Thursday, June 17, 2010


Its cheaper, safer and gets integrated into the economy...

The other day when I was in Ahmedabad, my colleague shared a very interesting incidence. Few days back my colleague, while driving jumped a red light, to be caught by a traffic police. And on demand for fine (read bribe), he realised that he had left his wallet at work. As was expected, the traffic police was unrelenting and all his pleas fell into deaf years. Frustrated by his situation, he made the last ditch attempt to fish his pockets, only with a hope that he could fi nd some money. It was then he realised that he had these food coupons (Sodexo), which he had received that day from his office. He tore a Rs. 50 coupon and offered the same to the traffic policeman. And as was expected, the cop had no idea as what was he supposed to do with the coupon. So my colleague had to finally explain him that it was almost like cash, the only difference being that it can only be transacted in stores like Big Bazaar, and the likes, in exchange for food items. Perplexed, and left with no other choice, the policeman, did accept the same.

Now without getting into any moralities - whether what my friend did was right or wrong, he definitely did something unique and interesting. But first, let us accept the fact that bribery flows deep in the arteries of the Indian system. It is so deeply entrenched into our system that it has become symbolic to us. Sometime back PHDCCI did a study stating that almost 40 per cent of our economy is black, indicating the extent of the malaise. Last year, there has been a study which stated that of all such transactions, 90 per cent of the bribes were consumed by the government officials, of which police consumed almost 30 per cent! This should not come to anyone’s surprise as we are all part of this malaise almost on an everyday basis. Interestingly, researches also reveal that bribes typically comprise of millions of extremely small and petty transactions, until of course; the transaction is as big as buying coffins or animal feed! Imagine the quantum of such transactions which adds on to a staggering 40 per cent of our GDP!

Coming back to my friend - unlike in his case, where he could successfully settle the bribe through food coupons, every time that we bribe, the cost of the bribe is much higher than the actual sum transacted. As for every time we pay cash, we do not calculate the taxes that we might have paid on the transacted amount, considering that ones own earnings have been completely accounted for. Which means that for every Rs. 100 transacted (for sake of assumption), 10 per cent to 30 per cent more goes away depending on the tax bracket one falls into. Which further means, that on the face of it, we might be paying Rs100, but it is costing us anywhere between Rs110 and Rs 130. Now imagine the cost, while millions of petty transactions that take place every year, through exchange of bribes!

Not just this, another interesting aspect of the above transaction is the fact that the moment cash exchange hands in form of bribe, a large part of it invariably leads to accumulation of black money, which gets hoarded most of the times. And unlike cash, food coupons cannot be hoarded and it has to be necessarily transacted, which has its own multiplier in its small way. If not for anything else, at least it is getting integrated in the white economy.

Now to say that corruption should be arrested is like feigning ignorance or being too political, to say the least. Bribery is a reality; so, why not legalise it through food coupons or something similar!!



  1. Hi ,
    Nice blog.And the last line is really intresting "legalising bribes".How can you legalise bribes??Have you really thought of any such way and if the answer is yes please do write about it in the next blog.Probably what we can do here is make a system where people dont take bribes and dont need to take bribes.But legalising it is the last thing and we shouldnt do it.

  2. Hi Sir,
    After reading this incident let me also add a incident during my tenure with a big apparel brand. One day people from a Private Custom clearing agent came in our store with our latest catalog to buy same designer Marked stuff by an Custom Officers family. And when we billed it, it came out with worth of more than Rs70000/-.
    Here, I just want to tell you the day officer have IT raid,if happens. The worth of assets like land,cash & metals are taken into consideration not these RS70k material into the account at least if he does not own amazing wardrobe like Satyam`s Ramalinga raju worth some millions.