Content

1. Deepening global corruption as a pointer for India
2. The judicial push for environmental CSR

Deepening global corruption as a pointer for India

Context

• Transparency International’s CPI 2025 shows global average declining to 42/100, with 122/182 countries scoring below 50, indicating worsening corruption and weakening institutional accountability worldwide.
• India scored 39 (Rank 91/182), reflecting stagnation over a decade (38–41 range) despite rapid economic growth, raising concerns about mismatch between economic expansion and governance quality.

Relevance

• GS-II (Governance): Transparency, accountability, anti-corruption institutions
• GS-III (Economy): Investment climate, ease of doing business

Practice Questions

Q1.Global trends of rising corruption reflect deeper institutional crises. Analyse India’s position in the Corruption Perceptions Index and suggest reforms for improving governance quality.(250 Words)

Issue in Brief

• Global corruption is deepening, linked to weak oversight, shrinking civic freedoms, and institutional erosion, affecting democratic accountability and governance credibility.
• India’s stagnant CPI score highlights persistent gaps in transparency, regulatory enforcement, and institutional independence, limiting its aspiration to become a developed economy by 2047.

Basics

• CPI (Transparency International) measures perceived public sector corruption, based on 13 data sources covering procurement, judiciary, regulatory quality, and accountability frameworks.
• Scores range 0 (highly corrupt) to 100 (very clean); score below 50 indicates serious corruption concerns and weak governance systems.

Key Data & Evidence

• Global average CPI score: 42 (2025), lowest in over a decade, indicating systemic global governance decline.
• India: Score 39, Rank 91/182, with no significant improvement since 2014 (38) despite becoming world’s 4th largest economy.
• Economic cost of corruption: Estimated ~5% of global GDP (~$2.6 trillion annually); India loses 0.5–1.5% of GDP, amounting to tens of billions annually.
• Compliance burden: 26,134 imprisonment provisions across business laws; a pharma startup faces 998 compliances, ~49% with criminal liability, increasing rent-seeking risks.

Challenges

A. Governance & Institutional Weaknesses

• Persistent gaps in transparency, accountability, and oversight mechanisms reduce public trust and weaken regulatory credibility and institutional independence.
• Perception-based stagnation indicates limited structural reforms, despite episodic anti-corruption actions, affecting long-term governance credibility.

B. Economic Implications

• Corruption increases transaction costs, regulatory uncertainty, and compliance burden, diverting entrepreneurial energy from innovation to rent-seeking navigation.
• Weak governance affects FDI inflows, sovereign ratings, and capital allocation decisions, making governance quality a competitive economic variable.

C. Regulatory & Compliance Architecture

• Excessive criminalisation of business laws creates discretionary power for officials, increasing opportunities for corruption and harassment.
• Complex regulatory frameworks discourage ease of doing business and startup ecosystem growth, particularly in high-compliance sectors like pharmaceuticals.

D. Comparative Perspective

• India performs better than Pakistan, Bangladesh, but lags behind East Asian and European countries, which improved through institutional reforms and regulatory predictability.
• Countries with rising CPI scores emphasised judicial efficiency, transparency laws, and independent oversight institutions.

Positive Trends 

• Digital Public Infrastructure (DPI) and Direct Benefit Transfers (DBT) have reduced leakages in welfare schemes by minimising intermediaries and discretion.
• GST Network enhanced tax transparency and formalisation, improving traceability in indirect taxation systems.
• RBI Digital Payments Index reached 516.76 (Sept 2025), reflecting rapid digitisation reducing cash-based corruption avenues.
• E-procurement and digital governance tools have improved transparency in public procurement and service delivery mechanisms.

Governance Dimension

• Corruption is not merely a legal issue but a systemic governance failure affecting trust, equity, and institutional legitimacy.
• Undermines constitutional values of equality (Article 14) and rule of law, disproportionately affecting vulnerable populations.

Way Forward

• Regulatory simplification and decriminalisation of business laws to reduce discretionary power and compliance burden.
• Strengthen independent oversight institutions (CVC, CAG, Lokpal) with greater autonomy, resources, and accountability mechanisms.
• Expand digital governance and AI-based monitoring systems to minimise human discretion in service delivery and procurement.
• Improve judicial efficiency and contract enforcement, ensuring time-bound resolution of corruption-related cases.
• Promote transparency frameworks (open data, public procurement portals) to enhance citizen oversight and accountability.

Prelims Pointers

• CPI published by Transparency International, measures perception of public sector corruption, not actual cases.
• Score range: 0–100, with below 50 indicating serious corruption concerns.
• Based on 13 data sources, including World Bank, WEF, and other institutions.
• India’s score (2025): 39, rank 91/182 countries.
• CPI focuses on public sector corruption, not private sector or household-level corruption.

The judicial push for environmental CSR

Context

• Supreme Court invoked Article 51A(g), emphasising environmental protection as constitutional duty, triggered by Great Indian Bustard habitat destruction by energy projects, reframing CSR from charity to obligation.
• Rising climate challenges (air pollution, water stress, waste crisis) alongside India’s Net Zero 2070 commitment (COP26) highlight urgency of aligning corporate spending with ecological priorities.

Relevance

• GS-II (Polity): Supreme Court activism, Fundamental Duties
• GS-III (Environment): Conservation, climate commitments, restoration

Practice Questions

Q1.The Supreme Court’s interpretation of CSR marks a shift from voluntary charity to constitutional obligation. Analyse its implications for environmental governance.(250 Words)

Issue in Brief

• Despite mandatory CSR under Companies Act, 2013, corporate spending remains skewed towards social sectors, with environment receiving only 7–9% of funds, indicating systemic neglect of ecological restoration.
• Corporate preference for short-term, visible projects like awareness drives and renewable initiatives undermines long-term ecosystem restoration requiring sustained investment and technical expertise.

Static Background

• Section 135, Companies Act, 2013 mandates eligible firms to spend 2% of average net profits on CSR, covering areas including environmental sustainability and ecological balance.
• Article 51A(g) imposes a fundamental duty on citizens and corporations to protect environment, now judicially interpreted as linked with right to carry on business.

Data & Evidence  

• CSR allocation pattern: Education ~38%, Healthcare ~22%, Rural Development ~10%, while Environment only 7–9%, reflecting imbalanced prioritisation.
• Bonn Challenge commitment: India targets 26 million hectares restoration by 2030, but private sector contributed only ~2% of 9.8 million hectares restored so far.
• Demonstrates massive “restoration gap” between industrial ecological damage and corporate investment in ecosystem recovery.

Challenges

A. Structural & Economic Bias

• Corporates prefer low-cost, high-visibility CSR activities, avoiding complex, long-term restoration projects involving forests, soil health, and biodiversity monitoring.
• Short reporting cycles and compliance mindset incentivise quick-impact projects, rather than multi-year ecological investments with delayed outcomes.

B. Institutional & Capacity Constraints

• Lack of technical expertise in restoration ecology among CSR partners limits adoption of scientifically sound afforestation and biodiversity recovery projects.
• Weak coordination with forest departments, universities, and NGOs reduces effectiveness and scalability of restoration initiatives.

C. Ecological Concerns

• Popular methods like Miyawaki plantations prioritise rapid growth, often compromising native species diversity and long-term ecosystem stability.
• Urban bias in CSR site selection neglects degraded forest and remote landscapes, where restoration needs are most critical.

D. Governance & Policy Gaps

• Absence of clear policy frameworks for degraded land restoration discourages corporate participation in large-scale ecological projects.
• CSR framework remains compliance-driven, lacking mandatory environmental allocation or outcome-based ecological metrics.

Good Practices 

• Mahindra’s ‘Project Hariyali’ planted ~25 million trees, focusing on survival rates rather than plantation numbers, ensuring ecological sustainability.
• ITC’s social forestry (1.3 million acres) integrates livelihood generation with conservation, demonstrating scalable, inclusive restoration models.
• Tata Group watershed projects, JSW mangrove restoration, and HUL circular economy initiatives show corporate potential in ecosystem recovery.

Ethical Dimension

• Supreme Court reframes CSR as constitutional obligation, linking business rights with environmental responsibility, shifting paradigm from voluntary philanthropy to enforceable accountability.
• Calls for transition from shareholder-centric governance → ecosystem-centric governance, where corporations act as fiduciaries of environmental sustainability.

Way Forward

• Introduce minimum CSR allocation benchmarks for environmental restoration, ensuring balanced sectoral distribution aligned with climate commitments.
• Shift to outcome-based CSR metrics like carbon sequestration, water retention, biodiversity indices, replacing input-based compliance reporting.
• Establish Restoration Trust / Escrow Funds to ensure long-term financing continuity for landscape-scale ecological projects.
• Promote multi-stakeholder partnerships involving forest departments, academia, NGOs, and local communities for scientific and participatory restoration.
• Prioritise degraded and remote forest landscapes, aligning CSR with national targets like Bonn Challenge and Land Degradation Neutrality goals.

Prelims Pointers 

• CSR mandated under Section 135, Companies Act, 2013 → 2% of profits.
• Environment is a permitted CSR activity, but not mandatory quota-based.
• Article 51A(g) relates to environmental protection as fundamental duty.
• Bonn Challenge → global restoration target of 350 million hectares by 2030.
• India’s target → 26 million hectares restoration by 2030.