ABSTRACT

Economic and business crimes have emerged as significant challenges in the modern global economy, particularly in India, where the rapid expansion of financial markets and technological advancements have transformed the business landscape. The increasing sophistication of economic offenses, including corporate fraud, money laundering, tax evasion, and insider trading, necessitates a robust legal framework and policy measures to maintain financial integrity and economic stability.

This dissertation, titled “Law and Policies Related to Economic Business Crimes: A Study in Indian Perspective,” is an endeavor to critically analysed the existing legal provisions, regulatory mechanisms, and policy frameworks governing economic crimes in India. The study aims to explore the effectiveness of laws such as the Prevention of Money Laundering Act, 2002, the Companies Act, 2013, the Securities and Exchange Board of India Act, 1992, and various other legislative measures intended to combat financial misconduct. Additionally, it examines the role of enforcement agencies and judicial intervention in ensuring compliance and penalizing violations.

The research draws upon doctrinal and empirical methodologies, encompassing a thorough review of statutes, case laws, scholarly articles, and governmental reports. Furthermore, interviews and surveys conducted with legal professionals, regulatory officials, and corporate stakeholders provide valuable insights into the practical implementation and challenges associated with economic crime prevention in India.

This dissertation aspires to contribute to the growing discourse on corporate governance, transparency, and accountability. By identifying loopholes and recommending policy enhancements, it seeks to aid policymakers, legal practitioners, and academicians in strengthening the legislative and institutional mechanisms governing economic business crimes in India.

I extend my sincere gratitude to my academic guide, mentors, and peers for their invaluable support and guidance throughout this research journey. Their insights and encouragement have been instrumental in shaping the direction of this work. I also acknowledge the contributions of industry experts and legal professionals whose perspectives have enriched this study.

With a deep commitment to fostering a fair and just economic system, I present this dissertation, hoping it serves as a meaningful contribution to the field of legal studies and economic regulations.

INTRODUCTION

The earliest form of human society as a society and thus crimes as old as it. Crimes are very intrinsic and evolving in nature. With respect to crime, it is that much dynamic that an activity can be crime at a certain point of time but it might not be a crime in some other point of time. One can do an activity which is a crime in one country but may not be crime in the other country. The nature of crime can change at the time frame one may have committed a crime at one time frame but not so in other time. Such as if you consider the example of modern time, prostitution1 is legal offence in one country and illegal in another part of the world. Just like the gambling may be a crime in one country whereas it may not be a crime in another country, prostitution is treated differently by different governments. Gambling on sports is a crime India but it is not a crime at UK. So, crime has a dynamism in itself and its definition is ever-changing in wrapping the place and the timing. If we explain crime in our common language so we consider it as wrongdoing for which is any existing law or the customs which are declared by any government body / agency or any other such authority which is responsible for the conduct of this person and area.[1]

Crime is an act of that goes against the law, in modern time. Thus, crime or offense may be towards the person or layman or can be towards the society. With respect to the law, there is one definition of crime for the government; science crime is defined. There is no such thing called crime, it is a constantly riding in parallel with the law. Law is the most fastest changing word which gets volatile with the change of law-making authorities.

In the economic business crimes encompassing in India’s socio-economic arrangement, the new-age crisis and danger involve threats that go beyond monetary measure. These crimes, frequently comprising complex schemes of financial fraud, corruption, tax evasion, insider trading, money laundering and corporate misdoing, erode the underlying framework of economic stability and governance[2]. That said, white-collar crime is different from other sorts of crime; it is extremely complicated (and non-violent) and is usually obscured by layers of legal and financial fromage. India, in globalise-economy transition phase has experienced an overwhelming scale, sophistication and impact of economic business crimes — puncturing investor confidence, hampering economic growth and eroding the faith of the public in institutions.

Determinants of growth and wealth competed with vulnerabilities to novel, transnational financial crime in the new global economy.[3]The emergence of digital banking, blockchain and online trading—two notable indicators of progress in the field of technology—makes economic crime detection and prevention more challenging than ever. Such crimes can take many forms, such as cyber-enabled fraud, cryptocurrency scams, or cross-border money laundering schemes, and why it’s essential that we have – not just an appropriate legal framework – but legislation that can deal with the globalisation of crime[4]. Overall, the transformation of India’s economy into a highly digitized economy helped to provide a significant boost to the economy, but at the same time has laid the groundwork for misuse which requires a comprehensive approach to secure the financial ecosystem and protect its stakeholders.

So are such offenses, on top of and in addition to a toxic mix of reluctant compliance or unethical exploitations of loopholes supported in a permissive milieu by deficient civic structures. The losses can be astronomical for the entity but also get media headlines on the magnitude of societal damage and reputational toll that these cases may bring for stakeholders; be it corporate frauds like that of Satyam and Nirav Modi-PNB fraud. Such crimes erode market integrity, distort competition, and have a dampening effect on overall growth.

Addressing economic crimes (read financial crimes) is integral for India to be intended to become the world’s economic powerhouse. An economy of black money and growing inequality would follow it — a loss of revenue being just one of the issues. Recognizing these challenges, the tools available to law and regulation must also evolve to combat sophisticated criminal techniques. This will be key to ensuring continued progress as the rifts they create can only widen if not addressed through sound policies, effective enforcement mechanisms and improved regulations.[5]

[1] David W. Neubauer, White Collar Crime: A Documentary and Reference Guide (ABC-CLIO, 2019) 45.

[2] M. K. Gupta, Economic Crimes in India: Legal and Regulatory Challenges (Eastern Book Company, 2018) 112.

[3] Meena Tiwari, “Regulation of Money Laundering in India: A Critical Review” (2016) 12 Indian Journal of Financial Crime 35, 37.

[4]Joseph T. Wells, Corporate Fraud Handbook: Prevention and Detection (Wiley, 2020) 133.

[5] William K. Black, Business Crime in America: A Social and Political History (University of Chicago Press, 2017) 59