NCRB’s Crime in India report provides data related to cases registered under various sections of the IPC that can be broadly categorized as economic offences. The report also provides data of cases registered under various finance related special & local laws. Data from the 2021 report indicates that the Conviction Rate of economic offences registered under IPC at 29.4% in 2021, much less than the overall conviction rate in IPC related offences.
Off late, central agencies like the Income Tax Department, Enforcement Directorate have been conducting multiple raids on allegations of money laundering, tax evasion and other economic offences. These economic offences apart from resulting in pecuniary losses for individuals and the state, also affect the economy. Counterfeiting currency, financial scams, frauds, money laundering and hawala transactions are some of the serious economic offences.
In the National Crime Record Bureau’s (NCRB) Crime in India (CII) report, data pertaining to cases of economic offences is provided. Data pertains to only those cases where FIRs are filed with the police. These include cases booked under both Indian Penal Code (IPC) and Special Local Laws (SLL). In this story, we look at the cases of economic offences as provided in the CII report.
Economic crimes under SLL Acts are registered under 6 legislations
Among Special and Local Laws (SLL) crimes, the report provides data on the cases registered under finance related and economic legislations that regulate financial transactions or areas involving large sums of money and which are prone to scams/frauds. These are.
- The Lotteries Regulation Act, 1998
- The Chit Funds Act, 1982
- The Negotiable Instruments Act, 1881
- The Benami Transaction Prohibition Act, 1988 & 2016
- The Mines and Minerals Development and Regulation Act, 1957
- The Prevention of Corruption Act, 1988
Economic crimes registered under SLL has dropped by 32% since 2018
The total number of cases registered under various finance related SLL Acts mentioned above is the lowest in 2021 since 2017. The number has dropped by nearly 32% since 2018.
Majority of the cases registered are under the Mines and Minerals Development and Regulation Act, 1957. Under this act, the mining of minerals like stone, gravel, precious stones, coal, etc. is regulated by the central government, and illegal mining of these minerals is liable for punishment. More than 80% of the SLL economic crimes were registered under this Act in 2017 which has gradually dropped below 70% in 2021. On the other hand, share of cases under The Lotteries Act,1998 has increased from 13% in 2017 to 25% in 2021. A total of 182 cases registered under the Chit Funds Act, 1982 in 2017 which has dropped to below 50 in 2020 and 2021. Cases registered under the Prevention of Corruption Act had dropped to below 1000 in 2020, the year of pandemic and has increased again by 5% in 2021.
Economic offences under IPC at 1.74 lakh in 2021, highest in the decade
In a chapter dedicated to economic offences in the CII report, cases of economic offences booked under the IPC are also provided. According to the latest report, the number of cases registered has increased from 1.14 lakh cases in 2012 to an all-time high of 1.74 lakh cases in 2021, registering an increase by 52% in ten years. Since the beginning of the decade, the cases registered have been on the rise, except in 2016 when it witnessed a small dip, and again in 2020, the pandemic year. In 2020, the cases dropped to 1.46 lakh from 1.66 lakh in 2019. Compared to 2020, the total number of cases of economic offences increased by 19.4%, overtaking the pre-pandemic levels. On the other hand, the rate of total economic offences has also increased from 9.43 per lakh population to 12.7 per lakh population in 2021. In 2021, cases of economic offences accounted for 4.75% of all IPC crimes.
Economic offences under IPC are categorized into 3 major heads
The NCRB report categorizes the economic offences booked under the IPC in three major heads. These are criminal breach of trust; forgery, cheating & fraud; and counterfeiting. Sections 406 to 409 of IPC cover ‘criminal breach of trust’, Sections 231-243, 255 & 489A to 489E IPC cover ‘counterfeiting’ and Sections 420, 465, 468, 471, 231-243, 255 and 489A to 489E IPC cover Forgery, Cheating & Fraud’. Since 2017, the NCRB report combined all the economic offences related to Forgery, Cheating & Fraud under one head.
|Criminal Breach of Trust||406 to 409|
|Counterfeiting||231 to 243, 255, 489A to 489E|
|Forgery, Cheating, and Fraud||420, 465, 468, 471, 231 to 243, 255, 489A to 489E|
Cases of forgery, cheating, and fraud account for 87% of the cases in 2021
Cases of forgery, cheating and fraud (FCF) account for lion’s share of cases under economic offences with more than 87% of the cases in 2020 and 2021, up from 85% in 2016. Over 1.52 lakh cases of FCF were registered in 2021, more than the total number of cases of economic offences registered in 2020. Cases of ‘Criminal Breach of Trust’ contributed to around 13% of the economic offences in 2017 and 2018, which dropped to 12.2% in 2021. Cases of counterfeiting have always accounted for less than 1% of the cases and dropped from 0.8% in 2017 and 2018 to 0.4% in 2021.
55% of the cases involved loss of property in 2021 and about 87.6% involved less than 10 lakh rupees
Misappropriation or loss in property was reported in about 55% of the cases, which is close to 96,000 cases in 2021 out of the total 1.74 lakh cases. In about half of these cases, the misappropriation or loss in property was worth less than 1 lakh rupees and in more than one-third of the cases, the loss was between 1 lakh to 10 lakh rupees. Not just in 2021, but since 2017, between 83 to 86% of the cases have reported a loss between 1 lakh to 10 lakh rupees. In 2021, close to 12% of the cases involved losses worth 10 lakh to 50 lakh rupees, compared to 11% in 2017.
The trends of the last five years are also on similar lines, across the categories, except for misappropriation amounts of 50-100 crore rupees reported in 2019. There were 353 such cases in 2019 compared to 35 or fewer cases reported in other years. In terms of number of cases involving a loss of more than 10 crore rupees, 2021 the lowest number of such cases (230) in the last five years was reported in 2021. However, 26 cases involved more than 100 crore rupees worth loss in 2021, highest in the period considered.
High pendency and poor conviction rate
At the end of 2021, the pendency rate for economic offences under IPC was 55.1% for the police and 96.6% for the courts. On the other hand, the conviction rate was only 29.4%. That is, less 3 out of 10 such cases result in conviction. This is much less than the overall IPC related cases conviction rate of 57% in 2021.
In the subsequent story, we will look at the trends in these cases registered across states, and the trends in court and police disposal of these cases.