2019 National Crime Record Bureau records more than 165,000 economic offences, a 6.1% growth over the 2018 data, and the trend is unlikely to settle down anytime soon. The offence is havoc on the economy of the country.
Economic offences are common crimes in India, prevailing for decades without any stringent actions against the offender. With time, the Government of India took mandatory measures, implemented changes within the existing Acts, and introduced new Acts.
What is Economic Offence?
The economic offence is a distinguished category of a criminal offence. The offender intends to cheat the victim. However, the offence is not limited to the victim. It impacts the national economy and monetary loss of victims ultimately.
These types of crimes might not cause any physical harm but imply to deceive and cheat. Because of the unique characteristics of this crime, it is havoc for government to scrutinise the crimes.
Simply put, any crime that deals with corruption, invoice manipulation, bogus imports, cyber-crimes, credit card frauds, money laundering, and smuggling comes under economic offence. The upper-class society generally anticipates committing such crimes due to the easy access to resources and motives in business activities.
In 2019, the state of Maharashtra in India had the highest number of credit and debit card frauds, with approximately 159 cases registered with the authorities. The country recorded over 365 issues of credit and debit card frauds that year.
Nevertheless, the offence continues this year. For instance, on July 2021, a Pune man was frauded by a fraudster for Rs. 3.57 lakh by promising an exchange of reward points on ceasing the existing card of SBI Bank.
According to the reports, the accused called the victim and proposed to reward him points by issuing him a new credit card in exchange for the present one, seeking all the confidential information, Rs. 3.57 lakh transferred from the victim’s Bank account. Later, on reporting to cyber security, the victim received the money.
Effect of Economic Offence on a Nation’s Economy
As mentioned above, the economic offence is of many types. For instance, money laundering is nothing but the generation of a significant chunk of money from a bank, financial institution or a legitimate businessman through criminal activities.
Now, when the money is supposed to circulate in the country when involved in fraud cases, it creates a void in the money circulation process. At the global level, it impacts the financial status of the Nation, which consecutively takes a toll on the import-export services. Since the import and export services taper, revenue generation for the government compromises, thereby striking the Nation’s Gross Domestic Product (GDP) and unpaid loan.
The shrunken GDP results in decreased supply and increased demand. Such a situation catalyse the inflation rate and poverty. The Nation compels to take loans from other financial institutions, which raises a question on economic governance, creating havoc. Moreover, as the offender takes a massive amount from Bank, the interest on the principal amount accumulates, affecting the status of the Bank.
Challenges While dealing With the Economic Offence
Pending cases and decreasing the conviction of fraudsters is evident. For instance, in 2019, the police investigation was pending in 54.6% of issues associated with economic offences versus 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. Such crimes are taking an evident hit on the national level as the Reserve Bank of India, in its annual report for 2019-20, revealed that Bank reported frauds amounting to ₹1.85 lakh in 2019-20, an increase of over 159% from the previous year.
The increasing cases in the economic offences and limited arrest of accused raise a question on competency on the criminal justice system, implying that it is less capable of dealing with financial crimes.
Why Do People Fall For Such Crimes?
In the 21st century, with intelligent technology and vast information spread over the internet, people still fall for the economic offence. Since generating money through any quick way possible is a road chosen by most people, offenders are well aware of the string to pull.
Generally, such criminals often pretend to be competent and gain trust by promising false outcomes. They introduce new schemes in the market and appear genuine to seek out information.
One of the significant aspects responsible for fraud is the lack of knowledge. Investing money in chit funds and securities or selling out confidential personal details pinpoints the unenlightenment of ordinary people.
Citizens must comprehend the schemes and situations before taking any monetary step, especially when fraudsters misuse technology and trust.
