Do you think that eradicating bribes will attract foreign direct investment for India? Analyse (200 Words)
Refer - Business Line
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· Businesses have an amoral view towards bribery and tend to treat bribes as a cost of doing business.
· The US’ Foreign Corrupt Practices Act imposes penalty on firms who make bribery payments overseas for business purposes.
· Although enacted in 1977, vigorous enforcement really picked up after about 2015. This has proven to be a challenge for multinational enterprises who follow the rules of their home country and also try to conform to host country practices.
· Ministers may love the talk of wanting a clean environment but enjoy the ‘commissions’ they skim off the top.
· The study also supports the argument made by US companies that the FCPA puts them at a competitive disadvantage vis-a-vis other countries that don’t enforce such rules against their companies.
· For many countries climbing up the rankings of World Bank’s ‘Ease of Doing Business’ was an incentive to clean up their act and fix obvious problems that were a deterrent to foreign investors.
· studies like the one discussed here will be a good substitute to motivate governments that they cannot stick merely to tax incentives and public relations if they want to encourage foreign direct investments.
