India's great escape from the socialist zoo : India : S A Aiyar : TOI Blogs

This article appeared in the Times of India on 18-04-10.

India's great escape from the socialist zoo : India : S A Aiyar : TOI Blogs

My reaction to this article: Excellent analysis, I agree with most of it. But India remains largely a country of conglomerates where existing business families hold sway in a crony capitalistic way. The examples cited of the IT sector are exceptions not the rule. These success stories were possible because the product in this case was 'invisible' to the bureaucrats and also because the markets were abroad.

To take a contrarian view, the fact remains that about 30 crore people in this country live in abject poverty. The tribals in this country were perhaps relatively better off under the British rule than they are today. They have lost most of their land to the settlers and have become a minority in their own land. In many places, arbitrary political boundaries have divided the tribals or adivasis of one ethnicity between several states. Their culture has been hijacked. Their children who come to towns & cities to work as household servants are abused or raped every day. (Most of it goes unreported).

I have wondered what is it about the developed nations and many of these newly industrialized nations that makes them prosperous and equitable. One law in particular that comes to my mind is the Estate tax which is imposed when wealth is passed on to the offspring via a will or on the death of a person. (This law mostly applies to the super rich). The crux of the law is that people who have amassed huge amounts of wealth in their life time can bequeath only a reasonable portion of their wealth to their children while the excess wealth becomes part of the state exchequer if not already given away in charity. This tough law has resulted in numerous charitable foundations and universities in the US. (If Bill Gates, Warren Buffet and others are giving away all their billions in charity, it’s partly because of this law). It’s amazing, even the communists in India haven’t lobbied for this law. It is countries like India; with wide spread disparities in income levels that need this law.