India Country Profile

Licences, Infrastructure and Public Utilities

Individual Corruption

Transparency International India & CMS 2007 together with the Transparency International Global Corruption Report 2008 reveal that citizens are often exposed to corruption when interacting with public agencies responsible for the provision of electricity and water. A majority of users perceive the Electricity Department and the Water Supply Department to be corrupt, and almost half the responding households believe that corruption is on the rise within these departments. Simple services, such as connecting to the water system or paying electricity bills, are ranked as the most common services for which bribes are paid. Nevertheless, there is a significant difference between perceptions and experience with corruption in these areas.

Business Corruption

Companies report that the administrative procedures surrounding the provision of public supplies, such as water and electricity, are generally cumbersome. As in the case of ordinary citizens, companies should prepare themselves for these administrative procedures that are often followed by demands for facilitation payments. This is confirmed by the World Bank & IFC Enterprise Surveys 2006, in which a high number of companies report that they expect to give gifts in return for access to a range of public utilities, licences and permits (see Frequency).

Political Corruption

According to the US Department of State 2009, public procurement regarding telecommunication and power has been particularly subjected to allegations of corruption over the past 8 years, and several government employees and public figures have been indicted or convicted.

Corruption in large infrastructure projects is considered to be a major problem in India. Bribery of high level officials and intimidation of potential bidders are common methods of obtaining contracts within the Indian construction industry. Subcontracting to small contractors who do not have the capability to execute major infrastructure projects is common, thus lowering the quality of public works.

According to an article by Indiainfo, in 2008, N. Chandrababu Naidu, leader of the opposition in the Andhra Pradesh assembly, charged the Congress Party government in the state for being 'neck-deep in corruption'. He alleged that Chief Minister Y.S. Rajasekhara Reddy and his cabinet colleagues were involved in the misappropriation of billions of INR under a massive irrigation programme launched by the government. Naidu claimed that the ministers had become subcontractors to get contracts worth INR 400 billion for the irrigation projects. None of the ministers charged have been prosecuted.

Frequency

The World Bank & IFC: Doing Business 2010:
- Building a warehouse in India requires a company to go through 37 administrative steps, which take an average of 195 days at a cost nearly of 2395% of per capita income.

- Starting a company requires the entrepreneur to go through 13 procedures, taking 30 days and costing 66% of income per capita.

- It takes an average of 7 years to close a business at a cost of 9% of the estate.

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give government administrative requirements (permits, regulations, reporting) in India a score of 2.9 on a 7-point scale (1 being 'extremely burdensome' and 7 'not burdensome at all').

Transparency International: Global Corruption Barometer 2009:
- Respondent citizens give public officials and civil servants a score of 3.7 on a 5-point scale (1 being 'not at all corrupt' and 5 'extremely corrupt').

- 27% of households who had contact with registry and permit services in 2008 report to have paid a bribe.

- Only 4% of households who had to obtain public utilities in 2008 report to have paid a bribe.

Transparency International: Bribe Payers Index 2008:
- Business executives give the registry and permit services a score of 3.7 on a 5-point scale (1 being 'not at all corrupt' and 5 'extremely corrupt').

The World Bank & IFC: Enterprise Surveys 2006:
- 67% of the surveyed companies report that they expect to give gifts in order to obtain a construction permit.

- 52.5% of the surveyed companies report that they expect to give gifts in order to obtain an operating licence.

- 20% of the surveyed companies report that they expect to give gifts in order to get a phone connection.

- 39.5% of the surveyed companies report that they expect to give gifts to obtain an electrical connection.

- 26.5% of the surveyed companies report that they expect to give gifts in order to arrange a water connection.