Demonetization: Witless and Anti-People

By Prabhat Patnaik

Narendra Modi went on national television at 8 p.m. on November 8 to announce that from midnight of that very date, i.e. in a mere four hours’ time, 500 and 1000 rupee notes would cease to be legal-tender. 

The justification advanced for this bizarre move was that it would strike at “black money”. An additional argument was thrown in, to the effect that fake currency notes used by “terrorists” would now cease to be effective, and some particularly enthusiastic supporters of the government even went to the extent of calling it a “surgical strike against terrorism”. 

I shall come to the fake currency issue later. Let me first look at the “black money” argument which even President Pranab Mukherjee has gone out of his way to endorse. This argument, namely that the demonetization of 500 and 1000 rupee notes constitutes an attack on “black money”, is based on an utter lack of understanding of the nature of “black money,” a conception of it that is staggering in its simple-mindedness. 

The implicit understanding is that “black money” consists of hoards of cash which are held in trunks or pillowcases or buried under the earth. With this understanding, it is then suggested that if 500 and 1000 rupee notes are demonetized, then people going to banks to exchange large amounts of old notes for the new legal tender would make the banks suspicious; and banks in turn would convey their suspicions to the tax authorities who would then catch the culprits. “Black money” would thus get exposed, and this would discourage further transgressions in future. 

Now, the second part of this argument, even assuming that “black money” actually consists of cash-hoards, makes little sense. If a person possesses, say, unaccounted money of Rs.20 crores, and that too in 500 and 1000 rupee notes, then such a person will certainly not come with the entire Rs.20 crores to a bank to change it into the new legal-tender (he will not be allowed to do so anyway); he would rather send several factotums to the bank, each carrying a small amount, and would do so over a number of days prior to the December 30 deadline. 

In fact even this prolonged effort would be unnecessary, since all sorts of intermediaries would come up fairly soon who would do this job of exchanging old notes for new ones on behalf of customers for a consideration. With such “black operators”, exchanging “black money” from the old legal tender to the new legal tender, the idea, mooted by “experts” on several TV channels, that demonetizing 500 and 1000 rupee notes would unearth illegal cash-hoards makes little sense. 

More importantly, however, this very conception of “black money” is absurd. Indeed the term “black money” itself is a misnomer, since it conjures up the image of a stock of money which is supposed to be held not openly, in the form of bank deposits, but clandestinely in the form of currency notes, and that too in pillowcases or in containers buried in the earth. 

Actually when we talk of “black money” we have in mind a whole set of activities which are either entirely illegal, such as smuggling, or drug-running, or procuring arms for terrorist organizations, or are undertaken in excess of what is legally permitted, or are not declared at all so that taxes are not paid on them. 

If 100 tonnes of minerals are extracted but only 80 tonnes are declared to be extracted, in order to reduce tax payment, then we have a case of “black money” being generated. Likewise, if $100 of exports are undertaken but only $80 are declared, and the remainder $20 are kept abroad in Swiss Banks, which is against the law, then we have a case of “black money” being generated. Or if rupees are changed into foreign exchange through the hawala route and kept as deposits abroad, then we have a case of “black money” being generated. In short, “black money” refers to a whole set of undeclared activities. 

“Black money”, it follows, refers not to a stock but to a flow. ”Black activities”, like “white activities”, are meant to earn profits for those engaged in them; and simply keeping a hoard of money earns no profits. What Marx had said about business activities also holds about “black activities”, namely that profits are earned not by hoarding money but by throwing it into circulation; the “miser” does the former, the capitalist the latter. And those engaged in “black activities” are capitalists not misers. 

Of course, in any business money is also held for a shorter or longer period (e.g. during the C-M-C circuit); but this is true as much for “white activities” as for “black activities”, so that the belief that the differentia specifica of “black money” is that it is held while “white money” is used for circulation, is completely without any basis. Allmoney circulates, with occasional pauses when it is held, whether it is employed in “black activities” or “white activities”. The essence of unearthing “black money” lies therefore in tracking down “black activities”, not in attacking money-holdings per se. And this requires honest, systematic, and painstaking investigation. 

Long before the days of computers, the British Internal Revenue Service had earned the reputation that it would eventually catch up with any tax defaulter simply through a process of grinding and meticulous investigation. True, Britain is a small country compared to India, but that only means that the size of the tax administering personnel has to be larger, tailored to the needs of the country; and if this is done, then unearthing “black money”, at least in the domestic economy, is merely a matter of patient and efficient tax administration. 

A sizeable portion of “black activities”, however, is operated through banks located abroad; indeed some would say that this constitutes much the larger portion. Narendra Modi himself before his election had talked of “bringing back” the “black money” stashed abroad, suggesting that the bulk of “black money” was located abroad, even though his remark displayed the same naïve understanding that “black money” referred to a hoard rather than to a range of activities. But if foreign banks constitute the predominant source of funding “black activities”, then the demonetization of 500 and 1000 rupee notes, while causing much hardship to ordinary people, will do little to eliminate such activities. 

This is not the first time that such demonetization of currency notes has occurred in India. In January 1946, the 1000 and 10000 rupee notes were demonetized; and in 1978 the Morarji Desai government had demonetized 1000, 5000 and 10000 rupee notes from the midnight of January 16. But even in 1978, let alone in 1946, this had caused no hardships for the ordinary people, since most of them had scarcely ever seen such a note, let alone possess one. (Even in 1978 Rs.1000 was a lot of money and common people hardly saw notes of 1000-rupee denomination). But that move of the Morarji Desai government, even though it did not impinge on common people, did not end the scourge of “black money” either. The Modi government’s move, while equally ineffective in countering “black money”, has the added flaw of impinging severely on common people. 

Some have argued that, whether or not the demonetization of 500 and 1000 rupee notes itself has the effect of countering “black money”, it represents a long-term move away from a cash-using economy, and amounts in that sense to a restraint on unaccounted activities that are typically not financed through recognized institutional channels. But quite apart from the fact that “black activities” financed through foreign banks will still escape detection in a cashless India, the very idea of a cashless India represents a pipedream of a segment of the elite, which is totally unaware of the difficulty that a common person faces in obtaining a credit card, or even opening a bank account (despite Modi’s loud boasts about expanding people’s bankability). The move towards a cashless economy, while not being realized, will simply become an additional means through which the common people will get squeezed. 

But, what about the other argument that such demonetization acts against terrorism by preventing the circulation of fake currency notes printed “across the border”? This argument hinges crucially on the assumption that the technology employed in printing the new legal tender will prevent any possibility of faking it. Let us accept that assumption. Even so, the introduction of such new legal tender which cannot be faked, at the expense of the existing legal tender, could have been effected in a gradual and altogether unobtrusive manner, exactly as the introduction of new currency notes in lieu of the old ones is routinely effected. 

It is not as if the government was expecting an avalanche of fake notes on the night of November 8; why could it not have avoided the sudden, surprising, and massive attack on the security and convenience of the people that it launched on the night of November 8? 

What the Modi government has done is unprecedented in the history of modern India. Even the colonial government had shown greater sensitivity to the convenience of the people than the Modi government has done by demonetizing only those notes which were possessed by the super-rich and not those possessed by the people at large. This “emergency measure”, however, is in line with the numerous other measures being currently pursued by the Modi government which has embarked on an undeclared “Emergency”: it is as fatuous as it is against the people. 

(Professor Prabhat Patnaik is a reputed economist and scholar. He is Professor Emeritus at Jawaharlal Nehru University and author of several books including The Value of Money, The Retreat to Unfreedom, A Theory of Imperialism (co-author Utsa Patnaik) 

By the kind courtesy of 

http://www.thecitizen.in/index.php/NewsDetail/index/2/9180/Demonetization-Witless-and-Anti-People

Ending Unrest in Kashmir

By Lt-Gen Harwant Singh (Retd) 

         That the J&K problem has been grossly mishandled right from the very start need no recalling. What should be of serious concern is that it is continued to be mishandled and mismanaged. Killing of a known terrorist has led to wide spread disturbances, considerable loss of life and injuries to hundreds of people, including police (state and central) personnel.

      Stone pelting has become routine form of protest, where those indulging in this unlawful activity are paid Rs 200 to Rs 500 per day. That authorities have failed to track down the source of this money and those making these payment, speaks volumes of the poor state of administration, intelligence agencies and law and order machinery. Those instigating these protests from the precincts of mosques too have been given a free run. Else by now most of those indulging in these unlawful activities and those indulging in stone pelting should have been rounded up.

       Given the ongoing unrest in the valley, Pakistan was expected to not only exploit the situation but equally give impetus to the disturbances by staging cross border raids in continuation of its policy of ‘thousand cuts’. That the Uri raid has caused so many casualties speaks equally poor state of alertness and security arrangements at this military camp. 

     While there is much chest beating and clamour in India for an immediate and strong retaliation, but what is not being appreciated is that India has been left with very few viable options. In any case the political class need enunciate its policy taking into account the full ramifications of it, and leave it to the military to execute it in the manner it finds appropriate. At the diplomatic level, to hope that concerted efforts by India can result in Pakistan being declared a terrorist state by the UN is to overlook the veto power of China. In any case diplomacy has never been India’s great asset.

    What is possible and must be played out to full is, the abrogation of Indus Water Treaty with Pakistan. After all, terrorism and friendly treaties cannot go hand in hand. There is therefore, the need to put both Pakistan and World Bank on notice (Indus water Treaty was negotiated through World Bank).  To let Pakistan know that we are serious about abrogating this Treaty, work on diverting waters of Chandrabagha (major tributary of Chenab) river into Beas River at Manali need be started.

    Much of the discontent in the Valley has been hyped up. There is no absolute poverty there as it is in other parts of J&K and parts of India. Billions of rupees that Indian government has been doling out to J&K since independence, have mostly been deployed in the valley. Admittedly good portion of these funds have ended up in political and bureaucratic pockets. What India has been overlooking is the imperatives of trifurcation of J&K, into three independent states i,e. Kashmir valley, Jammu region including Kishtwar-Doda and Ladakh to include Kargil, Zanskar and Nubra Valley.  

       While Article 370 has been a major impediment to economic development of J&K, those in the valley have been made to believe that its abrogation will be their very ruin. This line has suited the political class and some others with vested interest to the great disadvantage of the common man.

          With Article 370 in place, no large-scale industry has come to the State. Equally, no major investment from outside has taken place in the tourist industry, though the scope for it in J&K is enormous. Nor has the State drawn any outside investment in education and healthcare. Further, Article 370 has resulted in stagnation of price of properties and land. Absence of industrialization has denied the youth of the State lakhs of jobs, which industry and tourism would have, otherwise created. Therefore, unemployment haunts the youth and it has become the more disgruntled element, not only in the Valley but in whole of J&K. In the valley they are easily exploited by the separatists and ISI of Pakistan, pinning the cause of their distress on India.

   With the trifurcation of J&K, the choice to live with article 370 or abrogate it should be left with the three states. At the same time, steps towards abrogation of Indus Water Treaty, should be taken in hand without any delay and dithering. 

A Bold letter from Mrs Kanta Singh of Dist. Jhajjar, Haryana to Shri Manohar Parrikar, Minister of Defence,

Mrs Kanta Singh C/O Smt. Shakuntala Devi,
V.PO Bhadani, Dist. Jhajjar,
Haryana – 124104

Shri Manohar Parrikar,
Minister of Defence, Government of India
Delhi - 110011

Respected Shri Parrikarji,

The Indian youth join Army for many reasons. Some are romantics filled with patriotism and altruistic concern for the welfare of country. Some are looking for a job to support their poverty ridden family and some just blunder in. But they serve unto death for a higher reason, that is, `Guardian Attitude’. The Guardian Attitude is generated through a regime of tough training and strict discipline and strengthened by camaraderie between soldiers and officers and shared sense of glorious past which are hallmark of Military.

Very idea of Guardianship has to be rooted in the concepts of honour, higher purpose, and belief that the soldier-citizen is a standard bearer, who embodies the superior virtues of men’ but are loath to self-publicise. Consequently `the military elite, like other leadership groups is inhibited in proclaiming its special virtues’. Resultantly Indian military leader ship has, perceptibly not, been able to match up the shenanigans of a bureaucracy steeped in traditions of Delhi Durbar and unable to safeguard organisational interests of the military. This leaves elected leaders with responsibility to ensure that fiscal pedantry and bureaucratic skulduggery do not kill Guardian Attitude of military by depriving or stealing the special affections showered on it by a grateful society through special pay and perks given to soldiers and officers.
Examples which highlight progressive degradation of military since 1947, denial of fair wages and reduction in pension and recent recommendation for mass punishment by 7th CPC on military because some senior officers allegedly abused provisions of disability pension are matters of history and enough is available in public domain hence not repeated here. However I am keen to know your response to the following issues:-

• One hears a common refrain from `interested’ elements, especially bureaucracy that Armed Forces are manpower happy. But it would come as surprise to you that while three services spend 37 per cent of their budget on `Revenue’ account while the figure for `Revenue’ expenditure of Civil Wing is massive 63 per cent! Do you have any plans to review the `Outcomes’ from this huge expenditure? 

• As per Report of 7th CPC the MoD has sanctioned posts of 5,85,000 civilians, which is nearly half the strength of three Services. In view of increased mechanisation and IT enabled offices has a review of their efficacy and efficiency been undertaken with a view to right-size it?

• Civil element of the MoD has higher ratio of Group A services at 4 per cent and Group B at 15 percent as against the Army, which has 3.79 per cent officer and 12 percent JCOs against 86 per cent Other Rank. Resultantly not only less hands are available for actual work on site by average expenditure on a civilian employee of MoD is higher.

• Please glance at page 28 of 7th CPC report and you will find that MoD grossly understated expenditure on its civilian staff. It will be worthwhile to know whether it was done intentionally.

• You may also wish to check as to how the MoD is spending more than Rs. 1000 Crore per annum on pay, allowances and establishment of Ministry of Finance personnel! Do you genuinely need such a large number of finance guys to manage MoD budget or is it a case of freeloading at the cost of soldiers? 

• No wonder MoD spent Rs. 1883 Crores on itself in last fiscal (Refer demand No. 21 of Union Budget 2015-16). This amount is more than combined total budget of MHA, MHRD, MEA and a few other ministries combined. Do you plan to undertake any measure to reduce this expenditure?

• There are 62 Cantonments in India. Each of these has a CEO and DEO. These two IDES officials, who are equal to Major/ Colonel, occupy large lavishly appointed bunglows which are maintained by a retinue of staff! Do you have any plans to find out as to how are these facilities funded?

• Military Engineering Service (MES) spends 60 per cent of its budget on Revenue account! Is that fair for an organisation which it only meant to supervise works to spend Rs. 7200 Crores on pay and allowances to supervise works worth Rs. 4800 Crores executed by contractors?

• DRDO, purportedly a `Research’ organisation spends 61 per cent of its budget on revenue account. Thus leaving only 39 per cent for `Research’!

• The Defence Minister and other ministers of MoD are entitled to civilian staff including civilian staff cars and civilian drivers. Do you plan to relieve Army drivers and any other combatants attached to your office to let them perform their primary duties in Army?

• As a CM you must have enjoyed facilities of having a Camp Office at home. Are there any plans to do away with this archaic concept which allows ministers and civil officials to garner staff and other resources like electricity for personal purpose at cost to public exchequer?

• Are there any plans to remove/ reduce MTS and telephone attendants from residences and offices of government officials and ministers of MoD?

I close with a fervent hope for a reply and positive reaction to issues raised.

Best regards

Sincerely

Kanta Singh

An open letter to Indian leader Narendra Modi: Japan Times

Much has been said on the high expectations, over promising and under delivery already, but this is an interesting read:

Dear Modi-ji,

It is one year since you assumed office. Your government can surely point to a general boost to the country’s morale and self-confidence. But actual accomplishments remain modest. Against the scale and magnitude of what is required to catapult India into the ranks of the first powers within our lifetime, the effort is frustratingly half-hearted and the pace of change frightfully slow. At this rate, far from catching up with the world’s A-listers, India will keep slipping farther behind with each passing year.

There are four portfolios that you should prioritize with a sense of extreme urgency. First, choose a tough law minister to chop, rationalize and simplify the plethora of laws surplus to requirements for running a modern economy. S/he should ask: Is this regulation really necessary? Excessive rules — a sad legacy of 60 years of License Raj mentality — add to the cost burdens and incentivize corruption. Please trash them.

Second, appoint a powerful minister to perform radical surgery on the bureaucracy. Business executives rate India’s bureaucracy the most inefficient in Asia. The top bureaucrats likely have urged caution, emphasizing the importance of continuity in public policy. With respect, prime minister, if the people wanted continuity, they would have voted the Congress Party-led coalition back in with Rahul Gandhi as leader. Instead they gave you a decisive majority — the first in 30 years — to break the continuity and chart a radically new course. Throw out the seniority principle in choosing departmental heads, give them five-year contracts to implement reforms, and change the entire structure of recruitment, training and promotions.

I was disappointed you did not choose a non-career diplomat as ambassador to Washington. Your diplomats are individually brilliant, but their collective impact amounts to the whole being less than the sum of the parts. Quadruple the entry into the foreign service immediately and then be increasingly selective in performance-based promotions.

In all walks of life, some promising people disappoint, others burn out early and others blossom late. Choose proven performers from business, journalism, universities, the defense forces, sports and the arts to fill up to one-quarter of your ambassadorships. Imagine the impact if a famous actress like Shabana Azmi or a legendary cricketer like Rahul Dravid were your ambassadors to Washington and London. They are individuals with proven character traits of integrity, conviction, maturity, dignity and tact. Their access to all sectors of society in the host countries would be the envy of other ambassadors.

Third, your finance minister has been a disappointment: cautious and middling when the need of the hour is for bold and decisive leadership. The retrospective tax law was one of the worst cases in the world of a country shooting itself in the foot; it should have been thrown out in last year’s budget. Instead, the tentacles of tax terrorism are threatening to spread to the middle class. Please break the protectionist mentality, switch from penalizing imports (many help the cost competitiveness of Indian manufacturing and are essential to “Make in India”) to facilitating exports, have faith in the Indian trader’s world beating entrepreneurial skills, and force the bureaucrats to serve the people and business houses instead of bossing them around. Limit the government to providing high quality yet affordable public goods of health, education, infrastructure and law and order.

Finally, India has no future without world-class education. As someone intimately familiar with the world of higher education, I am saddened to see the widening quality gap between India’s and the world’s secondary and tertiary educational standards.

Consider the recently published fifth edition of the QS world university rankings. This year it drew on responses from 85,000 academics and 42,000 business executives to rank the world’s top 50 universities subject by subject across 36 disciplines. Only one Indian institution made it on the list: Delhi University is ranked 17th in the world in development studies. Thus no mention of the supposedly world-class Indian institutes of management or technology: they are world-famous only in India.

By way of comparison, my own university is rated in the top 50 in 23 disciplines and in the top 10 in four (including mine, politics and international studies), while Tokyo is judged in the top 50 in 29 and in the top 10 in six subjects. Chinese institutions are listed a total of 50 times (remember: India has only one). Among them, Peking University is listed in the top 50 in 22 subjects (and in the top 10 in one), Tsinghua University in 15 disciplines (in the top 10 in two), and Shanghai Jiao Tong University in seven disciplines. How exactly is India going to compete with China in the future?

A university degree is neither necessary nor sufficient for a good minister. But your present minister .doesn’t inspire confidence in her vision and competence to overhaul the education system. Success in this key enterprise will also make redundant the distorting and damaging program of caste-based quotas that has divided Indian society and shackled the economy.

You have traveled extensively to foreign lands in the past 12 months. The ambitious agenda outlined in your many speeches is indeed admirable. I appreciate you are seeking desperately needed foreign investment to kick the sluggish Indian economy into high gear. It must be deeply satisfying to be feted by governments that denied you a visa for a decade. You are human in soaking in the adulation of the adoring Indian communities resident abroad. I recognize too the merits of courting sources of investment finance, technology, credits and markets to drive your domestic agenda by convincing foreign audiences that the new India under your dynamic leadership is open for business.

They will not come because you travel abroad to court them with slogans and promises. They will come if you deliver results by tending to the urgent domestic reform agenda so that the size of the Indian market grows dramatically, business is easy to do, price signals determine investment choices and healthy profit can be made. This would make it easier to hire and fire workers, expand the base of skilled labor, increase worker productivity, connect suppliers to markets by building fast and reliable transportation corridors, and eliminate the discretionary authority of officials and politicians that imposes arbitrariness and magnifies opportunities for them to extort businesses and ordinary people alike.

Prime minister: Reciting slogans in foreign lands wins applause but the rush of investment money will begin only when you make the laws and environment friendly for doing business, creating wealth and jobs, and educating and training a skilled modern workforce. Prove yourself different from the sclerotic Congress Party. They wasted 60 years. Please do not waste the remaining 48 of your 60 months.

Yours sincerely,

A well wisher.

Ramesh Thakur is a professor at Australian National University.

http://www.japantimes.co.jp/opinion/2015/05/10/commentary/world-commentary/an-open-letter-to-indian-leader-narendra-modi/#.VVS6g_CYyM_

An early comment on the letter:

However erudite and thoughtful the entire article may be, but I am amazed at someone making out as if the only areas from where 

"individuals with proven character traits of integrity, conviction, maturity, dignity and tact" can be found are Bollywood and Cricket! 

The author seems to be over awed by the fact that these specimen of society earn bags full at the cost of Indian public, which itself has given in to the various styles and tantrums of these money making heroes. This obviously is an unqualified assumption or presumption of the author.

Yet another :

Modi Ji, you had been outstanding during your pre-election speeches and in making lofty promises of all kinds and asked for 60 months as against 60 years ruled by Congress. You  do not seem to have realized that most promises which could have been fulfilled without much ado, during the last one year could not be fulfilled by you and your worthy ministers and top bureaucracy, putting a question mark on credibility of your so called impressive seeming speeches and countless promises. Your speeches making new promises from day to day, in enormously large rallies and gatherings to induce and entice the millions of your countrymen who worked with great hope to make you the Indian PM, are now turning out to be hollow and just dramatized performances to get yourself elevated to the highest executive office of India. Most of your ministers seem absolute misfits for the posts you have elevated them to, and seem to be not only lacking a will and dynamism to perform their normal duties but also have proved to be totally incompetent to hold such high and prestigious offices.

Dear Mr Modi, you, boasted a lot just after taking over as the PM that yours will be a government that works, but to an utter dismay and to the contrary, the hand-picked bureaucracy of yours, has been a total disappointment, as they have yet to display any sense and capability to achieve any worthwhile targets toward fulfilling your promises, but have instead been an impediment in performing their normal duties. The government of yours just does not seem to be working at all, leave alone working towards achievement of your oft repeated tall and ambitious promises.  It may not be long before the millions of your countrymen start getting a feeling that you only made false and hollow promises to bluff them in your ambition to become Indian PM. Mr Modi please be advised that in the absence of sincere efforts on the part of your ministers and bureaucracy your credibility  is seriously at stake.

PM Greets Indian Population

Fifth column: A misconception

by Tavleen Singh | 

"I continue to support the Prime Minister fully because I believe that he could be India’s only hope for a better tomorrow."

The last days of last year I appear to have created the wrong impression with people whose political views I loathe. So I am going to correct this in the first column of 2015. The same Lefties and dynasty devotees who spent months deriding me on Twitter and in letters to this newspaper for being a ‘Modi bhakt’ have lately been greeting this column with howls of delight. Oho, oho, they tweet and write, another one disappointed with her ‘sahib’. As usual they are completely wrong. I have never been anybody’s ‘bhakt’, but I continue to support the Prime Minister fully because I believe that he could be India’s only hope for a better tomorrow.

After decades of stagnant, festering Nehruvian socialism that benefited only officials, politicians and povertarians, Narendra Modi has dared to speak a new economic language. In speech after speech during the election campaign and in speech after speech since he became prime minister he has talked of the ‘elimination’ of poverty and not its ‘alleviation’. And this appeals to me deeply because I believe that India has no right to be poor.

Tourism alone could have made the people of some of our poorest, most backward states very rich. This was never considered an economic tool by the Leftist economists who have controlled India’s economy for nearly all our years as an independent nation. The reason why investment in tourism has helped many countries lift themselves out of poverty is because the infrastructure needed to attract tourists is exactly the infrastructure ordinary people benefit most from. Good roads, good telecommunications, good transport facilities and a clean and healthy environment. Modi is the first prime minister to emphasise the importance of investing in tourism.

Modi has also been the first prime minister to question the relevance of the Planning Commission and central planning. Before killing this redundant institution he consulted chief ministers, indicating that he believes in decentralising economic power. May he discover quickly that decentralisation should go right down to the panchayat level so that schools and hospitals can come under elected representatives and not the ‘collector’. The post itself reeks of colonial governance and as long as it exists there will be poverty, filth and disease in rural India.

These are things our political leaders have never even talked about because by the rules of central planning, a handful of people in the Planning Commission have been allowed to make all major economic decisions. We need not shed a single tear for the demise of this relic from Soviet times and the Prime Minister would do well to ensure that the NITI Aayog functions as no more than a think tank. Chief ministers must be given more right to control their resources and more right to decide welfare programmes.

The opposite happened in the past decade because the muddleheaded NGOs who guided Sonia Gandhi told her that giving people legal rights to jobs, food, education and healthcare was the need of the hour. Since there were few among them with administrative experience, they did not know how hard it is to impose these rights. With a justice system that takes decades to deliver justice in cases of murder and rape, will any sane person go to court to demand the right to education?

India has been impoverished only because of bad economic policies and since the first political leader to have noticed the urgent need for ‘parivartan’ was Modi, I supported him then and I support him now. If I have opposed the Hindutva fanatics who have occupied far too much time and media space lately, it is because I detest fanatics and believe religion has to be a private matter. It has no place at all in the public arena and so the Prime Minister must ensure that in 2015, the sadhus and sadhvis go back to their caves in the Himalayas and that the RSS returns to being a ‘cultural’ organisation. There is much they need to learn about Indian culture, so they better get started. At the moment they would not know Indian culture if it walked right into them. May I suggest that the first field trip they send their pracharaks on is to Khajuraho. This might make them notice how their ideas of sex are in conflict with our ancient culture. But that is a different subject.

This week all I want to say to those who think I have lost faith in the Prime Minister’s ability to bring real ‘parivartan’ to our decrepit country is that I have not. May 2015 become the year in which we see signs of India finally emerging as a country that can be among the richest and most powerful in the world. For this, we must start putting the final nails in the coffin of Nehruvian socialism.

by the kind courtesy of The Indian Express : Jan 05, 2015

Beware netas, 'Bigg Boss' Modi is watching

  

by  Rajeev Sharma

Call it Gestapo or the prying big brother; call it whatever you will. But the fact is that Prime Minister Narendra Modi is walking his talk on a crusade against corruption, which he publicly reiterated in his Kargil rally on 12 August when he said: 'na khaoonga, na khane doonga (won't take bribe, won't let others take)'.

He has already unleashed the cat among the pigeons, so to say, by making it clear to all his ministers, bureaucrats and government servants alike that his supreme template of governance is zero tolerance on corruption.

Here is a pithy compendium of Modi’s latest diktats and moves, most of which you would perhaps be getting to know for the first time.

* CCTVs in Ministries

The Modi government has embarked upon a never-before move of installing closed circuit televisions (CCTVs) in major central ministries. The first in the line is the Ministry of Petroleum and Natural Gas, the cash-rich ministry where deals, orders and contracts worth billions are commonplace.

The proposal to install CCTVs in the petroleum ministry’s headquarters in New Delhi’s Shastri Bhavan has just been cleared and it will be a matter of days or weeks until all the CCTVs are in place. And this is an informal pilot project. More ministries will have such CCTVs in future. The Defence ministry should also be in this list.

* Ministries to Make Cabinet Notes Under PMO Directions

Another unprecedented decision that the Modi government is quietly pushing is that the union ministries will no longer prepare cabinet notes about their future plans on their own. Rather, under the new scheme of things, the ministries will be required to consult the Prime Minister’s Office and wait for PMO instructions for drafting cabinet notes about their functioning and future plans. Thus far, the ministries have been routinely preparing cabinet notes for consideration by the union cabinet. Henceforth, the ministries will be divested on this privilege and micro-managed by the PMO, even on the issue of preparation of cabinet notes.

* DAVP’s Advertisements to Newspapers in Last Ten Years Under Scanner

The Information and Broadcasting ministry’s Directorate of Advertising and Visual Publicity (DAVP) has also come under the PMO’s scrutiny. The DAVP has been told to submit to the PMO, all information and data about the advertisements it has given to media outfits in the past ten years. The PMO wants to know how much government money was pumped into which media outfits in the past decade (read the UPA tenure).

The idea is to regulate the pumping of government money in media outfits by way of advertisements which has kept these entities financially afloat. This is bad news for media outfits, including several major mainline newspapers, which have survived mainly on account of government doles in the form of advertisements. At least two major English dailies would be directly affected and may face closure if government advertisements were to dry up for these. One of the affected newspapers is a prominent English daily which has been pro-BJP in its editorial orientation and patronized by a tall leader of the BJP who is no longer in Modi’s scheme of things.

* Ministers Are Constantly Under Watch

Union ministers are constantly under the watch of PM Modi. 

More importantly, they have been given rude jolts from time to time to remind them that they are under watch.

Consider these two examples.

One minister was breaking bread in a five star hotel in New Delhi with a top industrial magnate who is known to be very close to PM Modi. During the course of his meal, the minister gets a call from the PM himself, inquiring whether the meal was over. It was a brief call and no directions were issued But the message was driven home and the minister quickly wrapped up his meeting and headed back to office.

Another minister was happily going to the Indira Gandhi International airport for his maiden foreign trip a couple of months ago, dressed in jeans. He had barely driven for about a kilometer and a half when he got a call on his mobile from the PM himself. The PM casually inquired where he was headed to and the minister gently reminded him about his foreign trip which had been duly cleared by the government. But he was flabbergasted when Modi chided him for wearing jeans and told him that as a public servant he would be under people’s gaze in India as well as abroad and may be criticized for his choice. As the line went dead, the befuddled minister ordered his driver to take the car back to his residence where he quickly changed into the traditional kurta-pyjama and proceeded with his foreign trip.

In fact, such is the mortal fear of PM Modi that ministers and top bureaucrats have stopped using their personal mobile phones for their very private conversations. Instead, they have started using the phones of their drivers and aides for such conversations as these phones are ‘safe’.

Vijay

PM Asks Top Bureaucrats to do Away With 'Archaic' Rules

Prime Minister Narendra Modi has asked bureaucrats to do away with "archaic" rules and procedures which hamper governance by creating "avoidable confusion" and encouraged them to take decisions with a promise of backing them.

Holding a meeting collectively with 77 secretaries and senior officers of all the ministries and departments in New Delhi, he asked them to approach him directly through phone or email to give suggestions or seek his intervention to resolve any issues.

Following is the full text of the press release by the Prime Minister's Office on his meet with the top bureaucrats:

The Prime Minister, Shri Narendra Modi, today held discussions with Secretaries of all the Ministries and senior officers of the Departments of the Government of India. Such a meeting has taken place after more than eight years. 

The Prime Minister listened extensively to suggestions and comments of the Secretaries for nearly two and a half hours. Shri Modi empathized with the sentiment expressed by the Secretaries, and their anguish in not being able to realize their true potential because of circumstances. However, he expressed full faith in their commitment and competence to build a better future for the country. 

He called upon the senior bureaucrats to simplify and streamline the administrative rules and procedures to make them people-friendly. He emphasized the need for a team spirit and urged the Secretaries to be leaders of their teams. He also encouraged the officers to take decisions and assured them that he would stand by them. He added that in the process of governance, ideas should be converted into institutions because institutions last longer than individuals. However, he clarified that there may be rules and processes which have become outdated, and instead of serving the process of governance, they are leading to avoidable confusion. He stressed upon the need to identify and do away with such archaic rules and procedures. He even added that the process of governance of his government should begin with cleaning-up of the offices, improving the workplace, which would automatically result in a better work culture and efficient services to the citizens. 

The Prime Minister emphasized the need for use of technology for greater efficiency and effectiveness in administration. He further added that in a democracy, redressal of citizens' grievances is very important, and information technology can help greatly in this regard. He also added that through use of technology, and better understanding among departments, administrative and schematic convergence is possible. Only through collective action, faster results can be achieved. Shri Modi offered that he would always be ready to give an account of the work being done by him. The senior bureaucrats echoed this sentiment and welcomed a similar standard of accountability. 

The Prime Minister said that he was accessible to all officers and encouraged them to approach him with their inputs and ideas.

The Government has written off 36.5 Lakh Crores to Industries in past 9 yrs.

Here is a very serious revelation by Shri P  Sainath.

The Nation has been officially informed periodically that the Government has written off a whopping THIRTY SIX LAKH CRORE RUPEES to corporate industries in past nine years !

This is shocking. But there is hardly any protest or reaction in the national media - who are busy hair splitting on minor issues.

I recommend you to read this article, with the seriousness it deserves.

nbs.

It is indeed sickening. 

Is there any institution say the appropriate level of Judiciary, who could take a note of this serious financial lapse by Indian Corporate Sector and devise a solution to prevent such large scale corporate misappropriation leading to write off of India's immense wealth.

                                +++++++++++++++++++++++++

P Sainath on Corporate Bailout #Rs 36.5 trillion  Budget 2014

India Resists

The revenues foregone in 2013-14 could fund the rural jobs scheme for three decades or the PDS for four and a half years.

                                                      By P. Sainath.

It was business as usual in 2013-14. Business with a capital B. This year’s budget document says we gave away another Rs. 5.32 lakh crores to the corporate needy and the under-nourished rich in that year.  Well, it says Rs. 5.72 lakh crores  but I’m  leaving out the Rs. 40 K crore foregone on personal income tax since that write-off benefits a wider group of people. The rest is mostly about a feeding frenzy at the corporate trough. And, of course, that of other well-off people. The major write-offs come in direct corporate income tax, customs and excise duties.

If you think sparing the super-rich  taxes and duties worth Rs. 5.32 lakh crores  is  a trifle excessive, think again. The amount we’ve written off for them since 2005-06 under the very same heads is well over Rs. 36.5  lakh crore. (A sixth of that in

just corporate income tax). That’s  Rs 36500000000000 wiped  off for the big boys in nine years.

With  Rs. 36.5 trillion  –   for that is what it is  –   you could:

·       Fund the Mahatma Gandhi National Rural Employment Guarantee Scheme for around 105 years, at present levels.  That’s more than any human being could expect to live. And a hell of a lot more than any agricultural labourer would. You could, in fact,  run the MNREGS on that sum, across the working lives of  two generations of such labourers. The current allocation for the scheme is around Rs. 34,000 crore.

·       Fund the Public Distribution System for 31 years. (current allocation Rs. 1,15,000 crores).

By the way, if these revenues had been realized, around 30 per cent of their value would have devolved to the states. So their fiscal health is affected by the Centre’s massive corporate karza maafi.

Even just the amount foregone in 2013-14 can fund the rural jobs scheme for three decades. Or the PDS for  four and a half years. It is also over four times the ‘losses’ of the Oil Marketing Companies by way of  so-called ‘under-recoveries’ in 2012-13.

Look at some of the exemptions under customs duty.  There’s a neat Rs. 48,635 crore written off on ‘Diamonds and Gold.’ Hardly aam aadmi or aam aurat items. And more than what we spend on rural jobs.  Fact: concessions on diamonds and gold over the past 36 months total Rs. 1.6 trillion.  (A lot more than we’ll spend on the PDS in the coming year).  In the latest figures, it accounts for 16 per cent of the total revenue foregone.

The break-up of the budget’s revenue foregone figure of Rs. 5.72 lakh crore for 2013-14 is interesting. Of this, Rs. 76,116 crore was written off on just direct corporate income tax.  More than twice that sum (Rs.1,95,679 crore)  was foregone on Excise Duty. And well over three times the sum was sacrificed in Customs Duty (Rs. 2,60,714 crores).

This, of course, has been going on for many years in the ‘reforms’ period. But the budget only started carrying the data on revenue foregone around 2006-07. Hence the Rs. 36.5 trillion write-off figure. It would be higher had we the data for earlier years. (All of this, by the way, falls within the UPA period). And the trend in this direction only grows. As the budget document itself recognizes, “the total revenue foregone from central taxes is showing an upward trend.“

It sure is. The amount written off in 2013-14 shows an increase of 132 per cent compared to the same concessions in 2005-06.

Corporate karza maafi is a growth industry, and an efficient one.