However, a string of high-profile corruption cases may have dulled India’s appeal to investors who have grown leery of such practices. In November a telecoms minister resigned over irregularities in the award of mobile-phone licenses and is currently under criminal investigation. An official audit put the potential cost to taxpayers at $39 billion.
Measuring corruption is an imprecise science. Transparency International, a Berlin-based watchdog, uses surveys to rank perceptions of corruption. In 2010 it rated China slightly better than India, with 3.5 out of a perfect score of 10 (India scored 3.3). The Philippines was rated as 2.4, compared with 9.3 for Singapore, which shared the top place with New Zealand and Denmark. Burma and Afghanistan received a dismal 1.4.
Corruption exacerbates disparities within countries, as the poor must pay more for public services, while those in government reap the benefits, says Anupama Jha, director of Transparency International-India in New Delhi. “Ultimately it is the poor who suffer,” she says. She cited a 2008 survey that estimated that low-income Indians paid $200 million a year in bribes to public officials.