Monday, January 31, 2011

Honesty is indivisible: Arun Kumar's shocking indictment of modern India

In December 2007 TJN visited Arun Kumar (pictured here) in New Delhi to discuss the need for an Indian Tax Justice Network. Arun is one of India's most prominent researchers based at the Centre for Economic Studies at Jawaharlal Nehru University in New Delhi. During almost an entire day of discussions about the current state of India, Arun used reams of fresh statistical data to paint a truly alarming picture completely at variance with the glossy vision presented in the international press:

Poverty remains rife, particularly in the rural areas. Many people eat significantly less than the minimum calorific intake required to maintain human health.

Inequality has risen to astonishing levels, comparable to those pertaining in pre-revolutionary France.

Security risks in some parts of the country are so extreme that, for example, regions of Andhra Pradesh where TJN's director John Christensen worked in the early 1980s, are effectively no-go areas due to Naxalite activity.

Now Arun has written an article published in The Hindu (attached here) highlighting India's astonishing problem with crime, illicit flows and corruption. As you can see, the scale of the problem almost beggars belief, and the rot runs deep to the heart of the political system:

"Today, policy failure is writ large and governance is failing all around. This is due to the growth in size of the black economy from about 4 per cent of GDP in 1955-56 to the present 50 per cent. The implication is that illegality in the country has grown and touches almost every economic activity. This is only possible if it is both systemic and systematic. The public sector and the private sector, that encompass every section of society, are now suspect. It is suspected that many have their hands in the till. Included here are Prime Ministers, Chief Ministers, Ministers, top industrialists, military personnel, judges, bureaucrats, policemen, professionals and so on."

Corruption on this scale requires the complicity of many sections of society:

"For illegality to flourish on such a vast scale, those involved in overseeing the functioning of society have to be systematically complicit. It cannot be that one day rules are broken but not the next day. Systems have been set in place to routinely commit illegality and make payoffs to the functionaries of the state."

The outcome is pervasive criminality running through the Indian political economy, blurring the lines between the business, political and criminal classes:

"Underlying this vast illegality is a ‘Triad' involving the corrupt business class, the political class and the executive. Since the mid-1980s, the criminal has also entered this Triad, leading to growing criminalisation. Many businessmen, legislators and so on have criminal cases pending against them. Policemen commit criminality in a routine way, and so on... What a shame!"

The first step towards curing these ills is to recognise the roots of the problem. Read the full article here.


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