Why Businessmen Bribe Bureaucrats ?

At a recent CII seminar , Arvind Kejriwal said ,

"  Not all businessmen are corrupt. Quite a few are honest "

Having spent many years in Income Tax department he ought to know that even when a businessman has maintained honest / truthful books of accounts and not indulged in any mal-practice , he is still required to bribe the concerned income tax officer , to get his tax return approved

A Chartered Accountant ( who specializes in filing tax returns for companies ) , once told me :

" I have forgotten my accounting principles . I have been reduced to being a broker between the income tax officers and my client companies

If these tax officers get their ' percentage ' , they could not care less as to how many sets of duplicate account books you maintain  !

Of course , being thoroughly ' professional ' , they do offer a discount to honest businessmen !  "

That bags the question :

" Why do businessmen bribe bureaucrats  ?  "

My take :

>  Dishonest businessmen bribe bureaucrats ,

    #  to obtain some unfair advantage

    #  to keep out competition

    #  to jump the queue

    #  to get permissions / licenses / tariff etc for which they are not eligible

    #  to get orders for which they are not qualified ...............etc

>  Honest businessmen are forced to bribe the bureaucrats , who hold up /

    deny permissions / services etc that are perfectly / legally due to them

     If they won't , they must pay a heavy price  !

Example  :

Some 43 years ago , my company decided to shift a factory from Sion to Madh ( locations , just 20 Km apart in Mumbai )

As the manager of the plant , I applied to all the concerned departments , indicating the shifting date , some 3 months in advance

I also vigorously followed up for all required permissions

Every department granted permission , except the Power / Energy Dept

They wouldn't issue the letter until I signed an undertaking , stating that , in all of our future recruitment , 80 % of the recruits will be " local "

Even though , my company had always followed this practice at the workmen level , it was not possible to follow it at the Supervisory - and above - level , since we ,

> conducted campus interviews all over India to get the best engineers

> advertized our supervisory vacancies , in all national newspapers

> transferred engineers ( job rotation ) across our country-wide factories

Apart from that , there was also a raging debate in the media re this unjust demand , which legal experts had held , " Un-Constitutional "

My management told me not to sign the undertaking

Result  ?

For the next 3 months , my 300 workmen sat idle in the factory  !

We lost production / sales, valued at lakhs of rupees

Looking at our determination , the Government finally relented and connected the power after 2 months

How could we pull this off  ?

Both me - and my boss , the director - were mere paid " Employees " of a large Public Limited Company and could afford to stand firm against this " Unfair / Unjust / Illegal " denial of service

But I doubt if I could have done this if I was myself the owner of a small factory  !

Arvind ,

It is sad to say this , but honest businessmen / industrialists have no choice , but to bribe , when a lawfully due service gets withheld

If all of them were to suddenly stop paying bribes for getting their  due services , then our GDP would dive below 2 % in next 6 months  !

If you come to power - and I hope that you do - please first ensure that no businessman is denied what is legally due to him

*   hemen  parekh  (  04 March 2014  /  Mumbai  )