Back in 1967, the then Indian finance minister Morarji Desai had the brilliant idea of raising taxes well beyond their existing level; the maximum marginal tax rate was raised as high as 97.75 percent.<\/p>\n
Desai, who was better known for drinking his own urine, reasoned that people would pay up and that India’s budgetary problems would be more manageable.<\/p>\n
Instead, the reverse happened. India has always had a problem with undeclared wealth, a kind of parallel economy which is called black money. The amount of black money increased by leaps and bounds after Desai’s ridiculous laws were promulgated.
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\nSeven years later, in 1974, the new finance minister Y.B. Chavan brought down rates by some 20 percentage points, but by then the damage had been done. The amount of black money in India today is estimated to be anything from 30 to 100 times the national budget.<\/p>\n
No deal of any size in India can be done without paying part of the price under the table. I had great difficulty in 2004 in selling a flat I owned, simply because I wanted all the money paid above the table. And that flat was being sold well below the market rate so that I could complete the deal soon and return home. But without a black money component, nobody wants to do a deal.<\/p>\n
Given this background, it is not surprising that the Indian Premier League, a cricket competition that is played every year and which has been in existence since 2008, pays its players — who come from every cricket-playing country — huge sums for a few weeks of Twenty20 cricket. The government pretends to be surprised about this and often vows to investigate the issue but is really not bothered; instead it is happy that black money is being converted to legal tender.<\/p>\n
Industrialists own teams and pump their black money into paying the players. They gain a measure of publicity, both for themselves and their companies. And that is something they love. After all, black money is not of much use unless can utilise it.<\/p>\n
In India, corruption is a way of life. You have to pay to get anything and everything done, even to get a proper bill for your monthly consumption of electricity. The symbol of one of India’s main political parties, the Congress (I) is the hand; it would be better to make it an outstretched hand because that is what one encounters in India right from the moment one gets off the plane.<\/p>\n
Hence for anyone to say that black money has no role in the IPL is akin to saying that people do not need to breathe in order to live.
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