sheer greed

Source: The Hitavada      Date: 08 Nov 2017 11:21:09

THAT many elite in India had been stashing away their money in foreign tax havens, was always a well known fact. That they took advantage of looseness in Indian financial monitoring system, was also a fact known even to a three-year-old kid playing in a side lane of a village. Yet, the system continued because there was a general agreement at the topmost levels of the Indian elite that unofficial storage of funds in off-shore havens may be allowed for multiple reasons. Now that this ugly reality has come to fore once again, the Centre is now talking tough in the most unconvincing manner. Given the details of how such funds are stashed away in safe places and managed stealthily, the Government almost does not have anything in its hands to have an effective control over such a sly activity. 

Of course, as all know, this is a global trend -- engaged in by elite of almost all societies. If there are 714 names of Indian firms and persons in the leaked list, then there also are many elite in other societies, including the Queen of England, with off-shore investments, some officially and some on the sly. It may never be easy for any Government to put brakes on such a system when the high and the mighty are involved in the scandalous stashing away of money in safe havens.

The common man may never understand why, but it may be so that making such arrangements for safe parking of funds is a need of the elite internationally, so that they can carry on with their unofficial businesses and investments with a view to conducting covert and even illegal operations. The expose` of the Paradise Papers, thus, only highlights the continued existence of such arrangements. This new revelation has said the same thing as did the Panama Papers sometime back.

Limiting the discourse to the Indian situation, it must be said that the Indian elite -- in business or in politics -- have been making such off-shore investments for decades on end. They have been engaged in the activity of stashing away of funds in safe havens for at least fifty years. One of the early exposures of such an activity came when the St Kitts issue came up during the tenure of Mr. Rajiv Gandhi as Prime Minister. Even at that time, it was considered a given that such an off-shore investing was in practice at high levels.

One of the purposes was to evade taxes, and ensure additional gains that the Indian system would not allow. The other purpose was to keep funds ready for use in sly affairs that could affect public interests and heighten personalised activity of the elite. Knowing this very well, the Swiss designed their banking system to grant a safe parking to the global elite in their banking coffers. They also introduced the unquestionable clause of secrecy as part of their official regulation, thus guaranteeing safety and security of the unofficially parked funds.

With such a system in place, and with such a widespread elite acceptance of off-shore arrangements of parking of funds, it would be only preposterous to expect the Government to succeed to a full measure in curbing the activity. The delicateness of the situation gets intensified because elite from all sides of the political divides are suspected to be party to the fraudulent investment, making it impossible for any Government to take tough stance.

In one of his suggestions to sort out such off-shore parking of funds, one noted economist had suggested that off-shore investments be allowed officially. The cheekiness of the suggestion apart, it would always remain a Himalayan task to alter this unofficial system whose genesis can be found in the tax havens. The Paradise Papers have done a great job, no doubt, but they do not have any solution to offer to stall the ugly reality.