Category: economics

The Great Indian Loot: Living next to the Looters

A few centuries ago, the British started looting India. Of course, they took the diamonds and jewels. But the main loot involved Indian resources. The resources were presumably expropriated by trading through  adverse terms of trade. The process has been documented by economists and historians -– it went on for a long time.

Currently, Indian resources are being looted by Indians on a large scale. They expropriate resources earmarked for welfare programs, for capital improvements. They steal funds earmarked for charities.

Funds earmarked for educational programs in schools are being appropriated by teachers. Politicians and their associates are selling jobs for money.

Some of these thieves are fat cats, far away from normal people like us, smoking fat cigars in their mansions or luxury high-rise apartments. But many are all around me. Yes   some of my  relatives, my friends, my neighbors, and many of my acquaintances are also involved in this Great Indian Loot. It stinks, doesn’t it?

Years ago, in a Kolkata neighborhood, my neighbors will be teachers, bank employees, small business people, government workers and so forth – the kind of people  who get regular paychecks, go to work regularly,  complain about inflation regularly and disagree with spouses occasionally. They will not be looting anything even if they were not totally above board.  After retirement these people will hang out in the local teashops, talk about past bravados, lousy bosses, beautiful women that they did not date but wanted to, and designate all politicians  as incompetent nincompoops. If I met these people in my neighborhood after coming back from America after retirement, I will be happily spending my golden years here .

But that’s not to be. My old neighborhood, where I returned, looks similar, but my neighbors have morphed. On my right side, there is a fantastic three-storied house with beautifully landscaped potted plants on the terrace and balcony, three cars and a retinue of servants. A promoter built the house about thirty years ago. In case you do not know about the species called promoters, they started roaming Kolkata about thirty five years ago. Their job was to buy old properties in a rapidly changing city and build high rises, selling them for a profit. The business model was legit – but its execution was neither conventional nor legal. Because of complex property laws, many old houses will have several owners/tenants , some of them paying very low rents under rent control. The promoters will somehow force all the owners/tenants to sell. In the process, sometimes some owners’ children will disappear, and return later with broken limbs or missing virginity, some owners will be robbed or beaten repeatedly, some might even disappear completely. After the land and the old buildings are acquired, lot of bribes were paid and lot of regulations broken in the process of building the new high rise apartment buildings. Apart from these main activities , promoters also dabble in many nefarious ventures and retain a bunch of goons and many local politicians and public servants, including the police, on their payroll.

Our promoter next door, after promoting to his heart’s content, settled down about ten years ago in his nice house, semi-retired. Unfortunately, the gods were not nice to him and he passed away soon afterwards . Now his wife and two grown children live in that house. I do not know what professions, if any, they are engaged in but I do know they keep to themselves. Thye behave like true aristocrats.  I hear them calling the servants by their generic names, like “security”, “driver” “darwan” , “gardener” etc. ,  -never their real names. I also hear their very loud bells that they use to summon the maid ( maids!)  

Two doors down, on the other side, an accountant owned a house. He was about my father’s age, worked for the central government – was posted in Ranchi most of his life. He was  our timid uncle, very soft spoken, he only visited  his house on vacations. He was always scared of his wife who was always mad at him because he lived in far away Ranchi while she had the responsibility for raising their four children. He prayed for a transfer to Kolkata which never materialized. By the time he retired, the kids have grown, the two older boys had become accountants also, and the girl was ready for marriage.

I went to school with the younger accountant boy, we played and chatted for years meeting almost every day. I reconnected with him after I returned from America. I found him reserved and somewhat distant. I thought he was intimidated by me. However, about a month ago agents from the Income Tax department raided his house. They were around for about four days , taking many boxes of documents from his house. He was not arrested, but I am sure he is under subpoena to appear before a judge in the near future.

Entire professions have changed substantively. Accounting was a boring profession, albeit well-compensated. But India changed from the early nineties. From abject poverty and sick domestic industries and  draconic banking regulations and  stifling government control over all sectors of the economy, India exploded with huge increase in trade and services. The number of both large and small businesses exploded, so did the number of agencies and schools and colleges that receive government funds. Accountants now are very busy and many get paid both over and under the table.

Law enforcement has been generically corrupt since its inception in British India 200 years ago. The legal system in India, for reasons to numerous to discuss here , has been totally dysfunctional for many years. Fortunately, I do not get a chance to hobnob with police officers or lawyers. But school teachers? I had hope there.

When I was enrolled  in my local school, the primary school teachers lived below the poverty level, while secondary school teachers lived a little bit above the poverty level. The schools were threadbare, our school had no electricity except in the offices and the teachers’ room downstairs. There were about 15 urinals for the needs of about 3000 students and one tube well for drinking water. No library, only elemental labs, no sports equipment, no landscaping.  Again, things changed from the nineties when India started getting prosperous. The teachers’ salaries increased to the point that they are comfortably paid now. During recent years the government built hundreds of new schools – even in remote villages, money started rolling in for capital improvements and infrastructure. At some point of time the looting started, by the teachers themselves, because the funds distributed by the government had limited oversight.

Unaware of all this, I naively went to my old school with an open checkbook, willing to donate big money for a good cause about nine years ago. The headmaster and the others were kind of horrified, and flatly refused to accept any donation from me, lest the accounting entailed with my donation will expose their own pilferage with the school funds. I tried for three years before the reality of the ongoing loot hit me !

As the teachers jobs, in fact all jobs in schools turned out to have decent pay and benefits and much less workload than private sector jobs, administrators and  politicians including Bengal’s erstwhile education minister started selling these jobs in exchange for fat bribes. Seven million dollars worth of Indian currency  were found in the minister’s mistress’s apartment. The extent of this ongoing scandal and several others like smuggling of cows and stealing of coal has convinced me that every single politician in Bengal is involved in this loot. The Enforcement Directorate is finding millions of dollars worth of  additional irregularities in the books almost every day!

Banks in the 70’s and the 80’s were the epitome of inefficiency, the clerical staff and the tellers were intent to do no work if possible. Harried bank officers stayed in their offices until 8 pm at night to finish up the banks’  routine work.  Then things changed – loans, mortgages and foreign transactions increased possibly one hundred times as the economy improved. The bank employees started working and were well-compensated, but the big business in India started looting the banks’ loanable funds – many of the bank employees were handsomely rewarded for this. The climax was reached during demonetization in 2016 when about 97% of the old notes came back to the banking system. No matter what people tell you, every single one of the banks’ branch managers and senior employees profited handsomely from this operation.

People in public service and in administrative jobs are surrounded by law enforcement, politicians, and wealthy business people – before you know it they are pushed into schemes where they participate in the loot.

Why am I complaining about this? I have a decent standard of living after retirement in Kolkata.  There is wonderful shopping, food and entertainment  available at my fingertips. Traffic is a problem but a car with air conditioning makes things easier. But I still can not talk to some of my cousins, their children or many of my old friends. They are hesitant to discuss their work life with me, some are actually afraid that their display of wealth disproportionate to their income will upset me.

Don’t get me wrong. I have met some very nice school teachers, some professors, a sweet librarian who specialized  in Chinese, a musician and some small business people – I happily hang out with them. I even found some charities that will not steal my money. My regret is that I hoped to have a more vigorous and more extensive social life after I retired in India.

There are shameless people I keep on meeting in Kolkata. A few years ago I met a great singer of classical music in a cultural gathering. Her husband was a councilor for a municipality in a suburb of Kolkata, We started talking and when he heard that I am visiting his neighborhood for a wedding invitation, he invited me to his house. Four of us went to his penthouse apartment and our jaws dropped. The furniture, the curtains, the window decorations, the wall decorations, the artwork, the lighting, everything was custom made – obviously done by an interior decorator. The apartment had a dreamy quality to it, right out of Bollywood – like a multi-millionaire’s house.

“This is a fabulous place. How do you keep everything clean and shiny?” I asked

“We don’t live here” The councillor said

“Huh?” It was my turn  to be surprised, again.

“We come here twice every week to drink some tea. That’s when the maid comes to clean up” he said

“We live in our older house with our grown son and his family “ He clarified.

Of course, with his councilor’s salary of 30 K rupees (about 375 dollars) per month or so, this apartment can not be shown to the public. The interior decorations and the artwork and the furnishing themselves must have cost about 100 thousand dollars!! He was just showing it off to the old NRI fool!