Wall Street Journal
CORINNE ABRAMS
For most countries, it would be a bad sign if close to 60% of business leaders considered corruption a widespread problem. In India, however, that is progress, a recent survey showed.
According to EY’s latest Global Fraud Survey 58% of Indian managers it surveyed considered bribery and corruption a widespread problem in the South Asian nation in recent months. That is a significant improvement from the 67% who had the same concerns a year earlier.
The results are from a survey conducted by Ipsos MORI for EY between October 2015 and January 2016 in which it interviewed 2,825 decision makers, including CFOs, CCOs, general counsels and others at the largest companies in 62 countries and territories. It conducted 50 interviews in India, it said.
Indian Prime Minister Narendra Modi, who came to power in 2014, has promised to reduce corruption in the country. The survey shows some of his rhetoric could be making an impact.
However, it wasn’t all good news. The corruption that remains is still enough to convince some companies doing business in India is too difficult.
“Despite the initiatives and the progress, respondents who exited or considered exiting India still frequently cited fraud, bribery and corruption, as well as inconsistent or arbitrary enforcement of laws and regulations, as key reasons for their exit,” the report said.
Clamping down on corrupt individuals would help, the business decision makers said, with 80% of them agreeing that prosecuting individuals would cut corruption as well as fraud and bribery.
In a concerning display of honesty, a “significant minority” of respondents admitted they would manipulate financial information to improve performance, the report said. And 30% said their loyalty to their company would prevent them from reporting fraud, bribery or corruption there.
The report also warned that companies engaging with state-owned businesses and government departments in India needed to have strong compliance programs in place.
The improvement in the perception of corruption is at odds with Transparency International’s figures, out in January. The Corruption Perceptions Index showed India was unmoved from 38 on a scale of 100, where zero means highly corrupt and 100 is “very clean.”
