Panama Papers: Will Modi punish defaulters in world's biggest tax scandal?
It was very likely from the beginning that the Panama Papers scandal would be covered up. Too many important people are involved, the political stakes are very high. So the PM has ordered that a small committee should be set up to speed up investigation with results in 15 days, instead of the SIT which would take its own time. So an ad hoc group would basically displace the SIT. Just the kind of politico-bureaucratic effort to bury the truth about one of India's greatest scandals, the greatest in recent Indian history.
PM Modi has also thrown a bone to the Congress. The FCRA will be amended to legalise many of the illegalities committed by Indian entrepreneurs exposed in the Panama Papers expose.
Will the Congress fall for this bait? To do this would be a folly as this would facilitate the BJP effort to muddy the waters. Instead of the BJP and its favoured capitalists being targeted for grossly violating a tranche of laws in the Panama Papers scandal, the Congress and other secular parties that are involved in a relatively minor way, would also be considered equally guilty in public perception.
This is much bigger than Bofors, which in terms of monetary loss was a trifle compared to the massive evasion of taxes by India's big capitalists including some of those close to the PM himself. So the stakes are very high.
The enormity of the expose leads to the question, why in the last two years has the Modi government not recovered any of the black money or identified any of the big business companies which only the investigation by international journalists have identified? The International Consortium of Investigative Journalists (ICIJ) and Suddeutsche Zeitung, Munich (SZM) have unearthed this huge international scam.
Such things are a unprecedented loot of public money, in view of the massive sums of taxes foregone. This completely exposes both the Modi government's evasion of its responsibilities to track down tax defaulters, investigate tax havens, and use all its resources to unearth black money on a war footing for productive purposes.
In India, social sector spending is grossly inadequate, including flagship programmes like MGNREGA which is hamstrung for lack of government funding. Consequently, rural distress continues, and there is forced migration to the already crowded and overburdened towns and cities. At the moment the Indian model is to give massive investments to the rich, whose tax rate is below that of several European countries, while doing precious little for the middle classes and the poor. Of course, this is not only the Modi government's doing.
This model was inaugurated by Dr Manmohan Singh in its essentials in 1991. The Panama Papers scandal has exposed its plutocracy and its vast inequalities. Will the current environment lead to some fundamental rethinking? Highly unlikely. With a great lack of political will, things, if anything, will get worse.