The recent spate of scams will adversely impact inflows of foreign capital into the country, according to a survey conducted together by the Federation of Indian Chambers of Commerce & Industry (Ficci) and Ernst & Young.

The survey report says that it is the inadequate law enforcement that causes corruption in India and that investors feel that corruption will adversely impact foreign direct investment (FDI) inflows.

The Government of India opened various sector for FDI in September last year and recently relaxed FDI norms to attract foreign capital, but the respondents feel that only this much will not be sufficient to attract FDI.

Nearly 83 per cent of respondents feel that the recent spate of swindles or scams will hurt FDI inflows, a whopping 89 per cent holds inadequate enforcement of laws responsible for increasing menace of bribery and corruption.

Ficci President Naina Lal Kidwai said, "Corruption invariably increases transaction costs and uncertainty in an economy while lowering efficiency by forcing entrepreneurs to divert their scarce time and money to bribery rather than production."

In the report, nearly half of the respondents say that their companies lost market shares to their rivals because the rivals used unethical businesses practices.

The report was prepared on the basis of an online survey conducted from March to May this year.