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Black Money – “Economics is not a moral subject”

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BLack Money
Photo: http://rashtriyaujala.com

Back in 2008, when the whole world was in a financial ruckus, India was not as affected as rather seems to be the fact. Altogether the country was extraordinarily afloat throughout the whole incident and started recovering just in a year.

And all of that was the blessing of ‘black money’.

Yes, that is what the chief economist of the World Bank and former head adviser to the Indian government, Kaushik Basu claims in his new book, An Economist in the Real world.

What is the deal?

The deal is simply that when all the nations and their banks were busy tackling the overburden of subprime loans (one that is given to people who have a previous record of difficulty in maintaining the repayment schedule) crisis. Indian almost suffered from none.

  • It is evident from the instance of 2005 to 2008, when the economic growth of India was an astounding 9% per annum.
  • But the underlining trick was in the scenery of housing and property pricing boom which had gone up to the rate of 16% between 2002 and 2006; more than the average income of India and even more than that of USA.

All because unlike most parts of the world, in India one will not find the price of the house or that of the property listed in the real estate agent’s office. The amount of the land is fixed by the seller and the person can easily demand the first half in the form of formal payment while the rest in cash. And this latter mode of payment is what constitutes the ‘black money’.

A bit more of the deal –

First up is that the moderate the payment is on the official papers, the less the risk of receiving a hefty capital gains tax bill. While the second one is that, it also benefits the buyer as they have to pay much less of the property tax.

While the UK and the USA did start charging as much as 110% more mortgage at the peak of the property boom, in India the mortgage amount has always been much lower than the actual cost of the property.

That’s why when the prices of the houses and lands fell in India back in 2008 and 2009, the

banks were still comfortably within the range of the property values.

How to solve the problem, according to Mr. Basu?

Some time back, Mr. Basu famously advised the government to criminalize the bribe-takers instead of the givers.

It will be interesting to see if the law is implemented then how the equation will affect the whole dynamics.

Though, he laments that the Indian law has not taken his suggestion into the account. It is likely that if it is ever sanctioned then the bribe-givers, freed from the threat of prosecution will automatically want to resist and be reluctant to take part in the bribe cycle again.

Ultimately, it can be concluded that his whole explanation is sound enough as proved by the fact that India’s economic growth was 7.4% in the third quarter of 2015. Apparently the fastest growth of any major nation in the world.

Kaushik Basu was talking to BBC

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Flipkart Brings First Nokia-branded Smart TV in India: Report

The visuals of the TV are bolstered with "MEMC" technology, which eliminates blurs and judders for a screen shift devoid of lags, thus, offering better picture definition

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Flipkart Buys Back Shares Worth $350 mn.
New e-commerce norms to impact e-tailers: Flipkart. IANS

Flipkart on Thursday launched the Nokia Smart TV in India as part of their strategic partnership. Priced at Rs 41,999, the Nokia-branded smart TV is currently available in a 55-inch variant and features “Sound by JBL”.

The smart TV will be available on the e-commerce platform starting December 10 and the firm will expand the line up of 4K variants in the coming months.

“The acoustics of the Nokia Smart TV has been engineered by JBL, which will let customers experience clear vocal tones and minimal harmonic distortion. True to JBL’s brand recall, the Nokia Smart TV will also enjoy deep bass tones, typically popular with Indian audiences,” the company said in a statement.

Notably, this is the first time that JBL is extending its audio expertise in television space in India.

The TV is powered by 24 watt built-in speakers, “DTS TruSurround” and Dolby Audio to enhance the overall audio experience.

Flipkart will provide complete TV protection for Nokia-branded smart TVs, which is available at a launch price of Rs 999.

Flipkart, Nokia
Flipkart earlier entered into a strategic partnership with Nokia to launch Nokia smart TVs in India. Wikimedia Commons

The programme gives consumers a coverage of three years against manufacturing defects and accidental damages, along with a guaranteed buyback value at the end of three years.

The Nokia Smart TV offers intelligent dimming that helps produce deeper blacks through accurate backlight control and a wide colour gamut.

It comes with the Android 9.0 Operating System (OS) that will allow users access a host of apps on the Android TV Play Store.

Also Read: Sony Unveils Alpha 9 II Camera in India for Rs 3,99,990

It sports a quad-core processor and 2.25GB RAM and 16GB ROM.

The visuals of the TV are bolstered with “MEMC” technology, which eliminates blurs and judders for a screen shift devoid of lags, thus, offering better picture definition. (IANS)