`India lost billions in illicit outflows`

Last Updated: Tuesday, September 14, 2010 - 12:10

Washington: Even as India continued to
register one of the highest growth rates post-independence,
rampant corruption resulted in an estimated illicit out flow
of a whooping USD 125 billion between 2000 and 2008; a
research and advocacy organisation has said.

The figures of USD 125 billion illicit outflow of
money from India are part of a report to be released by the
Washington-based Global Financial Integrity later this year.

"Much of the funds flowing out are generated at home
within India and then sent illegally abroad. So the growth of
corruption and India`s underground economy contributes
significantly to illicit financial flows from the country,"
said Karly Curcio, a junior economist at the Global Financial Integrity in a blog posted on its website.

"India`s economic boom continues with an average
growth rate of over eight per cent between 2004 and 2009 by
GFI calculations," it said.

"As the money flows, however, the poor continue to
stay poor. Corruption is rampant in India as it is in almost
all developing countries. Both corrupt political and corporate
officers manage to siphon off funds - intended to aid the
people of India - off to political and private sector elite.
Recent efforts in India to challenge this corrupt affront on
humanity have been met with severe violence," the blog said.

As India develops economically and builds better
infrastructure, one would think that all Indian citizens would
see an increased standard of living and that the income
inequality levels would fall, he noted.

"However, the gini coefficient, which measures income
inequality, has actually increased over the time period
measured, 2000-2005, from 0.32 to 0.37 on a scale of 0 to 1,
with 1 being the highest income inequality," the author said.

"We see in India - as in other currently developing
countries - that as the economy grows, so do illicit flows.
This positive correlation exhibits the increased incentives to
conduct illicit flows, mostly because more money is flowing
within the system to steal away and constant greed is tapping
into that pool," Curcio said.

Noting that India Ranks 84 out of 180 countries in
Transparency International`s 2009 Corruption Perceptions
Index, the author said as corruption continues to plague both
the country and its ability to develop free and fair
institutions to monitor and charge corrupt officials, the
majority of India’s economic growth will never make it to the
people of India who desperately need it the most.

PTI



First Published: Tuesday, September 14, 2010 - 12:10

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