Indians Pay $72 Billion As 'Bribe Taxes' Each Year

Survey Estimations

The survey, that called these informal taxes as ‘bribe taxes’, was done over the last three years in different parts of an Indian city to obtain an idea of the type of bribe taxes collected in practice and to estimate the amounts changing hands. It also used various media reports about graft cases, Lokayukta reports published in newspapers to arrive at bribe tax details. The survey does not cover large amounts of bribe taxes pertaining to major/minor projects awarded at the state and central levels and it estimates that the revenue generated in one city on account of bribe taxes could be around 5-8 crore a day.

According to the survey, 250 days of activity in government offices, the annual bribe tax would be at least 2,000 crore (based on an average) in each major city and at the national level it would be at approximately 1,00,000 crore as of 2010-2011.

The Economic Survey 2011-12 says that the combined tax receipts of the central and state governments in 2010-11 were 12,37,344 crore. If the general taxes are under-collected up to 20 percent of what is due, then the actual taxes would have been 15,46,680 crore. The difference of 3, 09,336 crore arises out of bribe tax reasons. Putting the earlier estimate of Rs 1,00,000 crore generated in all government activities together with this Rs 3,09,336 crore of bribe tax in tax departments estimated by the Economic Survey 2011-12, an estimate of Rs 4,09,336 are calculated as bribe taxes. During 2010-11 the GDP was 76,74,148 crore and corruption money thus amounts to nearly 6 percent of GDP.

In this estimation the huge corporate transactions on contracts worth billions of rupees on airports, expressways, coal blocks, spectrum allotments, power plants, IT parks, defense purchases, etc are not included. If they are added to this estimation, the bribe tax collections would be at least 12 percent of GDP, when the aggregate tax-to-GDP ratio is around 16 percent.