Economic Reforms: PM’s tough love though never his first
by Sucheta Dalal
The PM wanted support for tough economic decisions. People want
answers to some tough questions
The orgy of corruption that has marked the United Progressive
Alliance’s (UPA) second term continues to be exposed almost on a daily basis.
Meanwhile, the prime minister (PM) tried to reach out to angry Indians with
less than happy results.
Dr Manmohan Singh delivered a rare address to the nation in which
he said that economicreforms were necessary to avoid a fiscal crisis and a
repeat of 1991-type payment crisis; it was a time for some tough decisions. His
appeal was emotional too: “I promise you that I will do everything necessary to
put our country back on the path of high and inclusive growth, but I need your
support.” Unfortunately, it didn’t cut any ice with the public.
At the end of his speech, the angry buzz on social media was about
one single sentence—“money doesn’t grow on trees.” Clearly, the PM’s
speechwriter failed to note that India is angry exactly because UPA ministers
are ripping off the nation’s wealth from every available source—land, air and
water (mining, telecom and irrigation). In his rare appearance, the PM did not
think it fit to answer a whole host of questions that are burning in the minds
of people.
1. How has India, which was touted as an emerging superpower until
two years ago, suddenly reached a 1990-like situation when we had to sell gold?
2. If the country was in such dire straits, how did the
self-declared assets of so many politicians spike sharply? How is it that the
officially declared donations to major political parties have also jumped in
the same period? This wealth effect is not restricted to ruling alliance
politicians; the assets of senior opposition leaders have also expanded. Does
it stink of an unholy nexus?
3. While Dr Singh wants the public to bear the cost of the
“unsustainable increase in government expenditure vis-à-vis government income,”
aren’t he and his finance minister accountable for balancing the books and
planning ahead for eventualities? Instead, they were busy doling out subsidies.
4. While the PM wants us to take the diesel price hike in our
stride, subsidies are not really to blame for the losses to oil companies. As
former expenditure secretary, EAS Sarma, has pointed out in Moneylife, it is
Central and state taxes (which neither is willing to give up) that are
responsible for the price build up. So why won’t the Centre make some tax
sacrifices too?
5. Electricity distribution is another sector where ‘tough
decisions by the Congress only mean a big bailout. Since the PM’s address
frequently reminded us about a 1991-like situation, shouldn’t we remind him
about his role in providing a sweeping sovereign guarantee—covering even basic
business risks—to the dubious Enron Corporation’s Dabhol power project?
6. Or that the Dabhol debacle and plans for expensive independent
power projects (IPPs), under the Congress’s liberalised electricity policy, set
back the electricity sector by a decade? Even after the UPA returned to power
in 2004, why was power distribution left untouched and state electricity boards
allowed to pile up huge losses by turning a blind eye to massive theft, leakage
and subsidies?
7. If the situation was all so tough, how come the Narendra Modi
in Gujarat could ruthlessly curb power theft in his very first year in office
and renegotiate expensive power purchase agreements? How did Gujarat go from
being a power-deficit to a power-surplus state in just over a decade? How was
it able to electrify 100% of its villages and has eliminated the heavy losses
of its electricity boards?
8. If Mr Modi has achieved this by creating a separate
distribution network for subsidised power while giving other customers the
alternative of getting steady power supply, wasn’t this easy to emulate? And
doesn’t the failure to do so indicate a lack of political will in the
UPA-governed states?
9. What did Dr Singh do after the two-time northern grid collapse
in August? He announced dreams and doles. In his Independence Day speech, he
said that the Rajiv Gandhi Rural Electrification Scheme will provide
electricity connections to one lakh additional villages. Soon after, on 25th
September, the cabinet committee on economicaffairs approved a massive Rs1.90
lakh crore debt-restructuring package for state electricity boards. The payout
is linked to a regular increase in power tariffs for us the consumers. Will
higher tariffs collected from domestic and industrial customers actually turn
around the bleeding power distribution companies?
10. On another note, will the PM explain why he has abandoned
plans to track black money? Will he answer the open allegation/ speculation by
global investors that half the foreign portfolio investment of over $12 billion
in India this year is just round-tripping of unaccounted Indian money?
11. How can the government be credible when it attacks
constitutional bodies, such as the comptroller & auditor general (CAG),
for exposing reckless loot of natural resourcesand mega scams in almost every
sector? Isn’t the PM responsible for abject lack of governance and deep
complicity at all levels?
12. Doesn’t it stretch credulity to imagine that friends and
relatives of powerful politicians bagged lucrative coal blocks for free and
then obtained thousands of crores of rupees in bank loans to develop them on
merit?
13. Why should the exchequer bear the brunt for Praful Patel’s
profligacy in the civil aviation ministry? Can the government convince us that
a Rs 40,000-crore bailout to Air India is linked to strict financial
accountability?
14. Will the government prove that cornering of precious real
estate (by politician-builders), mining licences and key policy decisions are
not the primary reason for a spurt in corporate and foreign donations to
political parties?
15. Former railway minister Dinesh Trivedi’s proposed hike in
passenger fares after a decade did not evoke protest from paying travellers,
but Mamata Banerjee’s tantrums ensured a rollback and a new railway minister.
Yet, when it came to foreign directinvestment in the retail sector, why is the
Congress party willing to risk sacrificing the government itself?
16. Why is the Election Commission of India (EC) silent about EAS
Sarma’s demand to investigate foreign donations to political parties and
whether there was a quid pro quo involved? Mr Sarma’s crusade was triggered by
reports that the politically-savvy Anil Agarwal’s Vedanta Resources Plc had
donated $8 million to Indian political parties. Data put out by the Association
of Democratic Reforms shows that many political parties have seen a big
increase in corporate funding including foreign funds. On 26th September Mr
Sarma warned the EC that he would seek judicial intervention in the matter. Is
the EC under pressure to remain silent?
17. The quid pro quo that Mr Sarma wants investigated may not be
restricted to corporate largesse to the UPA constituents alone. In the Rs
70,000-crore irrigation scam in Maharashtra, Anjali Damania, an activist, has
alleged that the BJP leader Nitin Gadkari point blank refused to raise the issue
and embarrass the NCP. Is this why the opposition seems so feeble in its
protests?
The people of India are ready to make sacrifices but do not wish
to be fooled by a self-serving bunch of crooked politicians. Asking for
sacrifice, as long as these and other burning questions remain unanswered, is
sheer wanton audacity.
Sucheta Dalal is the managing editor of Moneylife. Subscribers get
free help in resolving their problems with select providers of financial
services. She can be reached at sucheta@moneylife.in
Sucheta Dalal is A Mumbai Journalist & Thinker,
So many unanswered Qs???? Further -
ReplyDelete1.possible country's revenue from all sources and resources is allowed to escape into individuals ac in national and foreign banks. lakhs of crores.loss 50% every year.
2. Out of that 50%,available revenue ,further 50%is siphoned by large network of individuals by diverse methods in ,PDS,public exp,subsidies....etc.
3. Then create provisions of VDS (voluntary disclosure schemes )periodically to regularise the loot of public wealth/money.
4.In quantitative terms -it is only 25% 0n the ground /actual public utilisation.
5. Further down ,if we add poor governance,management and low effeciancy.