Time-Value of Money -BOOKS INDIANS SHOULD READ- 11(Post No.8482)

WRITTEN BY R. NANJAPPA                        

Post No. 8482

Date uploaded in London – – – 10 August 2020   

Contact – swami_48@yahoo.com

Pictures are taken from various sources for spreading knowledge; this is a non- commercial blog. Thanks for your great pictures.


                                                 Chapter 4 Part 2

                                                    R. Nanjappa

Woes of the Uninc.

The much tom-tomed reforms have focused on the narrow corporate sector which is

controlled by the central government.  The Uninc. is at the mercy of the state govts which

are hardly touched by reform.

On the contrary, the Uninc. becomes victims of numerous state minions like the cops, various

departments, municipal authorities, local goons reporting to the party, etc. Though they have been

the growth drivers, they have not received  recognition or benefits, if any.

In fact, moves like FDI in retail will hit them even more, due to the concessional terms

extended to the foreign entities, while even normal recognition is denied to the Uninc. 
It is also hit by various thoughtless moves. For instance, when the Court orders that the motor vehicles

should have electronic number plates, it drives out of employment thousands of workers who are now

earning a living painting such boards , without teaching them another craft,  while conferring the

privilege of making the new number plates on four companies! 

The Uninc. is not a burden on the society or the govt. It is self-reliant, generates its own business

and income, saves enormously. It has no benefits of steady income, regular wages, insurance or pension.

It does not depend on govt for employment. Yet,in the name of reform focusing on the big sector, people

from the Uninc are driven out. Is there any wonder why poverty is still a phenomenon?

Prof. Vaidyanathan also points out how the leftists are against the self-employed, calling them


 Our government’s policies are likely to displace the self-employed and render them


Law and Social capital

In a deeply perceptive chapter, the professor points out how it is so difficult for the small man to enforce

contracts under our legal system which does not appreciate the Time-Value of Money. What better can

we expect when the govt itself is the largest litigator?
He records in a brilliant passage:

“It is extremely important to recognize the social capital we have accumulated in the

form of community and family linkages and we need to think afresh instead of getting

boxed into the Anglo-Saxon jurisprudence system. We need to remember that we have less

than ten thousand police stations in our country but have more than two million temples ie

places of worship.. by and large contract compliance is more due to the fear of God than

of legal processes”.

Bias against the sector 

In spite of its essentially beneficial economic role, the Uninc. does not get adequate credit facilities

from the banking system which dotes on the corporate sector ( and gets kicked in return by way of

unrecovered loans.) But there is a deeper bias against this sector.

“the metropolitan elite are allergic to indigenous institutions and the communists are

stuck in their nineteenth century rhetoric.”

 Corruption as a form of Tax 

The book has an interesting chapter on taxation. He says:

“The perception that India is an under-taxed economy is a myth, if one takes into account

the endemic issue of under-coverage as well as corruption in the system.”

In other words, corruption is for us another form of taxation. He provides interesting list of services by

govt employees where corruption works as taxation ie regular fees for regular items. eg: birth and death


Shopping jungle in Ranganathan Street, T.Nagar, Chennai.

Who dominate here: corporates or Uninc?

Saving: Value of Gold

Those engaged in the Uninc. sector have to depend on their own means for their saving . This they often

find in gold, which also doubles up as insurance and pension. There is poor return, but great security.  

The stock market is a big tragedy. It is a hoax.  It is an eternal scam.In spite of all the hype in the media,

only about 100 scrips are active; even in these, more than 70%  of trading is not for delivery- this is pure

speculation! His chapters on the financial markets provide many deep insights.


Analysing the caste factor, the book points out how more than 55% of the Uninc. enterprises 

were owned by ST/SC/OBC in the rural areas, and about 50% of the total. These are clusters and

hierarchies and form important social capital. This is not generally understood or appreciated.

tags- books, to read 11,

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