Thursday, August 11, 2011


Black money has been most progressively stable

In last 64 years of Independence, India has come a long way. From a GDP that was all of Rs.9,000 crore in 1947, it has touched Rs.63,00,000 crore, putting India into the coveted trillion dollar club. Interestingly, the members of these trillion dollar economies are a handful of billion dollars corporations and their well endowed billion dollar promoters, who have also made it to the Fortunes and the Forbes of the world. During the same span of time, the number of poor has only grown, same with illiteracy, and every count on health. And with respect to employment, it has definitely grown, but only with respect to the unorganised workforce, who are bereft of any form of social security.

But then, India definitely progressed. During independence, agriculture was the major contributor (59 per cent) to the GDP. However, as time progressed, the contribution of agriculture kept declining. By the end of 1990, with liberalisation making its way into our economy, the share of agriculture dropped from 59 per cent to 34 per cent while the share of service sector increased to a mammoth 40.5 per cent and that of industry to 24.6 per cent. The trend saw some turbulence in the wake of the new millennium. By 2002-03, agriculture share dropped further down to 20 per cent and industry landed at 18 per cent. While Service sector skyrocketed to 62 per cent! As of now, service sector contributes 65 per cent to the economy followed by industry (20 per cent) and a laggard agriculture sector that is struggling at 15 per cent. Though, agricultural output has increased multiple folds, it couldn't arrest increasing farmer suicides. Growth of service sector has been unprecedented, still over 85 per cent of the population remains excluded from the modern financial system and 90 percent doesn't not have any form of insurance. No doubt we have made some break through in aviation and telecom, but then the clear winner (particularly in the later case) has been corruption!

In fact, post independence, if at all we have maintained a sustained growth, without any bottlenecks, outperforming all growth counts of the entire economy as a whole – it has been corruption and accumulation of black money. There would be very few parallels to draw upon, with respect to the manner in which we could successfully institutionalise corruption and could make it the most universal and ubiquitous reality of our nation. By the end of 1950, illicit money flow out of India was a few billion dollars, which increased to $1.4 trillion by the end of 2010. As per reports in 2006-07, estimated black money in India was $550 billion – which was almost 80 per cent of the accounted economy. We as a nation take a lot of pride in calling ourselves ‘service economy’ or ‘world's back office’ as conventional wisdom says that India has embarked upon its growth. But in reality when service industry saw itself growing from a contribution of a mere 28 per cent to a contribution of 65 per cent, it is the black economy which made a killing by posting an aggregate growth of 600 per cent! It is reported that illicit flow of black money is estimated to be growing at an impressive rate of 11 per cent every year, compared to a growth of the entire economy which is struggling at 7.5 per cent!

All in all, we can call ourselves whatever we wish but the reality is that as a nation we have been progressively and inclusively corrupt. We are a nation where Independence for a few is more than ever-lasting corruption and for majority of others it’s just one day of holiday!


No comments:

Post a Comment