3. Effective Governance
3.1 Democratic Representation
3.2 Lack of Corruption
3.3 Efficient Administration
In-Country Assessment Information

3. Effective Governance

Goal – A popularly elected government free of corruption and functioning efficiently and transparently enough to guarantee economic freedom to individuals and support equitable property markets


3.1 Democratic Representation (Strong)

Core Question: Does the country have free and open elections for the leadership and can citizens engage in free enterprise?

Overall Ranking – 33 out of 166

Strong ratings are supported by a well developed legal framework, the freedom to associate and form civic organizations, and a free media that exposes scandal. However this is countered at times by ineffective enforcement of legislation due to corruption.

3.1.1 Voice & Accountability (Strong) Are citizens able to elect their government and do they enjoy freedom of expression, association and a free media?

Percentile Rank 58.29 (2012); Trend ↓ 

Though freedom of expression is higher than half the nations around the world, breaches fueled by politicians who can control police powers do occur. For example two women were arrested in 2012 over a Facebook post.

Source: Governance Matters 2010, World Bank –
Source: NDTV – Are citizens free to form political and civic organizations free of state interference and surveillance?

Rank 33 out of 166; Score 9.41 out of 10

Citizens are free to form civic organizations and political parties without state interference.

Source: The Economist Intelligence Unit Democracy Index 2013


3.1.2 Public Information (Weak)

Overall Score 70 out of 100 (2011) Are there regulations governing conflicts of interest in the executive and legislative branches of government?

Yes, Weak – under Conflicts of Interest Safeguards & Checks and Balances the Legislative Branch scored 61 and the Executive Branch 70. Can citizens access legislative processes and documents?

The Right to Information Act of 2005 provides strong legal rights for citizens to request information. However inefficiency of government response to such requests leads to less than perfect implementation.

Source: Global Integrity Report


3.1.3 Market Intervention (Weak)

Overall Freedom Ranking – 120 out of 178 Trend ↑ To what extent does the government intervene in the private sector including state owned industries?

Government spending is 27% of gross GDP and public debt is 67% of GDP. To what extent does the government control prices?

The government reduced fuel subsidies and raises rail fares for the first time in a decade in 2012.

Source: Index of Economic Freedom 2014 – Heritage Foundation


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3.2 Lack of Corruption (Very Weak)

Core Question: Is the public sector transparent and free of corruption?

Corruption is rampant across India at federal, state, and municipal/local levels. For both individuals and companies, bribes are required for almost any public service to be delivered. Many agencies have fixed bribe rates for various services offered.

Transparency (Weak)

3.2.1   What is the perceived level of corruption in the country?

Rank 94 out of 178; Score 36 out of 100

India has heavy corruption that touches every aspect of life across every income and demographic strata.

Source: Corruption Perceptions Index 2013, Transparency International

Integrity Mechanisms (Weak)

3.2.2   A National Integrity System is a framework where the principle institutions that contribute to integrity, transparency and accountability in a society can address corruption in a systematic way. Does a National Integrity System exist?

In the words of the National Integrity System report authors, “In terms of corpus of rules and regulations it appears that a lot has been done. But in reality one feels that a lot more is yet to be accomplished for ensuring results. In other words, the howl may exist, but the sting appears missing.”

Source: National Integrity System Assessment, Transparency International

Extralegal Payments (Very Weak)

3.2.3   How often do companies report that officials and/or companies expect additional payments to “expedite” services or gain business?

There is a high occurrence of bribery required for companies and individuals to receive almost every public service function. For many agencies, the bribe rate is fixed to a specific rupee amount tiered to different services requested.

Source: Interviews with investors


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3.3 Efficient Administration (Weak)

Core Question: Are quality services and qualified civil servants available to the public through the efficient use of public money?

The majority of capital slated towards development is lost to mismanagement and corruption of the civil service. Lack of accountability, influence of politicians, and recruitment hindered by caste requirements further hurts the efficacy of the bureaucracy.

Size of Government (Strong)

3.3.1   What is the size of government relative to GDP?

Government spending is 27% of gross GDP and public debt is 67% of GDP.

Source: Index of Economic Freedom, Heritage Foundation

Civil Service (Weak)

3.3.2   What is the quality of the civil service?

Score of 76 out of 100

Though ranked as strong by Global Integrity, India’s civil service is understaffed and prone to corruption.

Source: Global Integrity Report 2011
The Economist –

Government Effectiveness (Weak)

3.3.3   What is the overall effectiveness of the government?

Percentile Ranking 47.37 (2012); Trend ↓

India has had a disturbing trend of moving from a strongly ranked nation under this indicator to a weak one in the span of three years.

Source: Governance Matters 2010, 2011, 2012 World Bank


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