The global economy is estimated to be losing about $1.5-2 trillion, or 2% of gross domestic product, annually because of bribery, noted the International Monetary Fund. The indirect costs could be even higher as corruption leads to societal distrust and affects the government’s functioning.
India has had its own share of big corruption scandals. During the United Progressive Alliance’s second term, this reached a stage where bureaucrats were unwilling to take decisions due to the fear of getting dragged into controversies.
Corruption affects economic growth, fuels inequality and can lead to political instability, but controlling it can be difficult in societies where it is more prevalent. Kautilya compared finding government officials taking money with fish drinking water.
Still, the impact can perhaps be minimized by strengthening institutions, avoiding over-regulation and reducing bureaucratic discretion at various levels.