Monday, April 11, 2016

Panama Paper leak, and Indians

What does the Panama Paper Leak mean to Indians?

TLDR - Many of the super-rich Indians, first generation or otherwise, decided they'll have nothing or little to do with the regular taxation system back home, as that would be too tiresome, unfair and extortionist. They decided to siphon their wealth, or a large part of it, outside India to places like BVI, Cayman Islands, or Panama, where it'd be safe from the prying eyes of the taxmen, to be enjoyed at leisure later. Sadly, some pure soul in Panama decided to take some load off itself and brought a few lac documents to public attention worldwide! So we have yet another proof of what everyone suspected always.

BUT - If you look closely, it is not just about India, or Indians. The real issue is the Mega-Rich versus The Rest of Humanity.

Sample this -

  • An Oxfam report indicates that 62 individuals now have as much wealth as half the humanity. That's a cool 320,00,00,000 people (3.2 billion / 320 crores). [ 62 Super-rich ]
  • It is almost acknowledged that there are maybe a few thousand individuals (5000?) holding most of the power in the world, with the rest being mere inconsequential cogs in the giant wheel
  • The Elite versus Non-Elite division was never so stark, anywhere, including the great land of equality - the USA. Hence the protests.  [ We are the 99% ]
We are the world, we are the children

In this backdrop, it is not surprising that there are two parallel financial systems running in this globalised world. One is for the 90% plus majority of the 7.3 billion people alive today. The other is for the rest who do not wish to share their riches (as taxes).

Most of us in the majority are expected to adhere to the rules of the game, as not doing so would be unpatriotic, illegal and plain-simple 'not done'. We may face penalties, interest payments, naming-and-shaming, even jail-time for refusing to adhere to the myriad bunch of taxes (listing & trying to understand all of which would make learning the Shrimad Bhagwad Gita verbatim seem like a primary school pursuit).

The Super Rich consider themselves above the law. And anyway, what is the law? It is for the meek, the weak, those who cannot bend and twist it to their whims, using the brute force of their millions (and billions). The Super Rich look almost like a homogeneous international fraternity. It's not that the world governments are sleeping - they have made the FATF (Financial Action Task Force - India is a member and aim is to share financial intelligence worldwide) and the US has gone to the extent of co-opting foreign financial institutions into willingly sharing non-US-accounts details of US persons (the FATCA)! So even Indian financial companies have to do their bidding now (actually a good move).

So there is a whole parallel financial system of Facilitators, willing Island Nations, Law Firms, Lawyers, Accountants, Agents and Consultants that - for a meagre cut - will help the Rich siphon a lot of their wealth beyond the taxman's reach. It will be safe there. No marginal taxation. No inheritance tax. No legacy burden. Just pure money lying safe for the next generation to enjoy.

Or in the case of India - to be round-tripped back into the country via some place like Mauritius, to be invested for tax-favoured profits. All this while the super-rich sermonise from the most gracious of podiums regarding how their efforts are a humble bit in nation-building. How they generate jobs and pay taxes. It's a tragic farce. (To be sure, there are absolutely genuine, spotlessly clean super-rich too.)

Or even more simply - never to be taken out of India but circulated in the massive black economy back home through real-estate or benami transactions by the tonne.  This is something that the SC appointed SIT is now discovering and working on.
Dhoondte rah jaoge!

So for an honest, law-abiding and patriotic Indian, it sadly boils down to this - "Stay in line, pay your taxes without questioning, live with the generally pathetic level of public services provided without any accountability, pray to God you reach home in one piece each night (Survival of the Luckiest) and close your eyes." For the government of India, it is the beginning of another round of embarrassment and allegations-counter allegations. For the Supreme Court, yet another reminder of how unjust and lopsided the whole system has become.

And for Bharat Mata, another reminder of the amazing schizophrenia that some of her kids suffer from.


Brizz said...

We must thank those who revealed it and those brought it to public domain as the US has FATCA India should take some step in the same direction but we must not forget that there is huge difference between India and US law enforcement system. One side where US passed a law (FATCA) to get information about non residents US citizen's assets from foreign financial institutions, and other side in India on Black Money issues we are unable to get information from foreign institutions (even we don't that how much money has been stashed abroad by Indians)
There are many people who have arrogated hard earned money of tax payers ad disappeared and have no intention to return(Sahara and NPA.

Sir, what you think that what is the future? How can things get better in India?

Utkarsh Singh said...

Article was very much engaging.

Unknown said...

I think problem is from our side ... after doing slavery hundreds of year we got freedom but the habbit of slavery has not gone yet. We just talk talk and increase the TRP of every negative things around us.for any good to be happen it needs sacrifice . In our daily life we see lot of corruption going on around us why not start cleaning from own home.from last month "sarafa sang" is in protest and they are serious this time this a strong one they are not doing any trade , must be money crisis has started for many of them but they are not giving up.. we should learn from there will power and use that kind of will and start protesting against evey antisocial person or rule.. we need to do some sacrifices .. like stop eating onion when the prices are high it will automatically reduce the price .. ... this is my 1st post sir must be i have made lot of mistakes sorry for that.