india march poor farmers land right

India's Billionaires and the Wealth of the Nation
land law self made billionaires wealth gap property development economic growth

Indian Marchers for Land Reform Win Promises

India's government promises to allow access to land for millions of poor while delivering deeds and deals to the very rich. These 2012 articles are from: (1) The Guardian, Oct 11, on the poor by M. Tran and J. Burke; (2) BBC, Oct 12, on the rich by Soutik Biswas; (3) New York Times, Oct 16, on inequality by A. Lowrey; and (4) Stuff Nation (New Zealand), Oct 8, on recovery by G. Tait.

by Mark Tran & Jason Burke, by Soutik Biswas, by Annie Lowrey, and by Gerald Tait

Tens of thousands of poor Indian farmers marching on Delhi to press their right to land have called off their protest after the government bowed to some of their demands.

About 60,000 marchers, mainly socially marginalised dalits and tribal people, began the 350km march from Gwalior in Madhya Pradesh to Delhi last week, on the anniversary of Mahatma Gandhi's birth.

"Access to land is critical for the eradication of poverty. We hope that today's success will give hope and inspire other land struggles in other parts of the world."

One issue for the ruling Congress party is that the vast flagship subsidy programs designed to ensure basic levels of nutrition and employment among India's very poor -– and to gain their votes -– are riddled with graft and inefficiency. Hugely expensive, these programmes often fail to reach the most needy.

New legislation aiming to simplify the complex and archaic land laws in India, and ensure fairer compensation for those displaced by new infrastructure projects or industry, has been stuck in parliament and is unlikely to be passed soon.

To read more

JJS: Denied access to land impoverishes many, granted access to land enriches a few.

There are 46 billionaires living in India. There were only two billionaires in the mid-1990s.

The ratio of total wealth of the billionaires to gross domestic product (GDP) -- an indicator of how extreme wealth compares with India's growth -- rose from around 1% in the mid-1990s to 22% at the peak of the stock market boom in 2008, before dropping to 10% of GDP this year.

Though 21 Indian billionaires are "self-made", 40% of India's total billionaire wealth is owned by "inherited and growing".

The caste origins of India's billionaires are on predictable lines: 28 of the 46 billionaires come from traditional merchant classes (Banias, Parsis and Sindhis, for example), and a number of them belong to upper caste communities like Brahmins and Khatris.

A total of 43% of the billionaires, accounting for 60% of billionaire wealth, had their primary -- and original -- sources of wealth from industries like property development, infrastructure, construction, mining, telecoms, cement, and media.

Property development in India is India's most shadowy business with a large number of transactions in illegal money on which no tax is paid.

Infrastructure and telecom licenses are typically given out through bids, which are often non-transparent and controversial.

Impressive wealth creation occurred in sectors with substantial rent-extraction and rent-sharing between the private and government players.

To read more

JJS: Americans get land, but debt comes with it, so the dynamic of "rents" creating vast inequality still operates.

In America, income inequality has soared to the highest levels since the Great Depression, with the top 1% taking 93% of the income gains in the first full year of the recovery.

Since the 1980s, rich households in the United States have claimed a larger and larger share of overall income. The 1% takes about one-sixth of all income and the top 10% about half.

In rich countries and poor, inequality has a stronger effect on growth than several other factors, including foreign investment, trade openness, exchange rate competitiveness, and the strength of political institutions.

Starting in the 1970s in the US, earnings were squeezed for low- and middle-income households. They borrowed to improve their standards of living and used houses as piggy banks. But the housing bubble [actually, location bubble] collapsed, and took the rest of the economy with it.

The lower income a family earns, the more wealth they tend to hold in their housing [actually, land]. Housing [land] values have plummeted, and are not expected to recover for years if not decades. At the same time, many bond prices have soared and stock prices have performed well, aiding the upper-income households that tend to hold investments.

The top 1% of households now hold a larger share of overall wealth than the bottom 90% does.

to read more

JJS: American homeowners lose ground not because the land beneath homes becomes somewhat affordable during a recession but because of (1) the debt they had to take on, (2) increase of taxes and/or the decrease of social services, (3) inflation of prices for essentials like fuel, food, and medical care, and (4) the drop in real wages and/or the rise in overwork.

All four of those onerous trends are reversible. Governments could quit wasting public revenue on war machines, drug wars, suburban sprawl, etc. Likewise, they could shift taxes off our productive efforts and instead charge full-market value for the privileges they grant, such as oil leases, broadcast licenses, emission permits, utility franchises, patents/copyrights, corporate charters, bankers’ sovereignty, etc -- we’re talking trillions when it comes to such privileges making insiders in America and India so enormously wealthy.

Governments could also recover the value of land and resources (via a tax or fee or lease or dues), as by shifting the property tax off buildings, onto sites, especially downtown prime locations. Then owners would not speculate in land, would not inflate its price, so buyers would not have to borrow so much, keeping mortgages and debt in general easily manageable.

From its surplus revenue, governments could pay citizens a dividend, as does Singapore. Then people could more easily afford their land dues. Plus they could negotiate higher wages, enjoy time off, and get out from under the economy and the prescriptions of in-the-box economists and politicians in the pockets of lobbyists.

Wherever tried, geonomics has worked, even redistributing land to earnest farmers in Taiwan when that island languished in poverty. India and America could solve their wealth inequality by enforcing one's equal right to land. Fortunately, it’s an idea whose time seems to be coming. “Land Tax is the Key” in Stuff Nation (New Zealand), Oct 8; to read more .

BTW, behind the scenes, this website is undergoing a major overhaul that should be ready for public presentation in a week or so. When you return and see something totally different, don't be surprised! Indeed, if you'd like a preview, click here , then let us know what you think. Big thanks.


Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .

Also see:

Why Make Something Plentiful Scarce?

Each day, every year, each nation, everywhere

The 2012 Forbes 400 Richest List is Out

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