Governance failure and corruption affect the poor disproportionately – Finance Minister Pranab Mukherjee

The Hindu, May 21, 2012
White Paper on Black Money tabled in the Lok Sabha by Finance Minister Pranab Mukherjee
Source: The Hindu : News / Resources : White Paper on Black Money tabled in the Lok Sabha by Finance Minister Pranab Mukherjee

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New Delhi 16 May 2012 (Pranab Mukherjee)

[…] The “White Paper on Black Money” presents the different facets of black money and its complex relationship with policy and administrative regime in the country. It also reflects upon the policy options and strategies that the Government has been pursuing in the context of recent initiatives, or need to take up in the near future, to address the issue of black money and corruption in public life. There is no doubt that manifestation of black money in social, economic and political space of our lives has a debilitating effect on the institutions of governance and conduct of public policy in the country. Governance failure and corruption in the system affect the poor disproportionately. The success of an inclusive development strategy critically depends on the capacity of our society to root out the evil of corruption and black money from its very foundations. Our endeavour in this regard requires a speedy transition towards a more transparent and result oriented economic management systems in India.. […]

B.4 Cash Economy 5.2.24 Cash has always been a facilitator of black money since transactions made in cash do not leave any audit trail. So far, efforts to regulate and control cash transactions have been constrained due to two reasons. The first is that the poor have to deal in cash, particularly in the rural sector, and accordingly payments on account of labour wages or those made to rural artisans and institutions need to be made in cash. Second, the costs of transaction imposed by any regulations are likely to spread across the economy and affect both consumers and producers, thereby leading to resistance and lack of support for such a move. […]

Read more or download the official version of the White Paper:

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A case-study from Argentina and its rise from institutional and financial bankruptcy:

Wayne Ellwood argues that co-ops – democratic, community-focused – offer an egalitarian way out of our current mess.

[…] After years of enforced austerity and ‘structural adjustment’ the resource-rich South American country was awash in debt, crippling inflation, staggering unemployment and negative economic growth. (Notice any parallels with present day Greece and Spain?) […]

With inflation raging and tens of thousands of workers on the streets, the government finally called it quits, defaulting on its debt and devaluing its currency. Predictably, the kingpins of global finance went ballistic, warning that Argentina would sink into penury and chaos.

It didn’t happen. Over the next decade the country’s GDP grew by nearly 90 per cent, the fastest in Latin America. Poverty fell and employment rose steadily while government spending on social services slowly increased.

Many factors contributed to this astounding turnaround […]

So when the national economy collapsed and the country’s business class started to bail out, abandoning factories and stripping assets, the workers had a better idea. They decided to form worker co-ops and run the factories themselves. The movement became known as las empresas recuperadas (recovered companies). […]

What began as a brave experiment after the economic collapse of 2001 has become a vibrant and stable part of the economy. According to University of Buenos Aires researcher Andrés Ruggeri: ‘The workers learned that running a company by themselves is a viable alternative. That was unthinkable before… These are workers who have got back on their feet on their own.’ […]

A good idea takes root

Where plants are closed down, worker co-operatives can reopen them. The ‘recovered factories’ co-op movement is spreading in Latin America. There are 69 ‘recovered factories’ in Brazil, around 30 in Uruguay, 20 in Paraguay and a handful in Venezuela. […]

Co-operatives can point the way towards a different kind of economic model, where people control capital and not the other way around.

A little real democracy wouldn’t hurt.

Source: Can co-operatives crowd out capitalism? — New Internationalist Issue 454
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