While I can appreciate this as a "hack" to get stuff done in India, it seems a bit unnecessary. As others note, the reason why this works is that it's an implicit threat.

The better alternative is to address the underlying reasons for a lot of the corruption - and that's excessive regulation and costs to register and conform with the law. There's been a lot of work in this area with respect to legal versus off the books capital (e.g. Mystery of Capital by Hernando De Soto). You can quite easily see the plight of the entrepreneur/individual by looking at the World Bank's Doing Business reports - here's India's - http://doingbusiness.org/ExploreEconomies/?economyid=89

e,g.: it takes 13 procedures and 30 days to formally start a business in India versus 6 procedures and 6 days in the US.

This obviously isn't just India either. Most developing countries are like this. It's through regulations and compliance that government officials can seek graft. Streamlining has the effect of not only reducing corruption but making any form of transaction with the state far more efficient resulting in higher growth (there's a positive relationship between GDP growth and better rankings on the World Bank's doing business index).