India is poor, Indians are not

July 25th, 2011

Sometime ago, the Swiss Banking Association came out with a report that contained a list with details of bank deposits in the territory of Switzerland by nationals of different countries. And yes, the guess is right, nationals belonging to our own motherland, India, topped the list.  Indians topped the list with $1,456 billion black money in Swiss banks, followed by Russia ($470 billion), UK ($390 billion), Ukraine ($100 billion) and China ($96 billion). In fact, the combined deposits of the next four nationalities was still less by around $300 billion when compared to India. It is embarrassing for any country to top the list of black money holders and more so for India where nearly 500 million people are surviving on less than $2 a day.

The above clearly points out to the growing amount of income disparity in India. A handful of Indians are the owners of deposits which exceed the GDP of the country, whereas the mass is still struggling with basic survival issues like housing, hunger, potable drinking water etc.

A recent Global Financial Integrity (GFI) report suggests that in India, the underground economy is closely tied to illicit financial outflows. The total value of illicit assets held abroad represents about 72% of the size of India’s underground economy which has been estimated at 50% of India’s GDP. Clearly, the fact of corruption is undeniable.

In the run-up to the 2009 general elections when the political controversy erupted relating to ‘back money’ stashed away in foreign banking havens most of us thought that the incumbent regime would crack the whip. However, little did we realise that in the heat of that political juncture, the issue had degenerated into a blame game. More than two years have gone by and the UPA –II has done precious little to tackle an issue that is of the highest importance to the socio-economic well-being of the country.

If adequate steps are not taken to address the issue black money and to tackle the issue of growing income disparity within the Indian society, our country would fast be recognised as a “POOR COUNTRY INHABITED BY RICH PEOPLE”.

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Land acquisition and agriculture

July 13th, 2011

The root cause of the controversy surrounding land acquisition in India is the changing pattern of the society. As the society pattern changes, the land use also changes. India over the years is making efforts to move from a predominantly agrarian economy to an economy dominated by the industry. In this backdrop, changes in land use pattern can not be avoided.

Industrial plants are being built on farmland and wide open spaces of sparsely-populated rural areas are giving way to residential apartments. This is the natural consequence of the economic metamorphosis and the related demographic changes which India is witnessing. However, this process is generating considerable friction in the country. And as always, the friction is being addressed in more ways than one – but none of the ways appear to be a complete solution. The recent controversy surrounding the Noida land acquisition has exhibited the political side of land acquisition.

No one can deny that land acquisition has to be done at the behest of the government and a very strong regulation has to exist. Many state governments have started the process of devising substantial land acquisition laws. The state of Haryana was among the first in India to come up with a land acquisition policy that took care of interests of people whose land (and/or livelihood) were being forcibly taken away for ‘public purpose’. In fact, the revised national land acquisition policy draws a lot from Haryana.

The acquisition leads to two different kinds of displacements - the land owner is displaced; and the agricultural produce is also displaced. However, all the enactments which are being discussed and debated at different forum are merely focussing on the need for adequate compensation to the landowner, which addresses the first kind of displacement – of the land owner. The crop displacement which is a very vital consequence of the land acquisition is being missed out totally.

If mindless conversion of agricultural land is permitted, very soon the nation will start having scarcity of agricultural produce which is definitely not good for the nation. In fact, it is a circle, change in land use will result in industries to come up on lands which were till now producing agricultural products. These industries will in turn lead to an increase in the disposable incomes in the hands of the people, which in turn will lead to an increase in the demand for food grains. However, the production of food grains would have gone done down by then since the land under cultivation is being converted for non agricultural purposes. This cause and effect story needs to be addressed by the proposed enactments.

One of the simple ways to address this will be to impose a fee for land conversion and this should go to a central pool from where this money should be used for a second green revolution. But then simple solutions always escape a complicated mind and the mind of the Indian politician is no doubt complicated.

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The Prime Minister’s press meet

July 7th, 2011

Last Wednesday the much-hyped media meeting of the Prime Minister Manmohan Singh took place but failed to create any impact. It came immediately after P Chidambaram went on air (in an interview on NDTV) claiming that there is a perception that the PM should communicate more with the people. In fact anybody who was following up the event would have concluded the event to be a damp squip even before it had started.

A media meet by INVITATION in itself is a matter of joke. The invitation ensures that the PM wants to speak and not answer.

Whatever it be, at least the Prime Minister has finally broken his silence in the press meet to make his thoughts and views on certain issues more transparent. He also intends to make it a regular feature to improve communication channels with the Prime Minister and the public.

The five editors who met him became the spokespersons of the PM and told us that he was relaxed and appeared confident. However, if one goes through some of the utterances of the PM, they are far from confident and satisfactory.

On the Lokpal issue he said he was ready to come under the Lokpal Bill. However, he mentioned that certain Cabinet colleagues feel it may create instability. So we have a PM who personally feels that the demand (of including the PM under the Lokpal) of a section of the opposition and the civil society is correct. The PM personally believes in something and is being forced to do something else-–as has been admitted by him.

He utilised the opportunity to rubbish the Opposition’s claims that termed his government as “comatose” and termed it a “clever propaganda”. He also declared in his usual reticent self that “truth will prevail some day.” This is again very funny–if the PM knows the truth why should he wait for a day to come for truth to prevail. And if in our country the PM has to wait for a day for truth to prevail, God save lesser mortals like you and me.

On the unprecedented support for Rahul Gandhi and the recent rhetoric on ‘Rahul Gandhi for PM’ noise, the PM said, “Personally, if you ask me, the general proposition that younger people should take over, I think, is the right sentiment. Whenever the party makes up its mind I will be very happy to step down, but so long as I am here, I have a job to do.” He also added that he did not have any objections to Rahul Gandhi succeeding him. He failed to address the crux of the problem. The entire cry-–Rahul for PM-–has been raised by his party men only. Instead of ensuring that party colleagues do not create such unnecessary confusion, the PM decided to address the nation on this issue. This also defeats logic.

All in all there was hardly any significant comment from the PM. With the UPA government neck-deep in scams and controversies, this was just a timely move from the PM’s side to smoothen the troubled affairs and to set things right. And the outcome tells us it is a wasted opportunity. Hope the PM and his media team learns a few lessons.

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