Continued from:
MANMOHAN TRIES TO SOUND SINCERE BUT DOESN'T LIFT
CONFIDENCE – IT’S THE POLITICAL JAMBOREE CALLED INDIA (II)
For
most Indians, subsidy is a necessary evil; it’s the politicians who suck really
In
a country as poor and unequal as India, subsidies are the lifeline
for millions. Indian government reports on poverty line estimation and
population size have drawn flak for oversimplifying the poverty issue in the
country. If we shift to some international data sets for the universal poverty
line, a 2011 World Bank report says 68.7 per cent of the Indians live on less
than $2 (Rs. 110) per day on PPP basis. That comes to a monthly income of Rs.
3500 a month.
Managing
meals, maintaining healthcare, providing education and sustaining a standard
family life in Rs. 3500 a month is next to impossible these days!
World
Health Organization says Indians constitute world’s largest open defecators
community, the 58 per cent of the chunk.
Planning
Commission of India
says the country is facing a 76 per cent shortfall of doctors.
United
Nations’ Global Hunger Index puts India at 67th position
out of the 80 countries surveyed. Indians make 25 per cent of the world’s
hungry lot.
All
these tell Indians do need subsidy; Indians do need state’s help in sustaining
their day-to-day lives; Indians do need state’s assistance in finding the route
to lead an independent and dignified life not dependent on the state’s help.
And
for these inevitable reasons, Indian policymakers must never think of doing
away with subsidies that directly hit a family’s monthly budget. Diesel
subsidy is one such thing.
Manmohan’s
poor statement delivered on September 21 said, “We raised the price of
diesel by just Rs. 5 per litre instead of the Rs 17 that was needed to cut all
losses on diesel. Much of diesel is used by big cars and SUVs owned by the rich
and by factories and businesses. Should
government run large fiscal deficits to subsidise them?”
But
Mr. Manmohan Singh, tell us how many of Indians sustaining below Rs. 110 a day
drive even a Tata Nano, put aside the big cars and the SUVs?
Mr.
Manmohan Singh, these Indians depend on public transportation like buses and
trains that run on diesel. It is not all CNG and electricity yet.
Mr.
Manmohan Singh, these Indians depend on the food, grocery and other household
supplies every month the prices of which are governed by these modes of
transportation.
Prices
of essential commodities have shot up by 20-25 per cent after the ‘reformist’
diesel price hike. And whatever this hike does to reduce the government’s
burden, (Manmohan says Rs. 20,000 crore), is nowhere near to the high fiscal
deficit of over Rs. 5 Lakh crore.
Instead,
government’s governance management could be the key that Manmohan (or say any
politician in the driving seat) doesn’t want to accept. The loss to the
exchequer in scams like 2G spectrum allocation and coal-block allocation could
alone have saved billions of dollars. True, the figure of loss in these cases are
expected figures but they are based on market values and arrived at by India’s supreme
accounting body. Billions of dollars of Black Money stashed away – why can’t
government act sincerely to expose the culprits (if not to bring the money
back)? That would deter such practices in the future and would substantially
enrich government’s treasury by inflow of taxes.
Vested
interests!
How
can Manmohan act to crack down when many of his political fraternity are
deep-neck in these scams?
But
why then trying to sound serious for concerns of the ‘aam aadmi’ while acting
to preserve the interests of the corporate and political elite?
It’s
not the subsidies but the politicians who suck.
I
quote here some random line from one of P. Sainath’s articles (To fix BPL, nix
CPL, The Hindu, March 26, 2012), “Since 2005-06, for instance, the union
government has written off close to Rs.4 lakh crore in corporate income tax.
Throw in concessions on customs and excise duties and the corporate karza maafi
in this year's budget sneaks up to nearly Rs.5 lakh crore. In just this budget
and the last one, we've written off Rs.1 lakh crore for diamonds, gold and
jewellery in customs duties. The total write-off on these three (revenue
forgone under corporate income tax, excise and customs) heads in eight years
since 2005-06: Rs. 25.7 lakh crore. That's over half a trillion U.S. dollars.”
Huge!
Isn’t it?
It
is true we cannot take utopian view of any hard reality. Industries do generate
jobs and they need promotions but we need to see at what cost. We need to see
what types of industries are being promoted. Sainath mentions some sectors like
diamond, gold and jewellery and hospital equipments (most beneficiaries have
been the corporate hospitals) being benefited from these write offs.
There
has been a controversy on the huge fund (Rs. 95,000 crore) that the proposed
National Food Security Bill would require. Opponents say it would cost the
country dearly as it is already bleeding from the monstrous subsidies under
different heads. The two budgets that have written off almost a crore in the custom
duties on diamonds, gold and jewellery could alone have done it. Isn’t it Mr.
Manmohan Singh?
Writing
off practices like the retrospective taxation are understandable as they do hit
the prospects of large employment generating entities in the country but why
bestow largesse on sectors that serve very few in the country.
What
requires immediate attention, is corruption, political and industrial, and not
the subsidies.
Petroleum
products are heavily taxed in India,
at central and state levels. Rationalize them and there would be no need for
subsidies then. Why can’t politicians do it?
Petroleum
products are the easiest source of large revenue for many defunct and corrupt
state governments due of its ‘lifeline sort’ of use. Goa
generates handsome revenue from its tourism industry and so it could easily do
away with VAT on petrol.
Why
can’t state and central governments act to create alternative sectors of
competence to generate revenue?
To
continue..