Cyber Coolie

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Of Weddings and Economic Power

Posted by chakrabarti on March 4, 2011

Some friends of mine are outraged over an astronomical 14 million pound figure that was quoted in a British newspaper as the amount spent by a Congress politician at his son’s wedding. The article cites Congress leader Mani Shankar Aiyar, a renowned socialist, as saying such ostentatious behavior should be avoided by party members. Indeed, notwithstanding the rising inflation in the Indian economy of recent years, the amount allegedly spent by a public figure is quite obscene.

But I think a lot of us are missing the point by simply criticizing the spending behavior, whereas the most pernicious aspect of this whole affair is that a representative of the people [at least an aspiring one] would have accumulated such vast sums of money. Human beings often behave differently depending on their circumstances and consciences, so it is only natural that some wealthy people would like to flaunt their riches at a joyous occasion like their offspring’s wedding. But would the distribution of economic (and implicitly, political) power be much different if the person in question had thrown a more austere party?

To generalize this a bit more, Forbes’ list of India’s filthy-rich contains examples of the most ostentatious  [your Vijay Mallyas], as well as more modest ones [Narayana Murthy comes to mind]. But it is undeniable that their overall net worth provides them with disproportionate influence on corporate and public policies. Our marginal tax rates of 30%, along with major holes in the revenue collection process, do nothing to lessen the political power held by such figures in a society that has an average annual income of US$1,200, and a human development index rank of 119.

So let’s rail against lavish spending by political figures tied to the incumbent governing party by all means, but also let’s recognize the underlying systemic issue, aside from the ostentatious behavior.

2 Responses to “Of Weddings and Economic Power”

  1. Pradster said

    Spending is good, releases money back into the economy. The exasperation really stems from the sources of such money. No?

  2. Thou art conflating the issues. Of course spending is good and keeps the economy going, although it’s debatable whether spending by the business classes, or the masses, are more effective (there are studies making the case for both, and generally it depends on overall economic conditions). No doubt blatant underpricing of a scarce public resource such as wireless spectrum is thievery, and people need to be held accountable for such crimes, especially as they have tried to appoint their cronies in vigilance posts to sweep all of this under the rug.

    But that is only one kind of corruption we face today. There is also the more insidious problem of economic returns accruing to those in the upper echelons of society in a proportion that was unheard of even 10 years ago. Growth is a prerequisite to lift people out of poverty, but when it is not accompanied with appropriate redistribution of economic (and hence political) power, we will inevitably see the big business houses use their ever-increasing influence with the state to get cozy deals, be they the Tatas, Birlas, Ambanis, Bhartis, take your pick. In the end, that is way more harmful than simple quid-pro-quos carried out under the table.

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