The Panama Papers go to establish that there is a large parallel economy at the global level.
The Panama Papers go to establish that there is a large parallel economy at the global level. The counter to the “information attack” that the massive hack and leak of data was an attempt to discredit big names does not hold water when the facts speak for themselves. The UN convention against corruption has not proved to be the best instrument for checking money laundering as the persons involved are so powerful, well-connected and resourceful that they easily circumvent the law and manipulate existing loopholes to their advantage. It is a basic premise of economics that tax has to be levied or paid where economic activity takes place. It is a violation of law and a blow to the economy when large sums of unaccounted and untaxed money are remitted in offshore banks with loose tax regimes on the pretext of acquiring shares or setting up companies. The developing countries suffer the most on account of money laundering. What they lose in tax to MNCs is far more than what they gain in multinational aid. The multi-agency group set up by the Indian government to probe Panama Papers should come out with something tangible to invalidate the Opposition criticism that it was a shoddy attempt to brush aside the leaks.
G David Milton
Maruthancode, Tamil Nadu
Save the jobs
The news of Tata Steel UK shutting its British plants in six weeks should provoke a serious debate. Tata Steel in India is opearting at 100% capacity and delivered 10.3% volume growth, according to a report by T V Narendran, MD of Tata Steel India and South East Asia, in the 2015 Tata Steel Group Report. The jobs of 15,000 steel workers in UK need to be saved. A quick look at the costs shows the pensions liability of former British Steel of about 15 billion pounds sterling for which Tata Steel has committed to contribute 125 million pounds over two years. If this can be carved out and assumed by a new semi-government entity, Tata Steel UK will become more appealing to a new buyer. Simply bashing China is not the answer. The crisis is caused by global steel prices declining sharply from around $460/tonne to around $260/t in line with the glut in supply and the sharp decline in raw material prices. Iron ore has dropped from around $68/t to around $40/t while coking coal has dropped from $115/t to around $80/t. This is obviously a temporary phase which may not last more than 3 to 5 years.
Ranjit K. Bhandari
New Jersey, USA