It will soon be a crime for private companies and their officials to give and receive bribes to and from other private firms and employees.
The union home ministry is set to add a chapter in the Indian Penal Code (IPC) to check corruption in the private sector.
The rule applicable to malpratices in granting and securing of government contracts will be extended to private sector contracts once the new chapter is incorporated into the IPC.At present, the law is focussed exclusively on corruption within the government and among public functionaries.
The move is a follow-up to the UN Convention against Corruption, ratified by India, that requires member states to address the supply side of corruption involving government functionaries and corrupt practices within the private sector.
“Private-sector-to-private-sector bribery can be a serious factor in undermining fair and reasonable competition and may result in pricing which may become unaffordable,” said V Narayanasamy, minister of state in the department of personnel and training, at a recent international conference on corruption. Narayanasamy added that there is a need to take concerted and coordinated steps to criminalise private sector bribery in “competitive interests of businesses”.
A senior government official said the concept underlying the proposed changes was that nobody should receive an advantage not legitimately due to him or her. If such a case is detected, it will be treated as a crime punishable with a few years in jail.
The Indian anti-corruption approach has so far focussed on the demand side, the public servant and looked at private persons, at worst, as just abettors.
The central vigilance commission’s national strategy against bribery has also detected gaps in the existing law.
“There is no direct provision prohibiting a private person from offering a bribe or engaging in other corrupt practices,” the strategy says. This gap needed to be plugged, particularly since the private person could even have been the initiator of the bribe-giver in instances of “collusive corruption”.