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Let’s talk about corruption and public life

1: Meme Analysis (Jiali Fan: 26808048)

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‘Where is the capital of India?  – In Swiss banks’

 This Meme is making a pun here, as the old man was asking where is the India’s capital which is New Delhi, but the little boy was thinking that all of their capital which means money is in the Swiss bank.

‘Black money’ – the name for economic activities outside formal banking channels and include cash transactions in high-value assets of gold and real estate- is one of India’s biggest scourges.

This money is funnelled by corrupt politicians and colluding industrialists into Swiss Bank and all that money lies beyond the reach of the tax authorities, creditors and anti-corruption investigators. Recently, due to international pressure, Swiss government agreed to disclose the names of the account holders only if the respective government formally asked for it and in the report, India has more money in Swiss bank than the other top 4 countries including Russia, UK, Ukraine and China combined.

Deposits in the territory of Switzerland by nationals of following countries:

India – $1,456 billion

Russia – $470 billion

UK – $390 billion

Ukraine – 100 billion

China – 96 billion

Ambit Capital Research said in a research note: ‘Given that India’s GDP in calendar year 2016 is expected to be $2.3 trillion, the size of India’s black economy is about USD 460 billion, which is larger than the stated GDP of emerging markets like Thailand and Argentina’.

The black money is created by way of illegal practices and the control of government is not desired by such people and the ratio of black money is double than the legal money in Indian economic system. India’s black money pile is unusually large for several reasons. First and foremost, over half of the country’s output comes from the small, informal sector, where cash transactions are the norm. For example, an obvious phenomenon is that when consumers want to buy a product, the seller will tell them half of the payment as a formal payment and demand the rest in cash. That cash payment is what Indians refer to as ‘black money’ and finally go to the Swiss Bank. It means the seller can avoid a hefty capital gains tax bill. Buyers benefit too because the lower the declared value of the property, the lower the property tax they will be obliged to pay.

Indian economy, here persisting poverty and unemployment and national debt do not allow any Indian stash away his money in foreign banks rather than in the Indian banks and that too the illegally earned money so as to escape tax and finance laws in India. No doubt, India’s economic situation is such that it can ill-afford any kind of negative economic environment. The government of India should certainly take this issue seriously and try to bring back the black money as soon as possible.

However, why the Indian Government is not asking to Swiss Bank? The answer is simple as the government is working under the influence of those politicians and industrialists who have huge deposit in Swiss bank. They cannot expose their own people.

References:

Sanjoy Majumder 2016, Will India’s tax evasion amnesty scheme curb ‘black money’?, BBC News.

The Hindu 2016, Indian money in Swiss banks dips by 33% to Rs.8,392 crore.

2: Posters (Xueying Ruan: 26618435)Corruption and public life副本.jpgCorruption and public life.jpg

3: PPT analysis (Miao Zhang: 25465252)

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4:Interview Video

Clink here to watch to our Interview video:  India Corruption and public life

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