What is the issue of Corruption in India? What are the Anti-Corruption laws available?

By Neha Choudhary


The development of any country is the basic requirement for the actual growth of the country. For a nation to be developed, it needs to be economically, socially, technologically, or politically substantial. The advancement of any nation would be at a stake when any of these detriments are hindered by external causes and influence the enhancement of the country.

The most significant reason for the improvement of the country is the country’s stable and secured financial position i.e. a nation shall not have an economically weaker position among others.

For a reliable economic background of any country, it is paramount to administer capital formation, natural or human resources, surplus rates, foreign trade policies, political freedom and must be free from corruption.

Corruption being a social evil, is a major hindrance for the country’s economic development as it reduces domestic investment, discourages FDI, inflation rates, influence the basic sectors i.e. education, health, or infrastructure.

This article helps in understanding the problem of corruption in India and the laws available to curb this problem.

What is corruption?

India is a developed country and has been in the 1st position for several of its achievements and records. There have been disparate sectors where India has shown its best performances whether it’s agriculture, infrastructure, public policies, education, or health.

However, being at the position competing with other developed countries, there have been times when certain obstructions affected the position of the country.

Corruption is one of the obstacles that affect the economy of the country. There have been studies to show the corruption and exploitation level in the country and thus has witnessed that more than half percentage of the people have been at the position where they either support the practice of bribing the public officer or take the bribe themselves for a particular task.

People at some stage indulge in the evil practice of corruption and thus more than 50% of the cases go unreported.

However, India has not been in the worst position when it comes to corruption. According to the Corruption Perceptions Index, India is at 86th position and has dropped six positions from the last year and thus has shown improvement in the area of corruption.

Moreover, the drop in the area though shows a steady decline but doesn’t mean to reflect the total elimination of this social catastrophe.

From time immemorial corruption has abounded to time and hasn’t been cut off from the system even after the implications of various rules, regulations, and laws. There still have been plentiful cases to show the corruption levels in the country and how people support this abhorrent practice in one way or the other.

In modern society, corruption is said to be one of the fundamentals as renowned people are indulged in it and the ones who are true to their principles and choose the path of hard work over corruption are thus unrecognized and considered enemies of the system and therefore makes it burdensome and problematic for them to grow at their level.

Corruption is in every part of the country starting from opportunist’s leaders who care for monetary benefits rather than public welfare to traffic officers who at times use power and earn money out of people’s helplessness and thus there is hardly any person who has not been a part of the corrupt system ever in his life.

What are the affects of corruption?

Corruption affects the country in many ways, these can be understood as:

  • Development

The basic and prominent effect that the country goes through is its development. The high rates of the corruption and use of money at every level possible are thus the barrier to the advancement of the country. Corruption in the way of schemes and scams has eventually hindered the growth of the country and lost billions in these governmental projects in which general people invest.

The major effect of the obstacle in development thus leads to the downfall of the sectors like infrastructure, sports, research or science, technology, and defense as well.

  • Backwardness and Poverty

Another crucial sector that is affected by corruption is the level of poverty. The Government of India has been trying to wipe out the poverty of backwardness from the society; however, corruption leads to an increase the poverty yet again as it makes rich even richer and poor have become poorer.

Corruption in every part or department is the root cause of poverty in the country.

  • Talent Loss

Corruption level at some point forced the talented ones to think that being proficient and skilled is a drawback as those who can bribe have more capability than those who are efficient and competent.

This has been seen in various sectors and departments that corrupt authorities prefer those candidates for a job who are bribing them rather than the skilled and educated candidate and thus these sectors refuse to cross the line of development due to lack of actual talent and brain.

Due to the corrupt system and harassment due to corruption at the workplace, people started migrating to foreign countries in search of work which is a major loss for a country’s development.

What are the Laws Related to Corruption in India?

Corruption along with the problems generated with it is to be eradicated from the system as to speedy functioning and development of the country. The government has implied certain acts and sections intending to eliminate the social evil and cut off the practice of bribery, black money, corruption, etc. from the system.

Various methods have been tried to abolish corruption and certain punishments are also been prescribed by these acts.

Various acts and provisions have been enacted to prevent corruption in the country. These acts include certain sections under the Indian Penal Code, 1860, Prosecution section of Income Tax Act, 1961, The Prevention of Corruption Act, 1988, The Benami Transactions (Prohibition) Act, 1988, or the Prevention of Money Laundering Act, 2002. These sections also prescribe the punishment to the offender.

There has been computerization of services and vigilance commissions have been established and according to Right to Information Act, 2005, citizens have the right to know the information and actions and thus various redressal committees have been set up for grievances related to corruption which has eventually declined the level of corruption in the country.

  • Indian Penal Code, 1860 

Under the IPC, certain sections have been mentioned which are clubbed under anti-corruption laws which include:-

    • According to Section 169 of IPC“Whoever, being a public servant, and being legally bound as such public servant, not to purchase or bid for certain property, purchases or bids for that property, either in his name or in the name of another, or jointly, or in shares with others, shall be punished with simple imprisonment for a term which may extend to two years, or with fine, or with both; and the property, if purchased, shall be confiscated.”
    • IPC prescribes the punishment of imprisonment of description for a term which may extend to two years, or with fine, or with both to the offender who dishonestly misappropriates the property under Section 403 which mentions that “Whoever dishonestly misappropriates or converts to his use any movable property, shall be punished under this offense.”
    • Section 405 and Section 406 mentions the offense of criminal breach of trust and prescribes the maximum punishment to the offender of such offense. It also mentions the sections about this provision i.e. Section 408, 409, and 412.
    • IPC also mentions and prescribes the punishment for cheating under Section 415 and 417 under the corruption laws.
  • The Prevention of Corruption Act, 1988
    • Section 2 (c) of the Prevention of Corruption Act, 1988 includes xi sub-clauses which states the meaning of public servant in each clause i.e. Section 2(c)(i) states that “any person in the service or pay of the Government or remunerated by the Government by fees or commission for the performance of any public duty” etc.
    • According to Section 7 of the Act, “Whoever, being, or expecting to be a public servant, accepts or obtains or agrees to accept or attempts to obtain from any person, for himself or any other person, any gratification whatever, other than legal remuneration, as a motive or reward for doing or forbearing to do any official Act or for showing or forbearing to show, in the exercise of his official functions, favor or disfavor to any person or for rendering or attempting to render any service or disservice to any person, with the Central Government or any State Government or Parliament or the Legislature of any State or with any local authority, corporation or Government company referred to in clause (c) of section 2, or with any public servant, whether named or otherwise, shall be punishable with imprisonment which shall be not less than six months but which may extend to five years and shall also be liable to fine.”
    • Section 8 of the Act prescribes punishment for taking gratification, in order, by corrupt or illegal means, to influence public servant whereas Section 9 of the same Act prescribes punishment for taking gratification for exercise of personal influence with public servant
    • Section 10 of the Prevention of Corruption Act states the punishment for abetment by public servant of offenses defined in Section 8 or 9 whereas Section 12 states the punishment for abetment by public servant of offenses defined in Section 7 or 11. 
    • It also includes other Sections i.e. Section Criminal misconduct by a public servant (Section 13), Persons authorized to investigate (Section 17), Accused person to be a competent witness (Section 21), Statement by bribe-giver not to subject him to prosecution (Section 24), etc.
  • The Prevention of Money Laundering Act, 2002
    • According to Section 3 of the Prevention of Money Laundering Act, 2002, “Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of the offense of money-laundering” and thus the punishment is prescribed under Section 4 of the same act.
  • The Lokpal and Lokayuktas Act, 2013 
    • This Act seeks to provide for the development of the institution of Lokpal to inquire about allegations of corruption against certain public functionaries in India.
  • Other important acts like Benami Property Act, Black Money Act, or Companies Act provide the provisions to regulate the corruption in corporations or impose rules and regulations to curb the black money in the country.
  • In India, the Directorate General of Income Tax Investigation, Central Vigilance Commission, and Central Bureau of Investigation are the authorities established to deal with anti-corruption initiatives and in certain states like Andhra Pradesh or Karnataka, they have their anti-corruption units to deal with corruption matters in their respective state.

Corruption Scams in India

There have been seen numerous times that corruption has been reported in governmental departments, private enterprises, small or large businesses.

Corruption has been a hindrance for the development of the economy and affects the public in general as people who demand money are at the influential positions and benefits those who bribe them for either position in a particular department or smooth functioning of work etc.

It has also been quoted by the studies that “India is the ‘Most Corrupt Country in Asia-Pacific Region’” and every second person prefers to bribe. There have been numerous scandals and scams that lead to corruption ever since India’s independence.

Some of them have caught the eye of the concerned authorities and public at large and a lot have gone unnoticed and were not that famous.

  • Harshad Mehta scam – Harshad S. Mehta & Ors Vs the State of Maharashtra[1]

A very famous case that was reported or got worldwide noticed and even a web series was launched recently was the Harshad Mehta scam. In the Harshad Mehta case, the stocks were manipulated as money was illegally borrowed from big banks like the State Bank of India (SBI) and the National Housing Bank (NHB) using fake receipts. Harshad Mehta’s manipulation scheme turned out to be a financial scandal valued at Rs 10,000 crore.

The case was reported and was convicted by the High Court and the Supreme Court. However, the scandal opened the eyes of the authorities as there were loopholes in the system which made the scam a success at first, and thus to avoid them in the future SEBI introduced new rules to cover those loopholes.[2]

  • Chopper Gate Scam- AgustaWestland Chopper Case[3]

In 2013, the Chopper gate scam got on the news which however is not that famous but cost a lot to the country. The Augusta Westland VVIP chopper deal was led by the congress government where the money was paid to the middlemen and officials to purchase helicopters for politicians.

It was mentioned by the Crime Branch that approximately 2.5 billion were transferred through bank accounts in the UK and UAE and thus the politicians were accused of accepting bribes from the other party to win Rs 3600 crores Indian contrAct for the supply of 12 Augusta Westland AW101 helicopters.[4]

  • Vijay Mallaya Case- Vijay Mallaya Vs State Bank of India[5]

Recently, there was a case that got aired on the news channels for a very long time was the Vijay Mallaya case. In 2016, Vijay Mallaya was accused of fraud and money laundering as he borrowed a huge amount from various banks and ran out of the country.

It has also been mentioned various times that he’s been living as a refugee in the UK and been declared as an elusive economic offender under the Fugitive Economic Offenders Act as he owes over Rs 9000 crores.[6]

  • Telgi scam- Abdul Karim Telgi and Others Vs Union of India and Others[7]

Another scam that cost over 200 million to the country was the 2002 Telgi scam. This scam was named after Abdul Karim Telgi who initiated the scam of the counterfeit stamp. He sold stamp papers to the banks, insurance companies, and stock brokerage firms via fake agents.

It was also mentioned that police authorities were also involved in the scam as Telgi used to bribe them to avoid investigation and thus the whole scam pegged Rs 200 billion. In 2006, Telgi along with the people involved were convicted and imprisoned for straight 30 years however the culprit died in 2017 due to multiple organ failure.[8]

  • 2G Spectrum CaseCBI Vs A. Raja and Others[9]

Another famous case was the 2G spectrum case where the politicians under the congress coalition government were accused of the scandal. It started in 2008 when it was revealed that the government “had undercharged mobile telephone companies for frequency allocation licenses that used to create 2G spectrum subscriptions for cell phones” and the difference in money collected and mandated was Rs 1.76 trillion and thus Supreme Court declared the issuance of the licenses as “unconstitutional and arbitrary”.

However, in 2017, the accused were relieved based on a lack of evidence on the part of the CBI.[10]

  • Coffin Gate Scam

A case was registered against the Former Defense Minister of India George Fernandes under the charges of corruption as the case was called the ‘Coffin Gate’. The case was noticed when the authorities had found several flaws in the procurement of the caskets which were being ordered by the government to bring the martyred soldiers in a flag-draped aluminum casket and thus had a deal was signed with US-based Buritrol and Baizarces for the coffins.[11]

However, it was later noticed that the caskets were of low quality and highly-priced which were being purchased at $2500 for 500 caskets each and were presumed to be thirteen times more than the original amount.

The case was filed by the CBI against Fernandes for using his influential positions for personal gains, however, in 2013 he was given a clean chit by the CBI and other accused were relieved due to lack of evidence.

  • Rafale Case- Manohar Lal Sharma Vs Narendra Damodardas Modi And Others[12]

The most important case which even was an old scam but recently got on the news for its verdict by the Supreme Court was the Rafale case. The Rafale deal was a political controversy in India which was related to the purchase of 36 multirole fighter aircraft for the estimated price of Rs 58,000 crore or 7.8 billion euros by the Defense Ministry of India from France’s Dassault Aviation.

In November 2017, Congress leader questioned if there was an escalation of per-aircraft cost from ₹526.1 crore to ₹1,570 crores however, these accusations were denied by the Defense minister as he said that “the Cabinet Committee on Security approved before signing of IGA as the prices could not be compared as the tender for 126 aircraft and the agreement for 36 aircraft had different requirements”, Air Chief Marshal also denied the allegations and said that “the agreement for 36 aircraft was signed with better terms than the one that was being negotiated under MMRCA tender.” French government officials also rejected the allegations of violation of procurement procedures.

In 2015, a new deal was announced by Prime Minister Narendra Modi and the President of France for the purchase of 36 Rafale fighter aircraft only and withdrew the deal of 126 aircraft. Moreover, in 2016, a joint venture was announced within the Dassault and Anil Ambani’s Reliance Group.

In 2017, the presence of Anil Ambani in France during Modi’s announcement to acquire 36 fully built aircraft was questioned, and said that no approvals were taken before their joint venture. However, he denied the allegations and released a statement that he was present as a member of the Indo-French CEO Forum.

Moreover, the case was again heightened by Rahul Gandhi while campaigning for the 2017 Gujarat Legislative Assembly election and accused the Prime Minister of price escalation and favoritism towards Reliance Defense Limited.

However, it was informed that IGA had better aircraft pricing along with an improved maintenance package and a faster delivery schedule. In 2018, petitions were filed by multiple litigants, advocates, lawyers, AAP MP, and politicians in the Supreme Court claiming the procedural irregularities in the Rafale deal and on 14th December 2018, the plea was dismissed by the court and with due evidence, the court mentioned that there they noticed no irregularity in the decision-making process, pricing or selection of an off-set partner.

However, the review petitions challenging the judgment were dismissed by the court on 14th November 2019.


The development of any country is only achievable when the economy of the country is strong and no hindrance would weaken the economy. Corruption is a social evil and one of the factors that affect the development of the country as the economic system is directly affected due to corruption.

There have been many cases that were being reported for corruption in India and thus have been on the news for a long time.

The government has taken many initiatives to curb corruption and thus enacted the laws related to it. India Penal Code along with other acts like the Money Laundering Act or Black Money Act, Prevention of Corruption Act mentions the offense and provides punishment for the Act of corruption.

Even being a developed country and having a powerful legal system with such provisions, there is no complete eradication of the corruption from the country however there has been a fall in the position which makes India a less corrupt country out of the other developed nations.


  1. Harshad S. Mehta & Ors Vs the State of Maharashtra, Appeal (crl.) 319-320 of 1996
  2. Prachi Juneja, “The Harshad Mehta Scam in India (1992)” available at:managementstudyguide.com (last visited on 22 July, 2021)
  3. “Indian helicopter bribery scandal” available at: /nja.gov.in (last visited on 22 July, 2021)
  4. PTI, “VVIP Choppers Scam: ED Arrests Businessman in Rs 3,600-crore Money Laundering Case “ available at: news18.com(last visited on 22 July, 2021)
  5. Vijay Mallaya Vs State Bank of India, AIR 2019 Kant 23
  6. Team Lapaas, “What is Vijay Mallya’s Scam? Vijay Mallya Case Study” available at: lapaas.com/ (last visited on 22 July, 2021)
  7. Abdul Karim Telgi and Others Vs Union of India and Others, Criminal Appeal No. 58 Of 2010
  8. “Abdul Karim Telgi Scam: The Stamp Paper Scam 2003” available at: blog.finology.in (last visited on 22 July, 2021)
  9. CBI Vs A. Raja and Others, 45 (A) 2009
  10.  Uzair Ahmad Khan, “Case Study of 2G Spectrum Case” available at: blog.ipleaders.in (last visited on 22 July, 2021)
  11. “Remembering Coffin Gate: The ‘scam’ that ended George Fernandes’ political career” available at: moneycontrol.coml (last visited on 22 July, 2021)
  12. Manohar Lal Sharma Vs Narendra Damodardas Modi, WP (Crl.) 225/2018

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