http://www.business-standard.com/article/companies/corruption-in-india-is-masked-by-the-high-rate-of-growth-says-ratan-tata-113010900116_1.html
Ratan Tata, the former Chairman of Tata Group, feels that India is facing corruption at all levels. People are frustrated at this, however, no body is outraged. This is because India still has high GDP growth rate.
People should realize that developing countries, moving towards industrialization, do have higher growth rates than developed nations. In fact, India could grow at a much higher rate if corruption were absent from the society.
Ratan Tata, the former Chairman of Tata Group, feels that India is facing corruption at all levels. People are frustrated at this, however, no body is outraged. This is because India still has high GDP growth rate.
People should realize that developing countries, moving towards industrialization, do have higher growth rates than developed nations. In fact, India could grow at a much higher rate if corruption were absent from the society.
6 comments:
Corruption certainly hinders economic growth. But how much corruption is actually going on in India? I was curious so I looked it up. In 2010, CK Prahalad, distinguished University Professor of Corporate Strategy at the Stephen M. Ross School of Business in the University of Michigan, estimated the annual cost of corruption to be $55 billion or 5% of GDP. To Karn’s point, growth is good, but imagine the growth without (or even limited) corruption.
Ideally, growth without corruption would be even better than one with and India should try to eliminate its current corruption problems similar to how China is beginning its attempts to do so. However, it is extremely difficult to eliminate corruption. Another issue with some developing nations is that there is a belief that although it is immoral to be corrupt, if you are not corrupt, then you may not become successful. I think that countries like India and China may continue to struggle with corruption problems for some more time as they continue to display high growth, which as the article mentions, masks the corruption. Furthermore, there are also estimates that a large percentage of economic transactions in India are performed underground which excludes them from GDP calculations which could actually be underestimating GDP growth.
I agree that corruption defiantly hurting India's growth, and that it is something that is not easy to eliminate. People will always act in a way that benefits them. As long as there are more benefits than costs that come out of corruption, people will do what they can to get ahead. Also I think we can't just point our fingers at developing countries for corruption, and ignore instances of corruption or lack of efficiency in the developed nations.
I'm from another developing country so I basically grew up witnessing and gradually accepting corruption. Back where I'm from, bribery is not only frowned upon but also popularly accepted as it helps people get things done faster. I used to drive without having a license so whenever I got pulled over, I had no choice but to bribe the cops. But even if you are not doing anything wrong, they will always find a way to get you in trouble because bribery is their main source of income. This is sad I know and it does hinder economic growth as Chris said. I just hope this will one day be abolished for good.
The corruption in India has a lot to do with the rich not paying taxes. As it is no shocker, most of the politicians are rich people. Even with Fiscal Responsibility Acts which were passed in 2003, the politicians did not bind to the rules and regulations. In my opinion if you have to eliminate corruption, it should be started on a governmental level.
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