Individual Corruption

According to Transparency International India & CMS 2007, the Land Records and Registration Department is one of the most corrupt public services in India. Obtaining an income certificate, obtaining land record, sale/purchase deed, mutation, land survey, caste certificate and property tax are services that are frequently accompanied by demands for bribes. Furthermore, Transparency International Global Corruption Barometer 2010 reveals that more than three out of five responding households reported to have paid a bribe to land services in 2009.

Business Corruption

Companies should note that it is the lack of flexibility in the Indian system of land transfer and the many encounters with public officials that opens the way for them to demand bribes. According to the US Department of State 2011, the legal system places a number of restrictions on transfer of land with unclear titles, which complicates any land transaction. Critics point to the absence of a reliable system for recording secured interest in property, which makes it difficult to use property as collateral. This lack of transparent and consistent regulation creates wide discretionary powers for public officials.

According to KPMG’s Survey on Bribery and Corruption 2011, the real estate and construction sector is viewed by the surveyed business respondents as most prone to corruption. The report also lists some key factors contributing to corruption in the real estate and construction industry, amongst others, paying bribes to obtain routine administrative approvals and to cover up inconsistencies in quality of work and documentation.

Political Corruption

According to several 2008 and 2009 articles by Express India and Thaindian News, in 2003, the Central Bureau of Investigation (CBI) opened a case against former Uttar Pradesh Chief Minister Mayawati, the environment minister and four other senior officials for diverting a river and reclaiming land for the construction of shopping malls, shops and amusement facilities near the Taj Mahal complex. The state government had granted land to Jaypee Industries free of cost to construct an eight-lane expressway linking Agra to New Delhi. The state government waived a stamp duty worth around INR 500 million and also gave the contractor exclusive rights to construct commercial hubs and five-star hotels along the expressway. The ministers and senior officials indicted had not obtained planning consent. Moreover, they had released more than INR 17 million without sanction and had ignored other procedures. It was reported that some INR 175 million disappeared during the so-called Taj Heritage Corridor scam. After investigation, the case was recommended for prosecution.

After the election of May 2007, Mayawati returned to office as Chief Minister in Uttar Pradesh. On 3 June 2007, the Governor of Uttar Pradesh, the competent authority in this situation, refused to grant sanction to the CBI to prosecute her in the Taj case, claiming that there was a lack of evidence, which subsequently sparked public interest litigation (PIL). Thereafter, Mayawati appealed to the Supreme Court against the PIL, pleading to have the corruption case against her scrapped on the charge that the case is politically motivated and illegal. However, The Hindu reports that the Supreme Court had rejected her plea against the PIL in November 2009, thus paving the way for the CBI to prosecute her. The case was still ongoing, as of October 2011, according to Hindustan Times.

Frequency

The World Bank & IFC: Doing Business 2012:
- Registering property in India requires a company to go through an average of 5 administrative procedures, which takes an average of 44 days and costs 7.3% of the property value.

World Economic Forum: The Global Competitiveness Report 2011-2012:
- Business executives give the protection of property rights in India, including financial assets, a score of 4.3 on a 7-point scale (1 'very weak' and 7 'very strong').

KPMG: Survey on Bribery and Corruption 2011:
- 32% of the surveyed business respondents perceive the real estate and construction to be the most corrupt sector in India.

Transparency International: Global Corruption Barometer 2010:
- 62.5% of the households surveyed reported to have paid a bribe to land services in 2009.

Transparency International India & CMS: India Corruption Study with Focus on Below Poverty Line Households 2007:
- 36% of the households availing the services of the land records/registration during the previous year report having paid bribes - the second highest figure among the institutions surveyed (9.7% used a contact and 4% did not take the service because they were asked for a bribe).

- 69% of the households surveyed perceived the land records/registration to be corrupt.

- 82% of the bribes are paid directly to the land records/registration officials, while 17% of the bribes are paid through a middleman, as reported by the surveyed households.

- It is estimated that a total of INR 1.24 billion is paid bribes per year to the land records/registration.