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Drain of Wealth



A country such as India still grappling with large scale poverty and underdevelopment it comes as a shock to learn that Indians are the largest depositors in banks abroad with an estimated $500 billion (nearly Rs 24.5 lakh crore) of illegal money stashed by them in tax havens. This piece of information was disclosed by the CBI Director. If this was not enough even the largest depositors in Swiss banks are also reported to be Indians. It is obvious that the few powerful and corrupt elites in our society have been able to manipulate the system to their advantage. It is a known thing that huge money is being sanctioned by the government for undertaking the entire range of development activities across the country. We keep talking about how the fruit of development has not been reaching the poorest section of people. Now it becomes much clear as to where all the money meant for the country’s development is going—stored up in foreign banks and other investments. Those familiar with Indian history would have studied about the “drain of wealth” from India to Britain during the two centuries of colonial rule. Dadabhai Naoroji known as the Grand Old Man of India in his book Poverty and Un-British Rule in India brought attention to the draining of India's wealth into Britain. Hopefully the current discourse on black money will bring a sharp focus on how corruption is fuelling another era of drain of wealth. There is every reason to believe that India would have been far better off economically if the money and other resources meant for its development were utilized in a better way.

This brings us to the question of why we fail to learn from our past mistakes. Government programmes are designed and taken up with all good motive of development. Especially a big country like India where huge amount of public funds are to be dispersed, the government should have been more careful in ensuring proper checks on how such funds are utilized and the manner in which the plethora of government programmes are being implemented. Administration and governance of such a big country is not easy. But the government should be more circumspect to ensure that old mistakes are not repeated. Just take the case of several big programmes that the Government of India has come up with over the years to deal the various needs and challenges ranging from poverty alleviation, road connectivity, health care, education, rural development etc just to name a few. New central schemes are designed regularly. In recent years we have the Mahatma Gandhi National rural Employment Guarantee Act (MNREGA), Targeted Public Distribution System, Mid-day Meal scheme, National Rural Health Mission, Sarva Shiksha Abhiyan, Rashtriya Madhyamik Shiksha Abhiyan (RMSA), Jawaharlal Nehru National Urban Renewal Mission, Urban Infrastructure Development Scheme for Small & Medium Towns (UIDSSMT), Integrated Housing & Slum Development Programme (IHSDP), Pradhan Mantri Gram Sadak Yojana etc etc.

Just imagine the amount of funds waiting to be used for the all round development of the country. However, big government spending will also mean greater scope for corruption to take place. Not surprisingly, the Union Rural Development Minister, Jairam Ramesh, has asked State governments to ensure that the funds for the MNREGA is utilized properly as anomalies in the utilization of funds are surfacing in different states. The funds are being used to buy high-end SUVs instead of going to the actual beneficiaries. As rightly mentioned by the Minister MNREGA is not a scheme for buying SUVs but it is a scheme to help the poor villagers with a 100-day work guarantee and a payment of money for their labour. With so many schemes and programmes for the corrupt to thrive, perhaps the government should continue to improvise and ensure adequate measures to check leakage in public spending and stop the drain of wealth meant for development.

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