INDIA 2ND PIC.

 Globalization in India

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 Spin-offs
• lesser regulations for the private player

• they need to act responsibly –reliability (delivery on time) and quality (competition by foreign investors)

• doctors should be ethical (telemedicine)

• education (encourages competition (off campus centers for International Universities) vs need to monitor and curb unethical practices) –need to be
transparent – internet revolution. [wake-up call for teachers – due to the accessibility of updated information –need for the teacher to update himself/herself
–delivery style may bring more students to listen to the lectures (challenging experiments –dexterity)
• BOTTOM-LINE
• KEEPING THE STAKE HOLDERS HAPPY

• MANUFACTURING SECTOR; SERVICE SECTOR (EDUCATION, HEALTH)

 What is Volkswagen accused of?

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 White-Collar Crime
White-collar crime refers to financially motivated, nonviolent crime committed by businesses and government professionals.
Introduction
People who wear white collars to work steal and kill, but they use guilt and deceit.
More money is stolen and more people die every year as the result of scam and willful illegal corporate activity than as a result of the activities of street criminals.

White Collar Crime

General sense:
A variety of offences committed by powerful people or organizations
Offences are enabled by legitimate activities
Specific Sense
Offences carried out by individual people in the course of their employment, often against
employers
 WHITE COLLAR CRIMES

What is a white collar crime?

• There are various categories in jobs
• Mainly white collar, blue collar, pink collar,etc.
• The term "white-collar worker" was coined in the 1930s by Upton Sinclair, an American writer who referenced the word in connection to clerical, administrative and managerial functions during the 1930s.[2] A
"white-collar worker" is a salaried professional, typically referring to general office workers and management.
What is it About…..
 Reportedly coined in 1939, the term white-collar crime is now synonymous with the full range of frauds committed by business and government professionals. These crimes are characterized by deceit,
concealment, or violation of trust and are not dependent on the application or threat of physical force or violence. The motivation behind these crimes is financial—to obtain or avoid losing money, property, or
services or to secure a personal or business advantage. 
 These are not victimless crimes. A single scam can destroy a company, devastate families by wiping out their life savings, or cost investors crores of rupees(or even all three).
The Concept of White-Collar Crime
The U.S. Congress defined white-collar crime as an illegal act or series of illegal acts committed by non-physical means and by concealment or guile, to obtain money or property, or to obtain business or personal
advantage.
The term white-collar crime was coined in the 1930’s by Edwin Sutherland who defined it as crime committed by a person of respectability and high social status in the course of his occupation.
What happens in these
• Bribery
• Forgery
• Money Laundering
• Blackmail
• Counterfeiting
• Racketeering
• Embezzlement
Types of White Collar Crime
• Individual offences
– Against employer
• Theft, fraud
– Against customer
• Overcharging, fraud, identity theft, various “e-crimes”
– Against employee
• Theft, embezzlement
– Against other companies
• Insurance fraud
– Against the State
• Tax evasion, benefit fraud
 Why does it happen..???
• Greed!!!!!!!
• Some out of desperation
• forced to do it by order of others
• People think government regulations are not good and beneficial

Money Laundering..
• Money laundering is the illegal action of obtaining illegally acquired money(also called dirty money)
• It is done through a sequence of transactions to make it seem as if it was made my the company legally.

Purpose..
 Money laundering allows criminals to hide and accumulate wealth, avoid prosecution, evade taxes, increase profits
through reinvestment, and fund further criminal activity.
 And it’s a significant crime--money laundering can undermine the integrity and stability of financial institutions and
systems, discourage foreign investment, and distort international capital flows.
Money laundering is usually associated with crimes that provide a financial gain, and criminals who engage in money
laundering derive their proceeds in many ways. Some of their crimes include:
 Complex financial crimes
 Health care fraud
 Human trafficking
 International and domestic public corruption
 Narcotics trafficking
 Terrorism

• The number and variety of methods used by criminals to launder money makes it difficult to provide a complete listing,
but here are a few of the ways through which criminals launder their illicit proceeds:
 Financial institutions
 International trade
 Precious medals
 Real estate
 Third party service providers
 Virtual currency
How it happens..
 Occupational Crime
Occupational crime: Crime committed by individuals in the course of their employment.
Professional occupational crime: Crimes committed by professionals such as physicians and lawyers in the course of their practices.
It seems that every occupational category generates a considerable number of criminals and the higher the prestige of the occupation, the more their criminal activities cost the general public.
Corporate Crime
Corporate crime: Criminal activity on behalf of a business organization.
Crimes of fraud, concealment, and misrepresentation continue to victimize all sorts of groups and individuals in society.
• Illegal actions, or omissions, resulting from deliberate decision making, or culpable negligence on the part of a company
• Organizational Goals central to understanding corporate crime
• Indifference to outcome of action often contributes
Variety of corporate crime
• Against consumers
–Mis-selling: providing goods and services
–counterfeiting, dangerous goods
• Health and safety offences
–Employee, consumer and environment
• Financial Fraud
Other Harms
• Health Care
–negligence, injuries and deaths, drug reactions and interactions
• Chemical Warfare
–pollution, toxic wastes, smoking, food additives, pesticides

• Consumer Safety
–Defective Product
(TAX avoidance)
• is the legal utilization of the tax law to one's own advantage
–to reduce the amount of tax that is payable by means that are within the law
–Hiring a Tax Accountant is a strategy that many people use to reduce the expense of
•personal income taxes and
•business income taxes
(Tax evasion)
• Tax evasion is knowingly and purposely not paying taxes to the government or attempting hide taxable money.
• Many celebrities have been charged with tax evasion simply because their accountants didn't know what they were doing.
• An illegal practice where a person, organization or corporation intentionally avoids paying his/her/its true tax liability.  
• The process whereby a person, through commission of Fraud, unlawfully pays less tax than the law mandates
TAX EVASION IN INDIA
• In India, most of the persons do not pay their taxes.
• They try to avoid this by some illegal means or by taking the benefit of some loopholes in the Indian tax system.
• The amount which would have been used for economic and social development is used for anti social activities. All this creates black money and social evils in the society.
• Tax evasion is not a problem in development of country but also harmful for the country.
• The level of Evasion Tax also depends on the chartered accountants and tax lawyers who help companies, firms, and individuals evade paying taxes.
• Tax Evasion is a crime in all major countries and the guilty parties are subjected to imprisonment and fines.
 Number of tax payers in India
• According to the report released by Indian Finance Ministry, estimated number of taxpayers for financial year 2011-12 stands at just 3.24 crore people.
• That means, less than 3 people in 100 pay taxes .
• Out of these 3.25 crore people, 89 per cent pay taxes in the tax slab of 0 – 5 Lakh rupees, while on the other end of spectrum, only 1.3% of all tax payers have income about 20 Lakh.
Why is tax evasion so large in India?
• The most important question is the reason behind so much tax evasion in India.
• If we look at the rates of successful developing countries it would have at once discovered why their tax evasion is negligible and the revenue collected by them is two to three times more than India’s.
INTERNATIONAL COMPARISION
• Hong Kong has the most ideal tax system in the world.
• For individuals its exemption limit is about Rs 14 lakh, starting rate is 2% and maximum rate is 20%.
• Companies are taxed at 15%. The city is also almost totally free of the evils like litigation, bribery and accumulation of tax arrears.
• Singapore has exemption limit of Rs 5 lakh, starting rate of 4% and applies its maximum rate of 22% to income above the equivalent of Rs one crore.
• Russia taxes entire individual income at the single rate of 13%.
Causes for tax evasion:
• High tax rate – A study says that about 83% tax evasion in India is due to high rate of taxation.
• Complex tax system – about 63% of tax evasion is because of complex tax system in India..
• Multiplicity of tax 
• Administration inefficiency
• Corruption in public sector units,
Effects of tax evasion:
• Most of the respondent are agreed on the opinion that tax evasion has been causing reduction in country’s economic growth as an enormous volume of income is diverted to this unaccounted sector resulting in growing continuation of
parallel economy of the country. However, the direct effect of tax evasion is the loss of revenue, increase in inflation.
• Tax evasion has resulted in the diversion of resources for the purchase of real estate and luxury housing.
• Moreover, Black money has resulted in transfer of funds from India to foreign countries through clandestine channels which decrease country’s reputation globally.
Measures:
• The reduction in tax rates,
• Simplifications of tax laws,
• Removing loopholes in the tax system
• Proper processing of information available the under the annual information return
• Need for creating transparent, friendlier and less discriminatory administrative system
• Need to educate the people about Indian Tax law and create such an environment in which they pay their due taxes, do not evade the tax and
• Making people feel proud in discharging their duty to pay the taxes.
• Apart from these, there are some other measures suggested to over come the problem relating to tax evasion in India.
• Disentitling tax evaders/defaulters to avail of the facility of payment of taxes in the instalments and getting credit facilities from banks.
• Streamlining procedure for speedy determination of tax disputes. Special courts for this need to be set up.
• Paying special attention towards training for detection of tax frauds, evasion and black money generation, including deputation of IT officers to other countries for training to tackle cross border tax evasion.
• Providing adequate security to tax officials, conducting search and surveys.
• Improving morale of the tax department officials by providing them adequate infrastructure and other facilities, by recognition of their merit and giving hem the place that they deserve in the overall government set up.
 Difference Between Tax Avoidance and Tax Evasion
BASIS FOR COMPARISON TAX AVOIDANCE TAX EVASION
Meaning Minimization of tax liability, by taking such means which Reducing tax liability by using illegal ways is known
do not violate the tax rules, is Tax Avoidance. as Tax Evasion.

What is it? Hedging of tax Concealment of tax

Attributes Immoral in nature, which involves bending the law Illegal and objectionable, both in script and moral.
without breaking it.

Concept Taking unfair advantage of the shortcomings in the tax Deliberate manipulations in accounts resulting in
laws. fraud.
Legal implication Use of Justified means Use of such means that are forbidden by law

Happened when Before the occurrence of tax liability. After tax liability arises.

Type of act Legal Criminal

Consequences Deferment of tax liability Penalty or imprisonment

Objective To reduce tax liability by applying the script of law. To reduce tax liability by exercising unfair means.
Key Differences Between Tax Avoidance and Tax Evasion

A planning made to reduce the tax burden without infringement of the legislature is known as Tax Avoidance. An unlawful
act, done to avoid tax payment is known as Tax Evasion.
Tax avoidance refers to hedging of tax, but tax evasion implies the suppression of tax.
Tax avoidance is immoral that tends to bend the law without causing any damage to it. Unlike tax evasion, which is illegal
and objectionable both accordTaing to law and morality.
Tax avoidance aims at minimising the tax burden by applying the script of law. However, tax evasion minimises the tax
liability by exercising unfair means.
Tax Avoidance involves taking benefit of the loopholes in the law. Conversely, Tax Evasion includes the deliberate
concealment of material facts.
The arrangement for tax avoidance is made prior to the occurrence of tax liability. Unlike Tax Evasion, where the
arrangements for it, are made after the occurrence of the tax liability.
Tax avoidance is completely legal however Tax Evasion is a criminal activity.
The result of tax avoidance is the postponement of tax, whereas the consequence of tax evasion if the assessee is found
guilty of doing so, is either imprisonment or penalty or both.