Saturday, October 20, 2012

How bribes affect everyone!

I know everyone is against bribes (except I suppose the people taking them) but we're all paying them anyway, either willingly or unwillingly. Let's try and figure out how much its really costing us!

Let's take the most basic license required for any business in India, the Trade License. The official cost of a trade license varies from Rs. 25 to Rs. 50000 depending on the type of business you're thinking of opening. The bribe one gets asked for, for the license is usually about 2 - 4 times depending on how big a restaurant you want to open. Let's assume you're asked for 1.5 L in bribe. This brings the price of the license to Rs. 2,00,000 or Rs. 550 per day. This is the cost of just one license. Add to this the fact that you have to get a food license, labor license, music & entertainment license, get harassed by the traffic cops for money and you can see how this figure suddenly climbs to a substantial amount. If a restaurant gets 50 customers a day, between Rs. 25 & Rs. 50 per person is going in "incidental expenses" for a restaurant in Bangalore. This money can be used to get drinking water to everyone in Tamil Nadu!

PS: if you want a wine, beer or a full alcohol license in Karnataka the bribe is anywhere between 10 - 18 times the cost of an actual license. a Rs. 6000 wine license can cost anywhere upto 1,00,000, beer about Rs. 50 L & a full alcohol up to Rs. 80L!!!

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