January 16th, 2012
03:10 AM GMT
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(CNN) – India is Asia’s third largest economy, the world’s tenth largest by nominal GDP and is dubbed as the world’s largest democracy. So why does India still skulk in the shadows of the world’s other rising superpower China? One reason could be that India is hamstrung by its bureaucracy.

As the Economic Times stated, India needs to reform its bureaucracy and curb widespread corruption so it can fix its global image and achieve economic growth.

A recent report from the Hong Kong based Political and Economic Risk Consultancy Ltd ranked India the lowest on a bureaucracy rating in Asia. The report shows that the country runs an inefficient bureaucracy because of corruption and inadequate infrastructure. Business executives complain about how top officials are willing to accept under-the-table payments and how in turn, companies are tempted to make such payments in order to overcome bureaucratic inertia and gain government favors, the report says.

India ranked the worse in Asia, scoring 9.21 out of 10; next worse was Vietnam (8.54), Philippines (7.57) and China (7.11). Singapore’s bureaucracy had the best ranking (2.25) followed by Hong Kong (3.53).

The report defines a bureaucratic system as “one where workers in the public sector view themselves as officials in a hierarchical structure in which the higher you are on the organization chart, the more important you are.”

Onerous and fickle tax, environmental and other regulations that could make business in India “frustrating and expensive,” the report says. Dealing with the court system in India is “such an unattractive one in terms of time and costs that most companies avoid it.”

Bureaucrats are rarely held accountable for wrong decisions, the report says, and it’s extremely difficult to challenge them as they wield “terrific powers.” This could be one of the main reasons why average Indians as well as existing and would-be-foreign investors perceive India’s bureaucrats as negatively as they do, the report concluded.

The report showed that nothing has changed since the survey was carried out in 2010 where India fared the worst again. It is also this corruption and bureaucracy that has kept non resident Indians (NRIs) away from investing in India.

However, it was not all doom and gloom for India. The report did mention that India was better than the other BRIC nations, Brazil, Russia and China, as the fastest place to set up a new business and to deal with construction permits. India was the second fastest place to deal with export and import procedures.

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soundoff (38 Responses)
  1. Aldeno

    I'm an importer from India.My last container in December was stopped just prior to loading on the vessel for a full customs inspection. This involved unpacking every crate of heavy steel parts then throwing them back into the 20 footer followed by the smashed empty crates. The parts were precision machined items and most were damaged to some extent. My supplier said he dare not lodge a complaint with customs because of the retribution that would be exacted. Oh, my container also missed the sailing.
    Never had anything happen like this out of China. Not to say it doesn't happen there.

    January 16, 2012 at 4:08 am |
  2. gliese42

    I am an American Indian and I tried buying Indian goods but what shocked me was the price. Why does Chinese and even American made Indian cookies are much more cheaper than the Indian one. What's wrong India?

    January 16, 2012 at 5:14 am |
  3. Seatle06

    Many woman of India should first stop wearing those awful scarfs, sari, gaghra or whatever they call it. It makes them look EXACTLY like the woman of impoverished African nations where they are close to starving to death. Why do you think European/Western style clothing is so popular around the world including China. Stop wearing those dreadful clothes that makes your nation look like a third world garbage pile and then your image as a more developed nation will certainly begin to improve. Until then...

    January 16, 2012 at 5:28 am |
  4. FIP Wilson

    What corruption? In India the motto is 'IN CORRUPTION WE TRUST'.
    Accept corruption and live with it. Indians do not have problems with corruption. Why should yoju?

    January 16, 2012 at 5:44 am |
  5. V

    @Seatle06 ...wow ...that will definitely help Indian economy! ...as if!! lol

    January 16, 2012 at 5:45 am |
  6. V

    @Seatle06 ...btw ..it's Women of India ..uneducated!

    January 16, 2012 at 5:46 am |
  7. Desiboy

    Indians, please take the criticism well.

    If we simply deny these facts and don't change, our nation will never rise above this mess.

    As for hateful Pakistanis who are writing stupid comments, as corrupt as India may be, it is still million times better than the failed state of Porkistan, the largest terrorism exporter.

    January 16, 2012 at 6:17 am |
  8. Choco monster

    We need to make sure we have smooth business with India because for the survival of the world, we need to replace China as the manufacturer. Countries like India and other emerging markets need to get their stuff together not just for their own well being but for the world's.

    January 16, 2012 at 6:48 am |
  9. spa

    .India needs rebirth, but it is tooooo late. becasue we are right now a long line outside the apple store in NY,and you are in a long line for morning toilet.

    January 16, 2012 at 7:30 am |
  10. ROCK

    i guess we as an Indian should not have to change over dresses viz sarees , lehanga chunnia etc for the sake of some ppl like SEATLE doesnt understand our culture....more over ours is different society where we value our partner n have strong bond with him /her ...not like westerners where every season u change ur partner n say same deepest of love stuff to each of ur partners......how lousyyy is this sounding...how can a person say these words " u r my true life partner" to so many peoples.....its like getting polygamous tribal way, where ppl try to fool each other every season......to be honest tribal r atleast honest with themself n accpeting the same.....

    Further...Running such a big democrazy with no power againt people is very very complex thing to do...most of the people sitting doesnt even imagine how big is this system running by indian democratic govt....where most of the developed ppl fighting over thier region wine n language...though indian republic having more than 10 language which over 50 million people wud be speaking ....which if we go to europe wud harly be 2-3 language n US just one....apart from this the diversity of culture is not to be discussed over here ..as it wud take years to discribe........further the beauty of Indian republic is all such culture n languages existing without any rationalisation over any of such language or culture.....everybody is existing with pleasure...............dont you think that such a marvellous thing which we wudnt find any where in the world.....

    Regarding topic of the matter.....Corruption....no doubt there is corruption in India both top layer n lower layer.....but why dont get reported about any top level curroption in developed world which is being prevalent in big way..thought tightly vield.......why such a dichotomy in reporting the full news.......

    Further....i am sure we gonna be coming as more cleaner country , though it gonna take so many years , but still average indian is more mentally satisfied than polished, obnoxious, snobish westerner......

    January 16, 2012 at 7:47 am |
  11. ROCK

    I think...Seeatle forget to see the riots during all past cyclones..wherein all american running after valuables lying along devasted houses....rather then looking to save the people from their wounds.....such a pathetic state of humanity...wherein someone is dying in front of you and still u r looting his/her goods.....shamelesss.....its more naked then anything else in life...

    January 16, 2012 at 7:50 am |
  12. Singh

    This story truly tell what is India is like. I want to help my cousin back home but scared to put any Money. I do imports from China and Hong Kong in my current country and never have any problem.

    January 16, 2012 at 8:35 am |
  13. Ed

    I am South East Asian and been to Mumbai and New Delhi several times. India is an emerging power with large global conglomerates, nuclear power, billionaires, academicians, vibrant culture etc. But other than the culture and some brilliant and nice people at work, I was surprised not to find sign of India's wealth. Its a fun place, but I wonder where is the development... maybe in Bangalore? Or in the Himalayas up north? I don't know, maybe I have been to the wrong places. From reading the local papers, I can tell that local politics is as chaotic as the streets of Mumbai. Compared to China, I think India is in trouble controlling its people. When I say "controlling" I mean implementing the laws.

    January 16, 2012 at 9:26 am |
  14. Pavi

    I think the author wrote this in a haste and is contradicting herself in the last paragraph regarding China and India. Though I agree to some extent but not so much. I wonder how the surveys were done.

    January 16, 2012 at 10:19 am |
  15. iat7b

    A bit saucy in my earlier comment....and it didn't get published! Jeeze! I even toned it down a notch...rest of the world.....you just missed some funny observations thanks to you know who......killjoy!

    January 16, 2012 at 10:45 am |
  16. Frank

    Lots of trolls (Seatle06) in this thread. I wish they could be tagged for stupidity and expulsion.

    January 16, 2012 at 10:47 am |
  17. ashok

    This article is 100% TRUE. Yes, i am an INDIAN..I am very proud to say that i am an indian..other than that proudness, there is nothing i can feel about my country...I would like to start with an example of my own brother...he has passion towards MUSIC...but we lived in a house which belongs to lower middle class level...my bro wants to install a big home theater in that tent like house...he never aimed to have a big house and then buy a home theater...this example reveals the fact about india...unless otherwise we improve the basic infrastrastructure like good highway, good drinking water, etc we can not improve our country(india) at all...please accept the truth and try to change...

    January 16, 2012 at 11:01 am |
  18. Avinash

    So true! The Indian growth story is very superficial or at the best, limited to upper middle and higher class. Corruption is a chronic problem and there's no one else to blame that ourselves! I strongly believe that government and bureaucracy (anywhere in the world) is only as good as the rest of nation!! If all the government officials and bureaucrats are replaced randomly by another set of people, they would behave in similar manner. Its because everyone is corrupt, we have corrupt people in government. The only difference is they have a lot of power at their hands that makes them stand out and look worse!!

    Its all about general population's mentality, education and believe it or not... the past!

    January 16, 2012 at 12:44 pm |
  19. sadaboutindia

    "However, it was not all doom and gloom for India. The report did mention that India was better than the other BRIC nations, Brazil, Russia and China, as the fastest place to set up a new business and to deal with construction permits. India was the second fastest place to deal with export and import procedures."

    Don't you think the corruption goes hand-in-hand with these observations?
    The reason why it is fast to set up business and to deal with export and import procedures is that one can bribe the right people to smoothen the procedures.

    January 16, 2012 at 12:49 pm |
  20. James

    india has potential to be on par with china, unfortunately corruption is deep in india, so integrated its part of the culture .

    January 16, 2012 at 1:43 pm |
  21. History99

    Foreign investment and foreign trade both are just part factors for a counbtry's economic rise, or not! I wonder how the surveys were done, too. Could this company know Asian languages, such as Vietnamese, Thai or Malay; and how many samples were made.

    Singapore and Hong Kong both are so small, and they use English, so their bureaucratic system are good?

    The US has highest incarceration rate, half of world prisoners are US citizens in the US jails. So - the US is most corrupt country? Or the US education is most corrupt?

    January 16, 2012 at 2:17 pm |
  22. Sanseh

    Well corruption is too much in India an reason for backwardness. I often tell India is in those colonial era times where bueracracy controls too much power without any checks and balances they lord around and are the henchmen of policians which wield absolute unquestion power. It is doubtful India is democacy in the most remotes sense as it by one party rule too long. Further the party that rules existed before independence using the same techniques to rule nondvelopment/illiteracy . Even the election system is considered rigged in many ways. Poverty is exploited by politicians for their personal gains.Progress is occuring because of eductaion of public.

    January 16, 2012 at 2:20 pm |
  23. History99

    In 2020, India's GDP will surpass corrupt European countries, such as the UK and Italy. In 2029, India's GDP will surpass other corrupt European countries, such as Germany and France. That is the destiny for world history.

    European fortune is from most corrupt and evilest behavior – black slave trade, black slave labors and stealing resources from invading other countries. The real history is still corrupted by these immoral European countries.

    January 16, 2012 at 2:29 pm |
  24. xyz198155

    we need to seriously try and improve driving on roads in india. This reflects a lot about one's self discipline.
    We indians need self discipline and leaders at the grass root level. People need to take more responsibility onto themselves.
    Also we need not have to ape the west in every aspect, not all aspects of the west are that great.
    There is something really worthwhile india has offered time and again, we need to dig that out of our backyards and make use of it.

    January 16, 2012 at 3:02 pm |
  25. xyz198155

    Fixing the outside world (ie, higher GDP), will not solve human problems. Today, a human being's problem is all within in the head. The head of a human being is not able to function at its best. That's why we have wars, poverty etc....
    Why is it that in spite of all the advancements in the world, man still remains poor within his self. Something really has been lacking with respect to exploring the inner nature of man. In this respect india has a lot to offer, although lots of indians keep complaining about indian spirituality, there is really something worthwhile in india, that indians themselves are un aware of.

    January 16, 2012 at 3:06 pm |
  26. yash

    @Seatle06 btw skirt and pajamas have come from India....

    January 16, 2012 at 3:21 pm |
  27. Nice

    I think the main issue is democracy. Don't get me wrong, democracy is fantastic. But from a 'get the country moving and building' point of view, there lies the problem – too many democratic politics come into play. By the time the bill gets passed, it's 3 years late.

    If you look at China, where all the decisions are done by the central ruling party, projects can be up and running in a matter of weeks because there are no interference of democratic processes. Not always good and fair, but certainly quick in getting things done.

    January 16, 2012 at 3:42 pm |
  28. ineedabailout from londonpavedwithgold

    @Seatle06, what a pig ingnorant view. Please go away and learn some manners!

    January 16, 2012 at 5:54 pm |
  29. Jimmi Kristensen

    I doin't understand why people there vote for the congress party, that supports protectionism and bureaucracy, the hindu party is much better to do reforms and change. If they would stop their stupid visa requirements, travel limitations and import restrictions and create free market, the tourism there would double and their export too.

    January 16, 2012 at 11:05 pm |
  30. History99

    It is "modern style" not "European/Western style clothing", certainly before French Revolution the European clothing style is different. In my opinion Sari is beautiful; I like several traditional Asian clothing.

    However one thing is important for upgrading India's spirit of bureaucracy. India must have one national language (not eight), English is just a foreign language.

    January 16, 2012 at 11:19 pm |
  31. parijat luthra

    in india judiiary is ver very slow, some cases take from 10 years to 50 years to solve.

    if that gathers pace, most of the issues would vanish, as the laws are there, but no implementation.

    the budget of judiciary and no of judges, despite the huge population is low.

    January 17, 2012 at 2:40 am |
  32. Little Aussie Battler

    The difference...??? India is a democracy. Jai Hind!!

    January 17, 2012 at 3:37 am |
  33. eduardo kawak

    Bureaucracy – colonial England's lasting gift to India. This nation and its people have since perfected the art of the Red Tape beyond anything Kafka ever dreamed. Imagine an employee dispute over sick leave that spends 27 years in the courts system? And corrupt practices are so indoctrinated into the people, the country has lost the ability to function by the book.

    January 17, 2012 at 12:13 pm |
  34. Arun

    @seattle – not sure where you from but am speechless by your ignorance. BTW what has what one wears to do with the economy of a country? And who are you to comment on a country's clothing? What makes you an expert? You better sit in a corner and smoke some dope. It will perhaps clear your brain.

    January 17, 2012 at 1:19 pm |
  35. flippin chicken

    I dont see the problem........just pay the local officials and boom........your red tape is gone.

    January 17, 2012 at 5:37 pm |
  36. eman

    Shoof strange girl What do you de Ptsaly


    January 27, 2012 at 12:44 am |
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