The Hindu Business Line : Murky mining

Offering incentives to foreign investors is not new. But the exercise can cause trouble, especially when the design of incentives is flawed. Take, for instance, Guinea, which introduced, in 1995, a series of advantages for foreign mining companies. Accordingly, mining enterprises were entitled to sign agreements with the state which made them eligible for tax and customs concessions, and for special provisions concerning exchange rates and mining taxes. So much so, each co mpany established in Guinea has a specific tax and legal agreement, as a new book from the International Development Research Centre informs. “This situation creates important administrative problems for the state, among other things because companies do not have the same tax base. Further, such terms concerning the negotiating of mining contracts have the potential to impede close monitoring concerning the transparency of the basis on which mining revenues and consequently mining taxes are calculated, leaving room for discretionary practices.” This situation continues despite Guinea’s apparent adherence to the Extractive Industries Transparency Initiative (EITI), rues Bonnie Campbell in Mining in Africa: Regulation and Development ( www.idrc.ca ). The World Bank estimates the real current cost of fiscal exemptions that favour the mining sector in terms of lost revenue at 20 per cent of total revenue, or approximately 3 per cent of GDP.

Alarming read.

Dowry money

Modern dowry is entirely the product of the forces let loose by British rule such as monetisation, education, and the introduction of the ‘organised sector,’ says M. N. Srinivas in one of the essays included in The Oxford India: Srinivas ( www.oup.com ). “The attempt to equate the huge sums of cash, jewellery, clothing, furniture, and gadgetry demanded of the bride’s kin by the groom’s, to dakshina is only an attempt to legitimise a modern monstrosity by linking it up with an ancient and respected custom, a common enough and hoary Indian device. What is surprising is that this imposture has had so much success,” he rues.

A gift or daan has to be accompanied by a subsidiary cash gift (dakshina), explains Srinivas. “And in kanyadan the bride is given as a gift to the groom. On this analogy, the dowry becomes the dakshina. Stridhan usually refers to the gifts given to a woman by her natal kin or by her husband at or after the wedding.” But modern dowry is not dakshina or stridhan, he differentiates, because the amount of money given as dowry is substantial and its payment is demanded, directly or indirectly, by the groom’s kin. The author argues that the dowry money is far from being ‘a rotating capital fund’ as some imagine it to be. There is nothing to prevent the parents of the groom from putting the dowry money to any use they like, he adds. “What it leads to is certainly the impoverishment of the girl’s parents, and it does not always buy security for the girl. Insightful collection.

D. MURALI

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