Agnimitra wrote:ravi_g ji, thanks for the explanation.
So if the goal is to bring back black money and channel it back into the economy, what are the options to incentivize that? Using te stick will probably not achieve much. What has happened is typical of most societies that transitioned from agrarian to industrialized economies - an accumulation of capital by various means. Macroeconomically, the goal is to invest that capital back into nation-building. so what are the options? Some of the accumulators may already be converting by opening other legit enterprises like educational institutions, 'cultural' institutions (including religious structures as SIVs), etc. How to further incentivize bringing it back? I am assuming a substantial portion of it is merely sitting stashed away in some phoren bank. Is that a false assumption?
While handling any problem the safest+shortest route to success is not to say no to any means (including danda). Though your hunch is right – mere danda is not going to work in India where investment in enforcement mechanism is minimal/absent and the people are simply too smart/varied.
The cultural institution you are talking about has been the staple response in the Indic system (generically, the dharmarth route) which has been damaged to a considerable extent and for the upkeep of which we must fight. However it is a slower response and is driven towards core survival instead of being geared towards achieving super-specialty in economic development. The end result can be characterized as - Gen 4 fighter screw driver level vs. building a Gen 6 airborne fighting systems. The super-specialty can only be build up if we set out for it with intent and purpose – basically the paurush response, where we do it because that is built into our structure.
To comment on your ultimate wish, we first will have to drop the western pretensions regarding money being black or white and start thinking in more existential terms. For example, both of us know that w.r.t. black money the principle of ‘jiski lathi uski bhains applies’. So for example, you can (though you do not), simply take away the black money invested by me in your business and tell me (your black money investor) to bugger off. But you do not do that. Nor do the insanely large number of entrepreneurs hosting the black moneys of even more insanely large number of such investors.
Why?
The Indic response starts after answering this ‘why’. Answer is simple the color of the money does not matter but the color of the person’s mind, holding control of the black money or assets arising therefrom does. The varnas/color of the controller’s mind are absolutely and irrevocably linked to both the possible courses of action – to steal or not to steal. Reality is most people, who are interested in a long term fruitful life, one that is bequeath-able to their kids, will not steal, not even black money. What is applicable to most people is also applicable to most entrepreneurs, being subset of their respective universe. More appropriately there would in a sufficiently large population always be people willing to slog for their personal entrepreneurial vision. The black money does not stop an entrepreneur per se. Entrepreneurs by definition (like kshtriyas and brahmins) do not invest their own money. They invest whatever money (black or white) is made available to them by the larger public. It is not like businessmen crave a sensory desire to stash cash. They would actually hate it since it implies non-application of available resources. Quite a few businessmen do horde some amount of cash but that is only because there is no mechanism to bank the black cash. Most people do recognize the ‘ownership of the black money’ too, irrespective of what the law feels like.
So should we simply ignore the black money conundrum. Hell no. As I said the color of the money does not matter but the color of the controller’s mind does. Hence whatever money has been taken out of the Indian economy and stashed in Swish banks is actually today being used in propping up the Chinese economy. That money variously gets used to screw the actual owners - the Indians. So yes it is a wrong assumption that the black money is merely stashed up because that suggests it is benign. It is not benign it is malignant. The ownership is pre-decided even by the standards of the most uneducated. Its Indian. But the control is not in Indian hands. It is in Swiss and Chinese hands. WT_! but alas that is how it is. So should we then just suck up and bear with it. Well yes till the time the winds are adverse and no when the winds are favorable. So Makhilesh == adverse wind and NaMo==favorable wind. Fortunately for us the field of commerce and industry are not a matter of science where you have to look for a new answer to the better understood problems often changing the framework itself. It is a practice with a well-established framework, where you have to apply better the existing solutions to shaaswat problems. Hence declaring black money as national wealth is a dharmic idea. But for reasons stated earlier it is not going to yield results. It only has a much larger purpose of stigmatizing the easy-way of black money. At the same time running current businesses well will be accorded the same degree of sanctity by the mango abdul as vesting the assets in ones heirs. Hence Nationalization of unaccounted for wealth to be collected by the exchequer whenever and wherever traced (India or phoren), should be most welcome steps, from the PoV of long term nationalistic goals. Also for earlier pointed out reasons the ownership thus formally settled, we can begin to target the controllership.
Re. controllership the circuitous route of legislation waghera is not enough (it is actually even weaker than the simpler dharmarth route). Black money arose because there was a will to ignore the law. So lakir-peetna after the snake has crossed makes for a good laugh only but not a nationalistic stance. However we still should have SITs and formal requests to Germany and Switzerland as it helps challenge their controllership and helps establish our own. It also increases the risks for the Indian owners of black money as it symbolizes a will to establish the national character of unaccounted for moneys.
Again for earlier pointed out reasons please note that nobody likes to earn less on black money (I have been told of cases where the black money at times even earns a discount instead of an investment premium). That too with the attendant risk of getting blackmailed (which is well recognized on BRF). The simpler and straight forward route of ensuring a balanced economic growth is more important because that will in effect allow India to compete against china for India’s own money presently controlled by swish banks. This sounds revolting in as much as it involves recognizing the bitter truth of foreigners controlling our money. But it is pragmatic because the alternative is even worse. And if we can source opportunities faster than we can source cash into those opportunities, then at a certain point, we can begin to soak up even Chinese black money through the same conduit of swish bank, to feed our white economy (presently not even a wish, but not unobtanium).
This involves a massive reprioritization of economic planning at multiple levels. Take for example the following extract from another BRF poster’s post.
“The last mile, in the form of the clean store aisle, is the least pertinent matter in the whole topic. The meat of the topic lies behind the scenes - in the backend logistics, supply chain expertise, and more. Refridgeration and transport depends on good roads/rail and electricity. Anyone thinking that frontend retail needs expertise and capital is missing out on a lot of detail. The bulk of what is needed lies in the backend. FDI in retail will not solve that. In fact, it will harm the solution because it will trigger unnecessarily social and political opposition. The history of UPA policymaking is full of examples of supposedly good ideas so poorly implemented that they're a political liability more than a legacy.”
The argument is evidenced quite easily in real life, if you care to witness it. But that is only half an indictment of the ‘FDI in multibrand’. Because even the front end is not served properly by FDI in multibrand. And front end cannot be under-estimated in its value creating potential.
From the consumer’s perspective - The whole rationale for Big Bazar was to create the bazar ambiance which is quite unlike the western sense of retail. That is the reason why even the specialty-stores began by placing themselves in the shor-gul of South-Ex or CP, only later graduating to setting up shops in the Malls (Air-Conditioned and upmarket but still crowded and shoutbox types). I as a consumer want to experience more shopping in lesser time to be able to exercise my consumer-choice effectively. Which is not possible in a typically western retailing. Western retailing works where brands are more important than the products, most times justifiably so because of the investments in the certification processes. And for such brands people are willing travel longer distances and online shopping a real marketplace. Here people like to compare what is available in GIP Mall with what is available in Atta Market.
From the investor’s perspective - Constituents of Sangh (BJP!) are against FDI in Multibrand retail only. Not against FDI in retail, which is a substantial segment on its own and the investing justifies the branding. Now I live in Noida and have seen closely the development of NCR region. When we came to Noida, the commercial sector-18 was sparsely populated. Some early movers invested a lot of their time, money and effort in making it successful. Today this sector already houses & will have more of the multibrand retailing. All of it (the shop frontage, the multibranded shops, the customer service) developed by Indian entrepreneurs, with or without foreign collaborators. Today there are two ways to approaching further growth. One is to help these existing entrepreneurs to unlock their networth and re-invest elsewhere to continue the same cycle. But that presumes that we do not have enough entrepreneurs elsewhere, entirely capable of doing the same thing on their own. Patently wrong presumption, we have the problem of not being able to give enough opportunities to our talented people. We have enough of risk handling businessmen, we do not have enough of business opportunities. The indicted approach would probably be required in Chad, where I presume the large business risk handling ability is limited. So unlocking the wealth for these businessmen, is not a valid reason for FDI in multibranding. If unlocking is required that badly for these existing businessmen then they always have the option of selling out to Indian businessmen who will more than happily pay top rupees for these mature ventures. In fact I singularly doubt if these people want to sell out, except by way of the Parle-type deal. A Parle type deal where the Chauhan brothers sold out a built up brand only to have it killed and used the money to finance other ventures. But those days are well and truly gone, never to come back again. Today we need to increase the number of such entrepreneurs who need to be handed over more such geographies for more such business developments. For this the focus has to shift to domestic businesses management groups being given greenfield areas to develop further. These businesses will have a ripple effect in pushing up the market values in realty, for the mango man and creating further risk taking abilities at smaller level – people like you, me and Fathey. People like you and me will not develop by having Walmart sell our consumer needs to us. Big bazar is good enough, thank you. We will develop because our market value based net-worth is growing by leaps and bounds and we take personal risks based on that and start our own businesses – for example you are foreign return so you take a place in the GIP mall and I am Indian bound hence I take my place in Atta market. But we both compete and cooperate to serve our respective markets better. Where does even the scope for a Walmart arise from an economy wide investment POV. The domestic entrepreneur route will at once suck up all available black cash and white cash with nothing getting exported to swish banks.
From a nationalist perspective – the bane as is recognized by all is that a bunch of crooked people have been able to take large stakes in the Indian economy to secure/develop which they need now to undermine its groundings (social and economic) even further. But luckily for us these people were just names dropper, old-boys networks and cronies. They were not managers even though they could hire good managers, available easily in the Indian talent market. These smart but hired managers gave/generated for, these crooked politicans (even such businessmen were politicians because that is what they did and we know the names by their deeds and end results), some really good but high priced deals. This FDI in multibranding is an issue because the crooked politicians have cornered large parts of Indian urbania in high priced deals where real estate was an important part of the book value and the receivables were discounted to justify the investments. And now they want to offload their stakes to the only people who can buy up these large stocks of realty. Obviously you are not that. Obviously I am not that. Both of us are however voters of NaMo. Walmart is not the voter but they do have the securitization expertise and will have their bunch of assets and liabilities in such deals, sold off to always in the money, amerikhan investors. But the betterment of these stupid politician/businessmen using amerikhan cash, is not a national priority. Having enough business opportunities for the local abduls to soak up all available cash is a valid nationalist priority. Think for the local businessman as you think of the local armyman or the local researcher or the local worker/consumer. Just as more research opportunities cast a wider net to catch real and motivated scholars instead of mere degreeholders. Just as more of hard training and COIN ops prepare an armyman to fight bigger wars. Just as more responsibilities churn out better workers. Much the same way our wishes should be more for the betterment of more Indian businessmen and more resources in the hands of these people. Reality is even the Amerikhans benefited after WW-2 by this process. Its just that some of the Amerikhans now lie to us to force us into a smaller hole so we can be pegged easily by them. While our need is to deny the easy way out to these early mover cronies. This short circuit will prevent the cronies, from getting enough of their cash released for further wrongful deployment. At the same time they will be made to sacrifice their present gratification for the larger good of the national economy. Within the big businesses we have seen how Reliance and Tatas have been able to capitalize in this market. They too will get supported by such measures because these dirty politicians will ultimately be forced to sell off their stakes to these bigger Indian businesses who too will tap into the world financial market to fund their acquisitions. There will however be one important difference this time the Reliance and Tata businesses will be within the legislative jurisdiction of NaMo.
This is very bad move. The first bad move was by kangrez in naming schemes after its PMs, the second bad move is not removing such political propaganda using tax money. Modi is helping the populism of kangrez by not scraping such naming.
. This is considering their immense popularity.
. They have five good years to turn around things. By expecting every problem to be resolved in 24 hours, I guess we are all becoming like IT-Vity managers 
.
