The growing challenge of economic offences in India

Source:-https://www.hindustantimes.com

India’s criminal justice system is struggling to deal with growing economic offences according to the latest Crime in India report released by the National Crime Records Bureau (NCRB), which works under the Ministry of Home Affairs. The report has crime statistics for 2019. While the number of such offences has been increasing in the past few years, arrests and convictions have been coming down.
Annual growth in economic offences fastest since 2014

The number of reported economic offences in 2019 was 165,000, a growth of 6.1% over the 2018 number. This is the highest annual growth in the number of economic offences since 2014. These crimes grew at double-digit rates in 2013 and 2014. The NCRB classifies economic offences into three broad categories: criminal breach of trust; counterfeiting; and forgery, cheating and fraud. The third category has the largest share of economic offences.

Case pendency rising, arrests and convictions coming down

While the number of economic offence cases has been rising, the police’s track record in dealing with them has been patchy. This is evident in a fall in the number of arrests and convictions, and a rise in pendency of cases. Even conviction rates, which rose in 2017 after a fall in 2016, have fallen for two consecutive years now. A report in this newspaper (https://bit.ly/3leQdUV) in January pointed to an increase in trial pendency in courts along with falling conviction rates for economic offences in recent years. The charge-sheeting rate – share of cases investigated by police in which charge sheets were filed – increased between 2014 and 2017, and has remained largely unchanged in the last three years.

The criminal justice system is wanting in terms of dealing with economic offences

A comparison of economic offences with other crimes in India shows that the criminal justice system is less capable when it comes to dealing with the former. In 2019, police investigation was pending in 54.6% of cases related to economic offences, compared to 29.3% of all cases registered under the Indian Penal Code (IPC). And the conviction rate was less than half the rate for all IPC crimes.
Why faster resolution of economic offence case is important

The Reserve Bank of India in its annual report for 2019-20 revealed that bank frauds amounting to ₹1.85 lakh crore were reported in the year 2019-20, an increase of over 159% from the previous year. This is in keeping with the recent rise in such frauds.

To be sure, bank fraud is only one of the 24 types of economic offences, a list that includes tax evasion, money laundering, insurance frauds, and stock market manipulation.

The increasing number of economic offences along with fewer arrests and poor conviction rate could encourage unscrupulous elements to indulge in more such activities. This will entail growing losses to both private and public wealth and erode India’s image as a rules-based economy.