India saw illicit outflows of USD 125 billion from 2000-2008
WASHINGTON: A whopping USD 125 billion of public money has been siphoned off from India by corrupt politicians and officials between 2000 and 2008, as rampant corruption plagues the country that has seen rising inequalities despite unprecedented growth levels.
The figures of USD 125 billion illicit outflow of money from India are part of a report to be released by the Washington-based research and advocacy group 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.
GFI said according to its calculations India’s economic boom continued with an average growth rate of over eight per cent between 2004 and 2009.
“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.
The author of the report noted that an impressive growth has, however, not resulted in equitable development, rather the period corresponding to the highest GDP growth levels has seen the income inequality levels actually rise.
“… 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.
The opposition parties in India have demanded that the government take steps to bring back the money that has been stashed in foreign banks.
“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.