What Slows India? – Part I

 

India is one of the two largest pool of human resources, the other being China. These two Asian giants are on the top among the fastest growing economies in the world. India is said to be on the waxing state in economic growth. Yet, all in India aren’t enjoying this prosperity. There is certainly economic disparity. Though it is a global scenario and not exclusive to India, we might still see the gap is large in India (see the snapped news item below). Except the service sector, India has not been able to register phenomenal growths in the other sectors. Relatively, China has outsmarted India in many aspects. Not just in terms of emerging as a global manufacturing hub, but also in transport and infrastructural growth that couples with it.

 

 

On one hand we keep reading many Indian names in the list of richest persons in the world, leading entrepreneurs and the like. On the other hand we do see a pile of statistics on the poverty. The hunger map released every year still keeps Indian hunger only at a moderately high level. (In comparison China is in the ‘moderately low’ category)

 

Black Economy

There are enough welfare schemes and plans devised to address poverty in the nation. Yet, a sizable population is below poverty line. What slows India from eradicating poverty? Is it poor allocation of funds? Is over population a failing factor in achieving the goals of the schemes to the fullest? The questions are always aplenty. Not the answers.

Welfare Schemes are many. Though adequacy of the allocated funds is debatable, there is certainly a better way to spend them properly. Population growth can become a diluting factor affecting the expected results. But it could also be seen as a planning failure. There seems to be a miscalculation in speculating the outcomes. This is absolute bureaucratic inefficiency.

Every reason we might line up will lead to just one nodal point- ‘Black economy’. Time and again we have been hearing about the black economy which is said to have grown even bigger than the ‘White economy’. Understanding Black Economy is perhaps the only way to get a clear picture on the functional failure of public welfare schemes in every portfolio. What more, the dynamism of the entire society on the economic perspective. Even bureaucratic failures can be understood only by comprehending the Black economy in the right way.

There has always been many misconceptions and misunderstanding regarding Black money. Eminent Professor Arun Kumar, one of the leading economists in India, in his book Understanding Black Economy and Black money in India (2017, Aleph Book Company) clarifies and enlightens us with this regard. Going through just the introduction and the first chapter as readers we understand, what we already assumed are much different from the real scenario.

 

 

First the Professor guides us through the popular terminologies used in various media and substantiates the incorrectness in using many of them, to the Indian scenario. He argues black money – being the most popular term used for reference – is indeed a less precise term. The author’s introduction itself is clearly a myth buster. Besides he also sheds light on the need to understand Black economy, since it coexists with its ‘White’ counterpart. Without considering black economy, white economy can never be understood completely, he informs.

His words are revered in the academic circles, since he has devoted a large quantum of his professional career, in researching and understanding black economy, for decades now (He was a Professor of Economics, in JNU, between 1984 and 2005).

He argues corruption and black money is always not synonymous, thought both are deeply intertwined. Yet the increase in one raises the other as well. In simple any income that is not disclosed to the tax department is black, he clears. The policy makers and the politicians logically will only be talking of curbing the black economy. But nothing could be expected out of them, in action, simply because they too reap the fruit of black economy. So, we might hear their emotional speeches of fighting corruption or black money only on stages.

One of the popular misconceptions is ‘All black money is stashed as currency in foreign banks’. This is not only the public opinion in general, but also the serious belief of many elites. While in reality, only a meager portion of black money is hidden as currency, while the rest is injected back into the white economy.

There are several other factors slowing down the nation. Let us take a look at them in the next and concluding part.

 

Cover Image Courtesy: www.marketexpress.in

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