Article 2: Deepening global corruption as a pointer for India
Why in news: The Corruption Perceptions Index 2025 highlights worsening global corruption trends and India’s stagnant performance, raising concerns about governance quality, economic efficiency, and its impact on investment and growth prospects.
Key Details
- Global corruption worsening, with CPI average falling to 42 and most countries below 50
- India scores 39 (rank 91), showing decade-long stagnation despite economic growth
- Corruption increases economic costs, uncertainty, and reduces productivity & investment
- Complex compliance system with 26,000+ legal provisions increases scope for discretion and rent-seeking
- Digital reforms (DBT, GST, digital payments) have helped reduce leakages and improve transparency
Global Corruption Trends
- The Corruption Perceptions Index (CPI) 2025 shows corruption is worsening globally
- Global average score dropped to 42/100, lowest in over a decade
- 122 out of 182 countries scored below 50 → widespread governance concerns
- Only 5 countries scored above 80, compared to 12 earlier
- Weak oversight and shrinking civic freedoms are linked to rising corruption
India’s Position and Performance
- India scored 39 and ranked 91 out of 182 countries
- Over the last decade, score remained stagnant (38–41 range)
- Economic growth (4th largest economy) has not matched governance improvements
- Performs better than some neighbours but lags behind many emerging and developed nations
- Countries with stronger institutions show better CPI outcomes over time
Economic and Governance Implications
- CPI reflects perceived public sector integrity, not just actual corruption
- Low score signals weak transparency, accountability, and institutional safeguards
- Corruption impacts:
- Investment decisions
- Sovereign risk perception
- Long-term economic growth
- Globally, corruption costs about 5% of GDP (~$2.6 trillion annually)
- In India:
- Direct loss ~0.5% of GDP
- Total impact ~1–1.5% of GDP → billions in lost resources
Structural Challenges in Compliance System
- India’s regulatory system has high complexity and criminalisation
- Around 26,134 imprisonment provisions exist in business laws
- Example:
- Pharma start-up must meet 998 compliance requirements
- Nearly 49% carry criminal liability
- Consequences:
- Increased cost of doing business
- Greater discretionary power
- Higher chances of rent-seeking and corruption
Positive Reforms and Way Forward
- Digital initiatives have reduced leakages:
- Direct Benefit Transfers (DBT)
- Digital payments growth (RBI-DPI rising)
- GST network improving transparency
- E-procurement and digitisation reduce human discretion
- Key insight:
- Corruption is not just ethical issue → economic constraint
- Future path:
- Strengthen transparency, judicial efficiency, and regulatory simplicity
- Focus on continuous reforms rather than one-time actions
- India has strong foundations → gradual improvements can significantly improve outcomes
Conclusion
The CPI 2025 underscores that corruption remains a critical challenge affecting governance and economic efficiency in India. While digital reforms offer promising improvements in transparency, structural issues like regulatory complexity and weak oversight persist. Sustained institutional reforms, simplification of compliance frameworks, and strengthening accountability mechanisms are essential for improving governance credibility and supporting India’s long-term economic ambitions.