Monday, February 18, 2019

The original people of India are the poorest.

"The Betta Kurumbar are among the particularly vulnerable tribes of India and number not more than 10,000 people in all," wrote S Arasu. "Vignesh is among the first set of people form his tribe to receive a formal education." He is 19 years old and yet to complete school because he had to drop out to work as a laborer at a construction site to supplement his family's income. "Opportunities for us adivasis to develop are non-existent," he said. 'Adivasi' means 'original inhabitant'. Vignesh is not alone. Adivasis, or tribals, are treated very badly in India presumably because they are hunter/gatherers who want to preserve their ancient way of life. Trouble is, the forests they inhabit are rich in mineral deposits, coveted by politicians in the name of development. "In mineral rich Orissa, over 72% of all adivasis live below the poverty line. At the national level, 45.86% of all adivasis live below the poverty line." They have their own culture and customs but are looked down upon by other Indians as backward. Oppressed by the government they are easy prey for Maoist rebels, called Naxals, and then suffer reprisal attacks by the police. No wonder, Vignesh is contemptuous towards all politicians and intends to vote 'None of the Above' (NOTA) in the coming election. To alleviate poverty the economy must create jobs "But there is a deeply insidious problem at work in the form of shrinking employment opportunities, shrinking formal jobs, and a shrinking labour force," wrote M Vyas. The 'Make in India' program of Prime Minister Modi was supposed to "pull up the share of manufacturing in gross domestic product (GDP) to 25% by 2022 (from 16%) and create 100 million jobs in manufacturing". Instead "growth in new investment projects has plunged since 2015". 2015 was the year Modi launched two schemes to increase employment by increasing employability. 'Skill India' was meant to impart vocational training to 400 million young people. Rs 170 billion was allocated to the project, and another Rs 40 billion was earmarked for "market relevant training to 350 million young Indians". Mudra Yojana was set up to "provide loans up to Rs 10 lakh to non-corporate, non-farm small or micro-enterprises". By March of last year Rs 72.77 billion in Mudra loans had turned bad. All these schemes have to be paid for, which means trying to increase tax collections. In December tax officials demanded up to 50% in 'angel tax' from startups. In order to protect themselves from whimsical tax demands startups are registering in other countries. Which means less tax in future. Multinational companies are receiving two sets of tax notices. In a Catch 22 situation, the second demand gets activated if the company successfully fights the first demand on transfer pricing. Foxconn is waiting for a Rs 10 billion in tax refunds under GST rules which is hurting its operating capital. Why would anyone want to invest in India when "a rampaging tax bureaucracy has become more and more obsessed with attaining ever-elusive targets"? Poor Vignesh is a casualty of politics.

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