Finance Bill 2017 Legalising Unlimited and Anonymous Corporate Funding for Political Parties!
Huge Bank Loan Write-Off for Defaulting Corporates!
Rising Revenue Loss Due to Corporate Tax Exemptions!
Mysterious Silence on Panama Papers!
GST Favouring Big Corporates, Decimating Small Producers & Traders!
The dominant and commonsensical understanding of corruption is often in terms of individuals benefiting from ‘bribe-giving’ and ‘bribe-taking’. But modern institutional corruption – flowing from a nexus of big capitalists and politicians/governments – has a much wider scope and graver implications than individual corruption. We should recall here the proverbial statement (attributed to a leading Indian industrialist): “I don’t break laws, I make laws.” Crony capitalism – whereby governments and politicians make decisions to serve the interests of their cronies among the capitalists, in exchange for funds and various favours- is the worst kind of corruption today: the kind that hollows out our very democracy. This new-age corruption hardly appear to be ‘illegal’, as they take place not by ‘breaking laws’ necessarily but through suitable ‘making and changing’ of laws, whereby select corporates- as individuals or as groups- tend to corner benefits in terms of money and other resources.
Indeed, if we connect the dots of the recent string of policy moves – sweeping changes through the Finance Bill 2017, rising revenue loss due to widespread tax-exemptions for the corporates, mounting bad loans (NPAs) in banks and governments moves to write them off, the charade of demonetisation and GST, and mysterious silence and unwillingness to investigate the people named in Panama Papers- we can see the emerging architecture of LEGALISING corruption and crony capitalism at an unprecedented scale.
Whatever Happened To Getting Black Money Back From Foreign Shores?
Well, Modi manager Amit Shah candidly confessed that Modi’s promise of bringing back black money from foreign shores and depositing Rs.15 lakh in each of our bank accounts was only an election ‘jumla’. However, what is still more telling is why the Modi government refuses to reveal foreign account holders’ names; why no one having accounts in Swiss banks have been touched; why no one who sent black money through shell companies as revealed by Panama papers has been touched! On the contrary, the actor-hero named in Panama papers is the most frequent ambassador for most of government’s publicity blitz!
What Did We really Achieve By Demonetization?
Why do the RBI and the government, even after 8 months, refuse to tell the nation how much ‘demonetised’ currency has come back to the banking system? Every note deposited during demonetization was counted – and yet the Government claims to be unable yet to give us a count of how many notes of each denomination were deposited! According to experts, between Rs 14.5 lakh crore to Rs 15 lakh crore i.e. almost the entire demonetised currency has returned to bank counters by 31 Dec 2017! If such facts come into public domain, it would be proved that contrary to Modi’s grand claims of tackling black money through demonetisation, actually very little black money was recovered. The actual facts would reveal demonetization to be an eyewash – done at the cost of the loss of livelihood and great suffering of the country’s poorest people. A Parliamentary Committee also has found all the Demonetization claims made by the Government to be false. Even Bhartiya Mazdoor Sangh, a BJP affiliate, has reportedly complained of 4 crore job lost, 3 lakhs small amd medium industrial units shut due to demonetization.
So neither foreign nor domestic black money was recovered – on the contrary the Government brought in an Amended Finance Bill 2017 to allow for vast, unaccounted and secret corporate donations to political parties!
The Amended Finance Bill 2017: Unlimited and Anonymous Funding to Political Parties by Corporates : The amended Finance Bill 2017 was passed in the Lok Sabha on 22 March 2017. Totally ignored by the mainstream corporate media, this bill is probably the most important law passed in India since the Emergency in 1975. Here are the main points:
The government has created a new way of donating to political parties, called “electoral bonds” which guarantee to keep the donor’s identity a secret. Anyone can buy electoral bonds for any amount and donate them to a political party. The party does not need to declare the donor’s name. Previously, if anyone donates more than Rs.20,000 to a party, it has to be declared. Electoral bonds help political parties to get around that rule.
Further, the Companies (including foreign) can donate to parties WITHOUT ANY LIMIT. Previously there was a limit of 7.5% of last 3 years’ total profits. Also, companies now DON’T NEED TO DECLARE their donations to parties.
The Finance Bill also makes it possible for IT officials to raid anyone, anytime, without giving any reason, thus arming the govt to use the IT department for political witch-hunt and terrorising opponents.
The bill also lays down that the appointment of judges on Tribunals under 19 other laws/acts will now be totally controlled by government without the approval of parliament.
Interestingly, the same bill has made AADHAR mandatory for filing income tax returns and obtaining PAN cards!
Look at the brazen double-standards: While this bill demands full transparency from common citizens through AADHAR based surveillance over every bit of their economic activity, it ensures total non-transparency for the corporates allowing them to undertake unlimited and undeclared funding of political parties, lobbying and control over political system!
To avoid any detailed scrutiny of this sweeping law by Opposition, the bill was tabled as a “money bill”, meaning it does not require Rajya Sabha approval at all – only Lok Sabha approval, where the government has majority!
Tax Concessions and Bad Loan Waivers For Corporates at All Time High In Modi Regime
1) Revenue loss due to exemptions in corporate tax has shot up from Rs. 57,793 crore in 2013-14 to Rs. 83,492 crore in 2016-17!
2) Big Bank Loan Scam Underway: Remember the UPA Government’s 2G Scam worth Rs 1.76 lakh crore – which (rightly) triggered a huge anti-corruption awakening and movement. Now, isn’t the Government’s move to write- off corporate bad loans amounting to a far more massive amount than the 2G Scam, not an open loot of our banks by corporates? It is a Bank Loan Scam which mainstream corporate-controlled media wants to hide:
· According to ‘India Ratings’, till March 2016 of the unrecovered bank loans to corporates, almost Rs 13 lakh crores have come under the category of ‘bad loans’ (DNA, May 13, 2016). Of this Rs 7.4 lakh cr debt is almost at the risk of being written-off in coming years! (Economic Times, Dec 20, 2016)
• During the Modi regime there has been a huge fall in the recovery rate of ‘bad loans’ owed by corporates to banks – from 22% in 2013-14 to 10% in 2016-17! (Indian Express, January 03, 2017).
• Between 2013-16 public banks have waived/ written-off ‘bad loans’ worth Rs 1.54 lakh crores owed by corporates (Economic Times, December 07, 2016).
• Last year SBI alone waived Rs 7,000 crores owed by 63 big capitalist defaulters (DNA, November 06, 2016)
• In reply to an RTI, the Central Information Commission has said that the amount of money given by SBI to the Adani group cannot be made public (Live Mint, December 27, 2016)!
• Pandering to the corporate has reached such a level that Prime Minister Modi’s Chief Economic Advisor Arvind Subramaniam said in an address in Kochi on 14 March 2017, “The government needs to bail out large corporate borrowers at times though it may lead to charges of cronyism. You need to be able to forgive those debts because this is how capitalism works. People make mistakes, those have to be forgiven to some extent. Political system has to be able to do that and ‘bad bank’ is one way of trying to do that.” (PTI, March 14, 2017).
• What is interesting is that this government is gifting away people’s money to its favourite corporates Adani and Ambani not only within the country but also through international accords. During his Bangladesh visit in 2015 PM Modi gave Bangladesh a loan of 2 billion dollars. Later when Sheikh Hasina came to Delhi in 2017 the Modi government gave Bangladesh a loan of 5 billion dollars (about Rs 32,314 crores). These ‘loans’ were given with a view to enable Adani and Ambani to start their power projects in Bangladesh (Business Standard, April 09, 2017).
“PARA” – A Cover-Up for Bank-Loot by Corporates? The Government is proposing to set up a centralised Public Sector Asset Rehabilitation Agency (known by its acronym PARA) to whitewash and cover-up the massive defaulting on bank loans by corporates. This will take on the largest and most difficult cases of corporate loan defaulters and make the “politically tough decisions to reduce debt.” Isn’t it then essentially a “Private Accumulation Rehabilitation Agency”?
Clearly the Modi rule has emboldened defaulter Corporates as never before.
Another Telecom Scam In the Making? An inter-ministerial panel led by a senior official in the telecom ministry started its hearings on a possible bailout of debt-laden telecom companies. Several non-Jio telecom companies want major cuts in various statutory payments such as the spectrum user charge and the interconnect charge and a liberal payment schedule, allowing them to pay for spectrum over 20 years instead of 10! According to brokerage CLSA, because of Jio, the total revenue of Indian telcos declined for the first time since 2008-09 in the year ended 31 March 2017(Livemint, June 12, 2017). So while the elder Ambani cornered all the profit, the ‘loss’ incurred by other Telecom companies (due to Jio freebees) is now being sought to be filled by the govt bail-out package using public money!
Recall noted social thinker and author Chomsky saying, “A basic principle of modern state capitalism is that cost and risk are socialised, while profit is privatised.”
Worst of all, the Corporate-Government nexus also undermines democracy: There is no formal declaration of emergency in the country. And yet the govt-corporate nexus control media and get it to avoid or even take down news stories that raise questions about the conduct of the ruling party leaders or their favoured corporate groups. The way in which Times of India and DNA took down news stories relating to Amit Shah’s huge leap in assets, and the manner in which editors of various media houses have been removed for refusing to toe the line drawn by the corporate-Government nexus are fresh in our memory.