International Anti-Corruption Day: Survey reveals 83% business bribes were paid in cash in India

New Delhi: A new survey has revealed that 83% of bribes were paid in cash to get things done across the country. Labour/PF, property/land registration/transfer, drug, and health departments were notorious for bribery.

A survey conducted by LocalCircles revealed that nearly 7 out of 10 Indian businesses paid bribes in the last 12 months mostly to government officials to get permits or compliance done or for timely processing of contracts, with transactions exchanged mostly in cash and some in kind.

The survey results were released on the eve of International Anti-Corruption Day which falls on December 9.

Discussions amongst business owners, corporate employees, startup and MSME entrepreneurs on LocalCircles indicated that it is still very difficult to start and operate a brick-and-mortar business in India without paying bribes. If the business is a technology-driven startup, the vulnerabilities are reduced but even such businesses are susceptible to corruption related to taxation and labor.

`India Business Corruption Survey 2024’ was conducted to gather the pulse of businesses in the country on corruption. More than 18,000 responses were received from over 9,000 unique businesses located in 159 districts of India. 42% of the respondents were from metro or tier 1 districts, 33% from tier 2 districts, and 25% were from tier 3, 4 and rural districts. It asked five key questions to ascertain the level of bribery in the last 12 months along with common modes of transaction, reasons behind paying a bribe, agencies to which they paid a bribe, and the total number of bribery transactions.

83% paid it in cash

According to the survey, of businesses surveyed that paid bribes in the last 12 months, 83% paid it in cash and 17% paid it in kind (gifts or favors). From gifts to cash to favors, bribes are paid in many modes. Cash remained the most common way of paying bribes, with 53% of respondents claiming to have done so while 17 % paid it “in kind (gifts or favors)”, while 30% “paid indirectly through an agent”. In essence, of businesses that paid bribes in the last 12 months, 83% paid it in cash and 17% paid it in kind (gifts or favors).

"Many businesses, especially large corporates, startup unicorns or multinationals do not want to engage in corruption directly and hence they tend to hire middlemen, facilitators or agents who are tasked to also handle activities like bribery," said LocalCircles.

54% forced to pay

Of businesses that paid bribes in the last 12 months, 54% were forced to do so, while 46% paid it for timely processing. Bribery paid by businesses continues to take place despite computerization in several places, and behind closed doors away from CCTVS.

The number of bribery transactions & aggregate value reduced:

The number of bribery transactions and the aggregate value of bribes paid by businesses surveyed reduced in the last 12 months. Many departments are going through digitization or the introduction of systems to remove manual or human interfaces, and this is having a positive impact on a number of bribery transactions and the aggregate value of bribes paid by businesses.

26% indicated “fewer number of transactions and the lower aggregate value of bribe paid”; 6% indicated “similar number of transactions, the lower aggregate value of bribe”; 15% said “fewer number of transactions, the similar aggregate value of bribe paid”; 4% said “fewer number of transactions, the higher aggregate value of bribe paid”.

72% paid to govt officials

Many businesses surveyed admitted to paying a bribe in the last 12 months to different types of entities for qualifying as a supplier, securing quotations & orders, and collecting payments. According to the survey, 72% of respondents claimed to have paid it to “government officials”, 51% paid it to “Public Sector Undertaking (PSU) officials”, and 28% to “private company officials”.

75% paid to Legal, Metrology, Food, Drug dept

Businesses from across the country have regularly reported instances of corruption in almost all Government departments on the LocalCircles in the last 3 years.

The survey revealed that:

1. 75% of the respondents said “bribes were paid to officials of departments such as Legal, Metrology, Food, Drug, Health.

2. 69% said they were also paid “Labor/PF Department officials”.

3. 68% claimed to have paid bribes to “Property and Land Registration or Transfer officials”.

4. 62% paid to “GST officials”.

5. 59% indicated “Pollution Department officials”.

6. 57% to “Municipal Corporation officials”.

7. 47% to “Income tax officials”; 45% of respondents indicated “Fire department officials”.

Corruption is still rampant

Though India passed the Prevention of Corruption Act (Amendment) 2018, which criminalizes both accepting bribes and giving bribes, corruption is still rampant when it comes to doing business largely because it benefits both the official accepting bribes and the business giving bribes. One example is the bribery case involving a high-rank government official of the Central Drugs Standard Control Organization (CDSCO), India's drug regulatory body, in 2022. After a probe, the CBI arrested 5 people including the Joint Drug Controller of CDSCO and consultants for permitting waiver of phase III clinical trials to a private drug company in exchange for bribes.