Corruption

4.1 Concept and Definition

Corruption is the abuse of entrusted power for private gain. The Prevention of Corruption Act, 1988 defines it as a public servant demanding, accepting, or obtaining a gratification (bribe) other than legal remuneration. Corruption ranges from petty bribery (paying a traffic cop) to grand corruption (policy capture by corporations) to systemic corruption (kleptocracy).

Political corruption refers specifically to corruption involving elected representatives or political party functionaries — vote-buying, quid pro quo legislation, and diversion of public funds for political advantage. RPSC 2021 asked about "political corruption" as a 2-mark question.

4.2 Forms of Corruption in India

Form	Description	Example
Bribery	Payment to secure illegal benefit	Speed money for permits
Embezzlement	Misappropriation of entrusted funds	Welfare fund diversion
Nepotism/Cronyism	Favouring relatives/friends in appointments	PSU board appointments
Electoral corruption	Vote buying, booth capturing	Cash for votes
Extortion	Coerced payment by official	Police hafta
State capture	Corporations influencing policymaking	Regulatory loopholes

4.3 Causes and Impact

Structural causes:

• Low civil service salaries relative to private sector → temptation
• Complex regulatory regime with multiple clearances → rent-seeking opportunities
• Weak enforcement — overburdened judiciary, long trial durations
• Political funding opacity — parties fund-starved, resort to kickbacks
• Cultural normalisation — "everyone does it" attitude in certain sectors

Economic impact of corruption:

• Diverts public investment from productive uses
• Raises transaction costs for businesses — IMF estimates 5% GDP cost to India
• Discourages FDI — firms avoid countries with unpredictable corruption levels
• Erodes tax compliance — why pay taxes when money is wasted?
• Worsens inequality — poor bear larger relative burden through "everyday corruption"

4.4 Anti-Corruption Institutional Framework

Institution/Law	Year	Role
Comptroller & Auditor General (CAG)	Constitutional (Art. 148)	Audits all government expenditure
Central Vigilance Commission (CVC)	Statutory (CVC Act 2003)	Oversees vigilance in Central govt organisations
Central Bureau of Investigation (CBI)	1963	Investigates major corruption cases
Lokpal	Lokpal Act 2013	Independent ombudsman for Central govt complaints
Prevention of Corruption Act	1988, amended 2018	Primary anti-corruption criminal law
Right to Information Act	2005	Empowers citizens to access information — reduces opacity
Whistleblowers Protection Act	2014	Protects those exposing corruption
Benami Transactions (Prohibition) Act	1988, amended 2016	Curbs property held in fictitious names

Rajasthan's Lokayukta: Rajasthan was the first state in India to establish a Lokayukta in 1973. The current Rajasthan Lokayukta investigates complaints against state government officers, including police and revenue officials.

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