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Politics

  • Change is for the obdurate

    The country needs our anger today

  • Narmada, Bhopal are issues of democracy, fair deals

    Over the past few days, Jantar Mantar has been the venue of two protests against two of worst tragedies Independent India has witnessed. On one side of the road were activists

  • Old-style corruption better?

    A journalist from the International Herald Tribune asked my opinion about what he called modern forms of lobbying that us multinatio nals operating in India engaged in. He was investigating

  • Oil price hike: quick-fix measures wont work

    Railway minister Laloo Prasad Yadav and former cricketer Navjot Singh Sidhu are the clowns of Indian politics. But think of the actions of the two in the past fortnight and you will begin seeing the

  • In credible India

    Sometimes, a fortnight can mirror a year. With the year-end approaching, a flashback is usually in order. But recent events have made completely clear to me where we are and where we are headed. <br>

  • PC budgets for early elections

    Rs 60k-crore farm loan waiver, I-T exemption limit raised. P Chidambaram unveiled a Budget cleverly designed to win him many popularity contests. There were concessions on the income tax, reductions in customs and excise duties, and the mother of all farm loan waivers. While playing to multiple galleries, the finance minister also managed to reduce the fiscal deficit to lower than the target set under the fiscal responsibility law, and showed progress on the revenue deficit. Along the way, he designed his announcements so as to attack the twin problems confronting the economy: inflation (the excise and customs cuts will help lower prices) and falling consumer demand (lower tax rates for small cars and two-wheelers, and more money in people's pockets from the income tax concessions). Keeping in mind the Congressman's favoured

  • Politics over economics

    This Budget asks and answers some rather big questions. Begin by asking the man in the street, and he will say that he is happy with Mr Chidambaram's Budget. And so the finance minister has dared politicians to criticize the farm loan waiver, and he might as well dare others to criticize the income tax cuts, if they care to. In other words, he knows that he has touched a popular nerve in both city and country. The second big question to ask, therefore, is whether economics can hope to prevail over populism, or whether political considerations always trump good economics. Certainly the UPA government's fifth and final budget gives unequivocal answers: it is a political budget from start to finish. And so a government led by economists and economic reformers has ended up bowing to political considerations and implementing over five years programmes that they may not believe in, but which they have to introduce and then find reasons to support. When a government led by such notables writes off Rs 60,000 crore of bank money, or 3 per cent of all bank loans, it is as well to remember the harsh words hurled at Devi Lal when he did the same; but since he was an unlettered kulak, he could be safely abused. The truth is that while farmers have been in distress, writing off loans makes every farmer who repaid his loan feel like a fool. What does that do to credit discipline? Also, the write-off does not end rural indebtedness because farmers owe more money to moneylenders. And if they got into financial trouble because farming does not pay enough, then the debt write-off is only a palliative and does not solve the underlying problem. So farmers who borrow again (if the banks are willing to lend) will also get into trouble again. But these are the questions that economists ask. There is also a question that lawyers might ask: how does the government tell the client of a private bank not to repay a loan, unless the government makes it up to the bank? And surely, the government is not about to start paying up to ICICI and HDFC and all the others, is it? The triumph of politics shows also in the national rural employment guarantee programme, which has been extended to all 596 rural districts, even though Rahul Gandhi who first demanded this realises now that the programme is not being implemented well. Another indicator of the soft state is the increase in the income tax floor from Rs 1.1 lakh to Rs 1.5 lakh (it is still higher for women and senior citizens). But even in the United States of America, people start paying tax at a lower income level of $3,400 (Rs 1.36 lakh), while in China the tax floor is $1,400 (Rs 56,000). India is poorer than both those countries, so why do people with higher income in a poorer country get away without paying income tax? The answer is that the government wants the urban, middle-class vote. The fifth indicator of politics trumping economics is the government's refusal to raise petrol, diesel and cooking gas prices to reflect their real cost. So the oil marketing companies have lost over Rs 70,000 crore on this account in the past one year. The way the government does its accounting, some of these figures do not show up in the Budget, even though the government will finally have to pick up the bill. If you add up the oil subsidy, the fertilizer subsidy, the extent of the loan write-offs that have to be made good and the money that has to be provided for the Pay Commission award, the total is huge. That brings up another big question: should the Fiscal Responsibility and Budget Management (FRBM) Act be scrapped? For this law seems to be having the perverse effect of making the government hide more and more of its expenditure and not show it in the Budget. The finance minister can then claim that he is meeting FRBM targets, when in truth he is not. Scrapping the law might encourage more honest budgeting. The last big question is whether governments can be trusted to be responsible with money. Note that taxpayers have paid up an average of 22 per cent more tax each year through the five Budgets of the UPA government

  • Congress plans rallies to cash in on farm debt waiver

    Buoyed by the popular reaction to the farm debt waiver and debt relief scheme announced in the budget, the Congress has planned a series of rallies in State capitals and district headquarters. It will begin with a massive show of strength on the Ramlila grounds here on March 9. At the same time, Congress president Sonia Gandhi will meet State-wise all-party MPs from March 3 to 5 in the Parliament House. In a bid to pull out all stops to cash in on the popular sentiment, Ms. Gandhi's meetings with MPs will generally carry the message that the momentum and high ground gained by the party on the farmers' indebtedness issue, should be maintained throughout the year when six States go to the polls, and till the Lok Sabha polls next year. The States going to the polls this year are the ones where farmers would benefit the most from the Rs.60,000-crore debt waiver scheme. These are Karnataka, Rajasthan, Madhya Pradesh, Chaattisgarh, Delhi and Jammu and Kashmir. A senior party leader said that the mood in the party is upbeat and the leadership wants it to be sustained. Central to Ms. Gandhi's meetings with MPs would be the message that the programmes launched by the Congress-led UPA government should be "properly explained' to the people. In particular, the Congress would like to take the credit for the National Rural Employment Guarantee Programme and now the farm debt relief issue, the sources explained. On Monday, Ms. Gandhi will meet MPs from Andhra Pradesh, Assam, Bihar, Manipur, Meghalaya and Arunachal Pradesh. On Tuesday, she is to meet MPs from Jammu and Kashmir, Himachal Pradesh, Delhi, Karnataka, Kerala, Tamil Nadu, Puducherry, Haryana, Punjab, Chandigarh, Uttar Pradesh and Uttarakhand. On Wednesday, the Congress president will meet MPs from Madhya Pradesh, Rajasthan, Gujarat, Goa, Dadar Haveli, Daman and Diu, West Bengal and Andaman and Nicobar. The AICC has planned the rallies keeping in mind the hundreds of Congressmen who want to "thank' the Congress president for the decision on the debt relief scheme.

  • Cancun must not repeat Copenhagen

    <p>Developing countries must guard against a repeat of the situation at Copenhagen, where negotiations under the UNFCCC were deliberately stalled, and Heads of State/Ministers from developing countries were pressured to agree to &ldquo;something&rdquo; to save the climate regime from collapse.

  • Superstorm ‘Sandy’ tells us why the climate change denial must stop

    <p><img alt="" src="http://www.indiaenvironmentportal.org.in/media/iep/homepage/sn_blog.jpg" style="width: 600px; height: 131px; float: left;" />I start this blog on climate politics as tropical superstorm

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