Black money in abroad and absence of decentralisation of the planning process

Dr. Dhanabir Laishram *

Pic Courtesy : wikipedia/Jovianeye

In India some of the states are always going to Delhi with begging bowl to get more money for development and other programmes for education, health-care, agriculture and construction of infra structure etc. Delhi's ruling elites and bureaucrats are always firing to them like money lenders sound big voice to small farmers. However some of them seem to largest depositors in banks abroad, that is also illegal money.

On the other hand planning is also their wishes and giving money is also their desires not for the demands of the people in the states. During the past six decades, India has leaders with vision who worked hard to preserve its unity. The country has become a global leader in high tech and is planning a mission on Mars. Based on purchasing power parity, our economy is the world's third largest.

High-tech centres such as Banglore and Hydrabad, have given rise to IT companies like Infosys and Wipro, which are among the international elite bringing back the computer experts who once left India for California. Almost no other country has as many cellphone users; almost nowhere is the communications industry growing faster.

However, poverty is still rampant and chaos remains a defining characteristic of the country's political ethos. One in three of the world's malnourished children live in India; half of its population has no access to toilet; and 25 per cent still can't read and write. On the way to superpower status, India must first overcome deep-seated corruption and internal division.

Cumulatively assessed, these ingrained negatives reflect the failure of India's planning process and the Planning Commission in ensuring "growth with stability, equality and balance". The government's manifest ability to generate sustainable employment opportunities in the North East, the tribal belt dominated by the Maoists, Jammu and Kashmir and other backward pockets has triggered large-scale displacement and disenchantment among youth.

Whosoever rules India after 2014 elections will have to examine whether a diligent decentralization of the planning process can serve India's interest better. The problems faced by people of different parts of Indian Planning Commission in New Delhi can neither assess them accurately nor address them effectively. The idea of setting up autonomous planning commissions for areas with special problems should be considered seriously.

How far India's current planning process is responsible for the country being dragged far behind China is a moot question. British historian Timothy Garton Ash has recently given a civilisationnal spin to the issue. Ash said he was rooting for India because it could show that democracies can grow rapidly. On the other hand, in an article in the New York Times, Steven Rattner says, "Now the contest is emphatically over. China has lunged into the 21st century, while India is still lurching towards it".

It is hard to disagree with this contention. Today, the $9 trillion Chinese economy dwarfs the $2 trillion Indian economy on almost every count. China was a $2-trillion economy in 2002. So, India is 11- years behind China in the grand sweep-stakes. Chinese average incomes in 2004 were at around the level that Indian average incomes are at now ($3,620). The picture is far less pretty when we look at social indicators. The proportion of Indians living in cities in 2011 (31 per cent) was matched by China in 1995.

The gap is similar when one considers access to improved sanitation. China is around 17-years a head of India. It crossed India's current rate of child mortality before 1980 as it also did with energy use per capita.

How is it that the People's Republic of China succeeded within the same frame of time with its own unique metrics of planning and action to become the world's economic powerhouse, whereas India lagged behind in numerous comparable economic indices? India's leaders must, realize that the simplistic argument that India is the world's largest democracy and cannot be compared with an autocratic regime like China is no more acceptable to the bulk of Indians.

The real answer could be that while economic planning by and large failed in India, the derivative instruments of planning scored high marks in China, mainly through the well-orchestrated and diligently and forcefully implemented modernization programmes. On the hand a largely modular New Delhi remained operational within a highly centralized vector of political and administrative focus, often de-linked from ground realities in the vast and varied Indian terrain.

So, Banerjea suggested that it is imperative, therefore, that the development planning must be oriented from below and not above. This requires a greater role for the states of the union in areas such as education, health, food security and infrastructure and exploitation of natural resources.

In the ultimate analysis India's democracy has to address aspirations of the Indian people after assessing ground realities. Indian political class must realize democracy is truly a means to an end, not merely an end in itself. Not only planning but also the centre-state relationship in India is very much far from decentralization. In short for planning it is trickle down, even allocation of money to the state is seems to be so bothered and seriously care with inconsistent tendencies. On the other hand huge amount of money was in abroad.

One came to across what was happening some years back in India regarding black money in abroad. The Central Bureau of Investigation (CBI) exposed on February 13, 2012 that Indians were the largest depositors in banks abroad with an estimated 500 billion US dollars (nearly Rs 24.5 lakh crore) of illegal money in tax havens.

The tax havens include Mauritius, Switzerland, Lichtenstein and British Virgin Islands. Addressing the Interpol Global programme on Anti-corruption and Asset Recovery held in New Delhi, CBI Director A.P. Singh said these facts emerged during the investigation into prominent cases like those pertaining to 2G, Commonwealth Games and Madhu Koda. The investigation agency found that money was taken to Dubai, Singapore and Mauritius from where it went to Switzerland and other such tax havens.

Mr. Manmohan Singh, the Prime Minister of India also said that the states acting as tax havens for illegal money were reluctant to share information as they were aware of the extent to which their economies had become geared to the flow of illegal capital from the poorer countries.

Fifty-three per cent of the countries said to be least corrupt by Transparency International are offshore tax havens, where most of the corrupt money goes. The tax havens include New Zealand, ranked as the least corrupt country. Singapore ranked number five, and Switzerland, ranked number seven.

World Bank estimates of cross border flow of money from illegal activities and tax evasion is around $1.5 trillion, of which $40 billion is bribe paid to government servants in developing countries. Tracing, freezing, confiscation and repatriation of stolen assets is a cumbersome process because of differences in legal systems, high costs in coordinating investigations, inadequate international cooperation and bank secrecy laws.

Thus money come to the states is with full of care and debates. The debates are taken place as in between two devil advocates but more than that money was in the tax haven. This is your India.