Black is Back

Black is Back

Indians love many things about Switzerland: chocolates, watches, Bollywood movie locales and secret bank accounts. No wonder trillions of dollars are satcked away in secure vaults in the scenic Alps. A recent conservative estimate by the US-based group Global Financial Integrity Index pegs illicit capital flows between 1948, a year after Independence, and 2008, at $462bn - an amount that is twice India's external debt. India's underground economy today is estimated to account for half of the country's GDP. The issue of black money is a national shame.It is one of the biggest loot witnessed by the country, the loot of the “aam aadmi”.

Thanks to opposition and public ire over a series of corruption scandals, "black money" is back in the spotlight. The Supreme Court has been chiding the government for not doing enough to unearth illicit money. "Is there no basis to figure out black money?" the court wondered on Thursday. "What is the source of black money, which has been stashed away in foreign banks? Is it from arms dealing, drug peddling or smuggling?" Strong words indeed. But they may not be enough to uncover India's biggest and longest-running scandal. This week, Finance Minister Pranab Mukherjee unveiled what critics said was a laundry list of dreary platitudes and non time-bound plans to check the "menace of black money". This includes joining a "global crusade" against it, creating appropriate legislation and institutions to deal with such funds and imparting skills to officers tasked with detecting such funds. In effect, what the government is saying is that after 63 years of independence, we have no institutions or trained people available to curb a brazen and thriving underground economy which rewards tax evaders, humiliates tax payers and widens inequity. The government also talks about a new amnesty scheme for "black money", which is really a slap in the face of the honest tax payer.
Despite the government's recent noises, "black money" will continue to blot us and our economy. For one, it is a systemic problem. Those who stash away illicit money overseas comprise the political and professional creme de la creme - politicians, bureaucrats, businessmen, doctors, lawyers, chartered accountants and judges. That the government is not keen upon cracking down on illicit capital flows was evident, when, in 2008, it refused to accept a compact disc from Germany containing names of account holders in a Liechtenstein bank. Last year, under opposition pressure, the government accepted the CD, but refused to disclose the 26 names of Indian account holders in it. By this time these intelligent and powerful people would have closed their account and transfered all funds to other places without leaving any trail.
What we need to do is build strong cases against people it suspects are guilty of tax fraud and graft. Unless there is political will to dig out black money, nothing will happen.

Inflation rekindled

INFLATION REKINDLED
Food inflation is a national and an international headline again. The
country was celebrating the regional harvest feativals over the
weekend with just a marginal decline in the inflation rates, but the
food supply is no more stable. India's embattled coalition government
failed to announce major policy decisions to tackle soaring food
prices after days of wrangling, taking only minor measures seen as
unlikely to make a major impact.
Rising food inflation is a global phenonmenen. It has sparked violence
across the Middle East and South Asia over the weekend, as
demonstrators protested the high cost of staple commodities like
sugar, rice and milk. Following good harvests over the last year,
nations bolstered their food stocks and all but ignored the precarious
nature of food production. This year’s weather events remind
policymakers that economies are one drought or one flood away from an
available food supply. Australia, Europe, North Africa, India and
Southeast Asian countries have all reported drastic food inflation
that illustrates how commodity prices and weather events affect food
prices. The outbursts ignited fears that the world is due for a repeat
of the 2008 food protests that rocked countries as far apart as Haiti,
Senegal and Bangladesh. Food prices are now at anall time high, and
are trending higher, indicating that this may be only the beginning of
the food riot problem. What's more, oil prices are also edging up,
reaching their highest level in two years.
The UPAgovernment is grappling with the problem of inflation. Today's
problem is onion prices.Last month, the discussion on inflation
focused on dal and meat. A while ago, it centred on sugar prices. Each
time we face high food prices, traders and speculators are blamed and
income tax raids are conducted. Sometimes exports are banned. At other
times, imports are permitted. Often, forward trading in the product is
banned. Either drought or excess rain is said to be the source of
inflation. Rising incomes leading to higher demand, and supply
bottlenecks in an unreformed agriculture, are seen to be ultimately
responsible. The solution needs a multi-pronged approach.
Over the last five or six years, as problems in food prices have
surfaced again and again, we have discussed the solutions endlessly.
However, very little has moved on the reform agenda. And when prices
increase sharply, instead of a commitment to reform, we hear
statements by the government on how it plans to clamp down on
speculators, or stop hoarding, or ban derivatives trading. Time has
come when we need to debate over agri-reform and fix supply
bottlenecks with improvements in cold storage chains; changes in the
mandi system; reform of the agricultural marketing system; research
support for high value crops; liberalisation of trade in agricultural
products; opening up the sector to organised retailing and FDI; moving
away from price support for cereals; and so forth.The Government which
has been endlessly anaylising the situation for the past few days now
needs to come up with some solid solutions.

Unfair Verdict

Unfair verdict

I disagree with what you say and I shall defend to your death my right
to stop you from saying it.The opposite of the famous Voltaire saying
is perfectly apt in describing in the verdict on Binayek Sen. A doctor
by profession and humanitarian by instinct, Binayak Sen was held
guilty for sedition and treason for being a conduit between Maoists.
Blaming the sins of the Maoists on Sen, the life sentence imposed on
globally acclaimed human rights activist is easily the most scandalous
abuse of a colonial remnant in independent India. Clearly, India
could do without the shame of jailing a humanist for sedition while
the hate-mongers responsible for the dreadful events of 1984 (Delhi
massacre), 1992 (Ayodhya demolition) and 2002 (Gujarat riots), who
roam around as patriots.
There is a serious problem in India with the lower judiciary which
does not seem to have any idea of its crucial role as a defender of
human rights in a democracy. Especially in a democracy in which the
majority of the people are not aware of their rights and are routinely
oppressed by governmental and private oppressors. The attitude of the
bureaucracy and the politicians in this country remains both feudal
and colonial they frequently use and misuse the law to stifle dissent.
The higher judiciary shows some awareness of its crucial democratic
role and that is somewhat of a relief as it frequently intervenes to
reprimand the executive for its unjust behaviour.
The story of Binayak Sen is the story of the dangerously thin ice
India's democratic rights float on. A dangerous trend is unfolding in
India today: State versus people. Urban versus rural, unbridled
development versus human need, Industrialist versus farmers, blind law
versus natural justice. It could be the story of all of us who are
fighting against injustices of the society in shinning India. Most of
all, it is the story of what can be done to ordinary individuals when
the State dons the garb of a dictator. The time has come to demand
drastic reform of the criminal justice system to ensure that it is not
manipulated by the state to persecute, prosecute and victimize
innocent persons.
This miscarriage of justice in the Sen trial has tarnished the
reputation of the country. He has become an international symbol of
the struggle of the poor and marginalized people for their legitimate
rights. The Amnesty International considers him a prisoner of
conscience. A man who has been honoured with international awards for
his work among the poor, and on whose behalf Nobel laureates have
pleaded with the government, should not be treated in a better way.
The Chhattisgarh police and the trial judge who accepted its story
uncritically have sent out a dire warning to all those who value and
work for human rights. It is the disregard for the rights of the poor
that has triggered the Maoist revolt. It is unfortunate that this
truth is not recognized.