India's Pointless Search for 'Black Money'(bloombergview.com)
bloombergview.com
India's Pointless Search for 'Black Money'
http://www.bloombergview.com/articles/2014-06-25/india-s-pointless-search-for-black-money
27 comments
Spot On. Most Indians are aware that - wealth stashed abroad is probably not trillions and have no illusions about what that money will do when brought to India. For many of us - it is just curiosity. There is some money definitely and more than how much - people are interested in knowing whose money it is!
I doubt though if politically connected people will ever get exposed, but my morbid curiosity continues.
I doubt though if politically connected people will ever get exposed, but my morbid curiosity continues.
Your evidence is anecdotal. The article, to its credit, has actual references, as in what Baba Ramdev said, and a good deal of people believe him.
Just see a gamut of India opinions here, https://in.toluna.com/opinions/1277868/what-will-happen-if-a...
Just see a gamut of India opinions here, https://in.toluna.com/opinions/1277868/what-will-happen-if-a...
A majority of educated Indians see Baba Ramdev as crook. A self-styled guru curing cancer with Yoga and whatnot. So yalogin's response may not link to hard evidence but just because Ramdev can get behind a cause does not mean majority of Indians believe in it.
EDIT: If anything - if you take intersection of salaried Middle class and Baba ramdev's followers, you will be left with a small set. I am not saying Bab ramdev does not have a large following, but in a country where literacy is 72% (with number going lower in north india, where majority of Baba ramdev's followers are), it is hard to argue that middleclass supports this man's viewpoints.
EDIT: If anything - if you take intersection of salaried Middle class and Baba ramdev's followers, you will be left with a small set. I am not saying Bab ramdev does not have a large following, but in a country where literacy is 72% (with number going lower in north india, where majority of Baba ramdev's followers are), it is hard to argue that middleclass supports this man's viewpoints.
There are two sides to this entire Black Money story.
First is the bitter reality of the parallel economy that runs in India, amounting to huge revenue losses to the governments each year. The black money, not only robs to country and its citizens of their revenues, but also can then be used into funding terror activities, because this amount may very well be transferred via Hawala Channels ( they won't wire black money to tax havens, would they ? ). This is the money that can be used by the government to increase the services, this is the money that was intended to be transferred to the citizens in the form of increased infrastructure and better services. Ultimately citizens end up paying hefty amount of money for really crappy services.
the author is right in suggesting that this stash, if it even existed in no longer lying in the swiss banks, and has been rerouted to other investment opportunities, and possibly rerouted to Indian markets itself, via different channels (like the controversial participatory notes, shell companies etc). Both the current and the previous government have provided enough room for managing the black money, and I'll be surprised if India is successful in extracting any significant amount of money (order of 10 Mil. $), or to extract only account closure reports for the Indians who held account in various swiss banks and banks at other tax havens like Liechtenstein.
The other side of story is that it has become an issue that attracts eye balls. The amount that is suggested to be at stake is huge enough to attract the attention of even the upper middle class. People are very much dissatisfied with the performances of subsequent governments, and that made the Black Money Issue something on which political campaigns can be built upon. This issue was advertised in such a way that would attract the attention of average person, who wouldn't go into the details of the issue, by using headlines like, "We won't have to pay any taxes for a decade", "Every citizen would be given X sum of money", "India's revenue deficit would be bridged" etc.
As the events and outcomes of this election suggests, it worked. The current government even managed to show the act of constituting the Special Investigation Team to look into this matter, as a voluntary act of being righteous, when in reality they were just following the Supreme Court's directive to do so within a week.
Curious days ahead.
First is the bitter reality of the parallel economy that runs in India, amounting to huge revenue losses to the governments each year. The black money, not only robs to country and its citizens of their revenues, but also can then be used into funding terror activities, because this amount may very well be transferred via Hawala Channels ( they won't wire black money to tax havens, would they ? ). This is the money that can be used by the government to increase the services, this is the money that was intended to be transferred to the citizens in the form of increased infrastructure and better services. Ultimately citizens end up paying hefty amount of money for really crappy services.
the author is right in suggesting that this stash, if it even existed in no longer lying in the swiss banks, and has been rerouted to other investment opportunities, and possibly rerouted to Indian markets itself, via different channels (like the controversial participatory notes, shell companies etc). Both the current and the previous government have provided enough room for managing the black money, and I'll be surprised if India is successful in extracting any significant amount of money (order of 10 Mil. $), or to extract only account closure reports for the Indians who held account in various swiss banks and banks at other tax havens like Liechtenstein.
The other side of story is that it has become an issue that attracts eye balls. The amount that is suggested to be at stake is huge enough to attract the attention of even the upper middle class. People are very much dissatisfied with the performances of subsequent governments, and that made the Black Money Issue something on which political campaigns can be built upon. This issue was advertised in such a way that would attract the attention of average person, who wouldn't go into the details of the issue, by using headlines like, "We won't have to pay any taxes for a decade", "Every citizen would be given X sum of money", "India's revenue deficit would be bridged" etc.
As the events and outcomes of this election suggests, it worked. The current government even managed to show the act of constituting the Special Investigation Team to look into this matter, as a voluntary act of being righteous, when in reality they were just following the Supreme Court's directive to do so within a week.
Curious days ahead.
Someone should write an article about how some Indian writers need to stop eviscerating "millions of indians" based on imagined opinions.
This article is downright insulting. I am an Indian, and I don't believe that the "black money" is going to solve all of india's problems. That isn't even the point. The investigation is a good thing not because of the actual sums of money, but because some extremely powerful people who have stashed away the money need to be brought down. As the author himself says, the siphoned-off money is used to manipulate markets and elections. Shouldn't it be taken off their hands?
And trust me, hardly anyone who ever read a newspaper would take Baba Ramdev seriously. The author just kinda threw that in - "hey check out how stupid these indians are... they listen to a yoga teacher lol"
This article is downright insulting. I am an Indian, and I don't believe that the "black money" is going to solve all of india's problems. That isn't even the point. The investigation is a good thing not because of the actual sums of money, but because some extremely powerful people who have stashed away the money need to be brought down. As the author himself says, the siphoned-off money is used to manipulate markets and elections. Shouldn't it be taken off their hands?
And trust me, hardly anyone who ever read a newspaper would take Baba Ramdev seriously. The author just kinda threw that in - "hey check out how stupid these indians are... they listen to a yoga teacher lol"
> Shouldn't it be taken off their hands?
Alternatively, since the entire money system is based in the legal system, you could simply restrict what one person can accomplish with large sums of money.
Alternatively, since the entire money system is based in the legal system, you could simply restrict what one person can accomplish with large sums of money.
The site has a broken browser sniffer. On IE11 it throws a black layer at 90% opacity over the content and tells me that I should upgrade to a different browser...
What's the point of blocking out the entire content like that? If you really want to nag me based on some embarrassingly outdated user agent regex, go ahead, but at least have the common sense of offering a close button so I could still view the site despite your JavaScript competence.
What's the point of blocking out the entire content like that? If you really want to nag me based on some embarrassingly outdated user agent regex, go ahead, but at least have the common sense of offering a close button so I could still view the site despite your JavaScript competence.
> (very legitimate) resentment felt toward businessmen, farmers and politicians by salaried Indians
Resentment toward farmers? You gotta be kidding me. I agree with the argument that most of the illegitimate wealth get invested in India in one way or other and most of it might not be present in Swiss banks and several other things from the article, but above comment shows the author has no idea how Indian society is operating internally. I have lived both in village and in the city, I've seen salaried city/village people having many opinions/feelings for "farmers" but resentment was not one of them.
Resentment toward farmers? You gotta be kidding me. I agree with the argument that most of the illegitimate wealth get invested in India in one way or other and most of it might not be present in Swiss banks and several other things from the article, but above comment shows the author has no idea how Indian society is operating internally. I have lived both in village and in the city, I've seen salaried city/village people having many opinions/feelings for "farmers" but resentment was not one of them.
I think the author maybe talking about those groups not paying taxes, while the salaried have to.
I don't think anyone in India thinks farmers are given any unfair advantage. Actually all part of society is screaming to provide help to these people who still dare to farm instead of selling of their lands to real estate mafia even after all the stories of farmer suicides [1]
[1] http://en.wikipedia.org/wiki/Farmers%27_suicides_in_India
[1] http://en.wikipedia.org/wiki/Farmers%27_suicides_in_India
That may well be; but historically, farms were the perfect vehicle to launder ill-gotten wealth. You claim (on paper, and certified by greasing some palms) that your farm's output was $X*2, when in fact it was $X. Suddenly, the extra $X of money is counted as "agricultural income" and tax free (AFAIK).
He is, and yet the GP is right there is zero resentment middle class people feel towards farmers. I think what most people feel is a mix of gratitude and pity.
Seriously ? depending on the location, farmers may very well be the most wealthy group of people (Thanks to the real estate boom and the highly inflated land prices)
the article makes the mistake in generalizing the case, you should not do the same.
the article makes the mistake in generalizing the case, you should not do the same.
I think he meant the Feudal lords of the agricultural lands and not the actual labour who work on farms
> "One of the best places in which to invest money is India, not Switzerland or the US or any western destination,”
I have always sensed this to be the case, even though I don't have any data to back this up.
As an investor the last place I want to put my money (ill gotten or black) is in an off shore untraceable bank, or any bank for that matter. Banks' rate of interest can't even beat the inflation let alone give decent returns.
Secondly, I see money being splurged in entertainment industry (IPL, Bollywood). I really doubt that that money is all white. Most of the sponsors of IPL teams (hell, even BCCI's sponsor, Sahara) are not publicly listed (so there's no way to know their sources of income) and have been pulled by one or the other authorities. Bollywood's funding is more or less open secret that it comes from Mafia and it's a fair guess that they act as guardians and investors of the black money owned by politicians/businessmen/bureaucrats.
I have always sensed this to be the case, even though I don't have any data to back this up.
As an investor the last place I want to put my money (ill gotten or black) is in an off shore untraceable bank, or any bank for that matter. Banks' rate of interest can't even beat the inflation let alone give decent returns.
Secondly, I see money being splurged in entertainment industry (IPL, Bollywood). I really doubt that that money is all white. Most of the sponsors of IPL teams (hell, even BCCI's sponsor, Sahara) are not publicly listed (so there's no way to know their sources of income) and have been pulled by one or the other authorities. Bollywood's funding is more or less open secret that it comes from Mafia and it's a fair guess that they act as guardians and investors of the black money owned by politicians/businessmen/bureaucrats.
Someone should explain to them the difference between wealth and money.
Money stashed by politicians/rich-beyond-measure industrialists are a black box for majority of Indians. This money is not understood in terms of the impact it will make even if it flows back. Apart from this money, there is admittedly $20 Billion stashed in the form of gold in temples in India, this money is untaxed and not accounted for. For reasons that don't reveal themselves to me, no one speaks of such godly tax havens.
Modi regime promised to get back $3400 Billion corrupt money Indians have stashed in Swiss/foreign banks within 150 days.
http://www.samachar.com/Well-bring-back-black-money-in-150-d...
http://www.samachar.com/Well-bring-back-black-money-in-150-d...
Washington-based NGO Global Financial Integrity (GFI) puts the figure at nearly three times higher - $3.4 trillion
http://www.swissinfo.ch/eng/business/Black_money_problem_sta...
http://www.swissinfo.ch/eng/business/Black_money_problem_sta...
How do these articles get published/noticed? Here is the Assange leak amounts - http://bit.ly/1sGtsfk - And I do hope these people do not get away from what they did.
Don't think that image is true : http://www.hoaxorfact.com/Politics/wiki-leaks-published-1st-...
I am an Indian. While I can't say what every Indian thinks, I can say what I think and many people like me (middle class hard working Indians) think.
1. Black money will not solve all our problems and make us a superpower overnight. 2. Bringing the black money back will be a watershed event. 3. This will send a message that government is serious about corruption. 4. Less incentive for politicians to loot in future.
Better articles are expected from Bloomberg.
1. Black money will not solve all our problems and make us a superpower overnight. 2. Bringing the black money back will be a watershed event. 3. This will send a message that government is serious about corruption. 4. Less incentive for politicians to loot in future.
Better articles are expected from Bloomberg.
I am curious to know why has this been posted on HN and why do I see it on the homepage?
>Last week, a study by the Indian business confederation Assocham put that figure at nearly $2 trillion. Just to put this astonishing figure in context, that’s about the same as India’s gross domestic product.
Why do even educated writers compare unrelated terms? GDP is per year. That sentence is like comparing a distance of 60 miles to driving at 60mph.
Why do even educated writers compare unrelated terms? GDP is per year. That sentence is like comparing a distance of 60 miles to driving at 60mph.
I don't follow. The lost money is an amount equal to what the whole country makes in a year. Why is that a bad comparison?
It gives a negative impression when you compare it with GDP, because, when saying GDP, every one assumes it as the amount a country makes in a year, and the writer is take as a smug by the sensitive ones.
Seldom people take GDP as the amount county spends in a year (expenditure method for calculating GDP)( and that does not leave such a bad image of the situation after all :D )
Seldom people take GDP as the amount county spends in a year (expenditure method for calculating GDP)( and that does not leave such a bad image of the situation after all :D )
For example none of the Indians I know ever said their country will become rich if all the undisclosed wealth is siezed by the government. The reality is there is way too much corruption and the majority of the ill-gotten wealth is in India. In all but the biggest cities the real estate is not priced to market per the government and so the property is registered at 1/4th the value (for e.g.) and so taxes paid on only that amount. The rest is not disclosed and reinvested into the real estate market. There is a lot of that going on. What ever the Prime minister is doing about talking to Swiss officials is just posturing and he is also sure that not much is going to come out of it but some political victory.