12th Global Fraud Survey Growing Beyond: a place for integrity
Regional insights: India
70% of India respondents to our survey think that bribery and corruption are widespread in the country.
Even allowing for a recent slowdown, the Indian economy continues to grow faster than many other G20 countries.
However, with Indian GDP growth rates below the trend of the last decade, pressure on companies to meet expectations is rising, increasing in turn, the risk of fraud, bribery and corruption.
Although India continues to be a favored destination for foreign investment, with 71% of respondents to our 2012 India Attractiveness Survey keen to invest in the country, growth opportunities are constrained by regulation and bureaucracy.
A recent report from the World Bank ranked India 132nd out of 183 economies for ease of doing business, and as low as 181st for dealing with construction permits and 182nd for enforcing contracts.
Similarly, the World Economic Forum Global Competitiveness Report for 2011–2012 ranked India 96th of 142 economies for burden of government regulation.
The combination of a market with significant investment potential and a high level of bureaucracy has resulted in many seeking to bypass, accelerate or influence decisions. Media coverage from India has featured a series of corruption scandals over recent years, including a number involving national and state government representatives.
Coverage intensified in 2011 following high-profile protests over the pervasiveness of corruption in the country.
Given the extensive media coverage, it is not surprising that fraud, bribery and corruption are seen as significant risks in India. This is shown by the fact that 70% of India respondents to our survey think that bribery and corruption are widespread in the country and 72% believe that management is likely to cut corners to meet targets.
These findings are consistent with the decline in the ranking of India on the Transparency International Corruption Perceptions Index (down from 3.5 to 3.1 and from 72nd to 95th place in the rankings between 2007 and 2011).
With fraud, bribery and corruption risk so high on the domestic and international agenda, it is essential that companies with a presence in India actively address these risks.