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START-UP INDIA’S FOUNDATIONAL SCAM

WHY TAX/GREEN BREAK FOR INDIA’S RICH?

 

By Garga Chatterjee

 

On 16th January, with much fanfare, the Union government announced its “Start-up India” scheme. On attendance were big people, big enough not to deserve any income tax break in their next seven lives. But this is precisely what the Government of India (GoI) has offered – an income tax exemption for first three years of a “start-up”. There will also be tax exemption on capital gains. After all its fake environment-love recently in Paris, this GoI scheme has also offered a three-year exemption on environment law compliance! Entities will only need to self-certify! In the name of “start-up”, exactly what anti-environment, anti-labour racket are we starting up here? This will also be true for labour law and working condition compliance (including payment of wages and benefits to staff). Shamelessly, this whole scheme is being sold to the people as an employment generation scheme. What kind of pro-employment scheme waives off inspection of labour conditions? What kind of pro-employment scheme benefits from a waiver of external public scrutiny of employee rights violations? A scheme that promotes and employee-rights violation for three years and then makes shirking responsibility of ruin easy by special quick-exit insolvency and bankruptcy laws (helping “start up” to “close down” in 90 days) is being termed as transformative. We live in sad, rudderless, cruel times.

 

By this scheme, a “start-up” will get certain other benefits from the government. A 10,000- crore rupee corpus fund will be set up using public money that will lend/invest in high-failure rate schemes of the “start up” type. Given the amount of public money that Indian Union’s richest folks gobble up in the form of “loans”, one can only imagine that the public must be very, very rich to afford this latest scheme of transferring money of the poor to the rich. This is aimed at firing “start-up” culture, making the Indian Union some kind of a hub for innovation. How shall you qualify to be a “start-up” and get a piece of this 10 thousand crore action and tax benefits?  You have to be a private company/LLP/partnership set up in the last 5 years engaged in developing innovative commercial products that adds value. Now, here is the catch. Who decides what “innovation” is? Folks at GoI’s Department of Industrial Policy and Promotion (DIPP) will decide that! The present infotech-fetish ideology will no doubt cast a long shadow on what qualifies as “innovation”. Apart from that, I am the kind of crooked person who smells rat wherever there is the provision of handing out financial favours by discretion – especially because Government of India’s money is people’s money and my poor neighbourhood in Kolkata could do with some money for roads, sanitation and health. Under any constitution that accords equal citizenship, subsidies and tax exemptions are discriminatory since everyone doesnt get it. Hence, if discrimination has to be made, the only case for such subsidies/breaks can be made out for the poor and the traditionally discriminated. I know, you know and even those eyeing the Rs 10000 crores and income tax breaks know who will make hay with this public money. The PR blitz that accompanies such loots manufactures consent from just enough people so that things don’t look too naked.

 

Such is the promise and potentiality of “start ups” that public money had to be put up – something that wouldn’t be needed if private capital also saw the opportunity that GoI apparently sees. Such is the high employment generation power of “start ups” that the GoI will never tie the immense tax breaks to the number of jobs actually created. Let me predict on record here that this will be yet another scheme that will provide loans mostly to people belonging to higher castes. A stupendous majority of the money will go to people who form a thin minority of the population in terms of caste. The politico-ideological mindset from which such schemes spring forth also create the conditions for the suicide of Rohith Vemula, a Dalit PhD scholar at Hyderabad Central University, who died one day after this scheme was unveiled. Let me also predict that a majority of the public money, acquired from all states, will end up in three-four cities, so that people in Nagaland can feel happy that New Delhi is doing well. And after this latest round of money-siphoning from the bottom to the top is over, some future demagogue will promise a new transformation via some new high-octane eye-wash, for as long as the public exists, there will be eminently lootable public money.

 

Never before have a relatively tiny set of coat-tie-power-point types been able to command such an influence on policy-making for hundreds of millions. This is a real scandal.  In this subcontinent, lathe-machine entrepreneurs in every urban neighbourhood have toiled away, generating employment, without any financial benefits. This is where the numbers are. When the culture of a place makes non-resident folks as aspirational ideals, their pathways to success also become formula for mass imitation, with active connivance from sectors of media, business and most importantly, the government, as a cover-up for real betterment of people’s lives right here, right now. The inordinately high influence of software-technology driven cure-all dreams  has an unhealthy influence on the economic policy making of nation-state entities that have hundreds of millions of poor and marginalized people but act as if it were some middle-class white-collar utopia on the threshold of launching off into stratosphere.

 

No amount of self-delusion or sophistry or PR glitz can take away from the fact that if there were no gap between wage of majority of the people and the minimum amount of money needed for dignified living, that is, people had a decent minimum wage, the amount of innovation that would happen, without the need of app-masters and angel-speculators, would be something actually transformative. But we are unable to dream beyond our white collar confines, or for that matter to accord any amount of dignity to those beyond our white collar types. Close your eyes and think of all the entities that come to your mind when the word “start-up” is mentioned. These will mostly be things that ease the life of metropolitan yuppies.  Is this what it is then – making money not out of real production, but certain tinkering to service a certain class? Where are the start-ups for the non-dieting hungry, the non-backpacking homeless and the unfashionably naked? (IPA Service)