It suggests to the Indian mind that there are individuals who are pursuing wealth for the sake of wealth; and in the process, throwing in names of two sons of politicians.
As I browsed through my usual early morning news headlines on Twitter, I found a shrill announcement about a supposedly sensational exposé about Paradise Papers.
As I looked through the evidence presented by the leaks, I was left wondering about the alleged illegality of these investments. It was just this: corporate records brought out into the open for vultures to feast on, and for voyeurs to prey upon. ‘Here is an open invitation to make the best of what we have. If someone stumbles upon an illegality, please give us credit’.
The Indian connection in the leaks is presented in even more dubious manner. It is just ‘guilt by association’, innuendo and nothing more. In keeping with the latest ‘crusading’ trend: ‘it is likely’; ‘it raises suspicion’; ‘it cannot be denied’ type of journalism.
Is Moily’s son not allowed to ask for investment if his father happens to be a minister? How is Jayant Sinha culpable if he was an employee with Omidyar who invested in companies in tax havens? Are tax havens illegal?
It is equally interesting that The Indian Express has never mentioned the two best known Omidyar investments in India — Scroll and Newslaundry — along with a host of NGO investments. Is the fraternal feeling at work? If Omidyar Network is not a desirable investor, has the GOI banned it, or issued an advisory against it? The entire exercise is one of naming and shaming, without even telling what the shame is! I would even go so far as to suggest that a defamation suit might not be ruled out for the invidious tenor of the leaks.
So, what is this story all about? The newspaper itself provides the explanation:
Is it illegal to set up offshore companies?
Not necessarily. India has double-taxation avoidance agreements (DTAAs) with several countries with lower tax rates than its own, and companies — overseas corporate bodies (OCBs) — incorporated in such countries can use their tax residency certificates (TRC) to enjoy the tax benefits available legally.
Then why so much noise?
I have an explanation. The sudden spurt in the leaks, naming and shaming, and suggestive morality have their roots in the global Leftism project. Bernie Sanders and Jeremy Corbyn are at the forefront of this thought process. Briefly, it postulates that all offshore tax havens are immoral and companies should not be allowed to shelter their money in these tax havens to lower their tax liabilities. David Cameron has famously opposed this postulate, and there was even a testy exchange between him and Jeremy Corbyn on this.
Even Donald Trump supported the Sanders position before becoming president, but has done little or nothing since assuming office, a fair indication that he is pragmatic enough to realise that a crackdown on offshore tax benefits is perhaps the surest way of driving companies abroad.
In India, wealth creation was famously treated as evil under the Left-leaning governments, providing a humongous incentive to companies to siphon off money abroad to tax havens. The hypocrisy suited the unscrupulous rich quite well.
Wealth creation as evil was not just a Left-influenced philosophy, but has roots within the Indic culture as well, where the ‘daridryanarayana’ has been treated equal to gods in many traditions. However, prosperity has also been revered in our tradition in the form of ‘ashtalaxmi’, or the ‘eight paths to prosperity’ exemplar.
When the post-independent India wrongly plumped for the socialistic model in that famous Avadi session of the Congress in 1956, there was not much of a murmur from the cultural Right. After all, Mahatma Gandhi was culturally very much of the Right, but his economics was left of the Left.
It is in this backdrop that our business and industry needs to look at the economic reforms of the Prime Minister. Our industry captains seem to think that the 2014 elections was about giving the economy a sharp turn to the right and maximizing free markets. They can be excused as their English medium background has kept them isolated from the basic grain of India’s capitalism — thrift bordering on parsimony, limited wants, charity, not seeking wealth for the sake of wealth, treating wealth as eight-dimensional, and frowning at accumulation of money-wealth alone.
‘Paradise Papers’ exploits this mindset of Indians by innuendo. It suggests to the Indian mind that there are individuals who are pursuing wealth for the sake of wealth; and in the process, throwing in names of two sons of politicians. It does not point to any illegality, but just throws a suggestion to the lay public about the immorality of it all — the ‘do not covet, whose is wealth’ principle of Ishopanishad.
That is what this Paradise Papers leak is — short on culpability, high on innuendo and suggestive morality.
Read ‘Paradise Papers: Parking money in tax havens biggest threat to democracy in the world’, by Prashant Bhushan.