The roots of DeMo are deep in the globalization project.
The outsourcing agency responsible for the opening up of the Indian economy to Western interests, often in the most predatory fashion, was McKinsey and it was McKinsey that was bent on regulating and taxing the informal sector in India as far back as 2004.
Most tellingly, one of the reasons it gave for the need to introduce a Goods & Services Tax was the information such a tax would give on those businesses.
In business, information is money. Taxes thus become a way to subject rival businesses to surveillance and theft. The GST is next on Narendra Modi’s agenda, proving once again that the whole demonetization scheme is nothing more than the next step in the globalist project.
As a 2004 McKinsey report titled The Hidden Dangers of the Informal Economy put it pithily, “Informal companies evade fiscal and regulatory obligations, including value-added taxes, income taxes, labor market obligations (such as social-security taxes and minimum-wage requirements) and product market regulations (including quality standards, copyrights, and intellectual-property laws).” So far, governments in India have turned a blind eye to these illegalities, not least because they were worried about the consequences on employment and on the economy if they decided to enforce the rules. But it seems the present government not only wants to change that policy, but also wants to force the pace of change.
It is, of course, a laudable objective and the decision to force it through is a bold move. The big question though is: will it work? The McKinsey report is very critical of the informal sector, because its avoidance of regulation and taxes gives it an unfair advantage over firms in the formal economy, who are unable to increase their market share despite being far more productive and efficient. The report wants governments to start enforcing the rules against the informal firms, so that the formal sector benefits.
Significantly, it says value-added tax is a good place to start, since it enables the government to gain information about the informal firms and then go after them. It’s no surprise then that the government is trying to push through a comprehensive goods & services tax (GST). And that’s not the only place where the government seems to be heeding McKinsey’s advice—the report also says, “Another way of improving enforcement is for governments to partner with payments providers such as banks and credit card companies to increase the number of monetary transactions accurately recorded by the collections system and thus to raise the quality of the data available to tax enforcers.” The government’s push to a digital economy is precisely on these lines.
The expectation is that the short-term pain will lead to long-term gain. The benefits are expected to come from more tax revenue collected, which can then be used by the government to provide sops for the masses. The coming budget, for instance, is expected to echo this approach. The benefits are also expected as more firms join the formal economy, with access to funds and technology. The hope is that informal businesses will transform themselves from being the dirty underbelly of Indian capitalism into respectable, tax-paying, suited and booted members of a sleek, productive and bourgeois modern India.
Will the audacious gamble succeed? The McKinsey report didn’t think that informal firms could change so easily. It pointed out that informal businesses tend to structure their supplier and customer relationships in ways that make it difficult to go above board later, that customers of an informal firm come to expect very low prices, and many would go elsewhere if it transformed itself into a formal company and had to raise them. Indeed, the report said, “The idea that informal businesses might grow and join the formal economy is therefore a myth.”
Many firms in the informal economy would cease to be competitive if they are exposed to the full brunt of taxation and regulations of the formal economy. A 2014 paper by Rafael Porta of the Tuck School of Business and Andrei Shleifer of Harvard University, published in the Journal of Economic Perspectives, concluded thus: “we are skeptical of all policies that might tax or regulate informal firms. Rather than encourage informal firms to become formal, such policies may have the effect of driving them out of business, leading to poverty and destitution of informal workers and entrepreneurs. The recognition of the fundamental fact that informal firms are extremely inefficient recommends extreme caution with policies that impose on them any kind of additional costs.”
In other words, shock therapy such as demonetisation could very well turn out to be counter-productive. Instead, Porta and Shleifer say the cure for informality is economic growth. The evidence shows that informality declines, albeit slowly, with development. An 2009 OECD paper on Informality and Informal Employment also came to the conclusion that policies that make it more difficult for informal firms to carry out their activities and stricter enforcement of laws and regulations “have contributed to increased poverty and vulnerability by pushing already vulnerable groups of people into even more difficult situations.” What the government should instead aim for is expanding the formal sector, by making it easier for firms to operate there. But that is easier said than done and the record of the formal sector in creating jobs has been dismal.
The saving grace is that much of the talk about a transition to a cashless economy will remain just rhetoric. It’s also likely the government will soon realise that forcing the pace of change on the informal economy carries with it huge costs and it will opt instead for less ambitious, less intrusive methods.
I look forward to seeing what Indian resistance can do to change/alter/redirect this external force.
I have written elsewhere (on my website) that unless every nation gets rid of their native fifth columnists, they cannot effectively resist the drive to world order. The trend, and inability to interdict it, appears to make it a fait accompli.
The word fifth columnist means: those like you on the inside, they look like you, speak like you, and appear to be on your side when prominent, and blend into the natural landscape when unknown, but who work for the enemy whether for pecuniary gain (mercenaries) or ideological alignment (more common than often appreciated) or stupidity (fools and useful idiots, even more in preponderance than virtually any other body-politic).
The fifth columnists of India appear to be little different from Pakistan’s, and that unfortunately also remains true for all nations of the world including the United States.
So after all this shrewd diagnosis Lila, and this livemint’s Mckinsey report expose lends much credence to it all being a calculuated conspiracy of world order as you have maintained all along, what practical steps do the Indians take to rid themselves of their fifth columnists, will surely be a lesson to all the world in how to resist world order.
I await anxiously to see the wisdom of a 5000 year old civilization applied to adressing this 5000 year old problem which persists to this day. Every Indian conquest has, as you surely will concur, depended principally on the greed or the foolishness of India’s fifth columnists. This trend of ideological alignment appears to be the consequence of the white man’s burden and occidentosis which has colonized the subcontinent for over 150 years, ever since Macaulay instituted the Indian Education Policy of culitvating the “brown sahib” — in his own words:
“We must at present do our best to form a class who may be interpreters between us and the millions whom we govern, –a class of persons Indian in blood and colour, but English in tastes, in opinions, in morals and in intellect. To that class we may leave it to refine the vernacular dialects of the country, to enrich those dialects with terms of science borrowed from the Western nomenclature, and to render them by degrees fit vehicles for conveying knowledge to the great mass of the population.”
Which is the malaise plaguing the modern fifth columnist in India?
Thanks
Zahir
Zahir, you truly have put your finger on the problem.
Indoctrinated intellectuals form the proxy governing class, even more than native elites. As long as the globalist cabal has the money to spread around, they can hire more and more of those intellectuals.
Besides them, there is also an army of internet trolls, recently exposed by one troll in her memoirs. She documents how the BJP hired her and many others to target someone who had spoken out against the ruling party.
I am sure other parties do similar sorts of things, so I am not being partisan here. Opinion-making is the most important task in countries with a democratic set-up. How to keep public opinion believing the opposite of the truth? By taking over the language and framing the discourse. Look at the way cashless is defined as all virtue, technological progress and modernity, while cash is equated with primitive and corrupt?
The TV channels, except for CNN, have all taken the line that notebandhi is a good thing, though the implementation was bad. Wow. Over a hundred people have died, millions (about 5-6) have either lost work or are struggling or are about to lose their jobs. Tens of thousands of businesses have shut down. Famine is threatening. New forms of corruption have developed. GDP has taken a 20-30% hit in some estimates. The informal sector is permanently damaged. But you wouldn’t know that from the TV or from newspapers like the Hindu. I guess this is how the Soviets kept the outside world bedazzled with Potemkin villages while expropriating their citizens.
“Indoctrinated intellectuals form the proxy governing class, even more than native elites [who manufacture public opinion for the ruling class, some knowingly as ideologs and mercenaries and others unknowingy as useful idiots].” — how true.
This is where your little website here Lila, and perhaps mine too in some small way, play our tiny tiny role in calling out their bs.
As laudable as that may seem Lila, public opinion does not control nor impact ruling powers. As evidence I present the 2008 banksters bailout bill; virtually the entire American public was against it, but the US Congress still passed that Bill.
I await to see how the imaginative and ancient body-politic in India can resist this social experiement with their natural wisdom. I don’t think public opinion building is sufficient; it is, arguably, necessary, but not sufficient.
Something else is needed to convert public knowledge, public discontent, to public mobilization. I don’t know what that x-factor is.
Perhaps the Indians (public that is) can teach us. Historically, the populations of the Indian subcontinent, except for the tribal belts of Afghanistan, are not known for their active resistance to invaders. Why do I hope it is going to be different?
Thanks
zahir
True, Zahir. I don’t know that any large part of Indians is in touch with any ancient wisdom except the habit of enduring…which may be wisdom enough.
It’s not our ancient wisdom that I’m betting on right now. I think our talent for bending any rule that can be bent is what may see us through. That, and the general lack of decent infrastructure. I mean, it’s hard to run an electronic police state without electricity and enough bandwidth.
SERVER DOWN is going to be the epitaph of the Modi-fication of India.
“SERVER DOWN” — now there is some realpolitik! See I knew the Indian mind will come up with some natural thing particular to their national genius, their situation.
One thing that a friend of mine told me a while back when I asked him why he does NOT feel perturbed with all the evil and corruption and wars and man-made pestilences that mankind is engulfed in today, and I wish to share his thoughts with you. His reply was simple as we drove through Islamabad. It was something like this: how many rulers and conquerers and barbarians have visited civilizations from time immemorial — where are they now? This world order too will someday go the same way by natural decomposition. Why bother trying to hasten the inevitable — the corollary being, and the following are my words extracted from his mind on what he might have been thinking but did not articulate: just enjoy your own life if you are among the fortunate, and if not, well, that’s just too bad, c’est la vie.
The majority of privileged people are like that the world over, or so it appears to me judging from our collectively looking the other way, what Hannah Arendth called the “banality of evil”.
So your analysis leads you to the same conclusion that this dystopia under construction in Inda will go its way by natural outcome that is particular to India.
I am hoping, perhaps wishfully, that this will be hastened with some help from the collective human intellect and the collective human actions — and that’s what I am not sure what it is going to be.
What has actually surprised me is how rapidly this is unfolding, almost like “shock and awe”, so that by the time the Indian mind even wakes up from shock, it would already have been a fait accompli. That appears to be the social experiment — the validity of this technique to seed fait accompli, because it hastens the goals of achieving world order lest humanity’s collective consciousness which many claim is rising, put a premature end to it.
Any merit to that?
Indians can perhaps draw upon their own ancient heritage of higher states of consciousness….
I have some words on that idea in my essay: Higher States of Consciousness – Why it’s Necessary
http://humanbeingsfirst.blogspot.com/2016/08/higher-states-of-consciousness.html
Perhaps you can develop that idea further by drawing upon HIndu and Christian heritages of India. They must draw upon their own indigeneous strengths, perhaps long lost to time, but still present in their theologies as much as a categorical imperative no differently than Muslims worldwide must follow the prescriptions of their own faith. Unfortunately, none of us do in any significant number — and perhaps there lies the seeds of an indigenous solution (?)
Thanks.
Zahir Ebrahim
Project Humanbeingsfirst.org