There are four policy initiatives of the UPA government whose economic rationale is dubious -- at best.
Given the dream team of Messrs Manmohan Singh, P C Chidambaram, and Montek Singh Ahluwalia, these are four dubious initiatives too many.
Then how come such false initiatives are the flag-bearers of so-called progressive thinking? Because -- and here one is speculating although with cause (documented below) -- such progressive initiatives can have a high proportion of corruption content. Corruption that helps perpetuate politicians, political parties, and their power.
|Who is available for the employment guarantee scheme?|
|UNEMPLOYMENT RATE (% of labour force)|
|DAYS WORKED IN A WEEK|
|MEAN YEARS OF EDUCATION, LABOUR FORCE|
|MEAN YEARS OF EDUCATION, UMEMPLOYED|
|Source: NSSO Employment Unemployment survey for years 1983, 1993/94 and 1990/00. Notes 1. Unemployment is defined according to Usual Status in the survey. 2. labour force is defined as the population working orlooking for work (Usual status<=81) in the age group 15-59.|
Recall that in 1971 Indira Gandhi recognised the financial power of Garibi Hatao when she yelled "In the name of the poor". A decade later her son, Rajiv Gandhi, yelled back: "but only 15 per cent of expenditures meant for the poor actually reaches the poor".
Whether the road back to the shenanigans of Garibi Hatao (absolute poverty in India was around 45 per cent in 1960/61 and ditto in 1983 -- so much for Indira Gandhi's heart and efforts) is being led by the Left or their surrogates in the governing alliance is not relevant.
What is pertinent is that rather mystical or jadu or voodoo economic policies are being advocated, and perhaps even implemented. This should concern us all.
Given that the best and the brightest economic minds in India are leading the progressive alliance, the charge of jadu economics may seem extreme, but it is appropriate.
The B&Bs initiated the economic reforms, which allowed India to eject extreme forms of jadu economics out of our feudal and corrupt system.
But now jadu is back with a vengeance -- and brought to you by the same people who rejected it with conviction not so long ago! What can explain this Janus-like behaviour?
There are two possibilities -- either the B&Bs have learnt something new since 1996 (when they lost power) or they are being "forced" because of coalition politics to advocate jadu.
Let us examine the four policies for their progressiveness and corruption content. The first: free power for poor farmers. The second went for the guts and the policy gutter -- an education cess.
The third -- an employment guarantee scheme for the poor, especially in rural areas. The fourth advocates using just a small portion of our $130-billion plus foreign exchange reserves for infrastructure development.
These policies are not being made by economists, but by Bollywood movie makers. Check out how many times the B&Bs tugged at your heart and left the mind to be submerged by the tears of guilt.
Free power for farmers -- this will eliminate farmer suicides. Education for the poor --surely the shining India rich will not grudge a few morsels for providing basic education to the street children.
Employment for the poor -- surely it is better to provide employment to the needy. Infrastructure -- surely everyone wants better roads, more electricity, better airports -- and this will also help the poor.
These policies have been advocated with such Madison Avenue slickness that it has turned on non-B&B minds. My good friend and fellow columnist TCA Raghavan believes that concern for the poor is the Left's contribution to social justice; he forgets that non-Left individuals also have a heart, in addition to a mind.
Back to jadu economics. Free power for poor farmers. Every time there is an oxymoron, pinch yourself hard. Only then will you feel the pain that B&Bs can inflict.
First, poor farmers do not get electricity -- even if they have the connections it goes somewhere else (Delhiites know this very well -- power shortages never hit the houses of senior government servants, or Parliament, or the homes of the politicians).
The reason the policy is advocated, and so enthusiastically implemented, is because it opens the government books to discretion, i.e. it becomes legit for someone to get free power.
So now the urban rich, the industrialists, and politicians can be classified as "farmers"--money changes hands, power is free, campaigns get financed, and the Left-out intellectuals can sip their whiskies without guilt.
Education cess; when the cess was announced it was documented that the state of West Bengal had increased state expenditures on education by 160 per cent (compared to a national average of 37 per cent) since it came to power -- and that its record on increases in primary and secondary school enrolment was the worst in the country. Where did the money go?
For the salaries of cadres, so that Left social scientists could then applaud their "organisational ability" in winning elections. The Congress wants to win elections in UP and it needs funds.
(Did anyone notice that newspaper greetings for Ms Sonia Gandhi's birthday were sponsored by the Slum Redevelopers Association -- this is what Rajiv Gandhi meant when he said that the money for the poor does not reach the poor.)
Forex for infrastructure -- sounds good but who regulates the regulator? The Indian Express has been carrying out a fantastic expose about the "delays" in building the Bangalore International Airport.
Alongside this article (Dec 10, 2004) is a front page story about how India ranks as one of the most corrupt countries in the world, and Indians consider political parties as the most corrupt (much more so than even Pakistan)!
The simple fact is that procurement policies are where the graft is. Remember Bofors, or the coffins for our jawans (substitute the poor for jawans and the connection is apparent). To argue that anything more than a trickle of the money meant for infrastructure would actually be for infrastructure is to give trickle (down) a bad name.
Which brings us to the biggest scam of all -- I take that back. Each of the "in the face of the poor policies" deserves a Goebbels prize for the reality convincing lie. But the employment guarantee scheme is special.
It is meant to provide "at least 100 days of employment to begin with on asset-creating public works programmes every year at minimum wages for at least one able-bodied person in every rural, urban poor and lower middle-class household" (emphasis added).
Bring out the violins -- we are really going to do something for the poor. The presumption is that the poor are poor because they do not have work to do. This is an oxymoron -- the poor are too poor not to work. The arrogance and the ignorance of the social conscious in advocating this get-rich policy for the politicians stand woefully exposed.
The table documents the unemployment rates in India over the last two decades according to the NSS -- the official source of unemployment data in India.
It exposes the lie in at least three areas. First, unemployment is an urban phenomenon and is less than 1.5 per cent for rural agriculture households -- the poorest.
Second, those that are employed are working close to six days a week -- the EGS thinks that such people will be available for work for a third of the week -- 100 days annually! Third, the unemployed are the highly educated -- possessing, in 1999/00 more than nine years of education!
Where will the money meant for the EGS really go? Surely it won't go to the poor, or the needy, or even the educated unemployed. It will most likely go to "friends of the government" as fictitious assets are "created" (I have asked many times for visual verification of such virtual assets -- the invariable answer, they got washed away!).
These "assets" will help keep the ruling political parties in power. That is the real purpose behind Goebellian "in the name of the poor" social justice policies.
Is there a substitute relatively non-leaky policy to help the poor? Yes -- give them cash transfers. This is true empowerment -- civil society and newspapers, and the poor themselves, will enforce this policy.Leakage will be minimal. But it won't happen. Precisely because it will help the poor and not those who "implement" it.