Prime Minister Narendra Modi speaks during an election campaign rally in Kharghar, in Maharashtra. (AP Photo) Prime Minister Narendra Modi speaks during an election campaign rally in Kharghar, in Maharashtra. (AP Photo)

There are only two kinds of really rich Indians. Wealth creators and looters. The Prime Minister declared his respect for wealth creators in his Independence Day speech this year, acknowledging their vital contribution to his dream of making India a 5 trillion dollar economy by 2024. Sadly, he seems not to have noticed how important it is to control the looters if the wealth creators are to create wealth. In the looters category, as the more perceptive of you may have already gathered, I include politicians and officials. Looters by nature are incapable of creating wealth and get rich by looting those who can. On Modi’s watch, tax inspectors have been given the power to arrest those they accuse of hiding loot and they have become more vicious in this pursuit than ever before because the Prime Minister’s crusade on black money has emboldened them.

Last week, a friend who is as honest a wealth creator as I know called to tell me sadly that he is on the verge of closing down his very successful business because he can no longer face the daily menace of predatory tax inspectors. “They are threatening to charge me a penalty that will amount to a 100 per cent of my profits,” he said, “because my books show that I have sometimes made a sale of more than Rs 2 lakh in cash in a day. When people pay cash, and there are many who prefer to, I put the money in my bank account and pay taxes and GST, but this is not enough. These tax guys tell me that if I had spread the amount over four days it would have been alright, but since I have been honest enough not to, they want to charge me this penalty. This is insane.”

Yes it is. And, it is a direct consequence of the Prime Minister’s relentless quest for ‘black money’. It is true that tax evasion is widespread in our dear Bharat Mata, but there are reasons for this. The vast majority of Indians who evade paying taxes do it because the process of paying is so complicated. I do not pay GST in my line of work but those who do tell me that it is a Kafkaesque nightmare of rules and paperwork. Millions of small businesses have closed down because GST has driven them out of business. There has long been talk of ‘rationalization’ of this many-layered tax but this has not happened yet.

Very rich Indians, of the honest kind, evade taxes because they often have to keep money aside to pay politicians at election time. Mr Modi knows well that despite his determination to end corrupt practices, the money that fuels the BJP’s formidable election machine is as black as it comes. To get hold of this at election time, political parties deploy their most efficient looters. When the economy is booming and ‘animal spirits’ abound collecting for the party is usually easy. When times are hard as they are now the looters charged with finding this money do not hesitate to intimidate and threaten those who cannot pay. The irony is that if wealth creators were to use the same methods to collect their dues from government, they would land up in jail.

Speaking of jail, has the Prime Minister noticed that many dishonest wealth creators give up their businesses to enter politics because they know it is much easier to make money out of ‘public service’? Once they enter Parliament or some state legislature, they live like billionaires. They travel first class, go on wondrous holidays in foreign lands, send their children to fine foreign universities, buy their wives designer clothes and jewels and nobody asks any questions. If they spend Rs 2 lakh a day, no tax inspector asks them any questions because looters are cocooned by the mighty shield of political power. This is especially true if they attain high office and live in splendour behind the high walls of a bungalow in hated Lutyens Delhi.

Last week, while campaigning in Maharashtra, Mr Modi announced proudly that he had lived up to his promise of putting many looters in Tihar Jail. Decades of socialism created many, many looters who should be in jail, as should be wealth creators who loot banks on the pretense of doing business. The directors of the Punjab and Maharashtra Co-operative (PMC) Bank deserve to spend the rest of their lives rotting in a prison cell, as does Nirav Modi. But, if an honest man is forced into bankruptcy because he accepted cash from a customer that exceeded the ludicrous limits imposed by a bad regulation, then there is something very wrong with what is happening. Wealth creators must never be forced to live at the mercy of looters. This is something that happens only in bad countries.

This article first appeared in the October 20 print edition under the title ‘Down with looters’

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