India's transition from Receiver to Donor of Foreign Aid

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Poor Little Rich Country
BY PATRICK FRENCH | JUNE 24, 2011

How do you categorize India, a nation that is at once fantastically wealthy and desperately poor?



In May, the Indian government announced that it was giving $5 billion in aid to African countries in the interest of helping them meet their development goals. "We do not have all the answers," Prime Minister Manmohan Singh said, "but we have some experience in nation-building, which we are happy to share."

The British could be forgiven for being annoyed with Singh's largesse. Britain, after all, currently gives more than $450 million a year in aid to India, and has plans to continue doing so for at least the next few years. The British economy is bumping in and out of a recession, while India's gross domestic product is growing at more than 8 percent a year. This has put the British government in the rather bizarre position of having to sell bonds in order to donate money to Asia's second-fastest-growing economy, even as the latter is itself getting into the philanthropy business.

The policy is unpopular with most of the British press, which argues that because India has a space program and some flamboyant billionaires, it does not need aid -- especially when Britain cannot really afford it. (When the Labour government was voted out at last year's general election, the departing Finance Minister Liam Byrne left a one-line note on his desk for his successor: "I'm afraid there is no money." It was a joke -- but it was also true.) Nevertheless, Britain still sees itself as a donor nation, with all the obligations and international prestige that entails. This comes in part from a sense of postcolonial guilt: Prime Minister David Cameron spoke recently of a "sense of duty to help others" and the "strong moral case" for giving aid.

The situation suggests just how dramatically the economic rise of Asia has undone centuries of experience, and the expectation that the West will retain the hegemony it has had for the past 400 years. It is increasingly difficult to classify whether a nation is rich or poor, and terms such as "the Global South" and "the Third World" have to be heavily qualified to take into account the fact that large sections of the population in countries like China, Brazil, and India now have a purchasing power matching that of people in "the West."

In 1951, the American diplomat Bill Bullitt described the condition of India in Life magazine: "An immense country containing 357 million people," he wrote, "with enormous natural resources and superb fighting men, India can neither feed herself nor defend herself against serious attacks. An inhabitant of India lives, on average, 27 years. His annual income is about $50. About 90 out of 100 Indians cannot read or write. They exist in squalor and fear of famine." Today, it would be hard to make such an absolute statement about India. Poverty certainly remains a chronic problem, but it exists alongside pockets of substantial wealth. An Indian's life expectancy at birth now stands at 67 years, and continues to rise. It is necessary perhaps to think in a different way, and to see that a country like India, like Schrödinger's cat, exists in at least two forms simultaneously: rich and poor.

The most important change of the last two decades, since the beginning of economic liberalization, has been the transformation of middle-class Indian aspiration. Although the stagnant days of the controlled economy and the "Permit Raj" -- when important decisions depended on a bureaucrat's authorization -- had their own stability, they also stifled opportunity and individual talent. Members of the professional middle class frequently preferred to seek their fortune in more meritocratic societies abroad.

The modern Indian middle class has a new chance to shape its own destiny in a way that was not previously possible. You can move to your own house using a home loan and live outside the joint family; you can buy a car that is not an Ambassador or a Fiat; you can travel abroad and see how people in other countries live; you can watch your politicians accept bribes or dance with prostitutes on television in local media sting operations while surfing your way to Desperate Housewives or Kaun Banega Crorepati, an Indian adaptation of Who Wants to Be a Millionaire? Businesspeople who have succeeded on their own merits overseas, such as PepsiCo CEO Indra Nooyi, are presented as national heroes.

Poor Little Rich Country - By Patrick French | Foreign Policy

here, the above writer didn't mention that "slavery" is a state of mind, which is always present in most of the Indians. as, even if India has around 5,500 crore+ rupees (around $1.0 billion) foreign aid for different countries, as part of India's Annual Budget, the foreigners may just buy few 1000s Indians and get their work done in against India, the nation. :toilet:

its always seen that even if millions are required to build a nation, just few 1000s may help the foreigners destroy any country :facepalm:
 
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NRIs moving from the US to India: How much salary to expect

That story probably made news only because of its star power. The fact that NRIs from the US are moving back to India is no shocking development. NRIs have, in the last few years, been relocating to India in large numbers, in search of better personal and professional lives. And if you are an NRI considering that move, there is one important thing that you must understand very well: the salary you will get in India.

Kris Lakshmikanth, Founder CEO of The Head Hunters India Pvt Ltd. says, "When it comes to compensation, we find that NRIs have inflated expectations. They mainly go by hearsay; their friend or friend's friend who returned to India has told them a tall story about Indian salaries. They want to go by that yard stick."

USD will not convert to INR

The first thing to remember is that you will not make the rupee equivalent of your US salary in India. The cost of living in India is significantly lower than that in the US. This also means a lower labour cost in India. These factors will determine your India salary. Seema Nair, Co-Leader India HR Operations of Cisco India explains, "The salary in India (for Cisco employees moving from US to India) is related to local labour market wage rates with a potential premium for critical skill sets."

Achyut Menon, head of Options Executive Search Pvt Ltd also adds, "In the nineties, people who were posted to India got expat salaries. But those days are over. In the last 10 years, India has become an attractive market for global companies who are not just looking to set up offshore centers here, but also to capitalize on the growing, educated and highly aspirational middle class consumer segment. Added to that is the availability of skilled labour within India itself. Companies no longer need to pay expat salaries."

Benchmark: What then should be the broad benchmark?

Both Lakshmikanth and Menon say that while there cannot be a standard formula, the Big Mac Index is a good guideline to calculate salaries. The Big Mac index published by The Economist, is based on the theory of purchasing-power parity (PPP), according to which exchange rates should adjust to equalise the price of a basket of goods and services around the world. The basket in this case being a McDonald's Big Mac.

Now according to the last available index dated July 2011, a Big Mac costing USD 4.07 in the US costs USD 1.89 in dollar terms in India (Rs 85 converted at an exchange rate of Rs 45). It means that the Big Mac costs 54% less in India; the cost of living is 54% lower in India. Read another way, this means that the rupee is undervalued by 54% to the dollar and that on the basis of PPP, one dollar would actually be worth Rs 21 instead of Rs 45.

So if you are drawing a salary of USD 100,000 in the US, you can expect to draw Rs 21 lakh in India, give or take. At an exchange rate of Rs 45, that would translate to an Indian salary of USD 46,666 or 46% of the US salary.

"Senior management can expect anywhere between 40% and 70% of their last drawn US salary when they move to India," Menon explains, adding, "At the 70% end would be people who have moved to India to set up a development/ engineering center or to head the global company's India start-up."


Best career move

Having set that broad benchmark, the salary would also vary between industries and functions. You would need to choose your profile and company carefully to maximise your salary.

"Manufacturing would pay less than technology. Within technology, we find that delivery of software is something which Indian companies have become masters in. They don't need to employ people from overseas. In fact, such people from the US are paid less than the person who stayed back in India because those returning from the US have handled fewer people teams as compared to peers in India," Lakshmikanth points out.

Similarly, domestic Indian companies do not usually recruit NRIs for strategic positions if the NRIs are not familiar with the dynamics of the Indian market and work place.

As an NRI moving back to India, Menon says it would be best to join a company in the US which has plans to start-up/ expand in India. "A lot of US companies across sectors like engineering, legal, analytics, financial services, pharmaceuticals are setting up operations in India.

These companies are happy to send an Indian to India who also has experience of their other markets.
The employee benefits because he can grow with the company's operations in India. In the beginning, the company will set up a 30-40 staff office and expand going forward. As a member of the start-up, the employee grows as the company grows, making it a win-win for both" he explains.

Parting shot

"At the end of the day, come back to India for the same reasons you went abroad: for personal and professional growth and happiness. Come with a long term view in mind and you won't regret it," Menon advices.

(The author is a chartered accountant and financial writer. She also blogs at blogs.economictimes)

NRIs moving from the US to India: How much salary to expect - Economic Times

India beckons non-resident citizens home with plum salaries
January 03, 2013

Country is expected to create nearly 50,000 jobs for NRIs :thumb:

The overseas Indian community (non-resident Indians, NRIs) is estimated at over 25 million and is spread across every major region in the world. Many of these, now overseas residents, went abroad to study and many never came back.

The reason – there were better jobs and plum salaries to strive for in foreign countries.

This is a problem that India has faced over the decades but now it's trying to move away from being a country that specializes in importing labour. To get its people back home, the country is creating jobs for its overseas citizens. The latest figures from job portal Naukri.com shows that nearly 50,000 jobs will be made available this year to lure some of these defectors, particularly the high-quality academics and professionals, back to their home country.

The figure seems a drop in the ocean considering the huge number of Indians living aboard but signals a change, welcoming the returnees. :tup:

Each year, the number of jobs specifically targeted at NRIs, have gone up. The organised sector in India is set to create about 49,215 new jobs for non-resident Indian professionals in the calendar year 2013 with 43 per cent more jobs compared to 2012.:tup: Last year, the country was able to create around 27,983 jobs, reveals the latest results of MyHiringClub.com & NriJobPortal.com NRI Professional Employment Trend Survey 2013.

The survey is based on 4453 companies across 12 industry sectors in 11 major cities and indicates that most employers are optimistic about their hiring plans for NRI professionals in the New Year. :thumb:

"An increasing number of valued NRI professional recruitment will likely take place in 2013. This is a good sign for retaining talent in India. I believe job opportunities are most in Bangalore and most of the NRIs who are seeking to come back are tech professionals," said Rajesh Kumar, CEO, MyHiringClub.com & NriJobPortal.com.

IT & ITeS (11450) will offer the maximum number of jobs to NRIs. This is followed by FMCG (8930), automobile & manufacturing (7341), infrastructure (4894), pharma & healthcare (3245), telecom (1391) and banking & financial services (1391).

Bangalore is the city where most jobs will be created (11894), followed by Delhi & NCR (10320), Mumbai (6780), Chennai (5490), Kolkata (3290) and Hyderabad (2189).

Even though the country seems to be luring the professionals back home, workers under the unskilled and semi-skilled category are still flocking to other countries for better pay.

"We have not seen any huge upsurge in the numbers returning to India so far. Every year, there are one to two lakh (100,000 to 200,000) workers who return to India, usually at the end of their work contracts," Minister of Overseas Indian Affairs Vayalar Ravi was quoted in the Indian media nearly one year back.

The ministry tracks the movement of semi-skilled and unskilled Indian workers to the Gulf and other countries.

As per the reports, the Indian government processes six to eight lakh emigration check required (ECR) passports of workers who travel to the Gulf countries and some other countries.

This number seems to have gone up, as per the data of the ministry. For the current financial year in India, the number is about 6.1 lakh (600,100), which shows an increase in the number of Indian workers leaving the country for work abroad.

India beckons non-resident citizens home with plum salaries
 
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hello_10

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look, remittances to India is hardly around $30billion from US+EU, check, and it is from those high qualified professionals who run US's industries, to help them have high technologies and these industries not only employ low skilled/unskilled local civilians but also these firms pay very high taxes to the US's government from the business they do by using these High Qualified migrants, mainly Indians, who are cream of their society, and migrated there under "Demand List Category" for a better future. and hence they are involved in building US's society/economy this way :thumb:. at the same time, we do know that most of the companies as below are Western, so this way you get at least half of your $30billion remittances back to US+EU again this way. have fun

Foreign cos pulling more money out of India-Nomura | Reuters

Foreign cos pulling more money out of India-Nomura

May 25 (Reuters) - Foreign direct investment, the sort of sticky long-term money India craves to fund its current account deficit and build up its infrastructure, may not be so stable after all.

According to a Nomura report, multinational companies have been pulling money out of India at an accelerating rate, moving $10.7 billion out of the country in 2011, up from $7.2 billion in 2010 and just $3.1 billion in 2009.

Outward flows are bad news for a country that this week saw its rupee currency hit a new record low as investors worry about its hefty fiscal and current account shortfalls, slowing economic growth and policy gridlock.

Still, corporate funds continue to enter India even as existing investors exit. Inbound foreign direct investment surged 88 percent to a record $36.5 billion in the fiscal year that ended in March, according to official data.

"Global deleveraging may have forced companies to sell their Indian assets and repatriate funds to their home country," Nomura analysts wrote in the Friday note.

"At the same time, domestic push factors such as slowing potential growth, the high cost of doing business and regulatory uncertainty have weakened the investment climate, likely causing this erosion. This is not a good sign."

Telecoms companies Etisalat of Abu Dhabi and Bahrain Telecommunications Co are leaving India after their mobile phone licences were among those ordered cancelled by an Indian court amid a corruption probe.

New York Life recently exited its 26 percent stake in an Indian insurance venture with Max India for $530 million, while U.S. mutual fund giant Fidelity Worldwide Investment recently struck a deal to unload its India unit to local company L&T Finance Holdings.

Foreign companies have been increasingly frustrated by regulatory uncertainty and a lack of reforms. Rules that would allow foreign companies into the supermarket and airline industries are stalled.

Vodafone, the world's biggest mobile carrier, has repeatedly clashed with authorities in India, which is trying to collect more than $2 billion in taxes from it through a retroactive law change, even after India's highest court ruled in the company's favour.

Vodafone, the biggest overseas corporate investor in India, has said it will not walk away.

The Nomura report said the services, manufacturing and real estate sectors probably saw "the maximum outflow".

Foreign cos pulling more money out of India-Nomura | Reuters
 

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Younger CEOs paid more in India than US

MUMBAI: A new breed of younger Indian CEOs is rewriting the rules of the compensation game. In the process, they are topping their American and European peers to stand out as the highest paid executives globally, something which was once the exclusive preserve of executives from companies based outside India.

The average annual salary for an Indian CEO below the age of 50 years now stands at Rs 7.9 crore. Compared with the Rs 7.3 crore that American corner office occupants earn and Rs 7.8 crore pocketed by European bosses, it highlights the rising salaries of younger CEOs, especially in promoter-run firms in India.

Younger Indian CEOs may have stolen a march over their global peers in the salary sweepstakes but overall, Indian CEO salaries are substantially lower than their international counterparts. This was revealed in a study by global recruitment firm Randstad, which was commissioned by TOI to compare the differentials that exist between salaries of Indian CEOs vis-a-vis their western counterparts.

The compensation of Indian CEOs, though growing sharply, is still 45% lower than their American peers and 21 % lower than European CEOs. However, the gap in salaries when compared to European CEOs is shrinking faster, especially in the manufacturing, energy and infrastructure segments, the study points out. Indian CEOs received an average salary of Rs 6.3 crore.


The study is based on conversion of international salaries to Indian rupees by applying a Purchasing Power Parity (PPP) conversion factor of 20.224. This basically means that the exchange rate is adjusted so that identical goods in two different countries have the same price when expressed in the same currency. As a representative sample, Randstad took into consideration companies that form the BSE100 (for India), FT100 (for Europe) and S&P100 (for US) indices as of August 20, 2012. All long-term benefits like stock options were excluded.

"With current levels of inflation, and if India's GDP shows higher growth, the gap between salaries in India will come closer to the levels of the western world. The younger Indian CEOs are compensated better, because there is a higher concentration of promoter CEOs in this group. We can see that in sectors like manufacturing, energy and infrastructure, first-generation promoters are passing on the CEO mantle to their heirs and other family members," says Balaji E, MD & CEO, Randstad India.

However, the trend of promoter CEOs earning more than professional CEOs is not restricted to the younger lot. Across India Inc, promoter CEOs earn 53% higher than professional CEOs, the study revealed.

While professional Indian CEOs still need to catch up with their international peers, the gap in the average salary is highest in the information technology, telecom and communications, finance, retail, media and entertainment sectors, closely followed by the consumer goods industry. In the manufacturing, energy and infrastructure segments, the compensation of Indian CEOs is at par with the European CEOs due to the higher concentration of promoter CEOs in these two segments.

"Today, more and more Indian CEOs get compensated at world-class levels. This trend is driven by several factors. Firstly, it speaks of the professionalization of management and secondly, the most critical constraint to growth is the availability of general managers. It is just pure supply and demand. Finally, professional managers have a considerable set of opportunities to choose from. The broad implication is that, going forward, India cannot become competitive by playing cost arbitrage but has to master the innovation game," says Vijay Govindarajan, professor at Tuck School of Business at Dartmouth College and a part of the celebrated Thinkers 50 group.

Some Indian executives, however, think that the differences in the way salaries are structured for Indian CEOs compared to their western counterparts would continue for a while. "There is a difference between CEO compensation in India as compared to the US and Europe. American CEOs, in particular, and businesses have much greater risks attached to them. The stress that leaders undergo makes them demand far greater compensations whereas in the Indian context, the time lines for performance and the risk factor is much lesser," says Hari T, chief people officer at IT services major Mahindra Satyam.

Indian CEOs from the manufacturing segment earned the highest at Rs 8.7 crore, followed by CEOs from consumer goods with an average salary of Rs 5.6 crore. The other significant point to have emerged from the study is that private sector CEOs are compensated 21 times more than public sector CEOs. With an average salary of Rs 6.3 crore, private sector CEOs are compensated far better than their public sector counterparts, who earn an average compensation of Rs 0.3 crore. The salaries of CEOs of the public sector do not include benefits and perquisites provided to those in the private sector.

Rajeev Chopra, CEO and MD, Philips Electronics India, is more pragmatic and refuses to buy into the euphoria over increasing salaries of Indian CEOs. "Broadly speaking, compensation has always been and will continue to be a function of a myriad factors, such as the prevailing salary structure in the country's job market, the specific industry, the business situation a particular company finds itself in, etc. Therefore, clearly, a 'one size fits all approach' has not worked and may not work in the context of global salaries."

Be that as it may, due to the increasing complexities of Indian businesses, salaries can only go up.

Besides, comparisons would never cease considering salaries remain the biggest point of discussion across management levels in global businesses.

Younger CEOs paid more in India than US - The Times of India
 

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Foreign cos pulling more money out of India-Nomura

May 25 (Reuters) - Foreign direct investment, the sort of sticky long-term money India craves to fund its current account deficit and build up its infrastructure, may not be so stable after all.

According to a Nomura report, multinational companies have been pulling money out of India at an accelerating rate, moving $10.7 billion out of the country in 2011, up from $7.2 billion in 2010 and just $3.1 billion in 2009.

Outward flows are bad news for a country that this week saw its rupee currency hit a new record low as investors worry about its hefty fiscal and current account shortfalls, slowing economic growth and policy gridlock.

Still, corporate funds continue to enter India even as existing investors exit. Inbound foreign direct investment surged 88 percent to a record $36.5 billion in the fiscal year that ended in March, according to official data.

"Global deleveraging may have forced companies to sell their Indian assets and repatriate funds to their home country," Nomura analysts wrote in the Friday note.

"At the same time, domestic push factors such as slowing potential growth, the high cost of doing business and regulatory uncertainty have weakened the investment climate, likely causing this erosion. This is not a good sign."

Telecoms companies Etisalat of Abu Dhabi and Bahrain Telecommunications Co are leaving India after their mobile phone licences were among those ordered cancelled by an Indian court amid a corruption probe.

New York Life recently exited its 26 percent stake in an Indian insurance venture with Max India for $530 million, while U.S. mutual fund giant Fidelity Worldwide Investment recently struck a deal to unload its India unit to local company L&T Finance Holdings.

Foreign companies have been increasingly frustrated by regulatory uncertainty and a lack of reforms. Rules that would allow foreign companies into the supermarket and airline industries are stalled.

Vodafone, the world's biggest mobile carrier, has repeatedly clashed with authorities in India, which is trying to collect more than $2 billion in taxes from it through a retroactive law change, even after India's highest court ruled in the company's favour.

Vodafone, the biggest overseas corporate investor in India, has said it will not walk away.

The Nomura report said the services, manufacturing and real estate sectors probably saw "the maximum outflow".

Foreign cos pulling more money out of India-Nomura | Reuters

Finance ministry verifying outward remittances made in 2011-12 fiscal
Jun 14, 2013

NEW DELHI: The finance ministry is verifying outward remittances worth Rs 3.56 lakh crore ($70billion+) from India during 2011-12 as a major portion was not subject to tax deduction at source, an official said on Friday.

"The finance ministry is currently engaged in verifying the remittances made abroad from India as over 70 per cent of remittances going out of India during the financial year 2011-12 were without any tax deduction whatsoever,:toilet:" director income tax (International Tax), MS Ray said at an Assocham event today.

For 2011-12, there were 7,56,741 foreign remittances made from India with money worth Rs 3,56,461 crore going out of India, he added. (exchange rate in 2011, US$1.0 = Rs 50.)

Ray said: "...out of this, tax deduction at source (TDS) made was Rs 12,676 crore representing just three per cent of the total remittances going out of India."

He said that the income tax department is making efforts to verify the remittances and organising seminars and campaigns to spread awareness about consequences of withholding taxes in smaller towns.

These efforts are paying rich dividends, he added. Ray said that awareness about TDS, mainly in smaller towns and cities is not up to the desired levels. This is especially seen in places such as Ludhiana with large population of non-resident Indians, he added.

"The NRI population in these places is selling properties but while remitting the sale proceeds, people are not aware that TDS has to be made," he added.

Speaking about characterisation of income through royalty and fees of technical services, he said this is a major area of litigation and needs a coherent approach and understanding from both tax authorities and tax payers.

Ray added that the department is providing various mechanisms for greater certainty in taxation and reduction in litigation.

Finance ministry verifying outward remittances made in 2011-12 fiscal - Times Of India
 

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Congress is also a communal party, now, under the leadership of madam sonia........
QUALIFICATION FOR SENIOR RANKS
They had wire cutters also.
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in fact, exchange rate was US$1.0 = 44 Rupees only in 2011, which means around $80billion+ reverse remittances from India in 2011 :ranger:

here, high professional indian migrants/ migrant indian businessmen doing business in foreign nations, send money after paying very high tax as Indian migrants are the highest income group in western nations, who are part of generating technologies to run their Industries/ running business there and hence pay very high tax to those governments this way too, etc etc, and then India received around $60billion remittances in 2011. while around $80.00billion+ Reverse remittances from India without proper tax????????????

isn't is looting of India now days, in the same way as before 1947? how foreign companies and other sources are so successful in taking out money from India, "without paying tax also"??????
 
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Dollar Billionaires in Poor Countries: India's "Philantrocapitalism"
September 10, 2012

In this time of global financial crisis, when so many are suffering financial hardship, most countries have witnessed increases in their number of dollar millionaires. These 'High Net-Worth Individuals' (HNWI), according to a report by Capgemini and Merrill Lynch Wealth Management, have in recent years more than doubled in India. In 2008-09, India had 84,000 HNWIs. By 2010, it had risen by 50 per cent (126,700), the biggest increase of all countries.

In the worldwide list of dollar billionaires for 2010, India ranked third with 69, behind China (128) and the US (403). Forbes states, however, that the wealthiest 100 Indians are collectively worth $276 billion, while their top 100 Chinese counterparts are worth $170 billion. The three richest Indians together had more wealth the top 24 Chinese billionaires combined.

You don't have to look very far for evidence of their wealth, with more than 30 luxury skyscrapers springing up in Mumbai. For the rich occupants, the taller, the better, to escape from the reality of India below — the railway tracks, low-rise tenements, choking traffic and the 55 per cent of the city's population who live in slums. People are paying nearly two million dollars for a designer apartment, built in complexes with private cinemas, swimming pools, floodlit tennis courts and high-level security. Developers believe each year Mumbai can absorb between 30,000 and 40,000 more homes in the one million dollar-plus category. :india: (Another housing bubble in the making?)

Such extreme wealth doesn't go unnoticed. In the UK, people are questioning the decision to keep giving India some $460 million of aid annually, which makes India the largest single recipient of British aid. Many ordinary Brits are asking if it can be right that the downtrodden British taxpayer gives such sums to a nation that boasts such wealth (albeit highly concentrated).

Siphoning off the country's wealth

Some of the most damning comments about India come from French author Dominique Lapierre, whose book royalties from 'City of Joy' fund projects for the underprivileged in India. He is frustrated by the greed and corruption that he encounters.

Lapierre's non profit organisation, City of Joy Aid, runs a network of clinics, schools, rehabilitation centres and hospital boats. It operates 14 projects in India, most in the Sunderbans area. However, 90 per cent of free medicines get stolen in the journey from Delhi to Kolkata, and the project is thus forced to buy them at high prices from the market.

A few years ago, Lapierre set up in Delhi a trust which offers a tax-deductible certificate for all donations. With more than a hint of disappointment, he notes the foundation still does not have any funds from affluent Indians who seem reluctant to help their fellow country-folk.

Quite the opposite, it seems. Much of India's wealth has been creamed off into Swiss banks, robbing ordinary folk of a quality of life they can now only but dream of. According to some estimates, it could be over Rs 7,280,000 crore (around $1.6 trillion). Data from the Swiss Banking Association in 2006 indicated that India had more black money than the rest of the world combined, or 13 times India's total national debt. :usa: Global Finance Integrity notes this siphoning of wealth has served to widen the gap between rich and poor and asserts the main guilty parties have been private organisations and High Net Worth Individuals.

By contrast, Global management and consulting firm Bain notes philanthropic donations amount to just 0.6 per cent of India's GDP. This is not too good when compared to giving in the US and UK, for example, but is better than rates in other developing countries like Brazil and China. In the US, individuals and corporations are responsible for 75 per cent of charitable gifts, whereas in India individual and corporate donations make up only 10 per cent of charitable giving. Some 65 per cent comes from India's central and state government, and the remaining gifts are provided by foreign organisations.

In India, giving does not rise with income and education. As a percentage of household income, donations by the wealthy actually decrease. From an analysis of 30 HNWIs in India, Bain noted that they contribute, on average, just around one-fourth of one per cent of their net worth to social and charitable causes.

All of this is not meant to imply that philanthropy is absent in India. Far from it. Vineet Nayyar's Rs 30 crore gift (just under $7 million) to the Essel Social Welfare Foundation is a high-profile example of philanthropic giving. Over the years, Rohini Nilekani has donated $40 million to numerous causes that try to tackle the root causes of social problems and not merely the symptoms. Her biggest contribution has been to Arghyam, a Bangalore foundation that promotes clean water and hygiene, which now has projects in 800 villages. Philanthropy can and does positively impact people's daily lives.

Philanthrocapitalism: a plaster on a gaping wound

What is really required, though, is a proper redistributive system of taxation, effective welfare provision and genuine economic democracy through forms of common ownership to help address inequality and poverty. In the absence of such things, wealthy philanthrocapitalists will have a major say in deciding which problems are addressed and how, and some will be highly selective.

For instance, critics of Bill Gates say his foundation often ends up favouring his commercial investments. Instead of paying taxes to the state coffers, he donates his profits where it is favourable to him economically, such as supporting GM crops in Africa or high tech patented medicines. 'Giving' often acts as a smokescreen for channeling funds into pet projects and 'business as usual', with rich corporations receiving money to shape the world in their own image and ultimately for their own benefit. Apparent benevolence can have sinister motives, just like certain governments which provide money in the form of 'development aid' that is intentionally used to fund actions that serve geo-political self interest and ultimately undermine the recipient state.

Philanthropy isn't necessarily opposed to capitalism; it's very much part of it. Capitalism is designed to ensure that the flow of wealth goes upwards and remains there via, among other things, the privatisation of public assets, deregulation of the financial sector, the use of subsidies and tax policies that favour the rich, the legal obligation to maximise shareholder profits and the consistent downward pressures on labour costs.

Professor Ha Joon Chang of Cambridge University says that economics isn't a social science anymore, but adopts the role the Catholic Church played in medieval Europe. Essentially, economic neo liberalism is secular theology used to justify the prevailing system, with the hope that some drops of wealth will trickle down an extremely thin funnel to placate the mass of the population. Widening the funnel slightly by making benevolent donations will not address the underlying issues of a failed system. :usa:

For example, consider that one in four people in India is hungry and every second child is underweight and stunted. Environmentalist Vandana Shiva argues that hunger is a structural part of the design of the industrialised, globalised food system and of the design of capital-intensive, chemical-intensive monocultures of industrial agriculture. The long-term solution for hunger lies in moving away from and challenging the centralised, globalised food supply controlled by a handful of profiteering corporations.

This type of built-in structural inequality, whether it concerns hunger, poverty, housing, income or health, is part and parcel of a development process that is skewed by elite interests in India and at the World Bank and by the corporations that pull the strings at the World Trade Organisation, who have all succeeded in getting their 'globalisation' agenda accepted. No amount of philanthropy, regardless of how well meaning it may be, will remedy the overall destructive effects of the type of capitalism (and massive corruption) being embraced by India's economic and political leaders.

Originally from the northwest of England, Colin Todhunter has spent many years in India. He has written extensively for the Bangalore-based Deccan Herald, New Indian Express and Morning Star (Britain). His articles have also appeared in many other newspapers, journals and books. His East by Northwest site is at: East by Northwest :thumb:

Dollar Billionaires in Poor Countries: India's "Philantrocapitalism" | Global Research

the world is changing and the Philantrocapitalism is now the biggest challenge imposed on India from those falling economies who are worried from this changing world. there is always many good reasons to do those few wrongs which may help the falling economies maintain food supply for their future generations. and how India will tackle this type of "Guerrilla War", the Time will tell us :thumb:
 
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