Two recent reports released by a UN agency show that corporate corruption in India is no longer confined to isolated cases of unethical business practices but has become pervasive since the liberalisation of economy. The UN agency has also noted that though India has a number of laws to prevent and investigate corruption, there is no specific legislation to address the issue of corruption in the private sector. India has ratified the United Nations Convention against Corruption in 2011 to take the heat off its government battling serious corruption charges, as it did not wish to be seen unwilling to crack down on black money stashed away abroad.
However, the government has been less than eager to undertake follow-up action on the ground. This must change. The Indian Penal Code must be amended to include bribery within private sector a punishable offence. The Companies Bill 2012 that seeks to criminalise a number of offences and the Prevention of Bribery of Foreign Public Officials and Public International Organisations Bill 2011 should be brought on the statute book. The Serious Fraud Investigation Office (SFIO), which currently works under the ministry of corporate affairs, should be given a statutory status as recommended by the Naresh Chandra Committee, so that it can secure court approvals to interrogate suspects and carry out searches.
The captains of Indian industry, however, need not wait till the government acts, but take effective measures for self-correction on their own. Their silence on recent exposures of corporate corruption, from Satyam to Ranbaxy, is somewhat disquieting. To restore its own credibility, Indian industry and business must voluntarily adopt higher levels of transparency. Some have already signed up to World Economic Forum’s “Partnership against Corruption Initiative”. Industry bodies must encourage others to follow their example. Opposition to big business from communities is already a huge hurdle for growth in India and the civil society will not allow easy access to natural resources unless it trusts industry.