Some time ago I was reading a book titled ‘Unfair Advantage: The Power of Financial Education’, authored by Robert T. Kiyosaki. While reading it, I got attracted to some paragraphs in the introductory chapter, which touched upon how crony capitalism plays havoc with the lives of the ordinary citizens.
The paragraphs are given hereunder.
After 1971, bank bailouts increased in size.
By 2010, most people were aware of the subprime mess and the trillions in bank bailouts all over the world.
Today, many are angry that the governments bailed out the rich bank owners and passed the bill onto the taxpayers.
Unfortunately, few people are aware that these bailouts have been going on for years and have increased in size since 1971. In the 1980s the bank bailouts were only in the millions. By the 1990s, the bank bailouts were in the billions. After 2007, the bailouts became international and are now measured in the trillions.
This phenomenon is widely prevalent, especially in India. In the western world it is called ‘bailout’ and in India, it is ‘debt write-off’. Though the parlance is different, the net effect is same. It empowers the ultra-rich to accumulate obscene wealth and puts a dent in welfare spending.
When we imagine democracy we all invariably recollect Abraham Lincoln’s definition: “government of the people, by the people, for the people”. But in practice, it is “of the ultra-rich, for the ultra-rich, by the ultra-rich”.
What we are actually witnessing now is not a democracy. It is, in fact, an all-pervading crony capitalism masquerading as democracy. One may wonder what actually crony capitalism is. According to Wikipedia, the free encyclopedia, crony capitalism is an economic system characterized by close, mutually advantageous relationships between business leaders and government officials. The definition hits the nail on the head.
On December 7, 2016, the well-known financial daily, The Economic Times, reported that the Minister of State for Finance, Santosh Kumar Gangwar, in a written reply in the Rajya Sabha, stated that the Public Sector Banks (PSBs) have written off Rs. 1.54 lakh crore of bad loans between April 2013 and June 2016.
1.54 lakh crores? This is indeed a mammoth amount. And it has been written off. Now the question that arises is who will pay all this money. Of course the taxpayers. To offset the losses resulted from the debt write offs the union government will start infusing fresh capital into these public sector banks. And whom does it impact? It will adversely impact the fund allocations to the important sectors such as health and education and the worst affected will be the poor and the downtrodden.
The massive debt write offs raise many questions such as.
Who are these unscrupulous borrowers who defaulted?
Why only PSU banks have lent money to them?
Why are the names of these defaulters being kept confidential?
The answers are very much obvious.
As usual, the crony capitalism is at work in full force.
There is one more thing that is worth noticing. Whether it is UPA or NDA, things don’t change much. People vote only to choose the lesser evil and once the so-called lesser evil occupies the position of power then the people realize that they have actually ended up electing a bigger evil. The same thing is happening now in India. UPA, no doubt, was an evil personified. Dr. Manmohan Singh, the learned, suave gentleman kept watching silently even while the Madam and her cronies were virtually looting the nation’s resources.
Now, Mr. Modi, who rarely loses an opportunity to reiterate his status of being a tea seller’s son, has been indulging in endless theatrics. Many people supported him when he imposed demonetization thinking that it will unearth black money. People who had large amounts of black money managed to turn it into white effortlessly. Not even a single celebrity’s house was raided. Tollywood and Bollywood or for that matter any ‘wood’ which actually run on black money went scot-free. The ultra-rich business tycoons passed Modi’s ‘agnipareeksha’ with flying colours. And the poor and the downtrodden, who stood in serpentine queues to exchange their currency notes, did not get anything from the mammoth exercise.
When Modi goes abroad he creates big spectacles by giving rousing speeches while his ‘Bhakts’ keep chanting ‘Modi Modi’. Initially, even this writer was under a misconception that Modi would bring about some qualitative change in the way the country is governed. Now it is becoming apparent that he is a good ‘makeup man’ and what he is actually doing is putting some cream, lipstick, and mascara to ‘Bharat Mata’ to pave way for another bout of ‘India Shining’ campaign, which he feels will catapult him to another term.
He claims that he has a 56-inch chest and he can do anything. Then why doesn’t he make the names of the defaulters public? Because among those defaulters many are his closest friends. As per some news reports, even Ambanis and Adanis are among those defaulters. Are these defaulters so poor that they are not in a position to repay their loans? It’s nothing but a kind of quid pro quo.
During the election campaigning, Modi was featured in many photographs either embarking or disembarking private jets owned by Adani. Modi, who is building a strong platform for a second term, appears to be planning a sophisticated election campaign which will invariably involve huge expenditure. Now the question is who will finance all that expenditure. Recently his government passed a bill which enables the corporate organizations to donate huge sums of money anonymously to political parties. And here is when exactly the unscrupulous industrialists will pitch in and bailout Modi in return for the bailouts they received from him. A very good, mutually lucrative arrangement. Isn’t it?
When a poor farmer or a man who is in search of livelihood borrows money from a bank and fails to repay, the bank authorities send collection agents (goons) to their houses and even name and shame them by publishing their details along with their photographs in newspapers. But in our crony capitalism infested democracy all are ‘equal’ but some are more equal and some are less equal. Some are higher mortals and some others are lesser morals. So Modi’s men, who are ‘more equals’ and ‘higher mortals’, get preferential treatment and their respect and honor is preserved at any cost.
In return to an RTI application filed by the well-known newspaper, The Indian Express, the Reserve Bank of India (RBI) refused to disclose the names of those individuals whose bad debts are to the tune of Rs. 100 cores or more, citing the reason that the information is not available with them. Not available or political bosses or some ‘safed dadi’ instructed them not to disclose the names of his close friends and allies?
When someone raises all these issues, the government says, “The write-off is only technical and banks will continue to pursue the defaulters and will continue their efforts to recover the debts”. Really?
After a technical write-off, there is no incentive for banks to pursue recovery. They will only wait for fresh capital infusion. So whom are they trying to fool?
So the crony capitalism infested governments, which serve the interests of the parties that form part of the ‘axis of evil’ namely, industrialists, politicians, bureaucrats and the media, loot the people, suck off their blood and share the spoils. That is what is ‘democracy’, and to preserve this ‘democracy’, people, every five years, stand in long serpentine queues only to feel frustrated and deceived.
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