Dr Rajiv Desai

CORRUPTION AND BLACK MONEY IN INDIA

January 23, 2010 by Dr Rajiv Desai

CORRUPTION AND BLACK MONEY IN INDIA:
Corruption is defined as an abuse of public power for private gains in which an official transfers a benefit to an individual who may or maynot be entitled to the benefit; in exchange for an illegal payment/gift/favour which is known as the bribe.
Black money is defined as a money which is not accounted for in the official records,either earned through legitimate sources without paying income tax or through illegal activities.
Sources of black money:
1)corruption
2)drug trafficking
3)arms trafficking
4)gambling
5)counterfeiting
6)prostitution and pornography.
Corruption are of 2 types;petty corruption and grand corruption.
Petty corruption means common people have to pay bribe to small officials to get security,justice,health,education,water,electricity,ration etc etc…Almost 100 percent indian people pay for petty corruption.
Grand corruption means involvement of Ministers,MPs.MLAs,Bureaucrates and big businessmen who are involved in award of big contracts.
Why corruption???
Corruption basically means dishonesty which is wide spread in india.The root cause of this dishonesty is greed,compulsion and desire to get anything done at any cost.People also bribe God by depositing large sum of money and gold in temples to achieve success in business.
Key factors causing corruption in India:
1) lack of transparency and accountability in the system
2) lack of honesty in the officials
3) lack of strong anti-corruption mechanisms
4) accepting bribe as a way of culture,custom and life.
5) no fear of law in the minds of corrupt officials/politicians
6) bad economic policies.
Harmful effects of corruption:
1) Corruption is the greatest obstacle to the economic and social development of India by violation of the rule of law and weakening democratic institutions.
2) Poor people are hit hard because they are dependent on public services and they cannot afford ro pay bribe.
3) Corruption sabotages the policies and the programmes that aims to alleviate poverty.
4)Grand corruption impedes development.
5) Corruption increases world insecurity by funding terrorist organisations.
Scale of corruption in India:
Corruption is omnipresent in India right from union cabinet minister to the beggar.If anybody like me who says that he is not corrupt; he is considered as untouchable,social outcast, moral police and ridiculed by the people.Corruption extends from politicians to ministers to bureaucrates to police to court judges to journalists to land administration dept to government hospitals to builders to movie actors to sport stars to contractors to doctors to professors etc etc etc etc etc ………..
The state of kerala is least corrupt and the state of Bihar is most corrupt.Interestingly,Kerala is most educated and Bihar is least educated.Is corruption inversely proportional to the education of the people?
The head of medical council of India was found guilty of corruption and sacked few years ago.Many professors of private medical college accept part of their salary as black money.Many doctors ask for unnecessary lab tests,CT scans,MRI etc to collect cut-money.Many doctors write drugs because they get benefits from the company.Many chartered accountants teach clients how to evade tax and many chartered accountants have become builders by using black money of their clients.So education doesnot prevent corruption but worsens it.
GDP(gross domestic product) is defined as total value of all final goods and services produced by a country per year.GDP(PPP) is GDP calculated by purshasing power parity which is believed on the concept that any good/service has same price in all countries and therefore compare living standard of all nations by taking into consideration cost of living and inflation.GDP calculated by current exchange rates considers value of all goods with respect to international currency exchange rates and this GDP is lower than GDP(PPP) because rupee is weaker compared to dollar.
GDP(PPP) of India is 3319 billion dollars.
GDP by exchange rate of India is 1237 billion dollars.
Population of India is 1148 millions.
India is 4’th largest economy in the world by GDP(PPP).
India is 12’th largest economy by GDP exchange rates.
Indian leaders amd media gloat with these figures.
The truth is contrary.I will explain.
VARIOUS WORLD RATINGS OF INDIA:
1) GDP per capita is an indication of standard of living.India had 2900 dollars GDP per capita which is 136’th rank in the world with China 106’th rank.
2) Corruption perception index(CPI) published by Tranparency International in the year 2008 gave India 85’th rank in 180 countries.
3) UN’s Human development Index(HDI) gives India 128’th rank in 159 countries.HDI takes into account life expectancy,educational attainment and income of the people.
4) WHO ranked world health systems in the year 2007 where India was ranked 112 out of 190 countries.
Where does all money go?
Indian economy is dominated by parallel black money economy.In the year 1999, the black money generation was 20 percent of GDP.Today,it is 50 percent of GDP.
Swissbank association has revealed that 1456 billion dollars of indian black money exists in thier accounts.Since 1947 when india became independent,there is a public loot by politicians,bureaucrates and businessmen of india which resulted in black money siphoned out.Out of total 2150 billion dollars in swiss banks,1456 billon dollars are from india which is more than black money of all other countries in swissbank.Also,besides money,there are gold and diamonds in various tax heavens like St kitts,Antigua,Bahamas etc etc with the total money siphoned out of india is about 3000 billion dollars.Indian external debt of 163 billion dollars can easily be paid off.
Also,if 3 trillion dollars of indian black money can be brought back to india,then,india can become economic superpower soon provided that money is used in non-corrupt way.
THE MORAL OF THE STORY:
1) India is the most corrupt country in the world.
2) Corruption is the root cause of poverty in India.
3) The amount of black money generated in India is 50 percent of Indian GDP.
4) The amount of black money of Indian origin in various tax heavens outside India is 3000 billion dollars(149 lakh-crore rupees).
Dr.Rajiv Desai.MD.