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Thursday, July 25, 2024
HomeOpinionDiaryCurtail Crony Capitalism — Part II

Curtail Crony Capitalism — Part II

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Image Courtesy: economictimes.com

Under the Fugitive Economic Offender Act, if an economic offender flees the country to avoid the due process, he/she can be declared a fugitive economic offender and their properties can be confiscated. Nirav Modi and Vijay Mallya have been declared as economic offenders. Their property, including art collections and cars, were auctioned off to recover part of their debt.

To overcome the drawbacks in GST implementation, the Central Government has taken up corrective measures to bring the scheme back to rails. The GST Council, formed with the states having a two-third vote and the Centre a one-third vote, is a rare example of cooperative federalism. Where the government faltered was its implementation. It has since realised that it made the system exceptionally complicated, with five tax slabs and a complex filing process, all of which alienated small traders and businessmen, especially coming close on the heels of demonetisation.

In the Indian context, liberalisation of the economy was initiated on the premise that the seemingly socialist and centrally planned economy had outlived its utility and that private ownership and market forces would efficiently replace public sector undertakings and provisions. Such an opening up of the economy was also tried in other parts of the world with only one consequence — unprecedented concentration of wealth in the hands of a few and a marked shift in the actual centres of power. Crony capitalism was soon making fast inroads into the policy-making coteries of India, and this new-found confidence of the private sector bore fruits.

The tying of national interest to global capital has not only produced adverse and livelihood-threatening consequences for the masses of the country, but it has also deprived India of the higher moral pedestal in foreign policy. Deep-rooted socialism is the only true alternative to this ‘post-truth’ world where rhetoric has dislodged real issues. It is exactly such a backdrop that allowed the Narendra Modi regime to push through demonetisation of high-value currency notes. Even though its economic logic was suspect, it was a political success as most believed that it was restoring the premium on honesty by targeting the corrupt.

While the principal focus is on the present context of India under a liberal economic policy regime, both the past of Indian capitalism and the past discussion on the concentration of economic power are also brought into the picture to substantiate the key arguments. The paper provides theoretical and also some limited empirical substantiation for the proposition that unlike what would be the prediction of crony capitalism theory, liberalisation, rather than reducing the degree of subordination of public authority to private capital, has only facilitated an enhanced degree of state capture. We are trying our best to curb the nexus of crony capitalism in India and the success is just forthcoming even though it is somewhat slow. Curtailing the effects of crony capitalism will lead to economic growth in the coming years.


(The views expressed by the author in the article are his/her own.)
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