Corruption will continue albeit with slightly different arrangements: former US treasury secy
GN Bureau | November 22, 2016
By far the most sweeping change in currency policy that has occurred anywhere in the world in decades: that’s what former US treasury secretary and Harvard economist Lawrence H Summers along with PhD candidate Natasha Sarin say in a blog posting analysing the Modi government’s “dramatic action”.
Their conclusion, in short, is: “Without new measures to combat corruption, we doubt that this currency reform will have lasting benefits. Corruption will continue albeit with slightly different arrangements.”Of course, the authors have not taken note of prime minister Narendra Modi’s hints and remarks about “new measures” including getting tough on benami properties. That, however, is for future.
Summers admits that he has long advocated kill-the abolition of the $100 note in the US context and the 500 euro note (“aka the Bin Laden”) in the European context. This is the lesson for the world they have drawn from India’s experiment:
“We were not enthusiastic previously about the idea of withdrawing existing notes from circulation because we judged the costs to exceed the benefits. The ongoing chaos in India and the resulting loss of trust in government fortify us in this judgement.”
They also question targeting a currency note so widely circulation: “most Americans in the top 1 percent of the income distribution do not handle $100 bills on even a weekly basis whereas 500 rupee notes are very widely used in India.
Acknowledging the black money angle, they write, “We recognize that many of those who hold large quantities of cash in India have come by their wealth in corrupt or illegal ways. So, the temptation to expropriate is understandable. After all, as the argument goes, anyone who came by their wealth legally has nothing to fear from coming forward and exchanging old notes for new ones.”
However, they succinctly summarise what many people in India are fuming about: “Most free societies would rather let several criminals go free than convict an innocent man. In the same way, for the government to expropriate from even a few innocent victims who, for one reason or another, do not manage to convert their money is highly problematic. Moreover, the definition of what is illegal or corrupt is open to debate given commercial practices that have prevailed in India for a long time.”
Read the full blog post here:Most sweeping change in currency policy in the world in decades
One of the most significant setbacks from the massive upheaval caused by the Covid-19 pandemic is its effect on food and nutrition security. The pandemic has compounded the already rampant social inequity by adversely affecting the socio-economic status of millions of families across the nation. In the giv
Predictably Irrational By Dan Ariely Harper Perennial, 384 pages, Revised edition: 2010 In this meticulously researched work, Israel-American psychologist and behavioural economist Dan Ariely [h
Amidst growing concerns around lack of transparency, accountability and rights of users related to digital media, the government has framed ‘Guidelines and Digital Media Ethics Code’ after elaborate consultation with the public and stakeholders, to have a “harmonious, soft-touch oversight
A production-linked incentive (PLI) scheme with a cost of Rs 7,350 crore over four years was approved by the union cabinet Wednesday, aiming to boost domestic manufacturing and attract global investment in IT hardware like laptops, tablets, PCs and servers. The scheme extends an incentive of
Lamenting the fact that the government has not done enough to uplift cinema halls badly affected by pandemic-induced lockdown and get back audiences to theatres, legendary filmmaker Ramesh Sippy has said that the film industry needs a revival package and larger government support than that announced in the
Murder at the Mushaira By Raza Mir Aleph / 344 pages / Rs 799 While Indian-English writing has achieved great heights in literary fiction, that achievement is ye