Money, MPs and Pritish Nandy

I was a MP not very long ago. I loved those six years. Everyone called me sir, not because of my age but because I was a MP. And even though I never travelled anywhere by train during those years, I revelled in the fact that I could have gone anywhere I liked, on any train, first class with a bogey reserved for my family. Whenever I flew, there were always people around to pick up my baggage, not because I was travelling business class but because I was a MP. And yes, whenever I wrote to any Government officer to help someone in need, it was done. No, not because I was a journalist but because I was a MP.

The job had many perquisites, apart from the tax free wage of Rs 4,000. Then the wages were suddenly quadrupled to Rs 16,000, with office expenses of Rs 20,000 and a constituency allowance of Rs 20,000 thrown in. I could borrow interest free money to buy a car, get my petrol paid, make as many free phone calls as I wanted. My home came free. So did the furniture, the electricity, the water, the gardeners, the plants. There were also allowances to wash curtains and sofa covers and a rather funny allowance of Rs 1,000 per day to attend Parliament, which I always thought was a MP's job in the first place! And, O yes, we also got Rs 1 crore a year (now enhanced to Rs 2 crore) to spend on our constituencies. More enterprising MPs enjoyed many more perquisites best left to your imagination. While I was embarrassed being vastly overpaid for the job I was doing, they kept demanding more.

Today, out of 543 MPs in Lok Sabha, 315 are crorepatis. That's 60%. 43 out of the 54 newly elected Rajya Sabha MPs are also millionaires. Their average declared assets are over Rs 25 crore each. That's an awfully wealthy lot of people in whose hands we have vested out destiny. The assets of your average Lok Sabha MP have grown from Rs 1.86 crore in the last house to Rs 5.33 crore. That's 200% more. And, as we all know, not all our MPs are known to always declare all their assets. Much of these exist in a colour not recognised by our tax laws. That's fine, I guess. Being a MP gives you certain immunities, not all of them meant to be discussed in a public forum.

If you think it pays to be in the ruling party, you are dead right: 7 out of 10 MPs from the Congress are crorepatis. The BJP have 5. MPs from some of the smaller parties like SAD, TRS and JD (Secular) are all crorepatis while the NCP, DMK, RLD, BSP, Shiv Sena, National Conference and Samajwadi Party have more crorepatis than the 60% average. Only the CPM and the Trinamool, the two Bengal based parties, don't field crorepatis. The CPM has 1crorepati out of 16 MPs; the Trinamool has 7 out of 19. This shows in the state-wise average. West Bengal and Kerala have few crorepati MPs while Punjab and Delhi have only crorepati MPs and Haryana narrowly misses out on this distinction with one MP, poor guy, who's not a crorepati.

Do MPs become richer in office? Sure they do. Statistics show that the average assets of 304 MPs who contested in 2004 and then re-contested last year grew 300%. And, yes, we're only talking about declared assets here. But then, we can't complain. We are the ones who vote for the rich. Over 33% of those with assets above Rs 5 crore won the last elections while 99.5% of those with assets below Rs 10 lakhs lost! Apart from West Bengal and the North East, every other state voted for crorepati MPs. Haryana grabbed first place with its average MP worth Rs 18 crore. Andhra is not far behind at 16.

But no, this is not enough for our MPs. It's not enough that they are rich, infinitely richer than those who they represent, and every term makes them even richer. It's not enough that they openly perpetuate their families in power. It's not enough that all their vulgar indulgences and more are paid for by you and me through back breaking taxes. It's not enough that the number of days they actually work in Parliament are barely 60 in a year. The rest of the time goes in squabbling and ranting. Now they want a 500% pay hike and perquisites quadrupled. The Government, to buy peace, has already agreed to a 300% raise but that's not good enough for our MPs. They want more, much more.

And no, I'm not even mentioning that 150 MPs elected last year have criminal cases against them, with 73 serious, very serious cases ranging from rape to murder. Do you really think these people deserve to earn 104 times what the average Indian earns? 

Pritish Nandy in Times of India. Here

MPs in general are rich, endowed by flourishing business interests or hereditary handovers. The Association for Democratic Reforms, an NGO that works towards strengthening democracy and governance, says there are 315 crorepatis — persons whose net worth exceeds Rs 1 crore — in the 543-member Lok Sabha. Further, the average asset holding of the members of the Lower House is Rs 5.33 crore. Mind you, this is just the calculation based on disclosed assets, which are often not exhaustive —or even, the colour of the majority of assets — that MPs own. Whatever the party or state, barring some exceptions, the prevalence of wealth among MPs is universal.
 
Crorepati MPs
Of the 543 MPs in Lok Sabha 2009, 315 — or 58% — are crorepatis. This is nearly double the crorepatis in the 2004 batch. Further, the average declared assets of an MP in Lok Sabha 2009 is 186% higher than the 2004 average.

A report in Economic Times. Here

What is Islamic Finance?

What is Islamic finance?

Islamic finance refers to a financial system that is consistent with the principles of Sharia, the sacred law of Islam. It is different from regular banking in that it prohibits earning of interest (or riba) through the business of lending. It also prohibits direct or indirect association with businesses involving alcohol, pork products, firearms and tobacco. It also does not allow speculation, betting and gambling.

How does it work?

Islamic finance takes the form of Islamic banking and Islamic insurance, also known as Takaful.

Islamic banking is done in five ways:

1. Mudarabah, a profit-sharing agreement

2. Wadiah, a safe keeping arrangement

3. Musharakah, or a joint venture for a specific business

4. Murabahah, cost plus arrangement where goods are sold with a pre-determined margin of profit

5. Ijirah, a leasing arrangement

Takaful is a form of mutual insurance based on partnership and collective sharing of risk by a group of individuals.

How has Islamic banking progressed in recent years?

Islamic banking is most prevalent in Malaysia. It is spreading rapidly in West Asia, where the population is predominantly Muslim. New global financial centres such as Singapore, Hong Kong, Geneva, Zurich and London have made changes in regulations to accommodate the Islamic finance industry, which is nearly a trillon dollar in size now.

Indian regulations do not allow Islamic banking but the government is considering allowing it.

What restricts the growth of Islamic finance?

Most banks conducting Islamic operations have a panel of Muslim scholars called Sharia committee or Sharia board, which determines whether a product or practice complies with Islamic provisions. Also, the accounting is done differently for which there is an official standard-setting body known as the accounting and auditing organization for Islamic financial institutions. The strict code makes Islamic banking a very niche product. 

From Economic Times. More Here.

IMF loan to Greece?

Few Indians are interested in Greece’s fiscal crisis, or the proposed IMF loan of 15-25 billion as part of a European rescue package. But Indians should worry. IMF resources raised for low and middle income countries are being diverted to bestow a special favour on a rich European country.

Greece’s problem is European, and should be tackled by its rich European brethren. It should not dip into limited IMF funds raised for poorer countries.

The global financial system was paralyzed in September 2008. All trade credit to India vanished. So did foreign loans to Indian corporates. Foreign institutional investors, who earlier poured billions into India, pulled out $9 billion in 2008. The situation was worse in other developing countries. The IMF’s lending capacity of $250 billion proved pathetic when trillions in global finance vanished.

So, in 2009 the G-20 agreed to triple the lending resources of IMF. Many developing countries contributed , including India, knowing they might need this in the next crisis. None dreamed that the expanded facility would be used to bail out rich members of the eurozone like Greece, Portugal or Spain.

Yet it is now clear that in a worstcase scenario, these countries will require the mother of all bail-outs . A JP Morgan economist has calculated that $750 billion might be needed by Greece, Portugal and Spain. Greece alone might require $150 billion, and might go bust even after that. Bond markets fear that Greek bondholders may lose 30% of their money.

From Swaminathan S Anklesaria Aiyar's article in The Economic Times

To read the full article click here