Even as the Panama Papers scandal continues to rock the world in a way it seldom has been, it must be said the matter was always a time bomb ticking away to explode someday or the other. Nobody would doubt that there has been so much black money stashed away in different tax havens across the world by those who have illegally become filthy rich. As experts have been pointing out all the while, the world has never been so sharply divided between the rich and the poor. In the past few days so many astounding figures pointing to how criminally wide this divide is, has come forth in public space. One of the data often quoted is from an assessment by the World Bank. Scroll web journal for instance quotes this report on global inequality in an article saying the lower half of the global population possesses barely 1% of global wealth while the richest 10% own 86% of all wealth. Of this, the top 1% account for 46% of the total. It is this richest section of the population who are now trying to ensure their ill-gotten money, remains to their individual benefits only by stashing them away unaccounted for, even if this means breaking national laws and moral obligations. It may be recalled, the scandal broke after a leak of over 11 million digital documents from a law firm called Mossack Fonseca in the tax haven of Panama, to a media organisation and these were studied together and deciphered in for over a year by a team of mediamen from across the globe. From India, The Indian Express was chosen. The law firm, it is now clear, is been specialised in setting up shell companies for clients, where black money can be parked dodging taxes. The firm, as reports also suggest, helps these shell companies funnel back the black money into their countries of origin as foreign investments. It is also now clear over 500 of India’s rich and famous figured in the list of black money launderers.Among them most prominently is Bollywood superstar, Amitabh Bachchan, a Padma Vibhushan, and someone tipped to be appointed as the next President of India. What a shame indeed.
Zooming in on the black money scenario in India, it is said nearly 40 percent of India’s economy could be underground. This is the scale of corruption in this country. When there are talks of corruption in this country, the focus generally is on politicians and bureaucrats. But this is a fallacy, as the entry of multinational businesses in the country has proven loudly. If corruption is defined in terms of creation of black money and not just bribe taking and nepotism in the execution of government programmes, the scar would be deepest on the business world. Reports after reports have shown the needle of suspicion points towards this direction. In a place like Manipur where the secondary sector of the economy is virtually absent and tertiary sector is virtually government services only, perhaps there is an element of truth that the government sector is where most corruption happens and the biggest volume of black money is generated. But the sophistication of knavery being what it is in Manipur, it is unlikely our big black money millionaires would have thought of using the services of big international players like the Mossack Fonseca. They probably would have followed the other known routes in this country for parking black money, that is, by purchase of falsely under-invoiced properties on paper but at astronomical values in real terms.
According to a report, the soaring of property prices in Indian cities is an indicator of the volume of black money purchases. It is normal logic that prices rise in keeping with the purchase power of prospective buyers, for if nobody can afford a commodity, there will be no market for it. In the case of India, the balance between the known income standard of its population and the price of real estate are wide apart, much wider than in most other countries. A study by Prof. Sanjoy Chakravorty, of Temple University in the US, quoted in the Scroll mentioned earlier, found urban land prices have risen five folds in the decade 2001-11 in India. It says, “a citizen with an average national income would need to work for 62-67 years to buy property at the highest end of the market in Hong Kong, London, Tokyo and Paris. In contrast, it would take her 580 years to buy property at the highest end in a city like Mumbai and 100 years to buy a modest 800 square foot flat at the metropolis-wide average rate.” Yet urban property prices continue to rise because there are so many with modest tax accounted incomes, but huge coffers of illegal black money.