India anti-corruption agency: a genuine deterrent?

India’s new anti-corruption bill could be an effective deterrent in a country where bribery is currently rife

India’s Parliament has passed an anti-corruption bill that will lead to the implementation of an independent anti-corruption agency known as a lokpal.  The bill will become law upon signature by the president, although this is considered a formality.

The lokpal will be an independent ombudsman and will have powers to investigate and prosecute corruption by senior government officials. The setting up of such an agency was demanded by social activist Anna Hazare in 2010 amid anti-corruption protests including lengthy fasts and demonstrations which brought the issue to the streets of India.  However, the bill was stalled by senior government officials in India’s parliament who were reluctant to allow an independent agency to have such powers. 

This is perhaps unsurprising given the high number of corruption allegations that have been raised in recent years against India’s senior government officials.  These include the recent accusations that senior India officials accepted bribes in relation to the purchase of 12 AugustaWestland helicopters in February 2010 in a €560m deal.  The helicopters were purchased for use by the Indian Airforce to carry the president, prime minister and other senior officials.  The allegations came to light in February 2013 when Giuseppe Orsi, CEO of Finmeccanica (the Italian parent company of AugustaWestland) was arrested. Orsi is currently facing corruption charges in Italy over the sale of the helicopters. 

This is one example in a long line of corruption scandals and allegations involving the most senior of India’s government officials.  One such allegation regarding the sale of coal mines to private companies in return for bribes called for the resignation of India’s Prime Minister, Manmohan Singh, who denied the accusations. India is ranked 94th in Transparency International’s Corruption Perceptions Index out of 177 countries, giving it a worse reputation for corruption than Zambia, Jamaica or China.

However, pressure was put on the main governing party in India, the Indian National Congress, when it suffered defeats in major state elections.  This included Delhi where it was defeated by the Aam Aadmi party, or the common man party, a political party dedicated to fighting corruption. In addition, Anna Hazare resumed his hunger strike which lasted nine days until the passing of the bill.  It seems this pressure ahead of the general election in spring 2014 has led to the government passing the bill.

Anna Hazare has welcomed the bill as a sign of a changing political climate in India.  However, it has been criticised by some saying that it goes no further than existing laws in India that already criminalise corruption and that are rarely enforced.  The leader of the Aam Aadmi party for example has labelled the lokpal bill as weak.    

It will remain to be seen whether the law was passed as an attempt by India’s leading parties to secure voters ahead of the general election or whether the new lokpal will retain independence and bring action against senior officials to become an effective anti-corruption deterrent in a country where corruption is currently rife. 

Neill Blundell, partner and head of fraud, Eversheds