Sounding out the new FM

At the end of this exercise he could discover—perhaps to his own surprise—that the Finance Ministry’s main role remains that of supervising the economic dictatorship bequeathed to us by all those years of Nehruvian socialism and that the dictatorship flourishes despite more than ten years of economic liberalisation.

Worse, the commissars in charge of it have a vested interest in keeping it intact because it often enables them to make more money and much more easily, than the men whose affairs they snoop into.

From time to time their evil deeds get revealed when a raid by the CBI reveals that such and such income tax inspector in such and such town was found to own ten flats or fifteen bank accounts or dogs living in air-conditioned kennels. Sadly, so accustomed is the Indian public to tales of this kind that the story usually dies on day two as editors discover more pressing affairs of state to concentrate their columns inches on.

It is the view of this columnist that India’s most pressing affair of state is the fact that we remain one of the poorest countries in the world and North Block lies at the root of our poverty. When the man sitting in the fine office Jaswant Singh now occupies is imaginative and courageous — as Dr Manmohan Singh and P Chidambaram were — an instant frisson of excitement courses through the length and breadth of the country and that elusive illusion they call the ‘feel good factor’ suddenly becomes tangible. Things begin to happen and the wheels of the economy begin mysteriously to move faster and appear better oiled.

Unfortunately, even these two eminently worthy gentlemen did little to dismantle the policing roles of the Finance Ministry. Please remember that it was when the good Dr Manmohan Singh was in charge that Enforcement Directorate officials supposedly ‘questioned’ a young businessman to death for some foreign exchange violation.

This happened in Delhi’s Khan Market, less than ten minutes from North Block. The Enforcement Directorate said it was suicide and that the poor man had broken under their questioning and jumped out of the window.

Naturally, nobody remembers the case or even if any of the ‘questioners’ were brought to trial so nobody asks why officials of this kind exist at all in our liberalised economy.

One of the occupational hazards that every Finance Minister faces is that the moment he moves into the rarefied atmosphere of North Block he meets only the rich and hears only the voice of the powerful.

So,last week Jaswant Singh met mighty captain of industry to hear their views. If he spends as much time meeting small entrepreneurs from different areas of enterprise he will quickly understand why economic reforms do not get the support they deserve from ordinary Indians.

The truth is that they have not happened at lower levels of the economy. Smaller Indian entrepreneurs, at every step of their efforts to create wealth, face the same battery of officials whose main job, in our old socialist days, was to prevent enterprise. They still believe that this is their main job or in any case make money out of pretending that they think this is their job. And, their powers are vast.

So, Indian exporters deal with customs and excise officials who tell them the goods they are exporting are too expensive. And, if you happen to dare to want to set up a small factory or business you need so many permissions from so many different gangs of officials that only the most determined or the most corrupt survive.

Ostensibly the reason for the Finance Ministry being, de facto, the Ministry of Economic Policing is that Indians are in the habit of evading taxes.

No Finance Minister has so far asked why. If Jaswant Singh does, and if he manages to escape the prison of North Block and travel around the country, he will find that the reason why people do not pay taxes is generally because they feel they get nothing in return.

If they can be persuaded that paying taxes will ‘buy them civilisation’ in the form of clean water and electricity, sanitary living conditions and better schools and colleges for their children they will be less reluctant to pay.

No Finance Minister has so far even tried to widen India’s pathetically small tax base by using methods other than policing.

Changing the mindset of North Block is an enormous task and nobody expects Jaswant Singh to be able to work miracles but that a single man, determined to bring change can make a difference can be seen from what Arun Shourie has managed to do in the Ministry of Disinvestment.

Jaswant Singh himself made a difference in South Block so there is no reason why he should let North Block defeat him.

Respond to tavleensingh@expressindia.com