Is this corruption or India's brand new Caste System?

On the face of it it looks like corruption by public servants that is common across most of South Asia is no big deal. Some shared genes no doubt.

2500 years ago, people in power created the caste system design to deny other people's children opportunities of life. This system was centered around agricultural land the only productive asset of an agrarian economy. The king owned most of the land and leased it to his noblemen all of whom came from his warrior caste. This was natural as the king became king by killing all his rivals.

The king made an exception for the temple owners. These priests also owned a lot of land and they shared no revenue with the king. The priests thus owned about one quarter of all fertile land and that too tax free. They generated significant additional income through their religious services which again were mandatory for many.

The rest of the society which was the majority was landless.

This was the origin of the caste system. All those who controlled the revenue generating assets were the higher castes and the rest who produced all the wealth of the country and had to work for a living were lower castes.

In modern India, the government formally handles more than 60% of the GDP. This includes all the taxes, monetary printing and borrowings. The vast majority of the population (about 95%) run on the balance 40% of GDP. Of this 40% another big proportion is extorted by the public servants and 95% population is left with perhaps less than 25% of GDP as take home income.

Just like earlier times, the government, its employees, and its cronies control the bulk of the revenue resources of the country. They are the higher caste today.

The rest of the population which includes traders, all private sector employees(managements of large industry are higher caste though as they are cronies of government), all highly paid MNC employees(the MNC management is higher caste though as they are cronies of government), all unorganized sector business owners and their poorly paid workers, rural laborers and the underemployed is the lower caste. These are the people who produce all the wealth of the country to be sucked off by the government system. They have yet not become untouchables but are being systematically excluded from opportunities of life just like before.

Corruption is just an instrument to ensure this exclusion. Government creates complex laws and rules and then its employees and politician brokers use these rules to extort money from bewildered people who cannot understand the sophistication of these laws. Exactly like the priests used to create complex rituals earlier to extract offerings from the common populace.

Interestingly, many members of the modern higher caste are still called Dalits and Tribals. These are those lucky few who through the reservation policy have got co-opted by the system. No wonder they oppose tooth and nail any attempt to reform the system. Example is Mayawati's BSP's opposition to the Jan Lokpal proposals.

The fact is that people like Mayawati and many Dalit intellectuals who appear on TV programs now actually belong to the modern higher caste. It is in their interest to let the system perpetuate and defend it from any undermining by misguided people like Hazare and company.

Recently there was a big furor over the the FDI proposals for retail trade.

Nobody asked why normal Indian traders who work 14 hours a day, live very frugally, have little need for opulence and expense, employ inexpensive staff, are very intelligent and are very well networked with their supply chains are still not able to compete with organized retail with fully air conditioned stores, well paid employees, opulent ambiance and expensive infrastructure in a low margin business.

The answer is simple. The Big organized retail management is part of the modern higher caste and the small trader is a modern lower caste member. The government machinery extorts from the lower caste taders in myriad ways.

First the rent he pays as a percentage of his sales revenue is very very high because the government makes it very very difficult to build and run legal commercial space anywhere in the country. This restricts supply of such space and very very high rents as a percentage of sales revenues are natural. The organized retail in comparison rents bulk space in a prime area and pays much lower rates as a percentage of revenue.

Then there are the payoffs which are extracted by the municipality, police, tax officials from the small trader which the organized retail does not as it is from the modern higher caste.

All these outflows make the fixed costs of the modern lower caste small trader as a percentage of sales revenue much higher than modern higher caste organized retail.

This is the real secret of the issue. Of course we cannot expect out modern higher caste parliamentarians to discuss this openly. So in an effort to buy popularity they create a ruckus against foreigners in retail trade. This kind of obfuscation is exactly what one would expect from the modern higher castes to perpetuate their unearned privileges. The real issues are very different.

Another interesting subject...There was a land bill which was created recently for acquiring agricultural land by the state. Nobody seems to be discussing the fundamental issue of property rights here. The small farmer who now belongs to the modern lower caste has as much right to his land as Mukesh Ambani has to his Antilla mansion.

Can the government acquire Ambani's home for public purpose...it could make a good hospital....of course not...he is from the modern higher caste and therefore his fundamental right to property is protected.

The modern lower caste farmer has no such rights....in the minds of this feudal government, it still owns all the land and everybody is still a tenant. So village land can be acquired at will and some crumbs of compensation can be thrown at the tenants...to keep them from immediately starving...of course the prince Rahul Gandhi is large hearted and has promised to increase the quantity of those crumbs....

Look at the debate over the Lokpal bill. The feudal government considers itself above investigation....so CBI has to work under yoke of the royal house...how can anyone think of touching them or their caste people....