As you may well know, the number of multi-national corporations in India has been increasing which has improved India’s economy. The question remains whether corruption still plays a large role in India’s economy. Ravi Ramamurti, professor, International Business and founder, Center for Emerging Markets, Northeastern University’s College of Business Administration shares his thoughts on India’s current corruption situation.
“India has a long way to go before our institutions are truly professional and independent, or the average public official's salary is high enough to make corruption unappealing," Professor Ramamurti says. "Keeping in mind that most corrupt officials earn many times their salary through corruption, it will take a huge pay increase (or moral awakening) to wean them off corruption."
“In some ways,” says Ramamurti, “with economic growth, we have shifted from 'retail corruption', where petty officials took small bribes from average citizens, to 'wholesale corruption', where bureaucrats and politicians extract fewer but bigger bribes from companies. Average consumer has benefited whenever real competition has been ushered in — for example, in air travel, wireless telephony or gas connections," he says. "In these cases, corruption has waned or disappeared, and the consumer is king. But where monopolies still exist or competition is imperfect, as in infrastructure, public services, or regulated businesses, there is still plenty of room for corruption.”
“India has a long way to go before our institutions are truly professional and independent, or the average public official's salary is high enough to make corruption unappealing," Professor Ramamurti says. "Keeping in mind that most corrupt officials earn many times their salary through corruption, it will take a huge pay increase (or moral awakening) to wean them off corruption."
“In some ways,” says Ramamurti, “with economic growth, we have shifted from 'retail corruption', where petty officials took small bribes from average citizens, to 'wholesale corruption', where bureaucrats and politicians extract fewer but bigger bribes from companies. Average consumer has benefited whenever real competition has been ushered in — for example, in air travel, wireless telephony or gas connections," he says. "In these cases, corruption has waned or disappeared, and the consumer is king. But where monopolies still exist or competition is imperfect, as in infrastructure, public services, or regulated businesses, there is still plenty of room for corruption.”
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