Black Money, Blue life-Part 1: The New Class of Rich
During the last three decades, our society has progressively become more money-centric, greedy and selfish. In this new India, the cancerous growth in corruption has given birth to the noveau-riche class. This is the first part of a two part series
 
The 'Black (money) Rich' is a burgeoning community, mostly consisting of government servants using its authority for amassing wealth through bribes from people by covertly helping them break laws or by extorting money from hapless citizens. On the other hand, money solves most of the problems of the poor. Both, urban and rural poor folk are busy surviving from one day to the next. A little more money coming their way is a matter of mental relief and a day filled with happiness. When a poor family gets enough money for roti, kapda, makaan and can live within their means, it is largely free of tensions. There was a time not so long ago, when there were millions of such poor or lower middle-class families enjoying a culturally and socially rich life in spite of shortages and a hand-to-mouth existence. Everyone in the family shared the burden of poverty. As a young man, I have seen how imagination and innovation replaced money with enjoyment and celebrations in their daily life. I knew hundreds of such families, where sharing of work and pleasure came naturally. My school friends supplemented their family incomes by delivering newspapers and milk early in the morning. During Deepavali, they made and sold colourful Aakashkandils (lanterns) and often showed great imagination and skill by offering innovative designs. I was amazed by their creativity when they produced games and models from knick-knacks, for which they always got a pat on the back from our teachers. Poverty and happiness coexisted; smiles and laughter came easy in their life. 
 
What is worrisome, is the changing life and values in India during the last three decades as our society has progressively turned more money-centric, greedy and selfish. In this new India, the cancerous growth in corruption has given birth to the noveau-riche class. Let us call them Black Rich or 'B-rich' for convenience. The fast growing tribe of this B-rich class consists of small-time politicians (often, vividly caricatured in Bollywood movies), partners in the businessmen-bureaucrat-politician nexus and their middlemen lining their pockets, revenue inspectors and tax collectors, the police, license and permit inspectors and babus right down to the doorman, who uses his miniscule power by demanding speed money unlike the bakshish he often got in the past for showing curtsey. Traditional black money generators like the drug mafia, extortionists and those in sex trade are now bolder and menacingly fearsome. 
 
Many of them once belonged to the lower middle-class and do not possess life skills to earn more. Their power is derived out of their position in administration, that allows them to corner citizens by depriving them of  their rights and extorting money to allow them to enjoy what is rightfully theirs. Of course, when they are at the receiving end, they would use their substantial ‘black’ income for bending rules and procedures! Money comes easy to them and is often in sums of thousands or lakhs. Many small babus, for instance, at the Octroi Post, earn thousands of rupees a day! Now corruption has become a way of life. 
 
Construction industry is one of the biggest corrupt chains, widely supported by unscrupulous builders and developers who need a variety of permissions in the course of their business. Since it is a part of the cost structure that the bribe giver can easily recover, he pays with a smile. At least 10% of the price that one pays today to buy a property goes into the pockets of government officials and the municipal corporations dealing with builders. In some state governments, builders are appointed as ministers for urban development! 
 
It is alarming to note the deeply embedded corruption at all levels of government hierarchy. Media stimulated greed designed to strengthen consumerism and the corroded administrative system in our chaotic country have indeed turned out to be a deadly cocktail. Not that anyone cares, but I felt expressing early caution by showing how black money ultimately hurts the corrupt and their families might help at least some of them to regain sanity.   
 
This rotten tribe of B-rich is an antithesis to the khandani rich, whom many of us hold in high esteem. Their generosity is seen in charitable hospitals, clinics, sanatoriums, libraries, museums, schools, and research institutions. Their contributions from decades ago still serve the community and especially alleviate the problems of the economically challenged classes. Money has always been a corollary of the great vision, extra-ordinary wisdom and culture of these rich. These men and women wear their wealth very elegantly. They conduct themselves in a gracefully simple manner and are always modest and gentle while dealing with anyone. Unfortunately, they have increasingly become a rarity over the years.
 
On the other hand, the rich business class are from amongst the traders, bankers, corporate honchos and software tribe. These people are money-centric and always appear somewhat edgy; uncertain of tomorrow. This lot measures itself and others in terms of money and is often driven by greed and jealousy. The old yardsticks of greatness like sacrifice, wisdom, scientific research etc. are no more of any value. The measure of success or greatness is the accumulation of riches, the means to achieving them do not matter! They live in tension and consequently almost always end up becoming profitable clients of medical consultants. Constant stress of competitiveness takes its toll on them. Their lifestyle may be luxurious, but peace and happiness are in short supply. Having said all this, these rich are a class apart from the B-rich. 
 
(PS Deodhar is founder and former chairman of the Aplab Group of companies. He is also the former chairman of the Electronics Commission of the Government of India and was an advisor to late Prime Minister Rajiv Gandhi on electronics. He also was the chairman of the Broadcast Council in 1992-93 that set in motion the privatisation of the electronic media with metro channels.
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    COMMENTS

    bharati

    5 years ago

    Corruption happens when resources are scarce. Scarcity arose as our population is beyond excessive. No country can manage these numbers. Corruption remains minor when most basic needs are met and hence not seen as much in countries with a low population e.g Norway. The answer to India's corruption begins with not breeding recklessly, especially when you do not have the basics to raise a child. Cruel and callous to breed thus.... Corruption is a result here, not the root.

    S K Gupta

    5 years ago

    Okay here is my quick calc for a start up OPC Company I registered and still working on it.
    ROC Speed Money - Rs 1000/-.
    Corporation License - Rs 4000/-
    P Tax Online So Zero Speed Money.
    CST Registration Online So Zero Speed Money Paid.
    VAT/CST - Speed money Rs 7000/-
    "Forget Ease of Doing Business"
    Babus Make Good Mulla In this Country.

    Mahesh S Bhatt

    5 years ago


    Sir in this country State has cheated Common Man by loading extra ordinary taxes + corruption.

    India has lost business to China.

    Small countries Japan Korea/Taiwan/Malaysia who need to search on globe map.

    Thanks to Excise/Customs/IT/Corporate taxes blindly cut pasted as said by IMF.The fact of 1.3billion people is not there anywhere except China was never considered by our Leaders.

    Best under Constitutional Immunity only Sukram saw gallows.

    Lalu/Jayalaitha are having fun.

    Scams after scams but beauty is our Ms Sucheta Dalal lost TOI job.

    Very recently FSSAI Head got transfered for good job against Nestle Maggi.

    Anna Hazare was short circuited by Vilas Rao Deshmukh who died because of lack of Organ Transplant availability due to excessive laws.

    So solution.
    Define Values Ethical Codes
    There are lots of awards for people who makE money in right or wrongway & define it as a success.

    I have following suggestions,CRIBING IS SENSE OF LOSING.

    There should be Values based Foundation should recognise contributions & reward/award following categories of executives in respective fields

    1) Politicians who donot have any criminal/civil cases & has been imppecably honest in his career of 20 plus years.

    2) Woman /Man who raise families in challenged environments like divorce/death of partner/stying alone & husband leaves or is abroad.

    3) Recognistions to honest officers in Government like Vinod Rai/Khairnar/Ashok Khemka/Sreedharan ( Metro Man) Sucheta Dalal etc

    4)Friends who support friends & families

    5) People who support the family institutions out of way being a Relative/Friend etc

    6) NGO/People who support in crisis /disaster situations.

    7) People Families Relatives who support terminally ill cases for more than 7 years.

    8) People who support Old Age/Physically,Mentally,Emotionally Challenged.

    9) Recognise good thinkers/religious leaders who do satsangs/yogas/karmic actions/corrections soft support to society.

    Trust this makes good contribution.

    I say Dhan Daan ( giving wealth is easiest way to avoid the challenge giving Time/Shram ( effort) is difficult.

    God Bless us all.

    Thanks & Regards,

    Mahesh Bhatt View Values for Wealth at http://www.youtube.com/user/kirtidabhatt

    Anand Vaidya

    5 years ago

    That corruption is well entrenched in the government and construction industry is well known. I hope some solutions / action points will be presented by Shri. Deodhar.

    I'd like to highlight the following:

    If one is focused on NOT paying bribes it IS possible. Let us remember that black money feeds not just crime but terrorism, drugs, gun running etc too.

    First, We, as citizens should avoid breaking law - simplest examples: traffic offences, building codes, income tax.

    If caught in a traffic offence, please pay the fine and insist on a receipt. At least the money will go into the state gov coffers.

    Don't buy black tickets for movies. Don't engage touts at gov offices. Many processes are online nowadays.

    States like Karnataka have "Sakaala Act" - which guarantees delivery of gov services in time bound manner. Use those.

    I have obtained my passport+renewals, driving license+renewals, death certificate of my parent, voter ID, PAN, income tax refunds etc without paying any bribes.

    The real shocker was death certificate from the municipality: Issued within 20mins of application! No bribe asked or given

    I recently constructed a house and have not paid single paisa as bribe, because I have followed the Building Laws of the state. No one dare ask for a bribe and all paperwork such as building permit, completion certificate, electricity and water connections were issued in reasonable time frames with roughly 2-3 visits to the respective offices

    REPLY

    bharati

    In Reply to Anand Vaidya 5 years ago

    Agreed completely. Thank you for showing good common sense

    TIHARwale

    In Reply to Anand Vaidya 5 years ago

    good but experience says otherwise in Bangalore especially property registration in case of second hand buy.subsequently in name change in katha as this only will allow to pay municipal tax in new owner name.

    Shama Zaidi

    5 years ago

    The bribe quotient in a flat in Mumbai is said to be between 40-50%, not just 10% as this article suggests. That is why a flat in Mumbai is as expensive as new York, and London is cheaper.

    BASKAR BABU G

    5 years ago

    WELL SAID. IT ECHOS THE VOICE OF COMMON MAN WHO IS WEEPING INSIDE ON SEEING THIS CORRUPT SOCIETY

    ashwin

    5 years ago

    Congratulations, very well articulated.
    What we have in India is not Corruption it is black mailing, and this is due to too much of discretionary power with the officers, and politicians.
    Politicians need huge money to win elections and collect money for postings, the officers make good more than what they have paid. It is a vicious circle.
    Sometimes one feels that Democracy is to be blamed for this menace.

    MG Warrier

    5 years ago

    Words like corruption, black money and pollution have gained some common sense meanings in daily usage. Corruption has a much wider meaning and much more serious implications. It would be over-simplifying the damages corruption is doing to society, if one refers to corruption as bribes taken by/paid for getting things done quickly or by illegal means alone. There is an element of corrupt practice, illustratively in:
    i) Executives or owners siphoning off huge amounts from the revenues of an establishment as share of profit or remuneration, while keeping the employees under-paid.
    ii) Paying very low price for agricultural produce at farm gate and middlemen making huge profits by creating shortages in the market.
    iii) Fixing too low minimum wages and not enforcing that too at the ground level.(The recent Women’s agitation was for raising daily wages from Rs167-the minimum wage prevailing two revisions back- to Rs500/-).

    REPLY

    KVS Krishnan

    In Reply to MG Warrier 5 years ago

    I completely subscribed to your views.

    MG Warrier

    In Reply to KVS Krishnan 5 years ago

    Copied below is an excerpt from my article on corruption (if I remember correct, posted here in 2012) included in my book "Banking, Reforms &Corruption" published in 2014:
    "Let us consider a short-cut to bring the corrupt from their hideouts. There could be other methods which may work faster and better. But to initiate the debate let me introduce the idea of a domestic ‘Corruption Index’.
    The intellectual leadership of India should take up a project to assess the extent of corruption in India. This could be done by scientifically evolving appropriate methodologies for having a ‘Corruption Index’.
    There have been efforts to measure corruption with reference to various practices in different nations and rank countries according to their status in comparison with others in the group. But, one, it is no use knowing our position with reference to others and two, as we observed, corruption has more dimensions than illegal practices or bribes. As our government encourages ‘self-regulation’ these days in different areas, why not attempt a regulatory mechanism outside the statute book for assessing and quantifying corruption?
    It is here the idea of a “Corruption Index” gets significance.

    Imagine, one ‘Corruption Indexing Organization’ (CIO) gives you a rating of the person, department, organization (including a political party)/institution on a scale of, say, hundred, how deeply sunk they are in corruption, based on parameters explained to you? There can be several such CIOs specializing in different walks of life. Of course, the functioning will be fee-based and independent of government except for overall regulation, may be through a registration arrangement.

    Let us consider a couple of areas where this can be tried on a pilot basis.

    • Candidates contesting election

    Candidates themselves may furnish relevant information to the CIO and get their index commuted. The parameters could be, accumulation of wealth during the previous five years and source thereof, attendance in legislative houses where the candidate was a member during that period, participation in developmental efforts in the constituency and pending cases/charges of corruption if any(list is indicative). Once stabilized, index could be worked out annually.

    • Government departments

    Initially, the exercise could be confined to departments vulnerable to corruption. E.g. Excise, Motor Vehicles(Registration etc) The parameters could be, number of complaints during the previous five years, pending charge-sheets/cases involving staff members, punctuality in disposal of cases and assessment based on internal reporting(again, the list is indicative). Periodicity for revising index could be annual.

    It may also be necessary to develop skill through introducing corruption as a subject in Management Institutes and other professional schools so that CIOs are able to recruit experts for the purpose of functioning with professionalism.

    Two years back, a national newspaper had, side by side, printed views for and views against corruption. One view was that corruption is the oil that lubricates the wheels of progress. Many seem to agree with this view. Very recently, I read in a magazine an observation attributed to Kaushik Basu, which says: “The rationale for corruption is economic; the best way to handle it is to legalize it”. Perhaps, this advice from the one time Economic Advisor to the Prime Minister has been taken literally seriously by powers that be. Sometime back, the Supreme Court, while hearing a corruption-related case, though sarcastically, had suggested legalizing corruption and fixing specific amounts for every case. Perhaps, our private sector has implemented this suggestion long back. Service charges levied by the banks are one example that comes to mind. Now there are banks which charge separately for opening of accounts, issue of cheque books, certifying that an account holder is maintaining an account with the bank, for not maintaining minimum balances in deposit accounts and so on. Government is following suit and introducing levies/charges for every transaction in government offices."
    To get a copy of the full article, send an email to [email protected]

    MG Warrier

    In Reply to KVS Krishnan 5 years ago

    Copied below is an excerpt from my article on corruption (if I remember correct, posted here in 2012) included in my book "Banking, Reforms &Corruption" published in 2014:
    "Let us consider a short-cut to bring the corrupt from their hideouts. There could be other methods which may work faster and better. But to initiate the debate let me introduce the idea of a domestic ‘Corruption Index’.
    The intellectual leadership of India should take up a project to assess the extent of corruption in India. This could be done by scientifically evolving appropriate methodologies for having a ‘Corruption Index’.
    There have been efforts to measure corruption with reference to various practices in different nations and rank countries according to their status in comparison with others in the group. But, one, it is no use knowing our position with reference to others and two, as we observed, corruption has more dimensions than illegal practices or bribes. As our government encourages ‘self-regulation’ these days in different areas, why not attempt a regulatory mechanism outside the statute book for assessing and quantifying corruption?
    It is here the idea of a “Corruption Index” gets significance.

    Imagine, one ‘Corruption Indexing Organization’ (CIO) gives you a rating of the person, department, organization (including a political party)/institution on a scale of, say, hundred, how deeply sunk they are in corruption, based on parameters explained to you? There can be several such CIOs specializing in different walks of life. Of course, the functioning will be fee-based and independent of government except for overall regulation, may be through a registration arrangement.

    Let us consider a couple of areas where this can be tried on a pilot basis.

    • Candidates contesting election

    Candidates themselves may furnish relevant information to the CIO and get their index commuted. The parameters could be, accumulation of wealth during the previous five years and source thereof, attendance in legislative houses where the candidate was a member during that period, participation in developmental efforts in the constituency and pending cases/charges of corruption if any(list is indicative). Once stabilized, index could be worked out annually.

    • Government departments

    Initially, the exercise could be confined to departments vulnerable to corruption. E.g. Excise, Motor Vehicles(Registration etc) The parameters could be, number of complaints during the previous five years, pending charge-sheets/cases involving staff members, punctuality in disposal of cases and assessment based on internal reporting(again, the list is indicative). Periodicity for revising index could be annual.

    It may also be necessary to develop skill through introducing corruption as a subject in Management Institutes and other professional schools so that CIOs are able to recruit experts for the purpose of functioning with professionalism.

    Two years back, a national newspaper had, side by side, printed views for and views against corruption. One view was that corruption is the oil that lubricates the wheels of progress. Many seem to agree with this view. Very recently, I read in a magazine an observation attributed to Kaushik Basu, which says: “The rationale for corruption is economic; the best way to handle it is to legalize it”. Perhaps, this advice from the one time Economic Advisor to the Prime Minister has been taken literally seriously by powers that be. Sometime back, the Supreme Court, while hearing a corruption-related case, though sarcastically, had suggested legalizing corruption and fixing specific amounts for every case. Perhaps, our private sector has implemented this suggestion long back. Service charges levied by the banks are one example that comes to mind. Now there are banks which charge separately for opening of accounts, issue of cheque books, certifying that an account holder is maintaining an account with the bank, for not maintaining minimum balances in deposit accounts and so on. Government is following suit and introducing levies/charges for every transaction in government offices."
    To get a copy of the full article, send an email to [email protected]

    Salil Gumaste

    5 years ago

    That's true but who will bail the cat. Government employees are biggest source of corruption. Some 50 years ago teaching was a noble profession. School/college teachers were honest. What has happened is now most government school teachers get huge salary but do not teach. Most of them want students to join their private classes. So right from childhood we see corruption. This has gone now too far. Everyday we give bribe. We do not want to follow rules. The rules are so tedious that you cannot follow them as well. So again dog is waging its tail. And no one has clue how to fix it. Quite scary picture but things will be as usual. Those who will survive by hook or crook are our heroes.

    'India can be far more successful!'

    India can be far more successful and far more influential than it is today, mentioned Dr Raghuram Rajan, Governor, Reserve Bank of India (RBI)

     

    India can be far more successful and far more influential than it is today, mentioned Dr Raghuram Rajan, Governor, Reserve Bank of India (RBI) while delivering his key note address at the fourth C K Prahalad Memorial Lecture organized by Ananta Aspen Centre and Confederation of Indian Industry (CII) in Mumbai. Dr Rajan further mentioned that in the difficult times, environment for growth has to be achieved in the right way by working hard towards recovery and aiming at sustainable growth.  While the monetary policy will be accommodative there is room to expand sustainable growth potential. By continuing with reforms that the government and regulators have announced a sustainable growth potential can be achieved.
     
    Speaking about RBI’s key task to support growth he mentioned that it would focus on keeping the interest rates low in the near term as well as future to have a moderate interest rate regime to help borrowers as well as the savers. It will also focus on cleaning up the banking sector of the distressed assets, so that it can fund the growth agenda. He also suggested that India must resist special interest rates for targeted stimulus, long tax breaks, subventions, subsidies, directed credit, all of which historically rendered industry un-competitiveness with government over extended and country incapable of gaining its rightful position among nations.
     
    Mentioning about what RBI is trying to do and what more it needs to do in improving the environment of the financial sector Dr Rajan, elaborated on four aspects like, need to foster competition and innovation; creating hospitable environment to those who don’t belong to the club; dealing with distress for improving structures and strengthening human capital in the financial sector. 
     
    Rahul Bajaj, Chairman, Bajaj Auto Ltd, while delivering his welcome remarks mentioned that financial sector reforms should be a continuous process so that they are aligned and are future ready. He further elaborated that the role of reforms pertaining to financial sector should be to align rules and requirements among the multiple regulators so as to simplify; enable innovation and productivity in business for the benefit of customers and shareholders; stabilise the regulatory environment, create consistent and visible guidelines, and reduce risk amongst market participants and in the overall system in general and upgrade skills within the regulators through a healthy interaction and cross-pollination with private sector.
     
  • User 

    Inflation to be kept low while reforms implemented: RBI

    There are expectations that the RBI would reduce interest rates at its next monetary policy review later this month

     

    Reserve Bank of India (RBI) Governor Raghuram Rajan on Friday said inflation should be kept low not only now but also in the future, adding that reforms are needed for sustainable growth.
     
    Rajan said at an event here that keeping inflation down and implementing reforms are needed for maintaining sustainable growth.
     
    There are expectations that the RBI would reduce interest rates at its next monetary policy review later this month.
     
    This has been reinforced with the US Federal Reserve deciding to hold its interest rates much against the earlier expectation they would be hiked.
     
    On the US Federal Reserve's decision, Rajan said this could be due to concerns about the American economy.
     
    He said the US may be waiting for more information before deciding on a rate hike.
     
    Rajan also said the banks should quickly balance their books, adding there was need for a bankruptcy code to enable the lenders better handle their loan accounts.
     
  • User 

    COMMENTS

    Mahesh S Bhatt

    5 years ago

    Should we not recognise Raghuram Rajan Sirs fantastic contribution by holding the Indian Rupee to its lowest turbulence when other currencies went down by to 25%.

    Brazil is degraded to Junk level by rating agency by Moody.

    Do our Industrialst's (Government greasers) & Political class wants India to degrade to that levels.

    High prices of Real Estates/Oil & Petrol/Surprising Onion Inflations/Potato inflations around elections well doctored or Engineered.

    NPA across the key sectors Infrastructure/Airlines/Power/Telecom/Real Estate is not addressable by all Indians.Record inventories of unsold Commercial/ Residential.

    God Bless Mahesh

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