Massive black money economy cripples nation
|April 23, 2009||Posted by Jeffery J. Smith under Progress Report, The Progress Report|
Massive black money economy cripples nation
1,500 Indian Farmers Commit Mass Suicide
India is a nation of huge winners and miserable losers. We trim, blend, and append two 2009 articles from (1) AlterNet, posted Apr 16, on suicide by Tara Lohan, a managing editor at AlterNet, and (2) MeriNews, Apr 2, on black money by Vinod Anand.
by Tara Lohan and by Vinod Anand
- 1,500 Indian Farmers Commit Mass Suicide
Over 1,500 farmers in the Indian state of Chattisgarh committed suicide. The suspected motive was overwhelming debt in the face of crop failure.
The UK Independent reported: The agricultural state of Chattisgarh was hit by falling water levels. “It used to be 40 feet a few years ago,” Shatrughan Sahu, a villager in one of the districts, told Down To Earth magazine. Now its below 250 feet.
A significant contributor was nearby dam construction.
Farmer suicides in India, and increasingly across the world, are not new. In one region of India alone 1,300 cotton farmers took their own lives in 2006.
The UK’s Daily Mail reports Indian farmers had been promised previously unheard of harvests and income from genetically modified seeds. They borrowed more money than usual to buy GM seeds. But when the harvests failed, their debts were worse.
JJS: While the left focuses its blame on corporations, and corporations do deserve some blame, the actual story is more basic and long pre-dating global agri-biz; money and land have always been contentious for the masses.
Why do farmers need to borrow each and every year? Why cant they save enough to pull ahead? Why are the only lenders for-profit adversaries instead of minimal-profit co-ops? And why do farmers plant crops for which the land is not suited? In sum, farmers need money, but cant get it from farming.
Ironically, however, they could get more income from land, but not farmland; itd have to come from urban land, where locations are hundreds of times more valuable. That is, society could treat land value as part of the commons and recover ground rent via taxes, fees, or dues, and then disburse the revenue as a dividend to residents.
Enjoying such a stipend, farmers would not need to borrow so much if at all. They could occasionally afford to forgo the global market and instead cultivate for their family and locality, even give their land a rest. Smaller harvests of commercial crops would raise those commodity prices.
And to further augment farmer income, society would not tax wages nor sales. This entire revenue reform could be called geonomics. It would help uproot the corruption endemic in India. The government would not concentrate its levies on income — which people can hide — but on land and resources — whose value are obvious to all. And letting the Citizens Dividend replace many social programs would give politicians less discretion over spending and bureaucrats less opportunity to take bribes.
- Massive black money economy cripples nation
Apart from being the worlds largest democracy, India also has a parallel economy, called a shadow economy and underground economy. This term has many connotations. One of them relates to black money.
Black money is usually untraceable, and hence untaxable: business and other dealings that are not reflected in a countrys Gross Domestic Product computations. It is concealed money that is kept in secret account books (called number two accounts). It employs illegal (and even criminal) methods. According to one study, about 45% of our national income gets channeled every year to this concealed kitty.
Many professionals like medical practitioners, chemists, lawyers who charge good amount of fee from their clients and do not give any receipt, do not show such collections in their income tax returns, and this amount gets converted into black money. Tax evasion is also done by the intermediaries between the buyers and the sellers like the property dealers, and also agents between the public and the government officials like income tax experts. The fake pharmaceutical companies, that violate the copyrights of the patent medicines, evade everything they earn.
Last year Indians had $ 1.456 trillion in secret accounts, which is more than the balance held by all other nationalities taken together. Russians held $4700 billion, UK $ 390 billion, and China $ 96 billion.
Bribes are also black money. In terms of bribery we are the worst. According to the Transparency International, which publishes a Corruption Perception Index, about Rs 21,000 crore ($ 4.108 trillion) annually is estimated to exchange hands in the form of bribery in the country.
Super rich Indians — like the film stars, cricketers, business tycoons, and so on — have amassed a huge amount of black money both in India and abroad. Besides, there is also enormous black money in the coffers of the politicians, bureaucrats, and their supporters. They normally get involved in nefarious activities and entertain strong links with the mafia, essentially for muscle power, and through that they get involved in rent-seeking activities.
Jeffery J. Smith runs the Forum on Geonomics.
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