According to the latest report of the Washington-based Global Financial Integrity, ‘Illicit Financial Flows from Developing Countries: 2001-2010,’ India was ranked behind China, Mexico, Malaysia, Saudi Arabia, Russia, the Philippines, and Nigeria in that order. China proved to be 20 times more corrupt than India. Yet, India projected itself among the least governed democracies when it came to managing poverty, protection of human rights, crime against women and children, the role of bribery in the social system, administration of social and criminal justice and healthcare.

Will 2013 be any different? Being a pre-Lok Sabha election year, political turmoil over corruption expose’, inter-party feud, centre-state relations and utter governance deficiency may, in fact, reach a new low. The economic growth had hit the rock bottom in 2012, the worst in the last two decades. However, every one wishes the coming year were different. Indian economy is looking up. Inflation is downward. Investor confidence is improving. The latest state level election battle between Congress and Bharatiya Janata Party (BJP) ended in an honourable tie. A common man’s pocket friendly budget in February 2013 by Finance Minister P Chidambaram, hopefully accompanied by a good winter harvest, normal monsoon, cheaper bank credit, higher foreign direct investment flow into business and industry, better job prospects, and lower crime and corruption rates can buoy up the otherwise staid life of average Indians.

One expects the Congress party, instead of sulking in the big electoral defeat in Gujarat for the fifth successive time, will build on its modest year-end poll victory in the small Himalayan state of Himachal Pradesh and pursue more pragmatic policies to win the confidence of people across the country to lead the UPA government in Delhi for the third time in succession in 2014. In fact, Palaniappan Chidambaram’s coming budget holds the key to the possible UPA success in the 2014 Lok Sabha election. The business, industry and the common man hope that the forthcoming annual budget would focus on development and not doles. Development creates job and spirit of excellence in an atmosphere of healthy competition while doles encourage drudgery and disenchantment among receivers and dishonesty among distributors.

The issues which the government needs to settle quickly include reallocation of coal blocks for power plants, pending environment clearance to a large number of core sector projects and land acquisition for pending big ticket infrastructure projects. Neither fund, nor the domestic lending rate is a growth constraint. The time taken by the government to take important development decisions is. The policy to improve industry and trade links with Japan needs to be pursued more vigorously now that India has a true friend in Japanese Liberal Democrat Prime Minister, Shinzo Abe. A closer Indo-Japan economic relation will boost economies of the two countries, both suffering from slow growth syndrome. Japanese technology and FDI and India’s vast consumer base can produce a formidable economic union while the picture of western economies continues to look gloomy through 2013 and 2014. A better strategic relation with China, built on mutual trust and linking expansion of trade with diplomacy, is desirable for the economic progress of both the countries and the region.

For India as well as the rest of the world, the faster it forgets the pangs of failures, lack of political leadership, governance deficit and declined moral turpitude in 2012, the better it is for future development and public good. The rising illicit wealth among the rich and politically influential needs to be checked, accounted and harnessed for India’s economic growth. Can the rise of the youth and the son brigade in India’s politics and corporate world change the current skeptical environment and ensure greater transparency and better governance in business and politics? Young and educated politicians such as Rahul Gandhi, Akhilesh Yadav, Rajesh Pilot, Jyotiraditya Scindia, Joy Panda, Supriya Sule, Agatha Sangma, Dushyant Singh, Raj Thackeray, Prakash Jawadekar, Stalin and Jitin Prasada should assume more important role in national and regional politics.

Similarly, the new generation of India’s western-educated business scions may usher in a changed management environment focusing on corporate morality, governance and financial transparency. The end of 2012 ended the 21-year-long reins of Ratan Tata as head of the $ 100-billion Tata business empire, the country’s largest, 50 per cent of the turnover of which comes from global operations. A non-Tata and non-Indian national, 44-year-old Cyrus Pallonji Mistry, the youngest son of Irish construction magnet Pallonji Mistry, will head the business conglomerate, effectively from 2013. The change over, though looked smooth, is expected to have a far-reaching impact on India’s biggest multinational business conglomerate. Several of Tata enterprises are currently underperforming and losing money. Other business scions expected to acquire higher responsibility and say in India’s family-run big business in 2013 include Aditya Mittal, Pawan Munjal, Naveen Jindal, Prasant Ruia, Prasant Jhawar, Malvinder Singh, Sulajja Firodia Motwani, Siddharth Mallya, Karan Adani, Punit Lalbhai, Aditya Burman, Kushagra Nayan Bajaj, Raakhe Kapoor, Roshni Nadar Malhotra, Shashwat Goenka, Aditi Kothari, Arun Alagappan, Upasana Kamineni, Zahabiya Khorakiwala, Lara Balsara, Ashni Biyani, Lakshmi Venu, Nisaba and Pirojsha Godrej, Uzma Irfan and Amruda Nair.

The year 2012 witnessed a new low in India’s post-reform economic and political life. Economy grew at the slowest pace in the last two decades – just around five per cent. Industrial production grew by hardly two per cent. Business confidence continued to erode as the government proved to be directionless in the face of financial scandals involving various ministers, ruling party satraps and top officials unfolded in quick succession through the year. Political ethics took a severe beating as the government desperately pushed through its controversial agenda of allowing controlling FDI in multi-brand retail trade. Crime against children and women reached its peak in 2012 culminating in most horrendous gang rape and inhuman torture of a 23-year-old girl and her boyfriend in a Delhi school bus that raised nation-wide protests and public condemnation of the sloppy and insensitive police, administration and legal system. The incident drew the attention of the global media as the growing lawlessness earned Delhi a new name, the rape capital of India.

The picture of 2012 elsewhere in the world was equally depressing. Although the UPA survived the coalition politics, the coalition governments in Italy and Japan fell. Media ethics came under severe scrutiny in the UK, following Rupert Murdoch-led NewsCorp’s phone-hacking scandal, as well as in India. One of India’s leading TV channels, Zee, is facing investigation into alleged blackmailing of businessman-MP Naveen Jindal reportedly demanding Rs. 100 crore to drop a campaign against the business group over its involvement in the coal block allocation scandal. Murdochs – father and son – were summoned to the House of Commons to face grilling by the Parliamentary committee. Junior Murdoch was attacked with shaving foam pie. Two Zee editors spent weeks in the lock-ups to face police investigation. Management deficit grounded cash-strapped Kingfisher Airlines, India’s second largest commercial carrier, and threatens to bust the embattled Sahara group over returning public deposits amounting to thousands of crores of rupees.

India’s banking regulator, RBI, drew flak as a US investigation into operations of two British multinational banks, HSBC and Standard Chartered, involving money laundering and tax evasion linked their respective Indian arms. HSBC was fined $ 1.9 billion by the US regulator. Swiss banking giant, UBS, which reportedly holds many Indian accounts, was fined $1.5 billion for fixing London Interbank Offer Rate (Libor). Earlier, Britain’s Barclays was fined $450 million for rigging Libor, which issued price trillions of dollars worth commercial loans including those raised by India’s corporate sector.

WikiLeaks founder Julian Assange, suffering from severe lung infection, threatened to expose more illegal government deals across the world. The Indian government and money launderers have reasons to worry. Business and media baron turned politician Sylvio Berlusconi, who brough down the Italian government just before the 2012 Christmas, is said to be engaged with a girl, 48 years his younger. The former Italian prime minister’s fresh wedding is likely in 2013. The America’s top commander in Afghanistan, General Petraeus, lost his job over sex scandal. NATO soldiers in Afghanistan continue to dies in hordes in attacks by Afghan police and military, owing allegiance to Taliban. Repeated school massacre in the US, the last one being at Connecticut in early December, eroded the confidence of parents and guardians of American children across the country leading the chorus against the lack of public security and free arms sale.

John Dalli is considering legal action over the circumstances in which he was removed from his job as European Health Commissioner. Party leaders in the European Parliament have unanimously backed a new code of conduct for members after a spate of alleged corruption scandals. Dishonest money-making on the side has been under scrutiny among the European Parliament’s group presidents. Bribery allegations in the European Parliament have brought promises of tighter rules to govern relations between the members and lobbyists. Brazil’s Supreme Court found three top aides of former President Luiz Inacio da Silva guilty of corruption. An anti-crime squad in the southern French city of Marseille has been shut-down due to alleged widespread corruption. The wife of former German president, Bettina Wulff has published a new autobiography in which she rejected allegations that she once worked as an escort. The London Summer Olympics and Para-Olympics went off peacefully amidst unprecedented security, reconfirming China’s ascendancy in the games. India, the world’s second most populous country, failed to bag even a single gold.

‘Vatileaks’ of modern day Judas shook Catholic Church as Pope Benedict XVI’s personal butler, Paolo Gabriele, 46, was accused of leaking sensitive documents to the media. The scandal has come to be called ‘Vatileaks’. Paolo got Christmas pardon from the Pope. Umberto Bossi, founder and former leader of Italy’s Northern League is under investigation in a probe into the misuse of public funds. British Prime Minister David Cameron was forced to make a statement in the House of Commons to defend his embattled cultural minister against alleged secret help to embattled media mughal Rupert Murdoch. Former Turkish head of police, Mehmet Ağar, was handed down a five-year jail sentence, 15 years after a scandal exposed links between the police and the Mafia. Former US presidential candidate John Edwards has appeared in court in America on charges of using campaign contributions to cover up an affair. Spain’s King Juan Carlos invited public ire for his elephant-hunting holiday to Botswana at a time when the country is reeling under a debt crisis.

The Chinese Communist Party’s Central Committee expelled its former top politician Bo Xilai’s on crime and corruption charges. The New York Times said Chinese Premier Wen Jiabao’s family has accumulated huge wealth during his period in power. On November 15, China’s 'princeling' Xi Jinping was crowned the new head of the ruling CPC and the powerful military in a smooth transition to steer the world's second largest economy over the next decade, ending the 10-year reign of President Hu Jintao amid concerns over rampant corruption and widening rich-poor divide. Xi Jinping will assume the charge in March, 2013. Sino-Japan relations reached almost a flash point over the control of a tiny island, Senkaku, in East China Sea. North Korea’s year-end rocket launch and intercontinental ballistic missile programme and the presidential election victory of Park Guen-hye, daughter of South Korea’s longest ruling former dictator Park Chung-hee, added diplomatic tension in east Asia.

Secular Egypt voted for Islamist constitution. UN ‘observer’ recognition to the state of Palestine and the rise of Arab Spring brought hope for peace and democracy in West Asia despite the defiance of Syrian dictator, Bashar Hafez al-Assad, against the growing public and international demand for him to step down to usher in democracy in the Arab country that led to massacre of tens of thousands of innocent as well as revolting Syrian civilians through 2012. Notwithstanding the hanging of Ajmal Kasav, the lone survivor among the Pakistani terrorists involved 26/11 Mumbai massacre held with a killer carbine in hand, the Indo-Pakistan peace process continued to suffer following unnecessary and undiplomatic verbal onslaught against India by visiting Pakistan Interior Minister Rehman Malik in New Delhi. Pakistan failed to decide on according the most favoured nation (MFN) treatment to India for business and commerce despite an earlier understanding on the subject between the two countries. Planners have scaled down India’s 12th Plan annual GDP growth target to eight per cent from an earlier 8.5 per cent. (IPA Service)