By M L Satyan
Coimbatore, Oct 24, 2024: Across 112 countries, 1.1 billion people live in acute multidimensional poverty, according to the 2024 Global Multidimensional Poverty Index report.
In India, a total of 234 million people live below the poverty line, the highest in the world, according to a report released by the United Nations Development Programme and the Oxford Poverty and Human Development Initiative.
Multidimensional poverty was measured by constructing a deprivation profile for each household and person in it covering 10 indicators of health, education and standard of living.
Here is another shocking news for India. In the 2024 Global Hunger Index, India ranks 105 out of the 127 countries with sufficient data to calculate 2024 GHI scores. With a score of 27.3 in the 2024 Global Hunger Index, India has a level of hunger that is serious.
What exactly is causing poverty and hunger in India? We need to find an answer from the right perspective.
One of the sensitive issues during the regime of every government has been black money. As usual, most of the politicians (except a few principled and clean ones) talk nonsense on this issue wherever they go.
They keep making promises after promises and continue to fool the common people all the time. As long as there is a criminal-political-bureaucrats-rich people nexus in the country, none can solve the problem of the Black Money.
Black will always remain black. In this situation we need to ask a serious question – Is India economically backward? No person with common sense will say “Yes” to this question. We need to ask the Swiss banks.
Funds parked by Indian individuals and firms in Swiss banks, including through India-based branches and other financial institutions, jumped to a 14-year-high of 3.83 billion Swiss francs (over 305 billion rupees) in 2021 as per the data from Switzerland’s central bank.
The Indian deposits keep increasing every year. The second-best Russia has 4 times lesser deposit. USA does not seem to be even there in the top five! Indian black money is safe in Swiss banks. This is the bitter reality today.
So, we need to make a pragmatic and realistic statement like this: “India is a very rich country with economically deprived people”. If India is really a wealthy country, then, where is the wealth? Who is holding most of the wealth? What is the extent of black money in India? How on earth currency notes worth crores are getting caught during every election? This is now happening in Maharashtra. Who owns such unaccounted black money?
A few years ago, a study was undertaken by Kotak Wealth Management. The study estimated that India has about 65,000 super-rich households, with a total wealth of around 45 trillion rupees (US$1 trillion.) This was expected to grow to more than 235 trillion rupees (US$5.3 trillion) in future.
Dishonest industrialists, scandalous politicians and corrupt bureaucrats have deposited in foreign banks in their illegal personal accounts money that has been misappropriated by them.
In 2023, Indian visitors recorded over 600,000 overnight stays in Swiss hotels and the number is expected to rise to over 900,000 in five years. “Demand from India is growing exponentially,” said Switzerland Tourism CEO Martin Nydegger. As per a study more than 25,000 travel very frequently.
It is obviously for the sake of black money, believes an official involved in tracking illegal money. The saddest and the most depressing part of the story is that this ill-gotten wealth of ours has been stashed away abroad into secret bank accounts located in some of the world’s best known tax havens. And to that extent the Indian economy has been stripped of its wealth.
In fact, some finance experts and economists believe tax havens to be a conspiracy of the western world against the poor countries. By allowing the proliferation of tax havens in this century, the western world explicitly encourages the movement of scarce capital from the developing countries to the rich.
We are surprised to note that religious groups in India also compete with corporate infrastructure – i.e. Hindu temples adorned with gold and diamonds; Saudi Arabian styled posh mosques; precious marble-structured Sikh and Jain temples; western styled single and two-tier Christian churches with sky-rise towers (all multi-crore projects) and palatial and spacious ashrams/residences of religious leaders etc.
Unequal distribution of wealth and the unaccounted money are the real causes for poverty and the presence of the economically backward and marginalised people in India. The ultimate culprits are the selfish business groups in the corporate sector, vision-less politicians, corrupt bureaucrats and fake religious leaders. Surprisingly, all these people network together to safeguard their illegal wealth.
Irrespective of any political party, we hear daily from the media about the illegal multi-crore transactions happening among the politicians and bureaucrats. How does a simple MLA or MP or a government official earn crores of rupees withing a short period?
The criminal politicians and bureaucrats enjoy all types of comforts even inside the prisons. All this is possible because of their money power. We, the common people, are always taken for a ride.
The government-initiated Acts/Laws such as The Fugitive Economic Offenders Act, 2018; The Central Goods and Services Tax Act, 2017; The Benami Transactions (Prohibition) Amendment Act, 2016; The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015; Prevention of Money Laundering Act, 2002 remain mostly on papers. This is an irony.
Together with Rabindranath Tagore let us pray: “This is my prayer to thee, my Lord… give me the strength never to disown the poor… and help me to build a country where the mind is without fear and the head is held high and where the people are not broken up into fragments of narrow domestic walls of disparities and discriminations.”
Besides prayer, every responsible citizen needs to strive for personal transformation and also make sure about the proper implementation of the existing Acts/Laws related to black money.
M.L. Satyan has written a very thought-provoking article on poverty and unequal distribution of wealth. But what’s the solution to the ever-increasing gap between the rich and the poor? It’s a quixotic situation when India has world’s top economists and its food godowns are full of grains. This yawning disparity begins with the fields of education and health which do not offer level playing fields for the poor.
The idea of a Universal Basic Income (UBI) or an employment scheme wherein everyone is able to earn minimum Rs.10,000/- per month keeps surfacing from time to time. The government should print more money to run such schemes. However, the suggestions are rejected outright on the ground that we must live within our means. Now the question arises:
Why can’t the government print more money to reduce poverty?
The answer to this is given in a single word – “Hyperinflation.”
In recent history, we have seen hyperinflation occur in Zimbabwe and Venezuela. When these countries printed more money to try to make their economies grow, they suffered hyperinflation. Let us examine what exactly caused hyperinflation in Zimbabwe.
On 18 April 1980 Zimbabwe gained independence from the United Kingdom. President Robert Mugabe embarked on land reforms in the name of anti-colonialism intended to evict white landowners and place their holdings in the hands of black farmers. However, many of the new farmers had no experience or training in agriculture. Many farms simply fell into disrepair or were given to Mugabe loyalists.
The country experienced a sharp drop in food production and in all other sectors. The banking sector also collapsed, with farmers unable to obtain loans for capital development. Food output fell 45%, and manufacturing output fell by 29%. Unemployment rose to 80%. Much of the nation’s middle class fled the country en masse taking much of the nation’s capital. USA, IMF & EU imposed economic sanctions and Zimbabwe tried to overcome these problems by printing money. So the conditions of hyperinflation existed even before Zimbabwe started printing more money.
The fact is that new money that the government prints should add to the wealth of the country, and add value by producing new goods and services. Money is the lifeblood of an economy. Just as the human body lives and grows when blood circulates, money should circulate from one hand to another in order that the economy to grow. This is done by printing more money.
In India schemes like UBI & other welfare measures should be introduced by creating more money rather than the government sitting clueless and saying we should live within our means.