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In the last 10 years, the reporting of economic crimes such as cheating and criminal breach of trust, has doubled
New Delhi: A look at the 2015 National Crime Records Bureau data
shows a marginal increase in the number of economic offences from
those reported in the previous year. But if one goes back a decade,
the numbers stand in stark contrast.
In the last 10 years, the reporting of economic crimes such as cheating
and criminal breach of trust, has doubled.
Crime rate, or the incidence of crime per 100,000 people, also shows a
similar trend. For economic offences, the crime rate was 6.6 in 2006.
That increased to 11.9 in 2015.
Rajasthan had the worst record in terms of economic offences in 2006
and things havent got any better in 2015.

Rajasthan had the worst record in terms of economic offences

in 2006 and things havent got any better in 2015. Photo: Mint

The other states with the highest incidence of economic offences in

2015 are Telangana, Assam, Haryana and Kerala. In 2006, Punjab,
Andhra Pradesh and Kerala topped the list.

Among Union territories, Chandigarh occupied the top position in terms

of the crime rate followed by Delhi in 2006. In 2015, their positions are reversed.
A survey conducted by PricewaterhouseCoopers released in April said that 31% of the respondents were affected by economic offences in the
last two years, and 56% had an increased perception of threat of cyber crimes.
The rising incidence of economic crimes can potentially undermine Indias efforts to attract foreign investment and improve its ease of doing
business ranking.
To be sure, the rise in crime rate has also to do with the increase in the volume of transactions in India.
The volume and value of contracts, whether public or private, are much higher now than before, leading to more availability of money at every
level, according to Shankh Sengupta, a partner at law firm Trilegal.
There is also greater awareness and activism around issues of bribery and corruption in public office, he added.
NCRB data shows a greater number of public officials being caught under the law during the last 10 years. In cases probed by Central Bureau
of Investigation, the number of cases reported for regular department action has increased 15% to 272 in 2015 from 237 in 2006. Since 2012,
these cases have gone down.
The biggest economic frauds in India in the past decade include the Satyam Computer Services Ltd case in 2009, a Rs7,314 crore accounting
fraud, and irregularities in the allotment of 204 coal blocks that were cancelled by the Supreme Court in 2014. The case of Ricoh Indias
falsified accounts leading to a loss of nearly Rs1,123 crore in 2016 is a recent example.
The NCRB data for 2015 shows that cases of cheating and criminal breach of trust that involve loss of property of more than Rs10 crore have
increased from 5 and 4, respectively, in 2006 to 49 and 27 in 2015. India has enough laws to tackle economic offences, experts say.
I think our laws are fairly strict, a fraud is a fraud anywhere in the world whether you have the UK Law or Indian law or the Japanese law. If
you embezzle money, its cheating, its fraud, its a criminal breach of trust, said Pallavi Shroff, managing partner of law firm Shardul Amarchand
Mangaldas & Co. We have very strict laws, its just the enforcement of the laws that becomes a bit of a challenge.
The compliance requirements under the Companies Act, 2013 and its rules were introduced to curb possible fraudulent activity within corporate
entities. Increased corporate reporting of its financial activities, greater responsibility of auditors (especially for reporting fraud within a
company) were some of the features of the 2013 Act. The law also introduced a separate provision defining fraud, which was punishable with
up to 10 years imprisonment.
The slow pace of investigation and delays in courts deter investments to India, said Sengupta.
At the end of the day, its not sufficient to simply invite people to come and invest, the investors need to know that the country will facilitate the

07-10-2016 12:44

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investment, but they will ensure that I will be able to get a return on my investment on fair terms, he said.

07-10-2016 12:44