

India's Pointless Search for 'Black Money' - alphakappa
http://www.bloombergview.com/articles/2014-06-25/india-s-pointless-search-for-black-money

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yalogin
This article is written by someone with the same partisanship as an extreme
right wing Republican in the US talking about minimum wage or gay marriage.
There is too much sarcasm and too much talking down to in there. The reality
lies somewhere in the middle.

For example none of the Indians I know ever said their country will become
rich if all the undisclosed wealth is siezed by the government. The reality is
there is way too much corruption and the majority of the ill-gotten wealth is
in India. In all but the biggest cities the real estate is not priced to
market per the government and so the property is registered at 1/4th the value
(for e.g.) and so taxes paid on only that amount. The rest is not disclosed
and reinvested into the real estate market. There is a lot of that going on.
What ever the Prime minister is doing about talking to Swiss officials is just
posturing and he is also sure that not much is going to come out of it but
some political victory.

~~~
mqzaidi
Your evidence is anecdotal. The article, to its credit, has actual references,
as in what Baba Ramdev said, and a good deal of people believe him.

Just see a gamut of India opinions here,
[https://in.toluna.com/opinions/1277868/what-will-happen-
if-a...](https://in.toluna.com/opinions/1277868/what-will-happen-if-all-the-
black-money-come-back-to-India)

~~~
gnufied
A majority of educated Indians see Baba Ramdev as crook. A self-styled guru
curing cancer with Yoga and whatnot. So yalogin's response may not link to
hard evidence but just because Ramdev can get behind a cause does not mean
majority of Indians believe in it.

EDIT: If anything - if you take intersection of salaried Middle class and Baba
ramdev's followers, you will be left with a small set. I am not saying Bab
ramdev does not have a large following, but in a country where literacy is 72%
(with number going lower in north india, where majority of Baba ramdev's
followers are), it is hard to argue that middleclass supports this man's
viewpoints.

------
prateek_mir
There are two sides to this entire Black Money story.

First is the bitter reality of the parallel economy that runs in India,
amounting to huge revenue losses to the governments each year. The black
money, not only robs to country and its citizens of their revenues, but also
can then be used into funding terror activities, because this amount may very
well be transferred via Hawala Channels ( they won't wire black money to tax
havens, would they ? ). This is the money that can be used by the government
to increase the services, this is the money that was intended to be
transferred to the citizens in the form of increased infrastructure and better
services. Ultimately citizens end up paying hefty amount of money for really
crappy services.

the author is right in suggesting that this stash, if it even existed in no
longer lying in the swiss banks, and has been rerouted to other investment
opportunities, and possibly rerouted to Indian markets itself, via different
channels (like the controversial participatory notes, shell companies etc).
Both the current and the previous government have provided enough room for
managing the black money, and I'll be surprised if India is successful in
extracting any significant amount of money (order of 10 Mil. $), or to extract
only account closure reports for the Indians who held account in various swiss
banks and banks at other tax havens like Liechtenstein.

The other side of story is that it has become an issue that attracts eye
balls. The amount that is suggested to be at stake is huge enough to attract
the attention of even the upper middle class. People are very much
dissatisfied with the performances of subsequent governments, and that made
the _Black Money Issue_ something on which political campaigns can be built
upon. This issue was advertised in such a way that would attract the attention
of average person, who wouldn't go into the details of the issue, by using
headlines like, "We won't have to pay any taxes for a decade", "Every citizen
would be given X sum of money", "India's revenue deficit would be bridged"
etc.

As the events and outcomes of this election suggests, it worked. The current
government even managed to show the act of constituting the Special
Investigation Team to look into this matter, as a voluntary act of being
righteous, when in reality they were just following the Supreme Court's
directive to do so within a week.

Curious days ahead.

------
xmonkee
Someone should write an article about how some Indian writers need to stop
eviscerating "millions of indians" based on imagined opinions.

This article is downright insulting. I am an Indian, and I don't believe that
the "black money" is going to solve all of india's problems. That isn't even
the point. The investigation is a good thing not because of the actual sums of
money, but because some extremely powerful people who have stashed away the
money need to be brought down. As the author himself says, the siphoned-off
money is used to manipulate markets and elections. Shouldn't it be taken off
their hands?

And trust me, hardly anyone who ever read a newspaper would take Baba Ramdev
seriously. The author just kinda threw that in - "hey check out how stupid
these indians are... they listen to a yoga teacher lol"

~~~
kaonashi
> Shouldn't it be taken off their hands?

Alternatively, since the entire money system is based in the legal system, you
could simply restrict what one person can accomplish with large sums of money.

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pavlov
The site has a broken browser sniffer. On IE11 it throws a black layer at 90%
opacity over the content and tells me that I should upgrade to a different
browser...

What's the point of blocking out the entire content like that? If you really
want to nag me based on some embarrassingly outdated user agent regex, go
ahead, but at least have the common sense of offering a close button so I
could still view the site despite your JavaScript competence.

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channikhabra
> (very legitimate) resentment felt toward businessmen, farmers and
> politicians by salaried Indians

Resentment toward farmers? You gotta be kidding me. I agree with the argument
that most of the illegitimate wealth get invested in India in one way or other
and most of it might not be present in Swiss banks and several other things
from the article, but above comment shows the author has no idea how Indian
society is operating internally. I have lived both in village and in the city,
I've seen salaried city/village people having many opinions/feelings for
"farmers" but resentment was not one of them.

~~~
ortuna
I think the author maybe talking about those groups not paying taxes, while
the salaried have to.

~~~
ragsagar
I don't think anyone in India thinks farmers are given any unfair advantage.
Actually all part of society is screaming to provide help to these people who
still dare to farm instead of selling of their lands to real estate mafia even
after all the stories of farmer suicides [1]

[1]
[http://en.wikipedia.org/wiki/Farmers%27_suicides_in_India](http://en.wikipedia.org/wiki/Farmers%27_suicides_in_India)

~~~
discardorama
That may well be; but historically, farms were the perfect vehicle to launder
ill-gotten wealth. You claim (on paper, and certified by greasing some palms)
that your farm's output was $X*2, when in fact it was $X. Suddenly, the extra
$X of money is counted as "agricultural income" and tax free (AFAIK).

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vishnugupta
> "One of the best places in which to invest money is India, not Switzerland
> or the US or any western destination,”

I have always sensed this to be the case, even though I don't have any data to
back this up.

As an investor the last place I want to put my money (ill gotten or black) is
in an off shore untraceable bank, or any bank for that matter. Banks' rate of
interest can't even beat the inflation let alone give decent returns.

Secondly, I see money being splurged in entertainment industry (IPL,
Bollywood). I really doubt that that money is all white. Most of the sponsors
of IPL teams (hell, even BCCI's sponsor, Sahara) are not publicly listed (so
there's no way to know their sources of income) and have been pulled by one or
the other authorities. Bollywood's funding is more or less open secret that it
comes from Mafia and it's a fair guess that they act as guardians and
investors of the black money owned by politicians/businessmen/bureaucrats.

------
spacehome
Someone should explain to them the difference between wealth and money.

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wowsig
Money stashed by politicians/rich-beyond-measure industrialists are a black
box for majority of Indians. This money is not understood in terms of the
impact it will make even if it flows back. Apart from this money, there is
admittedly $20 Billion stashed in the form of gold in temples in India, this
money is untaxed and not accounted for. For reasons that don't reveal
themselves to me, no one speaks of such godly tax havens.

------
known
Modi regime promised to get back $3400 Billion corrupt money Indians have
stashed in Swiss/foreign banks within 150 days.

[http://www.samachar.com/Well-bring-back-black-money-
in-150-d...](http://www.samachar.com/Well-bring-back-black-money-in-150-days-
BJP-president-Rajnath-Singh-oevcMijfhae.html)

------
known
Washington-based NGO Global Financial Integrity (GFI) puts the figure at
nearly three times higher - $3.4 trillion

[http://www.swissinfo.ch/eng/business/Black_money_problem_sta...](http://www.swissinfo.ch/eng/business/Black_money_problem_stalks_Indian_elections.html?cid=38345148)

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infocollector
How do these articles get published/noticed? Here is the Assange leak amounts
- [http://bit.ly/1sGtsfk](http://bit.ly/1sGtsfk) \- And I do hope these people
do not get away from what they did.

~~~
confusedIndian
Don't think that image is true : [http://www.hoaxorfact.com/Politics/wiki-
leaks-published-1st-...](http://www.hoaxorfact.com/Politics/wiki-leaks-
published-1st-list-of-black-money-holders-in-swiss-bank.html)

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webbrahmin
I am an Indian. While I can't say what every Indian thinks, I can say what I
think and many people like me (middle class hard working Indians) think.

1\. Black money will not solve all our problems and make us a superpower
overnight. 2\. Bringing the black money back will be a watershed event. 3\.
This will send a message that government is serious about corruption. 4\. Less
incentive for politicians to loot in future.

Better articles are expected from Bloomberg.

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aniketpant
I am curious to know why has this been posted on HN and why do I see it on the
homepage?

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wfjackson
>Last week, a study by the Indian business confederation Assocham put that
figure at nearly $2 trillion. Just to put this astonishing figure in context,
that’s about the same as India’s gross domestic product.

Why do even educated writers compare unrelated terms? GDP is per year. That
sentence is like comparing a distance of 60 miles to driving at 60mph.

~~~
chc
I don't follow. The lost money is an amount equal to what the whole country
makes in a year. Why is that a bad comparison?

~~~
prateek_mir
It gives a negative impression when you compare it with GDP, because, when
saying GDP, every one assumes it as the _amount a country makes_ in a year,
and the writer is take as a smug by the sensitive ones.

Seldom people take GDP as the _amount county spends_ in a year (expenditure
method for calculating GDP)( and that does not leave such a bad image of the
situation after all :D )

