Telecom second largest corrupt sector, real estate on top: KPMG

 | March 15,2011 11:00 am IST

In the wake of the second generation (2G) spectrum scam, a survey on bribery and corruption in India by global consultancy firm KPMG has found the telecommunications sector to be the second most corruption-prone area followed by real estate and construction.


The survey, which was based on ratings of industries by different respondents, reflected that some industries tend to have relatively higher instances of bribery and corruption than others, primarily due to the link they have with multiple parties, both in the government as well as the private realm.


Almost 17 percent of the respondents surveyed said that telecom is the most corrupt industry sector while 32 percent of them regarded real estate and construction to be the one.


"This does not come as a surprise since in all these sectors, government and political intervention is considered higher. Large capital investments, multi-level approvals, complex processes and huge projects gives immense opportunity for corruption in these sectors," said the report.


The World Bank's Doing Business report 2010 estimates 60-80 percent of building projects (construction) in developing economies are undertaken without adequate permits and approvals.


Telecom was followed by social development sector including education, an poverty alleviation at 13 percent while finacial services such as banking, insurance and mutual funds stood at 10 percent.


The least corrupt sector according to the report was energy and power at 5 percent.


"We realized that there was an uneasy sentiment among the corporates in India about the recent developments," said Deepankar Sanwalka, head, risk and compliance group, KPMG India.


"Through this survey we have tried to find the concerns, apprehensions and the challenges faced by different sectors and have also laid stress on various steps that have to be taken immediately to restore confidence in the Indian economy."


The survey also sought that a solid, foolproof mechanism be put in place by the government to check and arrest the rising cases of corruption and bribery.


Strict enforcement of existing provisions under law, for both the taker and giver, is believed to be need of the hour to prevent further erosion of trust and credibility of India's economic success.