Rampant graft roils Indian politics

3 officials quit amid scandals

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NEW DELHI | India’s center-left government has been shaken to its core in recent days by the resignations of three key officials embroiled in three separate scandals that have made “corruption” the buzzword among the media, opposition parties and political analysts.

In perhaps the country’s biggest scandal, the Indian Supreme Court on Thursday demanded that Prime Minister Manmohan Singh explain why his administration took a year to investigate a faulty cell-phone licensing deal that cost the country nearly $40 billion.

The rebuke marks the first time in India’s democratic history that the court has taken the prime minister’s office to task, political analysts said, according to the Associated Press.

Meanwhile, a report released Wednesday by Washington-based Global Financial Integrity (GFI) shows that India lost a total of $213 billion in capital via “illicit financial flows” from 1948 through 2008.

“These illicit financial flows were generally the product of corruption, bribery and kickbacks, criminal activities, and efforts to shelter wealth from a country’s tax authorities,” states the report, which was written by Dev Kar, a former senior economist at the International Monetary Fund.

According to the GFI report, the present value of India’s total illicit financial flows is at least $462 billion.

In addition, India’s ranking has fallen in an annual international assessment of governmental integrity. The Corruption Perception Index, compiled by the global corruption watchdog group Transparency International, ranked India 87th among 178 countries in 2010, down from 84 among 180 countries in 2009.

“It is an indication that the country continues to be perceived as more corrupt as in the past,” the index report states.

India, the world’s largest democracy, has experienced significant industrial growth that has made it Asia’s third-largest economy, behind China and Japan.

However, corruption has long been a part of Indian politics, and lingering doubts about the government’s integrity could hamper future business deals and put a damper on the country’s economic growth.

What’s more, the scandals have distracted the national legislature - a coalition led by Mr. Singh’s center-left Congress Party - from its agenda and prompted the opposition, led by the center-right Bharatiya Janata Party, to call for investigations.

Over the past two weeks, three officials have resigned and denied any wrongdoing in their roles in three separate scandals:

c Ashok Chavan, chief minister of Maharashtra state, was forced to step down Tuesday over his involvement in a housing scam in which tony apartments that had been built for war widows were sold to government and military officials.

c Telecommunications Minister Andimuthu Raja stepped down Sunday amid charges that his agency sold second-generation (2G) spectrum licenses at undervalued rates to cell phone service companies, costing the national treasury about $40 billion.

According to an auditor’s report released this week, the telecommunications deal “lacked transparency and was undertaken in an arbitrary, unfair and inequitable manner,” and many of the licenses were awarded to “ineligible applicants,” who resold the licenses for a profit. India’s telecommunications regulator on Thursday recommended that 62 licenses given to five companies be canceled, the AP reported.

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