Corruption threatens to affect India's growth, survey says

Mar 15, 2011, 11:37 GMT

New Delhi - Large-scale corruption could derail India's impressive economic growth, researchers said Tuesday.

The survey released by consultancy firm KPMG said foreign investment inflows could also be affected if corruption was not controlled.

As many as 100 top domestic and foreign chief executives were questioned for the report, said KPMG executive Deepankar Sanwalka, who prepared it.

'Corruption poses a risk to India's projected 9-per-cent gross domestic product growth and may result in a volatile political and economic environment,' the survey released late Monday said.

'It is not about petty bribes (bakshish) anymore, but scams to the tune of thousands of crores (billions of rupees) that highlight a political/industry nexus, which if not checked, could have a far-reaching impact,' it said.

Prime Minister Manmohan Singh's government has faced public anger for a series of huge government corruption scandals, which include a multibillion dollar telecoms affair and financial irregularities in the hosting of the Commonwealth Games.

Earlier this month, the chief of the country's anti-corruption watchdog was forced to resign by the Supreme Court since he himself faced corruption charges.

'Public furore over recent scams, extensive media coverage and outcry indicate that as a nation we are starting to realize that eradicating corruption must be one of the priorities, if we are to attain sustainable growth,' the report said.

The report cited recent research by the US-based research and advocacy organization Global Financial Integrity that said India has lost 462 billion dollars to illicit financial flows, much of it through corruption and tax evasion, since its independence in 1947.

Past surveys have also concluded that graft could limit India's growth which have forced the country's business leaders to appeal to Singh to deal urgently with rising corruption.

The developments have worried Singh, seen as an honest politician presiding over a corrupt administration, who has admitted that graft could mar India's international image.