What indicates good health of any economy- black money or no money? Transparency International has been revealing the amount of black money illegally transferred from several among the 177 countries covered in its annual reports to tax havens abroad. The graph has only been moving northward. India too has made bewildering progress. How much black money is stashed by Indians in foreign countries is not reliably known. So guesses range from 44000 Crore to 2000000 crore rupees. But that is of lesser significance than the never stopping movement against corruption and black money. Political upheavals have been caused in the name of corruption & black money, holy promises made to root out corruption and bring back the black money from foreign countries, government have been changed, youth attracted to such movements have been frustrated as corruption and black money have grown exponentially. In our blind imitation of foreign economic doctrines, we have ended up converting perfectly white money in to black money, white economy in to black economy,wealth creation in to an ugly and abominable practice. How can wealth be created unless the policies, programmes and practices encourage industry, enterprise and businesses? But this is exactly the drawback of Indian economic regime. It makes grand promises only to fail on delivery. First, there is no incentive to create wealth. It is no less a victory in the world war if a first time entrepreneur successfully sets up his business. It is not possible to achieve such a success, irrespective whether the enterprise is micro, medium or large, without paying bribes in cash or kind or bringing political influence . For a young entrepreneur, everything starting with getting registration of the company with the Registrar of Companies to the Sales Tax, Income Tax and other authorities, is an obstacle race. Getting bank finance is simply out of question. A young Engineer or M.B.A. doesn’t get educational loan without collateral guarantee of 125% of the loan amount in the form of Fixed Deposit or Property without encumbrance. When the young graduate decides to start a small Business, the banks demand collateral. Now, if the fellow owns such huge assets, why will he need to start a business? Is it only in the interest of the individual or the national economy? Such ideas have not yet been given any consideration. There is no dearth of organisations (Small Industry Bank of India)and others or priority sector credit at cheaper rates than normal market interest rates from all public sector banks. None of them extends any help. All demand collateral irrespective of policy pronouncements of no requirement of collateral, 3 years audited balance sheet, next two years projected balance sheets etc even when the loan required is below 50 lakh rupees! Such entrepreneurs need credit sanction almost instantly. The model of SEWA (Self Employed Women’s Association) banking experiment type of a mechanism is the need of the hour.
Our policies are blamed for the foreign investors holding back their proposals. But nobody is bothered about the discouragement of the investment proposals of the new generation of domestic entrepreneurs. They have financed their studies. They deserve financial help to create new enterprises, which will generate incomes and jobs. They can’t bring the entire capital. Allow free investment in such small businesses rather encouraging people to transport their money to foreign tax havens by giving them some tax breaks if they finance such enterprises. Encourage banks to invest in such enterprises, as is done for farm sector. There is genuine growth potential both in farming and small businesses. For big businesses needing 200 or 500 crores, no bank asks for 125% collateral. Why,then, demand such collateral from the small man? If done with a serious sense of purpose, it will check whole sale export of our best talent, capable of generating wealth, income and employment. Not done, it will go on adding to corruption. We shall, in that case, be only launching anti corruption movements from time to time, making heroes of the most ordinary, ridiculing democracy and perpetrating miseries on our people. It is unsound economics to create Black Economy, generating Black Money while the potential entrepreneurs fail to even start their businesses because of No Money. We need to and can create 10 million high quality jobs by helping small businesses grow in less than 5 years time!