It is not a drizzle. It is not a downpour. It is a torrent. It is a tsunami. India’s politicians and bureaucrats are at it. Even those with an explicit agenda to undermine and destroy the nation won’t be doing it this well. In these days of tight budgets, countries could save money on undermining India’s defences, militarily and otherwise. India can do it by itself and much better.

That is the message of the ‘Open letter’ from the Finance Minister of Philippines to the Finance Minister of India written by Jerry Rao. IT is about how India’s taxmen are driving IT businesses to the Philippines. It takes IT (Income – Tax) to destroy IT (Information Technology). IT is getting its revenge on IT because it has been outside the tax net and that is one of the reasons why it boomed. Now, that is on the chopping block in the IT department.

The Comptroller and Auditor-General (CAG) once again estimated that the Government of India ‘lost’ 210 billion dollars in the allocation of coal mines. The CAG numbers were outrageous. Even if there was an allocation of mines at less than the fair value of the discounted cash flows from the coal to be mined out from the mines, it can be a conscious decision. Suppose, the mines were indeed auctioned to the highest bidder. That company’s cost of power generation would be so high and the recovery from user charges in India is so low that the company would soon go bankrupt and the State would have to step in, ask banks to defer loan repayment, etc.

If nothing is done, we simply would have a sick company sitting on production rights and not doing  anything. It would simply be waiting for some one to buy out the license and close shop. The lost production, wasted man and woman hours, etc., – how can the CAG account for it?

At one level, what can be argued is that these are examples of the distortions that our contorted subsidy and fiscal policies cause. That  is fair. But, the precise number is vastly exaggerated as Surjit Bhalla argues with more numbers. I have not gone into them.

All public policy decisions, including honest decisions, involve trade-offs. The CAG has said that the loss figures, purportedly estimated by it, were exaggerated and not the final loss estimate. Nonetheless, it got Surjit Bhalla enraged just as Mr. Mukherjee’s retrospective tax law amendments did, last week.

Shekhar Gupta documents the massive deterioration in Centre -State relations and recalls fondly how in Vajpayee’s times, things were better between Delhi and West Bengal:

On counter-terror measures, for example, there was closer understanding — and trust — between the Left-run West Bengal and BJP’s New Delhi when you could not find two political formations further apart ideologically. In fact, it was much, much better than the relationship between the current UPA and its own ally Mamata Banerjee’s government in Kolkata. That is because A.B. Vajpayee reached out to other parties’ chief ministers with respect and warmth, and earned some of that in return as well. Today’s breakdown is genuinely widespread, and has spread to individual, almost personal hostility and distrust for many ministers in the Central cabinet.

I lost a night’s sleep after I read how Mukul Roy, the new Railway Minister at the Government of India, not only rolled back most of the fare increases announced by his predecessor (asked to resign by Ms. Mamata Banerjee for daring to do so) but also even put the appointment of a Committee to examine the formation of an independent rail tariff authority on hold.

A Tamil daily reports that milk and electricity fares have been raised by the Mamata Banerjee government in West Bengal. That is not wrong. That is an economic necessity, thanks to three decades of misrule by the Marxists. But, why is she so dismissive of the plight of an important and prestigious institution like Indian Railways? The casualness with which some of these things are done is truly alarming. It should be noted here that the Lok Sabha (lower house of Parliament) passed Mr. Roy’ motion to roll back without any protest. Did any one stand up and argue against it?

Can intellectuals afford to leave here politicians and bureaucrats behind? Jayati Ghosh and C.P. Chandrasekhar provide an intellectual fudge to what they call ‘the subsidy hoax’. They argue that the government earns more in taxes than what it doles out as subsidies on oil products. Therefore, the current subsidy regime has to continue and that there is no need to raise prices. The Op.-Ed. makes several flawed assumptions and makes misleading arguments. It needs to be discussed separately.

T. N. Ninan dares politicians to come up with concrete numbers for defining the poverty line. Will they do it? We should note here that the BJP too questions the Planning Commission’s poverty line definition. Intellectual irresponsibility is now not the sole prerogative of the Left-Liberal flank in India.

‘Economist’ takes note of India’s lost magic and writes a fairly muted (surprisingly) Leader article on it. One important point that they make is that while 6% growth rate is nothing to be sneezed at, it might not be enough to ensure fiscal stability for the country where subsidies are still rising faster than nominal GDP. A slightly longer essay on India puts the challenges and opportunities in perspective.

Ayn Rynd would be happy with her disciples in Indian politics. They have adopted her message of self-interest, faithfully implemented it and have become prosperous in the process. To hell with national consequences.

It is  boom time for subversion of India.


DISCLAIMER: This is an archived post from the Indian National Interest blogroll. Views expressed are those of the blogger's and do not represent The Takshashila Institution’s view.