Pama Papers type cases fuel delegitimisation of wealth: Rajan

Mumbai, April 7: Calling it important for societies to work towards legitimising wealth, RBI Governor Raghuram Rajan said on Thursday that the phenomenon of rich citizens spiriting money away in tax havens, as alleged through the “Pama Papers”, may encourage dissatisfaction among the less well-off. “If you have a whole section of people who feel that they do not have the opportunity, then the focus will be on those who have it and the legitimacy of the wealth there. And that is something we need to worry about at the global level” Rajan said at the Confederation of Indian Industry-organised Singapore Symposium 2016 here.

“This is dangerous...the fact that there are occasions where people are found to be hiding their wealth as in the Pama allegations, essentially it contributes to the process of delegitimisation,” he added.

The Reserve Bank of India governor said such feelings had started to surface in India and parts of industrial economies as well, which was a worrisome phenomenon.

“Improving opportunities across the board is extremely important to sustain legitimacy of wealth. “After all, poor people consume every rupee that they receive. But for rich people, once you have bought your yacht and private jet, there isn’t more you can spend on,” he added. He also said providing ample opportunities to all sections of society would lead to better magement of wealth.

“When we think of fince, it has to be with purpose. Fince cannot create entrepreneurs but it can help them. Fince can help the householder mage risks. And with that in mind we have to figure out the appropriate markets and the appropriate institutions,” he said. (IANS)