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Bribery Is No More A Dirty Word, Says Survey

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Endemic corruption in India is no more a secret. Certainly, corruption has become the most talked about issue in India. It was a major election issue in the 2014 Lok Sabha polls as well. Cutting across the party lines politicians claimed that they have the fervor to wipe out the menace. However, the situation is still bleak.
 
In the present scenario, when new businesses are sprouting at a rapid pace, it is also a fact that intense competition and a volatile scenario and in order to grow and survive companies have to resort to corruption that includes appeasement and bribery.  
 
According to EY’s Europe, Middle East, India and Africa (EMEIA) Survey on Fraud and Corruption --The Easy Option forGrowth report, the issues of fraud, bribery and corruption and the ways to tackle them is still impeding India to realise its true potential to progress. The India findings shows  that 35 per cent  of the respondents do agree with the fact that conformity to their organisation’s anti-bribery and anti-corruption policies would eventually prove to be a hurdle to their competitiveness in the market. 
 

 
Around 57 per cent stated that increased regulation in their sector is augmenting challenges for the growth or success of their business. 
 
However, nearly 66 per cent have accepted that indulging into some form of bribery both in cash and kind is deemed acceptable.
 
Arpinder Singh, Partner and National Leader, Fraud Investigation & Dispute Services, EY said: “Irregular practices such as booking revenue from rebates with suppliers early still continue to be rampant. However, the survey does indicate that there is enhanced awareness about ethical business practices and that acceptance seems to be setting in, though it may take time.”
 
The findings that have surfaced and the concerns primarily for India are:
 
 Businesses are operating in an exceptionally challenging environment
  • Markets are not recovering as expected and some remain highly volatile.  67 per cent of respondents felt that India has been achieving economic growth which is slower than expected.
  • Economic sanctions are more complex and require greater effort for businesses to comply.  37 percent of Indian respondents stated that they are uncertain about their ability to trade due to economic sanctions and export controls.
 
But management is under increased pressure to find new ways to grow their business
  • 81 per cent said that managers are under increased pressure to identify new revenue opportunities
  • 66 per cent believe that the pressure to venture into higher risk markets is high
  • Manipulation of financial results is prevalent
  • 40 per cent of overall respondents believe companies in their market often exaggerate financial performance
  •  One in five senior managers have recently observed early recognition of revenue
  • 59 per cent opine that companies often report their financial performance as better than it is.

Fast track techniques for rapid growth may lead to unnecessary risk-taking behaviour
  • 80 per cent of the India respondents believe that bribery and corrupt practices happen widely in relation to business
  • 59 per cent of the respondents deem offering personal gifts, cash payments or entertainment as acceptable.
     
But effective compliance is a requirement for sustained success
  • The results show a clear correlation between companies that have experienced revenue growth and those that are seen by respondents as having more robust compliance programs
  • Respondents that report revenue growth in their business in the past two years are:
  • 34 per cent rate their company’s ethical standards as ‘very good’
  • 40 per cent of overall respondents believe companies in their market often exaggerate financial performance
Good practices yet to catch up
  • Some businesses still appear to lack the basic ‘building blocks’ in place for effective compliance
  • 66 per cent do not rate their company’s ethical standards when doing business as very good
  • 35 per cent of the respondents indicated that following their anti-bribery and anti-corruption policy very closely would harm their competitiveness in the market

The survey was carried out between December 2014 and January 2015, and the researchers conducted 3,800 interviews with employees in 38 countries, covering Europe, Middle East, India and Africa.
 


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