Thursday, February 17, 2011

Effect of Corruption in Business (Real Social Service)

There are only two types of social services. Politics and Business. Everything else is some variant of begging, where one donates to another.

You are interested in doing business and provide employment to many people and provide better service to many consumers. The rules are vague in that business. You need approval from the concerned minister and the license fee would be around Rs.10 lakh.

You went and met the minister for the approval. He gives you two options.

  • First option is, pay him Rs.5 lakh as bribe and pay government Rs.1 lakh as fee.
  • Second option is, forget about the business.

You dont have an option of paying Rs.15 lakh (fee+bribe), because of the intricacies in the system. If the minister brings the rule of paying Rs.10 lakh, then he would lose his authority to approve/reject specific people/organizations. If he brings the rule of paying Rs.1 lakh, then he can decide who can do the business and who cannot.

You dont have any other option other than the two. Even if you pay bribe and start the business, you very well know that you won't save that Rs.4 lakh, and it would be used up immediately to bribe others.

After some time, somebody investigates the issue of licensing and comes to know that, this organization has been given the license for very less fee, and because of that, the government lost Rs.9 lakh per license.

The immediate demands from all the opposition parties and watchdog organizations are,

  • Cancel all the licenses and give the licenses freshly with the correct procedure.
  • Some useless demands on the minister, and setting up commission etc. (till now, those never made any difference to the common man.)
  • Impose wind fall tax on the organization for earning profits till now. (It is a different question that you did not save any money, and used up everything in bribes.)

Nobody talks about the bribes that you had to give out, eventhough you were never interested, and tried your best to get the license without bribes.

People criticize you for paying bribes and getting into business.

They also say that, previously they had a great respect for you, and now, it is no longer there.

Many people send many mails to all their acquaintances about what can happen, if we had those money. The mail says that, if we had that much money, we could have done x, y, z etc. It also says, with that money, few fields would be improved completely as if they were not allotted sufficient money in the last few decades.

When the new Minister declares that, all the licenses would be cancelled, all the opposition parties and watchdog organizations express their happiness for taking preventions against corruption and getting back the money, and nobody cares about the organization which spent lot of money for the cancelled license.

All the politicians easily escape. In the worst case, they make a scapegoat for few days.

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