UPA: Governing with a 20th century mindset, my article

[Guest guest]

UPA: Governing with a 20th century mindset

By Sanjeev Nayyar February 22, 2006

http://www.esamskriti.com/html/essay_index.asp?cat=768&subcat=767&cname=upa_govt

 

In the 1972 Lok Sabha polls Indira Gandhi’s election slogan was Garibi

Hatao. Thirty-two years later Sonia Gandhi’s campaign centered around the

aam aadmi or catering to the poor. The Congress party’s poll slogan and

review of UPA policies indicate that nothing has changed over the years. Some

egs.

Fetish for Control: a nontaxable perquisite of the Liberalization process was a

reduction in the number of trips Indian entrepreneurs made to Delhi. Things

seem to be changing now. A July 2004 notification states that any construction

project under certain defined categories based on sewage discharge, quantum of

investment etc has to obtain environmental clearance from the Ministry of

Environment & Forest, New Delhi. Regulate by all means but decentralize

approving authority. Downlinking Policy 2005 too increases centralization. From

time to time steel minister R V Paswan threatens to impose price controls on

steel companies or fix wholesale/retail margins in the pharmaceutical sector.

This is a manifestation of the 1970’s mindset that induced centralization,

price controls and mistrust of markets. This eventually leads to delays and

corruption.

Increase Confusion, Paperwork: Fringe Benefit Tax (FBT) & Cash Withdrawal Tax

were introduced without adequate appreciation of practical difficulties that

lead to confusion. Taxation of expenditure was introduced in the 1970-80

period. The Finance Acts of: 1970 (disallowance of guest-house expenses), 1975

(ceiling for legal expenses), 1978 (limited disallowance of advertisement,

publicity and sales promotion expense), 1983 (payment made to hotels) amongst

others, disallowed expenditure above certain limits. FBT is payable on total

expenditure incurred. The net result is more paper work and higher overheads to

ensure compliance.

If revenue indeed was the sole consideration the UPA government could have

instead increased corporate tax rate, withdrawn tax exemptions and levied

service tax on lawyer’s fees.

Education: Recently the Union HRD Ministry first turned down and then agreed to

a request from IIM Bangalore to open a campus in Singapore stating that the

institute meets domestic demand first. This is like saying that India must not

launch satellites till every Indian has enough to eat. It is inward looking

policies as these that caused India’s share of world trade to fall.

(1950: 1.29%, 1970: 0.68%, 1990: 0.52%, 2000: 0.67%).

A Singapore campus would give the faculty higher salaries and global exposure.

Foreign postings are a motivational tool to lure/retain senior

faculty/managers. This strategy is used by multinationals like Levers & Pepsi.

The Reserve Bank of India (RBI) too is considered by many as a gateway to World

Bank/IMF postings. (PM Manmohan Singh worked with RBI & World Bank).

Subsidising Exports made sense when India was a dollar scarce economy. With over

$ 130 billion in reserves does India need to support exports with subsidies to

the extent she does? According to the governments own estimates revenues

forgone added up to almost Rs 40,000 crs in 2003-04.

Kerosene Prices are not increased to protect the poor. Never mind if it results

in large scale adulteration of kerosene with diesel, pollution and illegal

export to neighboring countries. At Rs 9.01, price of kerosene per litre in

India (Delhi) is 48% of that in Pakistan and 58% of that in Bangladesh

(Business Standard 10.11.04).

We are Poor: Inspite of the % of people living below the poverty line falling

substantially (1973-74 54.9%, 1987-88 38.9%, 1999-2000 26.1%, source

Statistical Outline of India) the Congress continues to tell the world that we

are a poor country. Few countries are bereft of problems and poverty but to

seek votes in the name of the poor for over fifty years is to belittle the

progress made. I wonder if there is a vested interest in continuously telling

Indians they are poor.

Court Judgments: In 1975 Indira Gandhi declared the Emergency to nullify the

Allahabad High Court judgment that unseated her for corrupt electoral

practices. In the 1980’s Rajiv Gandhi overruled the Supreme Court

judgment in the Shah Bano Case. In 2005 the government issued an ordinance to

avoid paying back ITC Rs 350 crs (plus interest) after it lost its excise case

in the Supreme Court. Upset with Apex Court’s ruling barring quotas in

unaided private professional institutions the UPA enacted a law providing for

reservations in private unaided colleges. Lastly the UPA government is yet to

implement an August 2004 Supreme Court order that asks it to construct the

Punjab portion of the Sutlej Yamuna Canal.

Be it 1975 or 2005 the Congress has shown scant respect for Supreme Court decisions.

Foreign Policy: Indian policies were marked by idealism, taking a high moral

ground. India paid for it dearly in 1962 (war with China). Citing military rule

in Burma, India refused to deal with the military government there. This allowed

China to get a foothold in that country and access to its gas reserves. Our

Burma policy would be rued most by those responsible for India’s energy

security.

Ever since King Gyanendra took over the reins in Nepal the UPA government has

insisted on return to democracy as a pre condition for normalization of

relations. History it set to repeat itself with the Chinese getting very active

in Nepal.

Successive Indian governments have no qualms dealing with a military dictator in

Pakistan but insist on return of democracy in Nepal. Should not National

Interest pervade the need to promote democracy?

Secularism: Inspite of adverse verdicts by the Allahabad High Court the

torchbearer of secularism Mr Arjun Singh believes it is secular to declare the

Aligarh Muslim University a minority institution. This is similar to the

Congress providing Haj subsidy since the 1970’s and its refusal to

criticize the existence of Shariat Courts that run a parrarel judicial system

in the country.

The word ‘Secular’ was made part of the constitution’s

Preamble in 1976 but left undefined. Try asking the UPA to define the word

Secular or benchmark with how secularism operates globally and you will be

labelled Communal.

Dismissal of State Governments: A reading of ‘Open Secrets: India’s

Intelligence Unveiled’ by M Y Dhar tells you how the Congress schemed to

overthrow legally elected state governments. Birth and rise of terrorism in

Punjab in the 1980’s is amongst others, believed to be a direct result of

Congress-Akali Dal power politics. In 2005 the Congress tried in vain to prevent

the formation of an NDA government in Jharkhand not to forget declaration of

President’s Rule in Bihar. Has anything changed, one may ask?

Inspite of some achievements the Congress led UPA government continues to work

with a 20th century mindset. That is unfortunate. Supported by a buoyant

economy it could unleash the Indian entrepreneurial spirit through deregulation

and creation of world-class infrastructure.

During the Emergency school buses were painted: ‘Talk less Work

more’. This is a slogan every Indian would like the UPA government to

imbibe in letter and spirit

EOM.