Posts Tagged ‘Union Budget’

How much is Rs 30 crore per hour for two years?

17 August 2009

With a drought that everybody loves around the bend, P. Sainath of The Hindu tears into the hypocrisy of a national discourse that wails about “fiscal imprudence” when farmers are waived off loans of Rs 70,000 crore but applauds when Rs 130,000 crore of concessions are doled out to the “corporate mob”:

“Let’s take only what the budget tells us (Annexure 12, Table 12, p.58). Income foregone in 2007-08 due to direct tax concessions was Rs. 62,199 crore. That foregone on excise duty was Rs. 87,468 crore. And on customs duty Rs. 1,53,593 crore. That adds up to Rs. 3,03,260 crore.

“Even if we drop export credit from this, it comes to well over Rs. 200,000 crore. For 2008-09, that figure would be over Rs. 300,000 crore. That is a very conservative estimate. It does not include all manner of subsidies and rate cuts and other freebies to the corporate sector. But it’s big enough.

“Simply put, the corporate world has grabbed concessions in just two years that total more than seven times the ‘fiscally imprudent’ farm loan waiver. In fact, it means that on average we have been feeding the corporate world close to Rs. 700 crore every day in those two years.

“Imagine calculating what this figure would be, in total, since 1991. (Er.., what’s the word for the bracket above ‘trillion?’) Ask for an expansion of the NREGS, seek universal access to the PDS, plead for more spending on public health and education — and there’s no money. Yet, there’s enough to give away nearly Rs 30 crore an hour to the corporate world in concessions.”

Read the full article: Drought of justice, flood of funds

Link via Anand V.

Also read: ‘80% of Indian journalism is stenography’

‘Indian media doesn’t cover 70% of population’

Not by P. Sainath: Everybody loves a good IT sop

‘India is a nation of two planets: rich and poor’

Is private sector really superior to public sector?

9 July 2009

The big crib about the 2009 Union budget is that it doesn’t send out any signal whatsoever on “reforms”. That there is no talk of disinvestment, no talking of parting with the family silver. And this despite the Left parties not having any role in or control over the new UPA government.

The negative reaction of the chattering classes is what has forced Manmohan Singh and Pranab Mukherjee to bend backwards to reassure investors and the stock markets since B-Day.

Siddharth Varadarajan argues in today’s Hindu that privatisation of public assets is not a panacea for plugging the fiscal deficit or for stemming the perceived ineffciencies of the public sector. Reason: “privatisation” is predicated on the presumption that public ownership of industry is inherently inferior to that of private.

“In his recent book, Privatisation in India: Challenging Economic Orthodoxy (RoutledgeCurzon, 2005), by far the most comprehensive and rigorous study of the issue in the Indian context, T.T. Ram Mohan of the Indian Institute of Management, Ahmedabad, conclusively debunks the assumption that the private sector is more efficient than the public.

“After carefully reviewing both financial performance and input-output related physical productivity in the two sectors, he concludes that “the evidence thus shows that the perception that the private sector is uniformly superior to the public sector … rests on a weak evidential foundation.” This does not mean other aspects of the reform package are necessarily bad.”

Read the full article: Go easy with the family silver

Also read: Three reasons why everybody loves to hate IT

Blah on the one hand and blah on the other

7 July 2009

An octopus, it is said, can make a great economist. Reason: it can say “on the other hand” seven times more than their more than two-handed counterparts. Especially when the annual tamasha called Union budget is around.

For weeks and months, pundits, policy wonks, television talking heads and other interested parties fulminate on what needs to be done and what is to come. Numbers with a lot of zeroes are thrown around. In the end, after every “show”, it is just a lot of on the one hand and on the other hand.

Pranab Mukherjee‘s budget is no exception.

The Congress’s surprising victory in the general elections, which allowed it to form a government without the support of the Left parties, and the President’s address to the opening session of the new Lok Sabha, had lead many cheerleaders (fully clothed) to presume that the reform rath would roll out.

In reality, yesterday’s budget was a page straight out of the Kuala Lumpur Police Department manual with not a squeak to pep up the markets. Yet, there is so much thunder and lightening in the papers and television, it is difficult to understand whether it was good, bad or abominable.

But at least we heard some nice lines:

1. Swaminathan Anklesaria Aiyar: “The only constituencies this budget addresses are the constituency of the aam admi and the constituency of 10, Janpath.”

2. Ashok Wadhwa: “The 2,000-point jump in the Sensex when the Congress voted back to power is as undeserved as the 800-point fall after the budget.”

3. Bibek Debroy: “If con is the antithesis of pro, then Congress is the antithesis of progress.”

4. Sandeep A.: “If this is the budget of a newly sworn-in government with a majority of its own and without left support, imagine the same budget in its fifth year with an election to face.”

What’s the best line you heard? And the worst?

‘What’s the Left’s vision of India i.e. Bharat?’

25 March 2008

Editorial in The Indian Express:

“What is it that the Left really wants? That the clock be turned back? Increase taxation, renationalise privatised PSUs, bring back the controller of capital issues, resurrect industrial licensing. It is hard to think that at least the major Left leaders would have implemented that agenda even if they were in power. Or would they? These are scary thoughts and they go right to the heart of the big question over the Left’s role at the Centre: what vision of India does it have?

“It is not as if the Congress or the BJP has an economic vision that is always intellectually coherent. But we know roughly what to expect, given the political exigencies of the time they are in power. But what of the Left? Is that why the CPM never wants to join a government in Delhi? Because then it loses the luxury of affirming economic progressiveness by only having to oppose — no need to propose anything that you may be measured against.”

Read the full editorial: Sixty something

CHURUMURI POLL: Is Left an enemy of the poor?

24 March 2008

In pre-liberalisation India, Left parties had a well-earned reputation of being the bugbears of industrialisation. Striking work at the drop of a hammer, making unreasonable labour demands, employing violence to have their way, forcing lockouts… left-backed unions had emerged as a major stumbling block. In post-liberalisation India, the Left parties have targetted their sickles on the stock markets, on the privatisation of public sector units, on land acquisiton for dams and special economic zones, on executive salaries, on petrol and diesel prices, on the nuclear deal, and such like.

Yesterday, in an uncharacteristic outburst, finance minister P. Chidambaram lashed out at the Left, indirectly accusing them of enjoying power without responsibility, for criticising and opposing everything being done by the UPA government of Manmohan Singh, including the Rs 60,000 crore farm loan waiver. “Those who say market growth is irrelevant and those who say the growth only helps the rich are the worst enemies of the poor. It is because of the growth, the Government is able to do many development programmes,” Chidambaram had said on Saturday in Madurai.

Question: Is the Left an enemy of the poor, or is it a necessary evil, a tempering factor, in the face of rampant liberalisation, privatisation and globalisation? Is the left making friends of the poor and underprivileged by batting for them, or is it condemning them to a life in the trenches? Is the Left opposition making India a better, more conscientious country, or is it dividing the nation between them and us, the haves and havenots? Is the Left adopting double standards by cheering China for the very sins it accuses India of?

Are the Left parties which are in power in just three States, and with 60+ MPs in the Lok Sabha, holding an entire country to ransom? Or is it reminding the nation that in the midst of all the progress and development, the glitz and glamour of Incredible India, there is a need for social conscience without which Atulya Bharat will perish?

9 ways to skin a cat. 2 ways to win an election.

21 March 2008

Swapan Dasgupta in The Telegraph, Calcutta:

“In an election year—although, strictly speaking, the Lok Sabha election is likely to be in early 2009—every government is under pressure from the political class to shower the electorate with sops and freebies. The underlying belief, which has never been empirically verified, is that a show of generosity will automatically translate into votes.

“In recent times, only the Gujarat chief minister, Narendra Modi, has had the gumption to defy political wisdom and refuse a blanket amnesty to many thousands of farmers who were charged with power theft. Most incumbent governments have followed the line of least resistance and made extravagant populist gestures that have cost the exchequer dearly and yet not guaranteed re-election.”

Read the full article: India remains incredible

Also read: Banks are the real beneficiaries of farm loan waiver

CHURUMURI POLL: Farm loan waiver: right or wrong?

If you give it to them, you must give it to us too

If you give it to them, you must give it to us too

11 March 2008

P. Chidambaram‘s waiver of farm loans in the Union budget has raised more questions than it has provided answers. Why did the government wait for four years before acting? Who will foot the Rs 60,000 crore bill? Will it really stave off suicides, especially when 60 per cent of all farm loans are from private moneylenders? Will it translate into votes for the United Progressive Alliance in the next elections, as Sonia and Rahul Gandhi seem to think? And so on.

But what the reactions to the write-off does is to expose how deep the divide is between urban, Incredible India and rural Atulya Bharat; between industrial and agricultural, pro-reforms and anti-reforms. Despite 17 years of liberalisation neither side has any room in its heart for the other. The demise of Nehruvian socialism, it seems, is seeing the Nehruvian middle ground dissolve before our eyes into an either-or, “My way or the highway” slugfest.

Former Procter & Gamble India head Gurcharan Das, with all his eggs in the LPG (liberalisation, privatisation, globalisation) basket, writes in The Sunday Times of India that to win an election, the UPA government doesn’t mind a whole nation becoming dishonest:

“Human society is based on trust. When an ordinary person takes a loan, he feels duty bound to repay it. He will even sell his family’s jewellery to fulfill his promise. This is because we learned as children from our mothers to keep promises. Tulsidas’ ideal, praan jaye par vachan na jaye was held up to us as a moral ideal. We admire Karna in the Mahabharata for not switching sides because he had given his word to Duryodhana. This loan waiver wounds that moral universe. It tells the farmer not to bother to repay his next loan, because, who knows, another party will be in power and it, too, will cancel his debts. What message does this send to the honest village woman who struggles every week to repay her micro-loan?”

At the other end of the spectrum is P. Sainath, the Magsaysay Award winning rural affairs editor of The Hindu. He writes of the irony of the Vidarbha farmers whose plight resulted in the waiver not being its beneficiaries, of the anomalies of the size criteria and land classification. But he uses the opportunity to twist a knife into the Doubting Dases.

“Is the waiver ‘unprecedented’? Each year, nationalised banks write off thousands of crores of rupees as bad debt. Mostly money owed by small numbers of rich businessmen. And theirs is not a ‘one-time waiver.’ It is a write-off that recurs every year. Between 2000-04, banks wrote off over Rs. 44,000 crore. Mostly, this favoured a tiny number of wealthy people. One ‘beneficiary’ was a Ketan Parekh group company that saw Rs 60 crore knocked off. However, those ‘waivers’ are done quietly. In 2004, last year of the NDA, such write-offs went up by 16 per cent. Such ‘waivers’ have not slowed down since 2004.

“And all this is apart from the annual Rs. 40,000 crore ‘giveaway’ to the rich, mainly corporate India. That has been the average in the budget every single year for over a decade. Then there are the straight handouts. No one knows how many thousands of crores are lost by handing out spectrum the way it’s being done. But we know it’s a staggering amount. Tot up the ‘tax holidays,’ exemptions and the rest of it and you’re looking at sums that make the ‘unprecedented’ one-time farm loan waiver look like loose change.”

Also read: CHURUMURI POLL: Farm loan waiver: right or wrong?

‘Bank are real beneficiaries of farm loan waiver’

6 March 2008

The conventional wisdom on Union finance minister P. Chidambaram’s Rs 60,000 farm loan write-off has been that public sector banks will have to take the “hit”. But BFL-mPhasis founder Jaithirth Rao, who was the youngest Citibank head when he set up operations in India, writes in The Indian Express:

“The real beneficiaries of this supremely pro-farmer move, one could argue, are not the farmers but the banks. Here they are saddled with loans that they could not collect anyway, and in place of these ‘non-performing’ assets (bankers love euphemisms) the banks will receive securities where the principal and the interest are fully guaranteed by the Sovereign Secular Socialist Republic of India. Bankers must be happy and with good reason.

“In the past, when rich businessmen who were friends (cronies?) of politicians could not or would not repay their loans, elaborate rituals like ‘restructuring’ and ‘references to BIFR’ were the order of the day. As the old saying goes, if you borrow a thousand rupees and default, the bank troubles you. If you borrow a million rupees and default, you trouble the bank. Since loans to individual farmers were small, by definition the banks troubled them and as there was no magical BIFR, loans stubbornly remained on stressed balance sheets. Now that worry is gone at one stroke.”

Read the full article: That old market for votes

Will taxpayers help bring the UPA back to power?

3 March 2008

Muralidhar Swaminathan on IBN Live:

“The UPA government has insured its political future with a Rs 60,000-crore cheque. The UPA will not pay for it but you, me and every taxpayer of the country will. If not today, tomorrow or three years down the line we have to pay this. The country’s taxpayers will pay to ensure the existing political combine returns to power. In short, the UPA is shamelessly trying to loot the country’s precious resources to further its own political ambitions…. Are we going to be mute spectators to this?

“The immediate questioning has centered around the source of funding for this largesse. But this is a secondary question. The primary one being: who has given political parties the right to appropriate funds? Will Parliament approve this mega ‘loan’ mela?

Read the full article: UPA’s Rs 60,000 crore insurance for polls

Also read: CHURUMURI POLL: Loan waiver, right or wrong?

‘Kaaji? Hawaa nikal gayaa na? Ab chalo’

1 March 2008

Sankarshan Thakur on a budget that’s more than a budget in The Telegraph, Calcutta:

“What P. Chidambaram took two breezy hours spelling out to the Lok Sabha, he could have said with a single word: elections….

“There was joyous drum roll lifting off the UPA ranks, the BJP squirmed in indignant silence. It was all too apparent that the finance minister was gleefully undercutting them in the vote stakes, but they couldn’t even cry foul…

“What was the BJP to rail against, though? The extension of minimum employment guarantee? Concessions to farmers? The hike in tax slabs? Today was a day the Opposition knew better than to oppose; that would be the surest way to be damned by constituencies across the country….

“It was railway minister Lalu Prasad who probably caught the Opposition’s post-budget temper most aptly today. As the House rose, the UPA barrel-chested, the BJP slouched, Lalu Prasad lingered in the first row, trying to locate adversaries to rib across the Lok Sabha well. He pulled a mock-glum face and ran his fingers slowly and elaborately down his eyes, as if to say, time for you to start weeping, mates. “Kaaji,” he dared no one in particular in the fast emptying BJP benches. “Hawa nikal naa gaya, ab chalo (so, has the wind been knocked out of you now? Let’s go).”

Read the full article: Two hours to spell out a word: poll

Cartoon: courtesy Surendra/ The Hindu

CHURUMURI POLL: Loan waiver, right or wrong?

29 February 2008

The centrepiece of the Union budget for 2008-09 presented by finance minister P. Chidambaram is unquestionably the waiver of agricultural loans to the tune of Rs 60,000 crore. All loans upto March 2007 and overdue up to December last year will be covered by June 2008. Three crore marginal farmers holding upto one hectare of land, and small farmers holding up to two hectares, will benefit to the tune of Rs 50,000 crore by the waiver. The one-time settlement for other farmers, in which the government will give a 25 per cent rebate on payment of outstanding loans, will cost another Rs 10,000 crore.

Coming as it does on the back of thousands of farmers’ suicides across the country, the write-off has been described as “revolutionary” by UPA president Sonia Gandhi. Prime Minister Manmohan Singh has called the loan waiver a “generous gesture“. But farmers’ groups, some of whom were rounded up by Congress lackeys to celebrate in front of Sonia’s residence, are not all enthused. They feel that the land-size criterion is too strict. Most of the farmers in worst-affect Vidarbha, where large packages announced by Singh have failed to stem the deaths, would actually miss out.

Questions: Is the move to write off farm loans a good move or a bad move? Is it really intended to help the farmers or is it intended to woo them in the next election? Will banks have to pick up the UPA’s tab or will the government impose a cess on non-farmers to raise funds? Will the write-off stop the suicide spurt or will it only end up in creating a very poor repayment culture among farmers? Has politics triumphed over economics? Or, given the general prosperity of the country, is it a small price–jai kisan and all? And above all, will such populism really swing votes in the direction of the UPA, or is the Indian farmer smart enough to see its motives?

Also read: Sheep, mutton, fish, Karnataka and Maharashtra

P. SAINATH: ‘India is a land of two planets: rich and poor’

Till debt, defaultment and death do us apart