Bailing out the richest

By Devinder Sharma
12 Mar 2010

Forbes magazine says India has almost twice the number of billionaires than last year. Strangely these richest of the rich gained when the world economy was badly hit by the meltdown. Was it despite or due to the economic recession?

Economic stimulus package helped billionaires
to increase wealth (courtesy: ndtv)
In 2009 when the world was bogged down by economic recession, and some ripples were also felt in India, an estimated $20 trillion was pumped in to boost the global economy. India too provided a bailout package, in three instalments, totalling to approximately Rs 3.5 lakh crore.

In February 2010, when Finance Minister was to present the annual Budget, the media had launched an orchestrated campaign saying that the economic bailout package should not be withdrawn. You could see almost every TV channel (and the pink newspapers) bombarding day and night how damaging it would be for the national economy if the bailout package was withdrawn.

Participating in the discussions on Budget, I did make it loud and clear (to the discomfort of the economists on the TV panels) that the bailout package was not required in the first instance, and should be withdrawn immediately.

Subsequently, I heard the Prime Minister say that only 1.5 lakh jobs were created in 2009 (against the projected 12 million). I guess this statement was used by the industry and business to defend the need for the continuation of the bailout package.

In my understanding, the bailout package was actually a dole to the industry and business to strengthen its bottom line. If you think that the layoffs in the industry were because of the economic recession, you are highly mistaken. Recession was very conveniently used by the industry to go in for labour-shedding, nothing more than that. Ask those journalists who have lost their job recently, and they will tell you they were laid-off not for reasons of economic meltdown.

Nevertheless, the economic meltdown provided an excellent opportunity for the rich to amass more wealth. Otherwise there is no way that the world's wealthiest club can grow wealthier at times of an economic meltdown. The bailout packages came out handy for the rich to accumulate more wealth, and that too in the name of rebuilding the global economy.

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