Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Monday 3 March 2014

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  )




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