Democracy and adult franchise are foundations of representative governance. The exclusive bridge to the pedestal of governing power in a democracy is election, acknowledged as a process of ascertaining the will of the majority. Contestants require funds which are sourced by the candidates and the political parties obviously from the wealthy business and industrial houses, who consider the funding as an investment capable of yielding returns. Two successive election commissioners have confirmed the funding process and the consequent nexus between wealth and power. A supplementary source is bribe collected during previous terms of office. All variants of democracy operate in more or less similar manner all over the world.
Governments in all democratic countries as a consequence have a strong rapport with industrialists and the wealthy class, who influence the policies of the government covertly and overtly. The media which is an arm of industrialists enjoys the freedom to oppose or support a particular policy as any other citizen but, has the power to create opinion over a larger area than an individual. Policy that runs counter to larger interest but favourable to select sections is a prerogative of the ruling majority as a policy decision and not questionable as unlawful or illegal even as the land acquisition ordinance.
The finance minister opened the budget session 2015-16 with a significant statement that in the nine months of the new government that preceded the budget session there had been no “scam”. The budget slashed the corporate tax by five percent – in terms of quantum of reduction the percentage would be 16.66%. The revenue loss would be around Rs 75000 crores. Wealth tax which was progressively watered down over the last few years was abolished. Service tax the incidence of which tax, is very wide and covers services availed of by even poorer sections on a day to day basis hiked to 14.3%, obviously to make up for loss of revenue on reduction of corporate tax and abolition of wealth tax. Unlike many comparable countries Estate Duty and Gift Tax Acts were repealed long ago in India.
The reason given for reduction in corporate tax was that Indian rate was higher than many other countries. Wealth tax collection the finance minister stated was a paltry Rs 1008 crores and the cost of collection would not justify the levy. Wealth tax was levied on value of few assets such as vacant urban lands that include plots in periphery of notified cities and towns, gold, silver and vacant apartments, and flats. The entire real estate business in this country is pivoted on speculative market that denies roof over head to half the population. Housing plots and vacant land are known repositories of black money. Officially we are told that 1000 tons of gold are imported annually. Over two decades alone that would total to 20000 tons. The land price in the notified towns and cities where the entire perimeter with a depth of 8 kilometers are developed housing plots are beyond the reach of many.
Abolition of wealth tax and reduction of corporate tax, transferring the burden on to common man is a policy decision that would promote the wealth of the affluent and increase the disparity between the rich and the poor. The hallowed slogan of “nectar of development” does not hide the ugly truth. If affluence can pressurize governance to accelerate affluence, a veritable cycle is set in motion that will widen the chasm between rich and the poor at an incredible pace.
Let us revert to the subject of undemocratic democracy that subordinates the interests of many to the supremacy of few by its’ very nature of operation. The acceleration in the disparity between the rich and the poor was heralded by the Forbes publication recently. The new listing indicated that the wealth of that predatory section of mankind grew from dollars six trillion to seven and a half trillion in a span of one year. If the disparity could be contained the influence of the wealthy will be reduced and the representative character of governance will improve. “A republic is possible only among equals”- Machiaville.
Our elected governments did not appreciate the concern of the Noble laureate Amarthiya Sen that our expenditure on education and health care need to be increased substantially. More importantly parity in the quality of education is required to set up an equitable platform for economic progress. Children of the poor attend inferior educational institutions and have no access to better schools and colleges which are expensive and are the exclusive rights of the rich.
Rural India which is indeed “India” as Gandhi said has a population of 864 million despite the persisting migration to towns and cities. In terms of education the rural population has just 4% graduates but 36% illiterates. A rich source of political support for the predatory politician. Rural schools run by government exist often only on paper. Government run educational institutions are far inferior to private run institutions. Autonomy of government institutions is persistently being eroded. If we need to bring about parity in quality of education the inferior institutions have to be placed under better management. Government should hand over educational institutions up to the secondary school level for private management with the existing infrastructure and funding, if we have to make a beginning. Costs of education upto secondary school level have to be mandatorily brought down and quality maintained by increasing the funding. Government interference in education should be barred and control made over to a national consortium of the institutions themselves. Like protests against land ordinance and OROP mass protests are required to break the nexus between the wealthy and governance.
(The author is a Tax Consultant and Advocate)
