Corruption in India: Challenges and the Way Forward

Syllabus: GS2/Governance

Context

• The NEET-UG 2024 paper leak reignited discussions on systemic corruption and institutional accountability, sparking a fresh debate on transparency, governance reforms and the efficacy of anti-corruption measures in India.

Corruption in India

• Corruption is the abuse of entrusted power or authority for personal, private, or unauthorized group gain.
  • It involves dishonest or unethical behavior by individuals in influential positions and can manifest in various ways across governments, businesses, and civil society.
• It affects the delivery of public services, public procurement, regulatory decisions, elections and the implementation of welfare.
• The Central Vigilance Commission (CVC) and the Prevention of Corruption Act, 1988 (amended in 2018) define corruption to include bribery, criminal misconduct by public servants and abuse of official position.
• According to the Corruption Perceptions Index 2025 by Transparency International, India has been ranked 91st among the 182 countries in the world with a score of 39/100 (0 being highly corrupt and 100 being very clean).

Reasons Behind Corruption & Corrupt Practices

• Institutional Weakness: The deterrent effect is weakened by delays in investigation and prosecution.
  • The limited autonomy of the investigative agencies often raises concerns about selective enforcement.
  • Requirement for prior government approval under Section 17A of the Prevention of Corruption Act to investigate certain decisions taken by public servants.
• Administrative Discretion and Red Tape: Complex procedures, excessive regulations and bureaucratic delays encourage rent-seeking and bribery.
• Weak Transparency Framework: There is apprehension that the Digital Personal Data Protection (DPDP) Act, 2023 could dilute the scope of the RTI Act by extending exemptions relating to personal information.
• Judicial Delays: Corruption cases take years to resolve and thus corruption is a high-profit low-risk activity.
• Political Corruption: Crony capitalism, opaque political funding and electoral financing are eroding public trust.
• Digital Divide: Marginalised citizens often need middlemen to access online services, opening up new opportunities for abuse, even as digital governance has reduced some petty corruption.

Impacts of Corruption

• Governance: Weakens democratic institutions, reduces administrative effectiveness, and erodes public trust in government.
• Economic: Increases project costs, discourages investment and distorts market competition. Promotes crony capitalism and inefficient resource allocation.
• Social: Denies citizens access to basic services like health, education, pensions and food security. Increases inequality by disproportionately affecting vulnerable sections.
• Political: Undermines electoral integrity and accountability; encourages abuse of public office for partisan purposes.
• Rule of Law: Selective justice and delayed administration of justice erode constitutional governance and public trust.

Has Digitalisation Reduced Corruption?

• Direct Benefit Transfer (DBT) + JAM Trinity (Jan Dhan–Aadhaar–Mobile): Launched in 2013, DBT sends subsidies straight into beneficiaries’ bank accounts using Aadhaar authentication, cutting out the network of middlemen who previously skimmed off welfare funds.
• Aadhaar-linked identity verification: Digital payments and biometric identification through Aadhaar have reduced corruption in employment, pension, and fuel-subsidy programmes.
  • Example: digital verification through Aadhaar seeding led to the elimination of about 5.87 crore ineligible ration cards under the Public Distribution System.
• Government e-Marketplace (GeM) for procurement: GeM standardises specifications, enables competitive bidding, and creates an audit trail, reducing the discretionary points in procurement where corruption typically occurs.
• Faceless tax assessment & GST: Faceless e-assessment for income tax, introduced from 2018, means tax officers communicate with taxpayers without face-to-face contact, closing off a classic bribery channel.
• Common Service Centres & DigiLocker: CSCs act as digital service delivery points, serving over 800 million citizens through more than 5.2 lakh centres, while DigiLocker lets citizens store and share documents like Aadhaar and licences digitally, with direct API-based issuance by government institutions.

Challenges Still Remains

• Exclusion errors mistaken for “anti-corruption wins: A J-PAL survey found that 88% of ration cards cancelled by the Jharkhand government for failing Aadhaar-linking actually belonged to genuine, eligible households  not “ghost” beneficiaries.
• Digitalisation doesn’t reach big corruption: Land allocation, environmental clearances, construction permits, and large contracts still involve heavy human discretion, and the digital transformation has reduced petty bribery without touching systemic, high-level corruption.
• Digital divide as a barrier: The digital divide produces new intermediaries with large numbers of rural and marginalised citizens accessing government services through cybercafés or agents.
• New forms of digital rent-seeking: Brokers now charge fees to help people navigate portals, biometric failures, or Aadhaar updates, effectively recreating a middleman economy around the technology itself.

Legislative & Governance Reforms Taken to Control Corruption in India

• Right to Information Act, 2005: One of India’s strongest transparency laws, it has empowered citizens to hold governments accountable.
  • It has helped expose several big scams like Vyapam recruitment scam, Adarsh Housing Society scam, Electoral Bonds disclosures and many irregularities in welfare schemes and public procurement.
  • India receives almost six million applications a year under the Right to Information Act, one of the most popular transparency laws in the world.
• Prevention of Corruption Act, 1988 (amended in 2018): It is to prevent corruption amongst public servants and commercial entities.
  • The Prevention of Corruption (Amendment) Act, 2018 has been drafted to bring Indian laws in tune with the United Nations Convention against Corruption (UNCAC) and to tackle both demand and supply side of bribery.
• Lokpal and Lokayuktas Act, 2013: Provides for establishment of statutory watchdogs to enquire into allegations of corruption against public functionaries.
  • It provides for a Lokpal at the Central level and Lokayuktas in all the states.
• Whistle Blowers Protection Act, 2014: It is meant to take complaints about corruption, abuse of power or criminal offences by public servants, while protecting the identities of those who blow the whistle on them.
• Benami Transactions (Prohibition) Amendment Act, 2016: It is intended to curb black money, bring in transparency and fight financial fraud.
• Prevention of Money Laundering Act, 2002: It aims at preventing money laundering, confiscating property derived from laundered money and combating financial crimes.
• Institutional Measures: Central Vigilance Commission (CVC), Central Bureau of Investigation (CBI), Central Information Commission (CIC), Comptroller and Auditor General (CAG) etc.
• Governance Reforms: Digital India and e-Governance initiatives; Government e-Marketplace (GeM); Direct Benefit Transfer (DBT); Public Financial Management System (PFMS); and Aadhaar enabled service delivery to reduce leakages.

Related Committees & Reforms 

• Santhanam Committee (1964): Laid the foundation for setting up of the Central Vigilance Commission.
• Hota Committee (2004): Recommended reforms in civil service and integrity in public administration.
• 2nd Administrative Reforms Commission (ARC): Improve ethical governance and accountability.
  • Cut discretion and simplify procedures.
  • Safeguard whistle-blowers and strengthen vigilance mechanisms .
• Law Commission: Emphasis on faster trials, independence of institutions and more transparency in anti-corruption laws.

Way Forward: Building on Anti-Corruption Drive

• Strengthen the RTI Act through transparency while balancing privacy concerns.
• Information Commissions to be filled; Appointments to be transparent.
• Ensure autonomy of institutions like CBI, ED, Lokpal & vigilance bodies.
• Establish an effective grievance redressal mechanism with time bound redressal of grievances.
• Cases to be disposed of within one year by dedicated courts for fast-tracking corruption cases.
• Enhance transparency with regard to political funding and public procurement.
• Improve digital literacy and assist service centres to promote digital inclusion and avoid exploitation by intermediaries.
• Increase citizen participation through social audits, proactive disclosure and greater protection of whistle-blowers.
• Strengthen ethical governance by implementing recommendations of the Second ARC and promoting integrity in public administration. 

Source: TH