Indian Companies Most Corrupt while Doing Business Abroad: Report
Corruption and bribery
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In the recent years, the “Made in India” phrase may have gained substantial momentum but the practices remain one of the most abominable in terms of global best practices approach. There has been significant exposure of Indian companies in global market in recent days but that is not a sign of any improvement in corporate practices, according to Transparency International's Global Corruption Report 2009. “A minimum of 100 senior executives each in 26 countries were questioned regarding the practices used by business persons from various nations,” it says. If the report is anything to go by, the Indian businessmen, although take pride in their success, are the most corrupt in their practices when it comes to play fair in conducting the businesses.
According to the report, corrupt practices constitute a major part of destructive force which is responsible for undermining fair competition. The corrupt practices also stifle economic growth and ultimately result in harming the business itself. Although the report is based on consensus of businessmen from around the world, there is hardly any disagreement to the fact that Indian businessmen are corrupt and ready to go to any length for achieving success. At least 30 per cent of 2,742 business executives surveyed across the world regard Indians among the most corrupt when doing business abroad to “speed things up”.
It is a well known fact that bribery is a common norm in India, not only in business but in every task that has even a little touch of bureaucracy. This report is only an addition to many reports and beliefs that term India a corrupt nation. It is to be noted that The Competition Act enacted in 2002 which promotes and sustains competition in markets and protects the interest of consumers has remained a non-starter in India, as per the report. Importantly, way back in 1988, the Confederation of Indian Industries (CII) put forward a voluntary governance code based on international best practices to help enhance governance, has not gained any importance among the Indian businessmen yet. The code of conduct forwarded by the CII were based on various constituents of best practices, such as independence for boards, the certification of key results and processes by key executives, audit committees with greater independence and financial expertise, and enhanced disclosure. It is found that only a handful of companies adopted the measures, resulting in widespread corrupt policies among Indian corporate.
The ultimate sufferers, due to these corrupt practices, are the common customers. It is believed that half of international business executives polled estimated that corruption raised project costs by at least 10 per cent. According to a spokesman of the NGO that published the report, "Ultimately it is citizens who pay: consumers around the world were overcharged around US $300 billion through almost 300 private international cartels discovered from 1990 to 2005".
The report is an eye opener of the various types of corrupt practices that are prevalent in Indian business houses. The report cites the example of the “sick” Stock Market policies, too. The report says that fraud and cheating behavior is omnipresent, including the stock markets in India. According to the report, the stock market fraud by brokers in collusion with corporations that aim to cheat investors and circumvent the regulator, the Securities and Exchange Board of India (SEBI) is a matter of concern. Though the SEBI has laws to punish the corrupt businesses through monetary fines, the report adds, the serious financial crimes can be exempted on a payment of mere 2,000 dollars. It is no magic then that many frauds are strolling in the stock markets to cheat investors and attain undue advantage in terms of financial practices.
It is a serious condition for the Indian businesses. The recent recession has clearly showed that businesses that are irresponsible and are not governed by strict management policies are prone to extinction. The Indian business houses should learn from the clear signs of the trend and adhere to global best practices if they wish to stay attractive in the long run. Also, the businesses should cite an example of transparency and non-corrupt attitude to the bureaucrats of India. After all, the businesses cannot harm themselves by wearing the same shoes as that of the bureaucrats.