Washington: Even as India continued to register one of the highest growth rates post-independence, rampant corruption resulted in an estimated illicit out flow of a whopping $125 billion between 2000 and 2008, reports PTI quoting a research and advocacy organisation.
The figures of $125 billion illicit outflow of money from India are part of a report to be released by the Washington-based Global Financial Integrity later this year.
"Much of the funds flowing out are generated at home within India and then sent illegally abroad. So the growth of corruption and India's underground economy contributes significantly to illicit financial flows from the country," said Karly Curcio, a junior economist at the Global Financial Integrity in a blog posted on its website.
"India's economic boom continues with an average growth rate of over 8% between 2004 and 2009 by GFI calculations," it said.
"As the money flows, however, the poor continue to stay poor. Corruption is rampant in India as it is in almost all developing countries. Both corrupt political and corporate officers manage to siphon off funds - intended to aid the people of India - off to political and private sector elite.
Recent efforts in India to challenge this corrupt affront on humanity have been met with severe violence," the blog said.
As India develops economically and builds better infrastructure, one would think that all Indian citizens would see an increased standard of living and that the income inequality levels would fall, he noted.
"However, the gini coefficient, which measures income inequality, has actually increased over the time period measured, 2000-2005, from 0.32 to 0.37 on a scale of 0 to 1, with 1 being the highest income inequality," the author said.
"We see in India - as in other currently developing countries - that as the economy grows, so do illicit flows.
This positive correlation exhibits the increased incentives to conduct illicit flows, mostly because more money is flowing within the system to steal away and constant greed is tapping into that pool," Mr Curcio said.
Noting that India Ranks 84 out of 180 countries in Transparency International's 2009 Corruption Perceptions Index, the author said as corruption continues to plague both the country and its ability to develop free and fair institutions to monitor and charge corrupt officials, the majority of India's economic growth will never make it to the people of India who desperately need it the most.
Developers are waiting for the period from 24th September to 7th October (considered inauspicious for property purchase) to be over for markets to pick up; but analysts do not expect many add-on incentives for consumers after this period
As always, developers are hoping for improved performance in real-estate sales this Diwali. However, real-estate analysts say that the nascent economic revival might not be enough to boost purchasing sentiments, even with the onset of the Hindu festival season.
Ashutosh Limaye, associate director, strategic consulting, Jones Lang LaSelle, a real-estate services firm, writes in his company's blog, "I think it's a fairly safe bet that we are not going to see any exuberant tradition-fuelled spiking of transactions this year. While the festival season is likely to bring a certain degree of temporary effervescence in residential sales, one cannot read too much into this in market terms."
Though one usually sees a spurt in transactions on festive days, it is because buyers defer their purchase till such days which are considered auspicious days (for Hindus) based on astrological calculations.
Sunil Bajaj, a real-estate consultant, told Moneylife, "Property is rarely bought on impulse and it cannot be compared to buying a television, stereo, mobile or even a car. The prospective buyer first shortlists and selects a house according to his choice; puts it on hold with the developer and finalises the deal on such festive occasions which are considered auspicious moments for property and other capital purchases."
But developers maintain that they expect to see an increase in sales this coming Diwali.
Vivek Lulla, marketing executive, Triveni Group, a real-estate developer with a focus on the National Capital Region (NCR) said, "We are experiencing low sales during (the) Ganapati (season, from 10th September to 22nd September). But after 7th October, we expect the market to go up. By Diwali, we are expecting a good outcome."
Rajendra Sharma, a Mumbai-based real-estate broker, said that during festival times, sales go up by 15% to 20% and expects the same this time too. But property prices are at an all-time high; it remains to be seen if buyers will go in for purchases even during the festive season.
Triveni Group claims that it has achieved its targets over the past two months, and has subsequently jacked up prices during the period that's deemed inauspicious for property purchase. "That's one of the reasons why we have recorded low sales. But we are not worried. We expect good sales during Navaratri and Diwali," Mr Lulla said.
However, he refused to comment on whether Triveni would offer any discounts this festive season, stating that Diwali is still "far away". Another developer, Mumbai-based Aditya Associates, said that it is also looking at high sales during Diwali. But this developer will offer discounts depending on market conditions.
But, according to Mr Limaye, the add-on incentives that developers usually offer during the festive period will not be much in evidence. "They (developers) are aware that their customers are focused on true value, and that it is location, pricing and appreciation potential that are now the primary criteria for Indian residential property buyers," says Mr Limaye.
Though analysts don't expect much leverage from developers, financial institutions such as Allahabad Bank are offering borrowers an interest concession of up to 1% on home loans during the festival period.
But analysts say this new offering from Allahabad Bank won't create an industry-wide trend as this bank is not a big player in the home-loan market. On the other hand, big lenders (both in the public and private sectors) such as State Bank of India (SBI) and ICICI Bank have hiked lending rates, Mr Bajaj said.
So will this festive season bring about some cheer for the residential real-estate segment? Or will developers have no other option but to pray that the customers come in, considering the astronomical prices of properties across India and tighter lending norms from financial institutions?
New Delhi: Finance minister Pranab Mukherjee today expressed concern over inflationary pressure on food prices, but said the Reserve Bank of India (RBI) and his ministry will take appropriate action as and when needed, reports PTI.
"Inflationary pressure is still there because food prices have gone up because of the erratic monsoon and certain other things," Mr Mukherjee told reporters here.
The Wholesale Price Index (WPI) for the month of August stood at 8.51%, as per the new series of inflation based on 2004-05 prices released by the government today.
"The RBI is constantly watching the situation. We are in touch with the RBI. The RBI and the Ministry of Finance will take appropriate measure at the appropriate time," he added.
As per the old series, WPI inflation stood at 9.5% in the month of August.
"I do hope that annual inflation would be much lower and it will be much below in the new series at 8.5% in the annualised rate... I think it be well below in the annualised rate," he added.
As per commerce ministry data, food articles became 14.64% dearer in August year-on-year, while prices of non- food articles likes fibre and oilseeds soared by 16.04%. Minerals became 23.82% more expensive.
As per the old index, which considered 1993-94 as the base year, inflation remained in double digits for five straight months till June. It fell to 9.97% in July.