Monday, November 28, 2016

Modified or Tughluq

Vasu Reddy from Chicago
Vasuredddy@aol.com

It has been a couple of years since BJP and Modi took over the governance of India from INC.  As with most NRI population, I too voiced great opportunism with the election of Modi to lead India.  Not withstanding his managerial abilities, his public persona, his pronouncements, his attitude, his work ethic, and whole lot of qualities and mostly his stance on cleaning-up India’s entrenched political and bureaucratic looting, was all in his favor.  I wrote many times that Modi did not need money for himself (I still strongly believe this) and thus makes him the best candidate to root out corruption.

Modi constantly spoke against corruption and black money in Indian political and commercial system.  The country is 100% dependent on baksheesh.  Everyone has a handout to do anything.  From very simple thing to complicated decisions are based on paying for the services, and Modi rallying against this was perhaps the most politically attractive rallying cry against the incumbent government, and rightfully so.  I fully supported the initiative to root out and stop public and political corruption.  Even our temples encouraged the people who gave money get preferential viewing of the good lord.  Once again Modi had no one at his side, and his family and friends were kept away from his circle of governance, thus eliminating the need for graft.

Since 2014, the initiatives with the international agencies, aligning with receptive governments with constant emphasis on rooting out the black money have certainly yielded results.  Public might not see the daily activity, but Modi’s government have been proactive to find and expose the unaccounted money, and bring some semblance of accountability to international hoarders.  It is unlikely that we can catch everyone in the world and expose or make them account for hoarding the money overseas, as many options are available to legally hold money overseas.  However Modi’s government has been putting pressure and getting people to fess up.  The most glaring of the ineffectiveness can be identified with at least a couple of individual instances, where the Indian government has not been able to bring the British to send back Vijay Mallya and Lalit Modi, who are both enjoying their time in the UK.  But there is steady progress with the Panama papers and Swiss and other off shore havens exposing the hoarders.

Within India, many steps have been taken to allow people to declare their horded assets, and also ill gotten assets by declaring and paying appropriate income tax.  The initial opportunity was simple and straight forward, there were no questions asked, just declare everything and pay taxes, and that’s it.  You had a clean slate.  There were clear guidelines and various schemes announced so that people did not nee to fear the authorities, simply show the money and pay the tax.  This also yielded some fairly large declarations of wealth, which again added to the international pressure to bring back the black money.  Modi’s government took various steps, prior to the latest November 8, 2016 demonetization of 500 and 1000 Rupee notes.

We could see further measures to get majority of the economy into a transactional process rather than hording, and Modi might still have a lot of measures that might be forthcoming.

But the problem with India is that the whole national wealth could be vastly under reported simply because of historical way of life in India.  Indians hold wealth in land, property, gold and silver and immovable assets, while many hold cash as the transactional way of life.  Banking, credit, debit, ATM, internet commerce and many of the last 20 years of global commercial developments while being introduced and accepted in India, the country still has its holdings outside of the banking/commercial systems.  So, while the looters and hoarders might use cash only as the way to stash their ill gotten wealth, 99% of Indians who are genuine keep their assets and cash the way they are used to, and are not guilty of any financial crimes.

The demonetization certainly added to the woes of ill gotten wealth.  People destroying, dumping, burning and simply throwing their money away are a reflection of ill gotten wealth and disregard for how it was acquired.  These guys could have simply given the money to temples and charities instead of destroying the money, even better they could have simply given the ill gotten money to army or other government organizations without destroying, but again looters really don’t think about anything positive.

While we applaud Modi’s continuous initiatives to curb corruption, the value of the way of life of Indian society and how 99% plus of Indians have their set ways of life.  Why do I, a tax payer and a law abiding citizen have to wait for hours to get my money, and also why do I have to even exchange or identify the money that I already accounted for?  Why not find the looters and tax dodgers, with ways and means available to the intelligence agencies?  Is the government playing ignorance about who is looting or are they simply still holding out for contributions?

The inconvenience to the public could have been avoided with many measures, but the intent is being widely accepted.  For NRI, this is simply a most difficult process, but again the government is allowing measures to make amends to legitimate currency holders.  What amounts to a managed society is limiting someone to a certain amount of money that can be cashed or help, as this is not the way economies should work, and democracies should flourish.  If I choose to only deal with cash, I should be able to, and the government should no tell me how much to spend or keep with me.  If I am a law abiding and tax paying citizen, then it is my choice on how I conduct my life and business.  As long as Modi and the government doesn’t reach into personal life of Indians who don’t need help with how to live it, they can and should keep finding ways to curb corruption.  But let the common man be just that; a law abiding common man.

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