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Parliament passed the historic Lokpal Bill in 2013. Photo: Priyanka Parashar/Mint
Parliament passed the historic Lokpal Bill in 2013. Photo: Priyanka Parashar/Mint

Upholding the integrity of the Lokpal

The Lokpal Bill is a step in the right direction for private sector India to mitigate acts of corruption and bribery

The recent spate of frauds has brought corruption in India under the global scanner. The Corruption Perceptions Index 2013 issued by Transparency International ranks India at 94 among a pool of 177 countries. Parliament passed the historic Lokpal Bill in 2013. Referred to as the Citizen’s Ombudsman Bill, the Lokpal Bill is an anti-corruption law drafted in India, seeking the appointment of an independent body to investigate corruption cases against government officials or dealings. After the President’s assent, the Bill is awaiting approval by the secretary of the legislative department.

While the ramifications are relatively clear regarding its ambit to unearth corruption which persists in the bureaucratic system, the big question is what does the law really mean for private sector India?

An EY report titled Bribery and corruption: ground reality in India 2013 states that a large number of respondents appeared to be comfortable with (or were aware of) business practices such as bribes. Such acts not only shadow innovation and financial progress, but are a major impediment in the sustainable growth of the economy. Therefore, the Lokpal Bill is a step in the right direction for private sector India to mitigate acts of corruption and bribery which not only erode its brand, but also stunt commercial growth.

There are some ways in which the law is expected to impact companies with Indian operations:

1) Certain sectors have a greater interface with the government through liaisons around licences, approvals or sales (such as public health), making these industries more vulnerable. The Lokpal Bill will aim to ensure greater transparency in such government dealings.

2) The last few years have witnessed sectors such as mining, telecom, construction, pharmaceuticals, etc. being under intense scrutiny for alleged breaches of various legislation. With the Bill in place, organizations can maintain optimum health checks, and bid for government deals on the basis of merit.

3) Though a vigil mechanism is mandatory under the Companies Act, 2013, this may still deter whistleblowers from divulging any information. The Lokpal is expected to restore confidence among whistleblowers as they will have the option to approach a neutral body as against an internal committee.

4) The Lokpal law is expected to be a significant influencer for global companies which may have previously gone slow on their operations in India. With an anti-corruption watchdog in place, these companies will look to strengthen their foothold in the Indian market.

5) Supplemented by the Prevention of Corruption Act, 1988, the law will also fortify India’s commitment to provide a safe and clear platform for global investors. The general sentiment of conducting business will improve, leading to enhanced stakeholder confidence and an inclusive growth of the economy.

As next steps, it is imperative to establish an anti-corruption compliance framework comprising anti-bribery and corruption risk assessment, policies and procedures, training, monitoring and establishment of a fraud response plan. Experience has shown that training and monitoring are the two weakest links in a company’s anti-bribery and compliance framework. This will help corporate entities be more aware, compliant towards the risks of today and the threats of tomorrow.

Arpinder Singh is partner and national leader—fraud investigation and dispute Services, EY India. Comments are welcome at

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