India’s Enemy, the State

I have consistently argued for years that the greatest enemy of the Indian people is the government of India.

India doesn’t have to be pathetically poor. But the government makes sure that Indians remain poor by preventing them from creating wealth. It’s a toxic mixture of idiocy, greed, and stupidity of the politicians and their bureaucratic minions. Why is this so? I believe the stage was set by the British.

The Anti-prosperity Machine

The British imposed an extractive and exploitative government on India. They created the original “anti-prosperity machine”. That is natural, expected and entirely reasonable since the British were colonizers. Colonizers don’t colonize out of altruism. They do it to — let me repeat that — to exploit and extract. The Indian government is a British creation, designed with the specific purpose of keeping the Indian people under its control. After the British left, those who took over realized that as the new masters, the system suited them perfectly well. All the talk about Indians gaining freedom from an oppressive government is a lot of hogwash that only the stupidly deluded can believe. Indians are still enslaved. They are still not free to create wealth. Here’s an example I came across in a hard-hitting piece by Raghav Bahl.

Modi allowing DACOIT-y

China and the US have globe-spanning mega corporations. No reason India can’t have them too — except for the fact that the Indian government does not allow it. Raghav Bahl explains how Indian laws hobble Indian digital corporations.

Raghav Bahl writes:

Simply put, America and China enable their iconic founders to raise astronomical amounts of capital – cleverly, and ironically, Chinese companies scoop up landfills of dollars on American stock exchanges to build Chinese assets – even as they are assured of retaining control via specially designed financial instruments, structures, incentives, and rights.

But Indian Entrepreneurs Are Trussed Up…

As opposed to such aggressive institutional backing, Indian entrepreneurs are trussed up in archaic laws. Not allowed to issue differential voting shares. Not allowed to issue non-voting stock. Severely constrained in issuing and pricing cross-border quasi-equity/debt structures, perpetual bonds, warrants, convertibles, puts, calls, tracking stocks or options. Cannot list on overseas exchanges unless the entity is listed in India (there has, lately, been a marginal, grudging relaxation of this).

Mantra Should be To Empower And Liberate

Whenever I have tried to explain this critical difference between ownership and control to officials at the Reserve Bank of India, the Securities and Exchange Board of India, NITI Aayog and the Ministry of Finance, I have encountered blank expressions, followed by suspicion and disapproval. They just don’t get it.

Read more at Why Is PM Modi Allowing DACOIT-y On Indian Digital Startups?

Author: Atanu Dey

Economist. View all posts by Atanu Dey