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‘There needs to be a crackdown on tax havens’

Despite the risks involved,nuclear power can be a much safer and greener option than thermal power,believes Jeffrey D Sachs,director,The Earth Institute,University of Columbia. In an interview with Surabhi

Written by Surabhi | Published: October 20, 2012 12:59 am

Despite the risks involved,nuclear power can be a much safer and greener option than thermal power,believes Jeffrey D Sachs,director,The Earth Institute,University of Columbia. In an interview with Surabhi,Sachs,who is also Special Advisor to UN Secretary-General on the Millennium Development Goals,blames rich nations for missing the 2015 deadline and believes it will have to be followed by a phase of sustainable development goals. Excerpts:

During the 2009 crisis,you called for higher public spending by India. What can be done now to revive the economy?

The government gradually needs to raise revenues. Tax enforcement laws should be tightened so that companies and wealthy individuals actually pay taxes. The total tax to GDP ratio of India is under 20 per cent. Over time,the tax to GDP ratio should be raised to over 25 per cent of GDP or even up to 30 per cent. Investments can also be made against future public tariffs by ensuring everyone pays their electricity bills,etc. But this is a political issue in India.

Are you in favour of Warren Buffett’s suggestion of taxing the super rich more?

In general,rich people should pay taxes and they should pay more taxes than they do. We have also created absolutely shocking system of tax evasion through tax havens like Mauritius,Cayman Islands,Hong Kong. Their whole economy is based on allowing people to escape their tax jurisdictions and that the world tolerates this is really a measure of our political corruption. It is a complete abuse of the public system and the tax system to allow this and there really needs to be a crackdown.

You have advocated use of nuclear power for generating electricity…

Nuclear power has three serious problems — the proliferation of fissile material; the issue of nuclear waste and the very real threat of a Fukushima-like problem. Coal-fired power plants don’t have the same visible risks but they have two insidious problems — they are highly polluting and contribute massively to global climate change. Nuclear power is not perfect but we don’t have any perfect option right now.

Do you think the 2015 deadline for the Millennium Development Goals (MDG) needs to be deferred?

Many countries will fall short of the goals. India needs to up its spending on social policies by another 1-2 per cent of the GDP to address issues of chronic undernourishment of children and poverty reduction. There needs to be a second period of goals after the MDGs from 2015-2030. They should have four key pillars — end extreme poverty; social inclusion for women and minorities; environmental sustainability; better governance — both by public and corporate sector.

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