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Wednesday, December 08, 2021

Not So Fast

Did the wrong BJP leader go on fast?

Written by Meghnad Desai |
September 25, 2011 3:40:10 am

Did the wrong BJP leader go on fast? The news that Nitin Gadkari had to undergo stomach-stapling to cure his obesity is both tragic and funny. He was,as I recall,‘well-built’ when he was chosen as BJP president. After all,those days exercising in half-pants in RSS shakhas must have kept him moderately fit. But life at the top in BJP is clearly demanding of his consumption powers and hence he has the neta rog—obesity. The London Times has an editorial on obesity among Indian politicians. Makes a contrast I guess from those pictures of emaciated children. India Shining!

Worse than that,however,in my view is the politicians’ pretence that everyone is an aam aadmi. In recent discussions about petrol price hike,Opposition politicians of all parties were protesting that the petrol price hike will hurt the ‘middle classes’. Now in a country where between 25 to 40 per cent are BPL,depending on whether you take the National Sample Survey (NSS) or the Tendulkar committee definition,and nearly 50 per cent below a dollar a day and 80 per cent below two dollars a day,any one driving a car and using petrol cannot just be ‘middle class’. They have to be in the top fifth or even the top tenth,say among the top 100 to 150 million people.

Is it wrong that the Government stop subsidising the rich—because that is what they are? Any subsidy has to be paid for out of general tax revenue and the bulk of that tax revenue is derived not from income taxes but from indirect taxes on commodities. All consumers—poor and middle class and rich—pay taxes. So the Opposition parties,including the Left and even UPA partners such as the Trinamool,who complain about the price hike are defending the rich.

Most State expenditure is for the benefit of the better off. Higher education is subsidised and this benefits the better off. Infrastructure investment in four-lane highways and swanky airports may help business but they are for those who drive cars and can afford to travel by air. It would be interesting to do an analysis of the Indian budget in terms of who gains and who loses. I can safely guess that in India,NREGA notwithstanding,the budget is pro-rich and anti-poor.

Petrol prices were administered. There is no justification for such controls. It is such distortions which feed corruption. The Indian economy is even now,a decade since liberalisation,full of such distortions. Control of kerosene prices leads to a large black market in which people are willing to murder inspectors who try to prevent such practices as happened in Maharashtra last year. The justification,of course,is that the kerosene price control helps BPL families which is very convenient for the black marketeers. The ostensible ground is that we cannot trust the free market as it would disadvantage the poor. The truth is that such price controls almost always help the rich to obtain what they want at cheap prices and create opportunities for bureaucrats to take bribes.

In the forty years till 1991,every price control and licence/permit helped the better off. This is why poverty came down far too slowly during those days of ‘socialist pattern of society’. Jobs were for the upper caste/upper class people in organised sector or in government with guaranteed salary rises and dearness allowance while the informal sector where most poor worked was thrown to the wolves. Not only was the Hindu rate of growth slow,but it did not generate jobs at anything like the pace required. No wonder sixty per cent of people still live in rural areas in dead end jobs.

The pity is that the government is too shy to defend itself even when it does something right. It should boldly explain the policy as one of progressive redistribution. Instead it abandoned its sensible policy of rationing the supply of LPG cylinders at subsidised prices. If you want to help the BPL families,give them cash; do not subsidise LPG because then only the better off benefit and the corrupt thrive. Anna Hazare should fast for removal of all controls if he wants to fight corruption. Nitin Gadkari can join him.

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