Let us be fair. The Modi government has been in power only for 15 months. That is a short time to achieve much in a large Country like India.
So I will not ask how it is that the black money stored overseas has not been brought back not in month, but in one year. Economic Times quotes that “Global Financial Integrity India, an international NGO, estimates an outflow of $44 billion from India every year during 2003-12.” That is some 2% of India’s Gross National Product of 2 trillion (2014-15) in international value of dollar. 37 dollars from the pocket of the common man who earned some 1400 US dollars a year – among the lowest in the world.
Economic experts like Professor Arun Kumar of JNU, New Delhi estimated that 2 Trillion dollars are stacked away abroad and predicted that a ‘strong man’ with the required political will be able to bring that money back to India. Within 24 hours of swearing in, Mr. Modi convened a committee of judges and financial regulators to find and get back the money sorely needed in the Country. The Country needed a strong man, said many. Mr. Modi is just that, said his right-wing party while many of its senior leaders secretly disagreed
If the Gandhis have looted that many crores, why don’t you take action?
Some of the black money that Mr. Modi confidently announced in San Jose, California was like this : “This person (obviously Sonia Gandhi, who declared an income of less than 1 crore, 18 lac) made 50 crores, that son (Rahul Gandhi, who else? who declared an income of 8 crores) made 250 cr, that daughter (Priyanka Gabdhi )made 500 crores (no public declaration available ) , someone’s damaad (son-in-law- Robert Vadra) made 1000 crores…” .
In the case of the damaad, Mr. Modi grossly understated the assets – Vadra’s net worth, according to one report, is 2.1 Billion dollars, that roughly amounts to an astronomical Thirten Lac Fifty Thousand Crore (136,50,00,000) against which Modi’s speculation of 1000 crores (1,00,00,000) is peanuts.
A Prime Minister of a Country which is not a Banana Republic is not expected to make public announcements abroad through his hat-sorry, turban. He is expected to have figures by which he can stand if challenged. So what is being done to haul up these supposed national looters and recover the money? Why didn’t the Finance Minister, Mr. Arun Jaitley, go by the words of his boss and have the four arrested?
Why aren’t the tax authorities unearthing their black accounts and blacker money? That you cannot take vengeful action will be a stupid argument – you owe much more to the people who elected you than to those who might cry vendetta.
Since nothig of the kind is being done, one concludes than Mr. Modi did talk like Presodent Mobutu, or, if you like, Donald Trump – both Banana Republicans.
Did you bring back black money from abroad?
Subramnaian Swamy, the BJP upstart, said he will bring back all the black money from Swiss banks if he were to be appointed Finance Minister. For obvious reasons, Modi sealed his fate by asking him to stand against Sonia Gandhi.
Modi himself made an untenable and illegal promise on a public platform that “when we bring back the black money of these thieves to India, every poor man will get 15 lakh rupees in his pocket”. Click to enlarge the image to read how he offered this huge sum of money – 15 to 20 hundred thousand Rupees – to voters. To listen to Mr. Modi’s full dishonest boast, click here.
How they collected the “Foreign Black Money”
Mr. jaitley, with nothing happening by way of bringing in the promised wealth, went for an easier route that had been traversed by his Congress predecessors – a COMPLIANCE WINDOW , Jaitley’s compliance window was open to those who have money stacked away abroad.
“Those coming clean will have to cough up 30% tax and 30% penalty (thus, a total tax of 60%) and avoid prosecution. The tax and the penalty can be paid by September 30.” Now that the target date is well past, Rs. 4147 crore is said to have been realized. On 30 September the scheme was closed as promised . The ministry says they have no idea how much should have been disclosed, but action will be taken against those who have not responded to the hand of cooperation (at 60% plus tax).Now if you do not know what is being hidden, how are you going to take action?
You have got 26 Rupees instead of 15 lac Rupees into your pocket.
Even at 60 (+surcharge etc.) percent penal rate of tax, some 2625 crore Rupees will be realized. All the announcements have been in Rupees while the previously predicted money in banks was in US Dolallars – all of 2.1 trillion on 2100 Billion – some 1680 dollars – 1,09200 Rupees approximately in every Indian pocket (not 15 lac). The catch is this : the money hidden away abroad is in US Dollars or Euros. You have not got back that money from abroad. Some 600-odd smart alecks are paying you income tax and getting away by paying Indian rupees from their local lockers while still keeping their money in Dollars or Euros. abroad. Your productivity has been abysmally low; your imports have fallen. Only thing that rises is the amount of rupee needed to buy a dollar. As a net importing nation, you should get that money in dollars into RBI. As far as I can see, since Jaitley is talking about rupees, under the circumstances you might as well print 2625 crore Rupees.
Now 4177 crores is some 6640 Million dollars. That is 0.032% of the 2 trillion estimated by Jaitley’s party. It’s like Jaitley went to catch a blue whale and came back screaming with delight that he caught a sardine. The 2525 crore collected, if distributed to every citizen, would put in less than 25 rupees instead of the Promised 15,00,000 to 20,00,000 Rupees that the poor voter was promised. Does not false promises and cash incentive to voters amount to corruption?
India is NOT the Fastest Growing Nation.
Even if it be true that India grew by 7.4% and China by 7.10% and the percentage of growth be based on growth relative of the previous year’s GDP, India is not the fastest growing nation by any count. The World Bank figures for 2014 places India at No. 8 of the fastest growing economies of the world. Please see the chart..
Thanks to Make in India campaign Foreign Direct Investment has grown.
The true picture is distressingly different despite the large budget allocation that the Finance Minister made for this campaign. You find a advertisement every day with more interesting concepts being shown on BBC, CNN, NDTV, YouTube – all the visual media that one comes across. This should cost the poor tax payer like myself heavily with no return in sight.
Let us look at the figures.
With a fair comparison in mind, and to allow time for Modi’s Make in India campaign to take effect, I have taken the ten-month period between October 2014 to Julu 2015 for comparing the three major competing BRIC countries – Brazil, India and China (Russia has had a dismal period, any way). The figures for August and September ae not available as I write this.The figures are sourced from the World Bank report.
You find that Brazil has been receiving a healthy quantum of investment from abroad although its economic growth is said to be ‘waxing and waning, and its economy has not grown beyond 2.2% during the past two years. During the ten months I refer to, Brazil which runs no comparable campaign for investment has received over US Dollars 53 Billion.
Here, we see an interesting pattern belying all the public claims made by the Prime Minister and the Finance Minister. Even at the best of times, India does not surpass the average Foreign Direct Investment into Brazil. The scale tops at 5000 Million (5 Billion) whereas Brazil tops at 7 Billion. The total inflow to India is to the tune of 28.6 Billion; a little more than half of the dollars that went into Brazil. Don’t discount the fact that the population of Brazil (200.4 Million) is less than a fifth of India’s.
The pattern of the undulating skyscrapers in the chart tells an interesting story. By December 2014 , the international travels of the Prime Minister (and that of the virtually submerged Foreign Minister of whom you hear nothing in the media), you see a certain optimism among the investors. By March 2015, however, the discordant noises from the Hindutva underlings of Modi are being heard aloud; and the belief that the frustrating record in ease of doing business (ranked 142 the world, very nearly the bottom), availability of land (a great attraction as much as the possibility of a good return) and pragmatic changes in labour laws would improve had turned into disappointment. President Obama had made that telling remark that made investors sit up – India would do very well if there is religious tolerance. The message also meant that there is no hope for India if there is no religious tolerance..
The nations are watching the growth of religious intolerance in India; there is a continuous effort at pumping in Hindu prayers and religious practices into school curriculum; Hindutva- zealots are re-writing history. There may be other factors – but the spectre of social instability has been the major cause for poor response to India’s attempt at attracting more investments.
If I were to draw this chart for China on the same scale as India and Brzail, the bar graph would go far beyond the top of this page. The fall inJanuary 2015 may be attributed to a sudden panic that Chinese economy would be sinking. Xi Ping’s diplomacy returned huge dividends – the day Modi went and placed a 3.1 billion order on Boeing, Xi Ping secured an agreement that the same Boeing would invest 300 Billion in a new factory in China. You can see that there is an inexplicably linear rise in the FDI into Xi Ping Country from January to July while Modi development model wavers dangerously.
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