How many times have you heard the public cursing politicians for what they have not done for their country? Chances are you won’t be able to count.
How many times have you heard the public praising you for what you have done for your country? Chances are you won’t be able to count.
Abusing politicians has become our national pastime. Need we say more? ‘Abusing’ seems to be too strong a word, so is the reality. Most of us have grown up listening to epics of moral bankruptcy of our rulers & their opposition. Every Tom, Dick & Harry is too eager to badmouth the political class, little realizing that more often than not s/he too deserves the same, maybe more. What most of us fail to realize is that it is this political class which has kept the nation alive & kicking & if it was not for them the country & its people would have surely gone to dogs. Our politicians may be corrupt & hypocritical sycophants, but are still better than the most of us ordinary mortals.
We are the real culprits, I am afraid to say. The great Indian public wants politicians to be embodiment of all things fair & just, while it itself is the root cause of all evils. We chastise Netas for corruption, how many of us can truly claim not to have given or taken a bribe in our lives? We want the Netas to play by the rules, how many of us have not broken some rule or the other at different times of our lives. To put things in simple perspective, what do you do when you see an empty road with a red traffic light? Most of us will overlook the signal & cross the road and what happens when we get caught by the Traffic Police? We beg the policeman to drop charges, use all sorts of emotional black mail, threaten if we have contacts in high places & negotiate a 50 Rupee bribe & crawl our way out.
We are happy contributing thousands of Crores to the VDIS scheme floated by good hearted politicos & then abuse them all over. We are happy to let our kids jump merit by paying hefty capitation fees or using our caste. We are very innovative in stealing (aka saving in fashionable language) Income tax, Sales tax, VAT, Service Tax, Excise, Customs etc.. etc.. & call it financial ingenuity. We do not hesitate to change the classification of the same materials in different books & loot the country (commercial people will know this).
Why do builders always have different architectural plans for the municipality & for the customer. How do we dare to operate a medical shop without being a qualified pharmacist? How many of our factories meet the norms set by the factory Inspector (I challenge Indian factories to prove their adherence to fire safety norms). How do we dare to buy pirated music, films & DVDs, smoke in public places, give false affidavits, buy without bills to save sales tax, the list can go on & on...
Let us admit it. We are no better than the politicians. Some will argue that paying a 50 buck bribe to the traffic police is not corruption & go on to claim that the Netas do far bigger scams. But then our bribe is small because we are small fry, dealing with small, mundane matters. Netas deal with far bigger things, so engage in bigger corruption. The ratios & the proportions remain the same. “Jiski jitni aukat wo utna corruption karta hai” as a politician said. Let us not mistake our limitations for honesty.
The key to national progress lies not in blaming the political class, but ourselves. We are to blame for the mess because we have all created it. Eradication of corruption is the collective responsibility of all citizens. Merely chastising a particular class of people will not do. Its time we come out of our hypocritical consciousness & introspect ourselves. People living in glass houses should not throw stones.
Tuesday, April 14, 2009
Monday, April 13, 2009
Poor Indians, the Rich Swiss
A lot of cry is being raised for bringing back the Indian money deposited in
Swiss banks. It makes one feel better that somebody at least remembers the problem. More often than not corruption & black money is blamed for the burgeoning Indian deposits in Swiss banks. However there is another side to the story, which goes unnoticed.
Since the 90s, when the reforms began, the value of the dollar has progressed from about Rs.10 to Rs. 50. The value of the Rupee has been falling against the
Dollar (except a brief surge a year back) which makes it worthwhile for an Indian with excess money to store it in Dollars. Further the value of the Rupee will continue to depreciate, which means further erosion of the net value of the savings in rupees. This coupled with the rampant inflation in the Indian economy ensures a negative growth of the economic worth of Indian money in PPP terms. On the contrary, the same money, if kept overseas in dollars consistently increases its net value outperforming both the Indian Inflation & the international economic trends.
This is another major reason for the increase in Indian deposits in Swiss banks.
What is the remedy? Is ending corruption the only way out? The answer of any patriotic economist worth his salt should be a big NO.
We, Indians as a rule are very dishonest & unpatriotic people. But for a few demonstrations of valour by our soldiers, our innate character borders on being a borne traitor rather than a patriot. Due to the utter dishonesty of our character, (mostly promoted by the arm chair Ganidhians badmouthing politicians of all hues) Indians as an entity will never fight against corruption, which makes it, better for the establishment to concentrate on using economics to combat the problem.
The most disastrous tragedy of corruption on our economy (the symptom as well as the effect) has been its exodus abroad. We (and many others) have been financing the Swiss Economy & Euro-American Growth for decades. The Black Rupee (notice similarity to blood diamonds, another peculiar character of similar character) stored in the safety of Swiss vaults does not produce interest worth being interested about!
Thus the Swiss get virtually interest free funds in billions, which is used to finance their chocolate & watch makers (amongst numerous others), a great portion of which is purchased by our white Rupee completing the parody of economic life cycles. The Swiss are very innovative & ingenious people. They have mastered the art of subsidizing the positive growth of their economy by a reverse mechanism of cross subsidizing the negative growth of corrupt countries like ours. Morons like us finance the upsurge in their economy, currency & international rankings on diverse wellness parameters at the cost of degrading ours in inverse proportion.
To halt this trend, we must prevent the exodus of Indian money. Before trying to prevent the exodus of the Rupee, we will first have to make the Rupee stable & should we wish to generate a return of the money already stashed abroad, the Rupee will need to be made stronger. If the Rupee becomes stronger, the Dollar will be depreciate vis-à-vis the Rupee & it will become alluring to bring back the money & to prevent the devaluation of the net worth of this Black Rupee.
This is a worthwhile option because money laundering is indeed very easy locally. If even a fraction of the Indian deposits in Swiss banks, were to come to India (they definitely will, if the rupee strengthens consistently), this money could be easily hidden away by the novel Hawala operators in chains of Benami transactions. This will have a positive effect on most aspects of the Indian economy like Real Estate (most of large chunks of land are Benami properties or purchased through black money), increase in consumption (sectors like food, white goods, automobiles, electronics), industries of snobbery (expensive weddings, haute couture fashion, in general the blasphemous show of liquidity). All this will eventually have the tickle down effect & do wonders for the recession struck economy, if not the polity.
Another angle to our woe of backwardness is the fact that although poor, we are net exporters of Finance. One of the major reasons for the fall of the Rupee is the encouragement by the government of India to send the Indian money abroad. In fact most of the developing & the not so developing countries are heavy exporters of their currencies to the first world. Since the international currency has been the Dollar & other first world currencies, the third world countries have to maintain a reserve of foreign currency to finance their international purchases. This creates a demand for the first world currency, more specifically the Dollar. This sustained demand for the Dollar (& a few other such internationally used currencies) drives up heir price & makes their economies more valuable in an ever increasing manner.
Indian government (& most of the third world) is under a misguided assumption that its economy will be judged in direct proportion to the value of the foreign exchange reserves it holds (or hoards). Hence more often than not it goes overboard in hoarding more foreign currency than is required, again contributing to the appreciation of Dollar & company vis a vis the Rupee & encouraging further exodus of the Rupee. To buy these huge stocks of foreign currency, more & more of the local money needs to be sent out. The volume of this money is much more than that of the foreign investments coming into India. Thus we have a situation we fare unfavorably with the world on balance of trade, but favorably in the trade of money. The tragedy is that this favorable status is unfavorable to our economy!
If we wish to make our economy strong in real terms in the long run, we will have to curb this outward flow of the Rupee & stop strengthening the others at our cost. Further we can strive to become a mini dollar at least for the nearby region. A strong currency is one of the first steps to the recognition of a country’s economic might & the key to sustained long term growth.
And yes, it can also help us to bring our Swiss billions back!
Swiss banks. It makes one feel better that somebody at least remembers the problem. More often than not corruption & black money is blamed for the burgeoning Indian deposits in Swiss banks. However there is another side to the story, which goes unnoticed.
Since the 90s, when the reforms began, the value of the dollar has progressed from about Rs.10 to Rs. 50. The value of the Rupee has been falling against the
Dollar (except a brief surge a year back) which makes it worthwhile for an Indian with excess money to store it in Dollars. Further the value of the Rupee will continue to depreciate, which means further erosion of the net value of the savings in rupees. This coupled with the rampant inflation in the Indian economy ensures a negative growth of the economic worth of Indian money in PPP terms. On the contrary, the same money, if kept overseas in dollars consistently increases its net value outperforming both the Indian Inflation & the international economic trends.
This is another major reason for the increase in Indian deposits in Swiss banks.
What is the remedy? Is ending corruption the only way out? The answer of any patriotic economist worth his salt should be a big NO.
We, Indians as a rule are very dishonest & unpatriotic people. But for a few demonstrations of valour by our soldiers, our innate character borders on being a borne traitor rather than a patriot. Due to the utter dishonesty of our character, (mostly promoted by the arm chair Ganidhians badmouthing politicians of all hues) Indians as an entity will never fight against corruption, which makes it, better for the establishment to concentrate on using economics to combat the problem.
The most disastrous tragedy of corruption on our economy (the symptom as well as the effect) has been its exodus abroad. We (and many others) have been financing the Swiss Economy & Euro-American Growth for decades. The Black Rupee (notice similarity to blood diamonds, another peculiar character of similar character) stored in the safety of Swiss vaults does not produce interest worth being interested about!
Thus the Swiss get virtually interest free funds in billions, which is used to finance their chocolate & watch makers (amongst numerous others), a great portion of which is purchased by our white Rupee completing the parody of economic life cycles. The Swiss are very innovative & ingenious people. They have mastered the art of subsidizing the positive growth of their economy by a reverse mechanism of cross subsidizing the negative growth of corrupt countries like ours. Morons like us finance the upsurge in their economy, currency & international rankings on diverse wellness parameters at the cost of degrading ours in inverse proportion.
To halt this trend, we must prevent the exodus of Indian money. Before trying to prevent the exodus of the Rupee, we will first have to make the Rupee stable & should we wish to generate a return of the money already stashed abroad, the Rupee will need to be made stronger. If the Rupee becomes stronger, the Dollar will be depreciate vis-à-vis the Rupee & it will become alluring to bring back the money & to prevent the devaluation of the net worth of this Black Rupee.
This is a worthwhile option because money laundering is indeed very easy locally. If even a fraction of the Indian deposits in Swiss banks, were to come to India (they definitely will, if the rupee strengthens consistently), this money could be easily hidden away by the novel Hawala operators in chains of Benami transactions. This will have a positive effect on most aspects of the Indian economy like Real Estate (most of large chunks of land are Benami properties or purchased through black money), increase in consumption (sectors like food, white goods, automobiles, electronics), industries of snobbery (expensive weddings, haute couture fashion, in general the blasphemous show of liquidity). All this will eventually have the tickle down effect & do wonders for the recession struck economy, if not the polity.
Another angle to our woe of backwardness is the fact that although poor, we are net exporters of Finance. One of the major reasons for the fall of the Rupee is the encouragement by the government of India to send the Indian money abroad. In fact most of the developing & the not so developing countries are heavy exporters of their currencies to the first world. Since the international currency has been the Dollar & other first world currencies, the third world countries have to maintain a reserve of foreign currency to finance their international purchases. This creates a demand for the first world currency, more specifically the Dollar. This sustained demand for the Dollar (& a few other such internationally used currencies) drives up heir price & makes their economies more valuable in an ever increasing manner.
Indian government (& most of the third world) is under a misguided assumption that its economy will be judged in direct proportion to the value of the foreign exchange reserves it holds (or hoards). Hence more often than not it goes overboard in hoarding more foreign currency than is required, again contributing to the appreciation of Dollar & company vis a vis the Rupee & encouraging further exodus of the Rupee. To buy these huge stocks of foreign currency, more & more of the local money needs to be sent out. The volume of this money is much more than that of the foreign investments coming into India. Thus we have a situation we fare unfavorably with the world on balance of trade, but favorably in the trade of money. The tragedy is that this favorable status is unfavorable to our economy!
If we wish to make our economy strong in real terms in the long run, we will have to curb this outward flow of the Rupee & stop strengthening the others at our cost. Further we can strive to become a mini dollar at least for the nearby region. A strong currency is one of the first steps to the recognition of a country’s economic might & the key to sustained long term growth.
And yes, it can also help us to bring our Swiss billions back!
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