India lost $125 Billion due to illicit outflows
Wednesday, 15 September 2010, 01:36 IST
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India lost $125 Billion due to illicit outflows
Washington: Even as India continued to register one of the highest growth rates post-independence, rampant corruption resulted in an estimated illicit outflow of a whooping $125 billion between 2000 and 2008, a research and advocacy organization has said. The figures of $125 billion illicit outflow of money from India are part of a report to be released by the Washington-based 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. "India's economic boom continues with an average growth rate of over eight per cent between 2004 and 2009 by GFI calculations," it said. "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. As India develops economically and builds better infrastructure, one would think that all Indian citizens would see an increased standard of living and that the income inequality levels would fall, he noted. "However, 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. "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.
Source: PTI
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