J.R. Mhatre Road,
Juhu Ruia Park,
Juhu, Mumbai – 49.
Re: Growing Divide Between The Affluent And The Common Man.
As one of the multitude who resides in this beautiful city of Mumbai, I wish to highlight the general observations which play in the growth of the society and consequently retard the economic development of the masses. Shocking as they may appear to be, these observations are the bare facts which need to be considered seriously before the masses rise in rebellion in protest against the growing divide between the rich and the poor.
1) Around 3 decades earlier (in the earlier 80’s) approximately 60% of the population in India would reside in slums, 20% of the population would reside in registered societies formed by slum inhabitants, approximately 18% would reside in luxurious apartments and around 2% would reside in bungalows and mansions. The graph illustrated herein below depicts the same.
At that time, there are sufficient opportunities for employment since the masses would normally earn their livelihood by working in the agricultural sector as farm hands, or as a worker in the cloth mills which existed all over India. Even though the economic development was slow, the masses were content for they had, reasonable opportunities to sustain their families.
However, with the passage of time and with the Government adopting a liberal economic policy, the economic development of our country has taken giant strides with India emerging as one of the growing powers of the world. Sad, but true, the economic development has been at the cost of the masses since the divide between the upper and lower strata has grown so large, that the commoner has to battle against all odds to make two ends meet. The graft below depicts the growth in the divide between the rich and the poor and serves the growth in the divide between the rich and the poor and serves as an eye-opener for the required re-medical measures which is a pressing need of the hour.
2) Another reason for the growing divide is due to the corruption that prevails on a mass scale within the concerned departments, of the governing bodies such as the I.T. Department, the Sales Tax Department, the service tax department, the excise department etc. It is common knowledge that the audited results of various corporate giants are manipulated to serve the interests of the entrepreneurs which would have been practically impossible if not for the corrupt departmental heads of the concerned governmental bodies. To cite an example of such manipulation of audited results is the fact that when a corporate body approached a financial institution for a financial arrangement, the audited results produced then one magnified in order to enter into the arrangement of working capital etc. However, at the end of the financial year, the same corporate house files returns before the I.T. Department stating negligible profits and at times even losses, in order to evade the rightful payment of dues in the form of Income Tax. Further, such corporate bodies evade the payment of Sales Tax, Service Tax etc. by greasing the palms of the corrupt departmental heads. This results in the growing divide but sadly, the actions of such corporate houses are never re-questioned nor brought to light for no one is interested in the consequences of such actions of the Corporate house.
3) Television advertisements for formations, are the order of the day with the corporate giants engaging the services of renowned personalities for attracting the eye of the common man. The costs of such promotions usually run into crores of rupees which are borne by the corporate houses. However, the factual figures of payments to the renowned personalities promoting the product, are never disclosed. Surprisingly, the I.T. Authorities choose to turn a Nelson’s eye to such unaccounted income of these renowned personalities thereby raising serious doubts about their honesty and integrity in discharging their functions for which they are paid handsomely. Consequently, it is the commoner who suffers since the chasm of the divide grows larger and deeper with every day break. Further, a question that arises here is – does the Corporate House manage to recover its huge promotional costs in the form of sales of the product? Are such expenses justified in terms of proportionate profits? Or is the action of the Corporate House just another ruse to launder its unaccounted income in the garb of advertisement and promotional expenses?
4) Further, producers of cinematic films and television serials produce and release their offerings to the general masses in cinema houses and on television shots. Such production is normally financed by the corporate houses who utilize the opportunity to promote their products in the form of advertisements, to the producer. However, the amounts paid for the same by the Corporate Houses are generally understated grossly which eventually aids the producer to evade taxes by way of taxes on his income. Is this again a ruse by the corporate house to launder their unaccounted funds? This again, is the duty of the investigation department of the Income Tax Department, who choose to turn a blind eye to such actions just to fill their coffers at the cost of economic development of the country.
Further, the producers of films have now been given recognition as corporate entities with the objective of having more transparent dealings and moreover enables the production house to borrow money for their projects from recognized financial institutions. However, the questions that now arise are :- How far are the financial projections that are tabled before the financial institutions correct and true? And how does the financial institution recover their money in case the project runs into losses in the event of the film flopping at the box office? Are these loans then written off? Is this action then not at the cost of the common man?
5) Several corporate houses who approach and enter into financial arrangements with financial institutions, end up as defaulters and cite reasons such as insolvency and bankruptcy in order to evade repayment of their financial obligation. However, when the same matter is handed over to the DBOD of the Reserve Bank of India as well as the DRT, it rarely succeeds in recovering the funds. Why? Is this not an erosion of funds that could have been suitably utilized for the progressive growth of the masses?
6) The projections tabled before the SEBI by a Corporate House in order to procure an acknowledgment card for issue of an IPO are never are never investigate and the same are taken as true on the certification of a Chartered Accountant or a Cost Accountant, whose palms are normally greased. These stakes (when offered to the common man) are usually listed on the Stock Exchange at a premium with no supportings as to the authenticity of the profitability of the corporate house, whose audited results are manipulated to serve the interest of the entrepreneur who heads the corporate house. The common man, investing his hard earned savings, normally ends up at the receiving end when the stocks crash, leading to ruin and misery. Here again, the chasm grows at the cost of the layman wherein on one hand the common man faces poverty and the Corporate Houses grow stronger. Is it not the duty of the government bodies to ensure safety of the investments of the common man?
Sad, but true, we live in an economy where much redressal is required but not forthcoming. It sends sudden down the spine of a common man when he thinks of what the future holds in store for him. Is the government listening?
MANORANJAN S. ROY