FacebookTwitterGoogle+RedditEmail

Feeding Frenzy of the Kleptocracy

by P. SAINATH

Forbes has just added an ‘errata’ to Union Finance Minister P. Chidambaram’s budget speech. The minister had found a mere 42,800 people in the country with a taxable income in excess of $184,000 a year. Forbes, the Oracle of Business Journalism, does not list taxable incomes. But it does put up a list each year of billionaires the world over. And in 2013, 55 Indians (up from 48 last year) figure on that list,  with an average net worth of around $3.52 billion. (See: http://www.forbes.com/billionaires/ )Their total net worth is $ 193.6  billion. (That’s…er, Rs. 10.5 trillion).  Chidambaram might want to compare notes with Steve Forbes. They could come up with a lot more names falling within his narrow super-rich spectrum.

The 55 wonder-wallets give India 5th rank in the world of billionaires on the Forbes List.  Behind only the US, China, Russia and Germany. Our rank in the latest United Nations Human Development Index (2013), though, is 136 out of 186 nations. With almost all of Latin America and the Caribbean, bar Haiti, ahead of us. (We have though. elsewhere, managed to tie with Equatorial Guinea).

Well, okay, the total worth of our megabucks mob on the Forbes List comes to just over $193 billion. But a glance within reveals a grim class divide. At the bottom are the common or garden variety  tycoons, barely scraping past the one billion-dollar mark. There are four of them, inches away from plutocrat penury, with only a mere billion to their names. There are 17 in all below the BPL (Billionaire Permanency Line), which seems to be $1.5 billion. Once you cross that threshold, you tend to be a permanent member of the club.

There’s another 12 in the magnate middle classes, between $ 1.5 and $ 2 billion. Next, the deluxe segment:  16 of them  —  above $ 2 billion, below $ 5.5 billion.  And finally, the big boys  –  above $ 6 billion each. The top ten are worth $102.2 billion. (A bit more than our fiscal deficit of $96 billion). There is also a platinum tier.  The top three account for  a quarter of our total billionaire wealth, if Forbes is to be believed.

I’m not sure Forbes is to be believed. All these sound like grave under-estimates. Meanwhile the Chinese and Russians have forged ahead of us on the List. (Steve, I demand a recount). Either the Chinese and Russians are up to no good, or Indian creative accounting is keeping our numbers down. This fiasco becomes particularly galling when we’ve all been investing so heavily in the growth of our super-rich and better-off.  Some $ 97 billion  in this year’s budget. You can express that as Rs. 5.28 lakh crores (in Indian terminology). Or, as Rs. 5.28 trillion. It’s just as obscene either way. See (Statement of Revenue Foregone ). Heck, we deserve a better performance from our billionaires.

One of the biggest write-offs in this year’s budget is the customs duty on gold, diamonds and jewellery  —  $11.2 billion. That’s more than what’s been written off on ‘crude oil & mineral oils.’ Or even on ‘machinery.’ The waiver on gold and diamonds in just the last 36 months  is $32.3 billion. (Or what we lost in the 2G scam). I guess we shouldn’t be surprised, then, that three new Indian entrants to this year’s Forbes Billionaires List are in the field of jewellery.

It’s not as if we haven’t been generous with them in other sectors, though. The latest  write-off in corporate income tax is even higher at $12.5 billion. The total revenue foregone this year ($97 billion), as others have pointed out, is greater than the fiscal deficit. But just look at what the write-offs on corporate tax, excise and customs duties add up to since 2005-06, from when the data begins: $573 billion or well over half a trillion dollars). It also means we’re writing off taxes and duties for the corporate mob and rich at a rate of over $8 million every single hour on average.

But the budget has almost nothing worthwhile for, say, health or education where there’s a decline compared to allocations last year (in proportion to GDP). Ditto for rural development. And a micro-rise for food that will quickly be taken care of by prices.

Gee. It seems there’s no need for the super-rich to commit half their fortunes to charity. They are the charity we all of us support. End the lavish waivers, pay your taxes and we’d be in glowing fiscal health. Every other economic survey and / or budget has noted the obscene write-offs as a source of worry and said so. Recall that the Prime minister and finance minister have both in the past promised to end this corporate feeding frenzy at the public trough. But it only gets bigger.

What gets smaller is India’s tax to GDP ratio. In Mr. Chidambaram’s own words: “In 2011-12, the tax-GDP ratio was 5.5 per cent for direct taxes and 4.4 per cent for indirect taxes. These ratios are one of the lowest for any large developing country and will not garner adequate resources for inclusive and sustainable development.” (Emphasis added: PS). But he does nothing to correct that by way of raising revenue. Only by curbing expenditures in the social sector. He’s nostalgic, though, for a time when “in 2007-08, the tax GDP ratio touched a peak of 11.9 per cent.”  That was when the write-off trough was much smaller.

What also gets smaller is the idea of food security in a nation where the percentage of malnourished children is nearly double that of sub-Saharan Africa. How do they get past the porcine gridlock at the budget trough?

Also getting smaller is the average per capita net availability of foodgrain. And that’s despite showing an improved figure of 462.9 grams daily for 2011. (Caution: that’s a provisional number). Even then, the five-year average  for 2007-11 comes to 444.6 grams. Still lower  than the 2002-06 figure of 452.4 grams.

It’s scary: as we warned last year  –  Average per capita net availability of foodgrain declined in every five-year period of the ‘reforms’ without exception. In the 20 years preceding the reforms — 1972-1991 — it rose every five-year period without exception.

Ah, but they’re eating a lot of better stuff, hence the decline in cereals and pulses. So drone on the Marie Antoinette School of Economics and assorted other clowns. Eating a lot better? Tell that to the nation’s children —   for whom sub-Saharan standards would be an improvement. Tell that to the famished in a country ranking 65 in the 79 hungriest nations in the Global Hunger Index. (Eight slots below Rwanda). India’s GHI score in 2012 was worse than it was 15 years earlier in 1996. Tell it to Forbes.  Maybe they could do a list of the most insensitive elites in the world. You know who’d top that one.

P. SAINATH is the rural affairs editor of The Hindu, where this piece appears, and is the author of Everybody Loves a Good Drought. Sainath is presently in the US teaching for the (Fall) semester. He can be reached at: Sainath@princeton.edu.

P. SAINATH is the rural affairs editor of The Hindu, and is the author of Everybody Loves a Good Drought. He can be reached at: psainath@mtnl.net.in

More articles by:
Weekend Edition
June 24, 2016
Friday - Sunday
Pepe Escobar
Goodbye to All That: Why the UK Left the EU
Michael Hudson
Revolts of the Debtors: From Socrates to Ibn Khaldun
Andrew Levine
Summer Spectaculars: Prelude to a Tea Party?
Kshama Sawant
Beyond Bernie: Still Not With Her
Mike Whitney
¡Basta Ya, Brussels! British Voters Reject EU Corporate Slavestate
Tariq Ali
Panic in the House: Brexit as Revolt Against the Political Establishment
Paul Street
Miranda, Obama, and Hamilton: an Orwellian Ménage à Trois for the Neoliberal Age
Ellen Brown
The War on Weed is Winding Down, But Will Monsanto Emerge the Winner?
Gary Leupp
Why God Created the Two-Party System
Conn Hallinan
Brexit Vote: a Very British Affair (But Spain May Rock the Continent)
Ruth Fowler
England, My England
Norman Pollack
Fissures in World Capitalism: the British Vote
Paul Bentley
Mercenary Logic: 12 Dead in Kabul
Binoy Kampmark
Parting Is Such Sweet Joy: Brexit Prevails!
Elliot Sperber
Show Me Your Papers: Supreme Court Legalizes Arbitrary Searches
Jan Oberg
The Brexit Shock: Now It’s All Up in the Air
Nauman Sadiq
Brexit: a Victory for Britain’s Working Class
Brian Cloughley
Murder by Drone: Killing Taxi Drivers in the Name of Freedom
Ramzy Baroud
How Israel Uses Water as a Weapon of War
Brad Evans – Henry Giroux
The Violence of Forgetting
Ben Debney
Homophobia and the Conservative Victim Complex
Margaret Kimberley
The Orlando Massacre and US Foreign Policy
David Rosen
Americans Work Too Long for Too Little
Murray Dobbin
Do We Really Want a War With Russia?
Kathy Kelly
What’s at Stake
Louis Yako
I Have Nothing “Newsworthy” to Report this Week
Pete Dolack
Killing Ourselves With Technology
David Krieger
The 10 Worst Acts of the Nuclear Age
Lamont Lilly
Movement for Black Lives Yields New Targets of the State
Martha Rosenberg
A Hated Industry Fights Back
Robert Fantina
Hillary, Gloria and Jill: a Brief Look at Alternatives
Chris Doyle
No Fireworks: Bicentennial Summer and the Decline of American Ideals
Michael Doliner
Beyond Dangerous: the Politics of Climate
Colin Todhunter
Modi, Monsanto, Bayer and Cargill: Doing Business or Corporate Imperialism?
Steve Church
Brexit: a Rush for the Exits!
Matthew Koehler
Mega Corporation Gobbles Up Slightly Less-Mega Corporation; Chops Jobs to Increase Profits; Blames Enviros. Film at 11.
David Green
Rape Culture, The Hunting Ground, and Amy Goodman: a Critical Perspective
Ed Kemmick
Truckin’: Pro Driver Dispenses Wisdom, Rules of the Road
Alessandro Bianchi
“China Will React if Provoked Again: You Risk the War”: Interview with Andre Vltchek
Christy Rodgers
Biophilia as Extreme Sport
Missy Comley Beattie
At Liberty
Ron Jacobs
Is Everything Permitted?
Cesar Chelala
The Sad Truth About Messi
Charles R. Larson
A Review of Mary Roach’s “Grunt”
David Yearsley
Stuck in Houston on the Cusp of the Apocalypse
FacebookTwitterGoogle+RedditEmail