Corruption is the most severe constraint in job creation in India, a World Bank report on More and Better Jobs in South Asia has said.
The report, which studies the creation and growth of jobs and wages across the eight South Asian countries — Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka — said that between 2000 and 2010, these countries created an average of 800,000 jobs a month, which is now expected to rise to 1.2 million a month for the next few decades.
That, however, could be at risk as firms in South Asia face a number of constraints, with political instability, access to electricity and corruption topping the list.India reports the highest incidence of bribes among South Asian nations for obtaining operating licences and construction permits.
“Firms in India report spending an average of 2.2% of sales on informal payments and an average 8.1% of managers’ time dealing with the government,” the report said. The manufacturing sector in India is more constrained by corruption than the services sector, paying 4.9% of sales to and devoting 12.6% of managers’ time to bribes, the report said. The highest incidence of bribes occurs in grant of construction permits, tax meetings, operating licences and electrical connections, the report added.
Corruption in the country’s 14 high-income states is the biggest constraint in the business environment, compared to electricity being the biggest constraint in the remaining 18 low-income states, the report said.