Monday October 14, 2019
Home Business Black Money –...

Black Money – “Economics is not a moral subject”

0
//
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

Next Story

Oracle Ensures Keeping Sensitive Data within Boundaries of India

Not just big enterprises, Sutherland is confident the new Oracle Cloud will help small and medium businesses (SMBs) shun the legacy infrastructure and begin their Cloud journey

0
Oracle office.

By Nishant Arora

There is definite hunger and desire among the Indian enterprises to move their workloads to the Cloud and with Oracle Gen 2 data centre now open in Mumbai, we have ensured that sensitive data remains within the boundaries of the country, a top company executive has said.

The Indian CEOs and CTOs are clear on one thing: It’s from my data that I’m going to learn my customers’ behaviour, understand my product better, receive new insights and innovate on top of those.

“Every organization is a data organization today; it’s all about the information and how to analyse it, parse it and create AI-based Cloud models that help the organization grow. We have now fulfilled the most challenging demand coming from the Indian businesses: If the data doesn’t stay on-premise, let it stay within the country,” Andrew Sutherland, SVP-Technology, Oracle EMEA and JAPAC, told IANS.

For Sutherland, it is big leap for Oracle at a time when not only companies but the governments too recognize the value of information and how data is core to the success of any firm across verticals.

“We’re becoming increasingly conscious that there are strong data jurisdictions and we need to respond to that in a sensible way. By putting Gen 2 Cloud data centre here in India, we hope that we will meet those requirements,” the executive noted.

Over 100 enterprise customers in the country have already moved their workloads onto the Gen 2 Cloud data center in Mumbai, which is being run solely by Oracle without any third-party involvement.

The Cloud major has plans to open another Gen 2 Cloud data centre in Hyderabad next year.

Oracle Launches Intelligence Map for Close Look at Internet.
Witnessing double-digit growth in India for past 3 years: Oracle. IANS

Customers and partners in India can now harness the power of Oracle Cloud and leading services like Autonomous Database to unlock innovation and drive business growth.

The Gen 2 enterprise cloud supports all legacy workloads while delivering modern cloud development tools, so enterprises in India can bring forward their past as they build their future.

According to Sutherland, to help enterprises achieve greater insights and deliver better customer experiences, we need to have a whole new Cloud architecture that is built around cost, scalability, agility and self-repairing capabilities.

“In the new Oracle Cloud infrastructure (OCI), the multi-layered security provides a different security architecture with incorporating intelligence into it. We’re asking data to look after itself with autonomous database in this infrastructure. That’s what we are confident it will help unlock the modern Cloud era for enterprises,” he elaborated.

Also Read: Bitfury to Set up a Blockchain Innovation Centre in Hyderabad

Not just big enterprises, Sutherland is confident the new Oracle Cloud will help small and medium businesses (SMBs) shun the legacy infrastructure and begin their Cloud journey.

“There’s hunger and desire to move onto the Cloud among SMBs in India. I don’t think there’s any cultural resistance in any way. There is boldness in their approach. The next step is where to take the first bite to eat and for that, we are here to help,” said the Oracle executive. (IANS)