India Inc justifies corruption for survival
Corporate India believes strict adherence to anti-corruption measures will harm competitiveness in the current market conditions.
Justifying corruption for business survival, 66 per cent of the Indian respondents in EY's worldwide Fraud Survey 2015 said some form of bribery, such as giving personal gifts, cash or entertainment was acceptable.
Four in five of the Indian respondents in the survey carried out across 38 countries said bribery and corrupt practices occurred widely in business.
A little over one-third of the Indian respondents said conformity to a company's anti-corruption measures would harm its competitiveness. Globally, 20 per cent of respondents felt alike.
India ranks second among 38 countries with 62 per cent of the respondents saying they had heard of financial performance manipulation at their company in the last 12 months. Also, 59 per cent of the Indian respondents said companies often reported financial performance better than the actual.
The survey is based on 3,800 interviews with executives from large companies, including 100 from India.
On most parameters Indian respondents re-affirmed the perception that corruption and fraud in corporate life were here to stay.
Given the tough business environment in the last two years, 81 per cent of the Indian respondents in the 2015 survey said managers were under pressure to create new revenue opportunities. This figure was 74 per cent in the 2013 edition of the survey.
"The perception on the ground is yet to catch up with stricter regulatory activities," said Arpinder Singh, partner and national leader, fraud investigation and dispute services, EY. Though there was enhanced awareness about ethical business practices, their acceptance at different levels of the organisation might take time, he added.
Around 60 per cent of the Indian respondents said ethical standards had improved in their company in the last two years. And 84 per cent of the Indian respondents said their company had anti-bribery and anti-corruption policies and a code of conduct, against 78 per cent in the 2013 survey.
"Top management must now lead by example to spread the message of zero-tolerance to corruption," said Singh.
A slew of new Indian laws and rules, including a stricter company law, a tighter listing agreement, a whistleblower policy, internal control mechanism, and reporting of fraud by auditors, are targeted at curbing corruption and fraud in business.