Vishal is an ordinary man with an ordinary story of corruption in India. He lives in east Delhi, part of the traffic-choked sprawl of India's capital. He owns a fried chicken takeaway similar to thousands of others that have sprung up in recent years to serve the new tastes of the burgeoning middle class.

And he faces an ordinary Indian daily routine of petty corruption. The number of people Vishal has to pay off is bewildering. There are the local beat constables who take free lunches, and the more senior police officers who can cause problems with opening hours. They take 10,000 rupees (£130) on the 10th of each month to allow Vishal to stay open late.

Then there are the officials from various local authorities who also receive regular payments – around £50 per month – to ensure that health, safety and hygiene inspections go smoothly.

"Of the 40,000 rupees (£520) I earn a month from my restaurant, I pay at least a third in bribes," Vishal, 26, said. But bribery also extends into his personal life. Vishal has two young children and to get the eldest in to the best local school he paid a "donation" of 25,000 rupees (£340) in cash to the headmaster.

A driving licence needed another bribe. Getting an appointment with a competent public doctor cost a substantial amount. And then there are the traffic police. Every other week Vishal says he is stopped, told he has committed an offence and made to pay 100 rupees (£1.25), the standard fee to avoid "too much bother".

"I am so disappointed [about] everything you have to pay," he said. "And no one does anything. The politicians won't do anything because they are all corrupt too."

Such sentiments are widespread in India and explain the sudden outpouring of anger over recent days as tens of thousands of people took to the streets across the country to protest about the arrest of anti-corruption campaigner Anna Hazare.

Though a string of major corruption scandals such as the telecoms licence scam that cost the country up to £26bn, and the alleged fraud surrounding the high-profile Commonwealth Games in Delhi, has fuelled some of the fury, it is the grinding daily routine of petty corruption that is at the root.

"You pay for a birth certificate, a death certificate," said Varun Mishra, a 30-year-old software engineer and one of thousands who marched in Delhi to support Hazare. "All your life you pay. And for what? For things that should be free."

Hazare, 74, has harnessed this grassroots frustration to launch a popular movement. Having been jailed as a threat to public order, he went on hunger strike and refused to leave prison when released. He has finally left jail, having been granted permission to hold a 15-day fast in a public park.

His public relations team has run rings around clumsy and slow official spokesmen. India's prime minister, Manmohan Singh, has an impeccable reputation for personal probity but has looked distant and out of touch.

Hazare is campaigning for a powerful new anti-corruption ombudsman with the right to investigate senior politicians, officials and judges. His critics say this would be undemocratic, and worry about the division of powers. But for people like restaurateur Vishal, Hazare is a hero. "At least he is doing something," he said. "No one else is."

Though bribery, or "graft", is a fact of life for more or less everybody in India, the demonstrators are largely urban, educated and relatively well-off. "What you are seeing on the street is a middle-class rebellion," said Mohan Guruswamy, a former senior official in the ministry of finance and founder of the Centre for Policy Alternatives thinktank.

There are reports in local media that call centres and other back office operations in IT hubs such as Gurgaon, a satellite town of Delhi, and Bengaluru, the southern city, have faced staffing problems with up to half of workers joining the protests. Teachers, lawyers and medical professionals have also featured prominently.

Support for Hazare is particularly strong among those who have benefited most from India's recent breakneck economic development but are frustrated by a largely unreformed public sector that delivers poor and haphazard services. They are often the young.

Many of those who waited outside Tihar jail in Delhi to greet Hazare on his triumphant exit were in their teens or even younger. One 12-year-old carried a placard saying "save my future".

Tens of millions of school and college-leavers pour into the Indian jobs market each year. State institutions have not kept pace with aspirations raised by years of rapid economic growth and with skill levels low and good jobs scare, unrest could rise.

Senior Congress party politicians this week argued that some level of graft was "inevitable" in a developing economy. However, analysts said the extent of the problem in India – which ranks at 87 out of 178 on the campaign group Transparency International's index of corruption – is unique. "India is comparable to China, doing better than Russia, less well than Brazil," said Robin Hodess, the group's research director. "But bureaucratic and petty corruption is extreme in India."

Some say India's generally patchy law enforcement is to blame. "We are politically advanced in terms of institutions," said Guruswamy. "We have courts, a parliament and a long tradition of democracy ... but very few people are ever held to account." Last week a senior judge faced unprecedented impeachment proceedings 25 years after the alleged offence.

Others say those who pay the bribes are to blame too. One supreme court lawyer who refused demands for commissions in return for sanctioning payment for work he had done for the government, said giving in to corruption could be down to "deep powerlessness" or simply a "I just want to get on with my day" type of attitude. "As Indians we see corruption as something that permeates our lives, like air pollution, but we need to think much more carefully about it," he said.

Raghu Thoniparambil, who runs the website ipaidabribe.com, pointed out that corruption in the private sector was just as prevalent. "All these protests are very inspiring but will people really change? I don't know," he said.

Less ambitious and spectacular measures could have more impact than the ombudsman office Hazare and his followers want to create, Thoniparambil argues.

As well as perceptions of general corruption, Transparency International also compiles an index of nations where bribes are paid most frequently, particularly in business. India ranks 19 out of 22, above Mexico, Russia and China.

Manu Joseph, editor of the news magazine Open, speaks of "hypocrisy". "The Indian relationship with corruption is very complex and politicians are representative of society as a whole," he said.

But the widespread anger is also due to a sense that modern India not only deserves better but needs to at least moderate rampant corruption to compete on the world stage.

The most high profile cases have already damaged the nation's image sufficiently to slow economic growth. One text message circulating in India last week focused on the huge sums of "black money" illegally stashed by wealthy Indians in overseas assets and bank accounts. The return of these funds could pay for "Oxford-like universities", borders stronger than "the China wall" and roads "like in Paris", it said.

"We want a great country, stronger than the US, UK and Australia," said 18-year-old Sushil Kumar as he waited for the protest march from Hazare's jail to start. "India will be great, with its traditions, its culture. But we have to beat corruption."

The anti-bribery website

Launched last October, ipaidabribe.com is the brainchild of Raghunandan Thoniparambil, a retired official from the elite Indian Administrative Service.

By Friday 12,076 people had posted their personal stories of graft for all to see. They included businessmen forced to pay 50 rupees (70p) to traffic police, 300 rupees (£3.20) paid for a passport verification, 40,000 rupees (£540) handed over to have property registered, 5,000 rupees (£67) for a birth certificate and travellers who had to give 100 rupees (£1.30) to get berths on otherwise full express trains. Software takes names off the site.

"The aim is not to identify people but to identify the problem," Thoniparambil said. In June, after a BBC report about ipaidabribe.com several similar sites opened in China. Within two weeks they were shut down.

"In India we are sometimes a little slow or dysfunctional but civil society, simple democracy can make a huge difference," added Thoniparambil.

• This article was amended on 23 August 2011 because the original converted 25,000 rupees to £3,400. This has been corrected.