The size of this scam is 1.2 times corruption in India!
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» Why the biggest hedge funds are holding cash?
» A state that can be a model for Indian economy
» Poor financial reporting hits Chinese companies
» A new industry to create 1 lakh jobs in India!
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An interesting article in the Wall Street journal had put into perspective how the government could have utilized the funds from the 2G spectrum had no scandal taken place. Food for every destitute Indian for the next decade. Funding of the flagship employment program for India's marginalized for the next five years. Primary schooling for every Indian girl for the next three years. The reduction in every Indian's tax rate by 15% for the next year, or the reduction of India's outstanding debt by 10%. Thus the absence of the scams over the past 2 decades could have meant a huge boost to the Indian economy. But the chronology of scams shows that policy inaction has left the culprits more confident over the years. In fact, in the biggest scam in Indian history that was uncovered in 2010, members of the government itself were found responsible.
Chronology of scams in India | Size* (Rs m) |
Bofors scam, 1989 | 400 |
Harshad M scam, 1992 | 6,000 |
Telgi scam, 1995 | 20,000 |
Hawala scandal, 1997 | 1,000 |
Ketan P scam, 2001 | 50,000 |
Satyam scam, 2008 | 90,000 |
CWG scam, 2010 | 80,000 |
2G spectrum scam, 2010 | 1,760,000 |
Overall corruption | 15,550,000 |
Money laundering | 18,860,000 |
*Estimated numbers
The synonymy of corruption with India has indeed left a bad taste in moth of global investors. Indian stocks witnessed a huge downgrade in valuations when the CWG and 2G scam were uncovered. Since then, investors have dumped every stock that has been even remotely in the news for being associated with a scam. But the problem does not end there. There's another scam that dwarfs absolutely everything that has occurred so far. And this scam answers to the name of money laundering. As per the results of a study on corruption, published by Rediff, the size of money laundered by Indians stands at staggering Rs 18.8 trillion. The same is apparently 1.2 times the overall size of corruption menace in the country. We believe that it is time both the government and companies realize that being corrupt is no longer going to take them too far.
We recently got some very interesting results from a poll conducted on the most trustworthy companies in India. Why don't you too participate and make your opinion count? Click here to participate.
01:15 | Chart of the day | |
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Fitch has rated that around 35 Chinese companies may have closed the door to the capital markets on escalating corporate governance issues. Issues like these make investors once bitten, twice shy when it comes to investing in such companies or markets. Maybe China should take a leaf out of the book of some of India's top trusted companies.
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04:50 | Today's investing mantra |
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10 Responses to "The size of this scam is 1.2 times corruption in India!"
Tinku
Jul 21, 2011This is ridicular to put the size of 2G scam to 1.76 Lakh crore. This is the total amount the government could have garnered if they had sold as per 3G and got the same rates. Giving cheap licence is a government policy with the intention to provide cheap tariff to end user. Some time back J Mulraj had written article favoring this policy. Also, there is no guarantee that corporates would have given the same rates to buy 2G licence like 3G.
seth
Jul 21, 2011Money is money. The question is the end use of money generated from scams or business or trading or whatever else. If the money earned thru unfair means is also ploughted back into the economy say buying assets, buying luxury goods concealing losses incurred in business, then it may not be unproductive. The unproductive money is the money that is stashed away under the bed, in foreign banks,in lockers .
We must be able to compute the percentage of productive v/s the unproductive money to arrive at the actual impact on our economy.
It is wrong to assume that this figure quoted is the amount of money available somewhere for the asking and could be deployed to feed the millions. The money has in all probability been utilised already except the funds stashed away which to my guess would be less than 20 %.
Most scamsters do not leave their money idle.
Aloysius
Jul 20, 2011The scam figures are mind boggling, but taking these figures into consideration, the economic situation should be much worse with Rupee being just a piece of paper and things should be looking bleak for India. I wonder whether the figures are potential loss or some guesstimates. Because somewhere I have read that the Telgi scam was the likely loss the Government would have had if he would have been allowed to function.
S.K.DAMANI
Jul 20, 2011Dear Sir,
The bogey of 2002 riots is unnecessaryly dragged against Gujarat. Agreed wrong has been done and snail justice is proceeding, but , as newspaper reports suggest, now the minorities are more than happy and secured than in many of the other states.
We are now 64 yrs old. People also understand the cards played by political parties. But development and secured livelihood is more imp for the people. And Gujarat is providing them. And most important fast decisions and WITHOUT CORRUPTION ( which is at its worst at Delhi and 2nd must be Maharashtra)
News about even Bajaj Auto and Infosys also moving there is really heartening.
The only wish is NArendrabhai should stay in Gujarat and not get into the traps of BJP leadership to move to Centre.
Better to be a king in your state rather than involved in the dirty, filthy environment of Delhi.
If he stays at Gujarat, very soon, he will create Shanghai, Dubai very much in our own country.
Wish him all the best. (Have no political affiliations)
Thanks
Damani
mangesh vahalia
Jul 20, 2011India's growth should be deducted/ reuced by the volume / amount of existing scams, because drained out fruits our productivity during th pereiod under review. may caital value of our assets ahve also depreciated to that extent. immeiate and urgent action is warrented for correction and recoupments of such 'stolen' assets through such scams irrespective reshuffle if any in the team or the party at helm.
girish
Jul 20, 2011Gujarat jewu thaawa maate pheela guuju thaavu paade
bhaaya ne khaaya sivae kain sujjhe nahi
A J WADHWA
Jul 20, 2011The money involved in corrupt practices finds it way in the banks abroad. Ana Harare can get ready reference and Baba Ramdev Need not take services of his Mahamantri for the arithmetic
anupam garg
Jul 20, 2011China shld learn 4m india's most trusted companies or company...thr's just 1 word as per d survey...TATA
& wht is Mr. Jim sayn? the fundamental method of valuation is stupid?
Jeet Thakur
Jul 20, 2011Cloud Computing isn't new. The internet itself is a big cloud. And all these websites are smaller clouds. So now you can figure how old the concept is.
But what's new is that somewhere, some marketing guys probably "discovered" ways of selling a product by wrapping it around the word "Cloud Computing". It's become a rage. It's a good thing. When sales guys make a discovery, they can find ways to sell it, envision new methods of application, and that's going to help companies bring out more products, more employment and more money to be made by all.
Subhash Chandra Saxena
Aug 1, 2011Please try to send copy to me also so that I should know the real fact of this corruption of this scame.
Subhash Chandra Saxena