Crony Capitalism

Crony Capitalism and India-By Somik Sarkar

“....One of the greatest dangers to the growth of developing countries is the middle income trap, where crony capitalism creates oligarchies that slow down growth. “

                                                      RBI Governor

Do you agree with that statement ? Do you really thing that crony capitalism is the only reason for the slow down of India’s growth? Do you believe that the corruption is the consequences of the crony capitalism? 1st of all what is “Crony capitalism”?

The word “crony” means “ally” or “companion” and capitalism means “a privatize economic system”
As a whole we can say that the “crony capitalism” is an economic system where some businessmen and government personals get together and run a government. In that case those businessmen get some extra advantages from government in taxation where common people don’t. So now you can imagine the effect rather bad effect of this system. India ranks 6th in the top 10 billionaire chart but still we can’t eradicate poverty from our country, still children in our country did not get the basic demands like food, clothes and education.

Since our independent there are thousands of scam has been registered and still counting. Recently the coal scam ( 1856 billion) and the 2g spectrum scam ( 1766.45 billion) , this two national scam are one of the biggest scam in our country . If someone went through the whole report can easily understand how some government personals and government organization and some private company had played the major role in this scam.As a result we the common people have to suffer. Government compensates this money from us. We all aware of the hike on mobile phone bills after that 2g scam , now we have to bear this coal scam as well.

 Now we belong in a society where if you don’t have money, you can’t live even if you have money you have to pay hundred of taxes that makes you feel that unbearable. But this politicians businessmen cut shorted all the money and transfer to their foreign account. According to CBI report that Indians have $500 billion of illegal funds in foreign tax havens, more than any other country. The Swiss bank has denied though, and said the amount is INR 92.95 billion.

Let’s take the word of Swiss bank authority, so now with this amount of money (INR 92.95 billion)
The government would easily deal with those long lasting economic problems in our country. Even that helps to increase the GDP rate as well Now our owner able prime minister is not the 1st one who voiced against Indian black money. There has been no. Of committees are formed from our independent but the result is not up to the mark. Now in this situation we could hope for something good in this time.

 Now some political points of view regarding crony capitalism.
 Jane Jacobs described it as a natural consequence of collusion between those managing power and trade, while Noam Chomsky has argued that the word "crony" is superfluous when describing capitalism. Since businesses make money and money leads to political power, business will inevitably use their power to influence governments. Much of the impetus behind campaign finance reform in the United States and in other countries is an attempt to prevent economic power being used to take political power.

 Sources :  Wikipedia, Times of India, The Hindu

By  Raghuram Rajan