THE NEW ROBBER BARON

By Indrajit Barua

 

In India – still socialist despite whispers of reform – the new robber

baron and the biggest one is the State itself.

 

The State routinely and regularly steals from its citizens and deprives

them of the basic necessities of life like drinking water, education,

health care, fuel, electricity and a host of similar things so essential

for survival as dignified human beings and members of an organized

society in an independent country.

 

All this has been done in the name of reaching ‘the commanding heights

of the economy’ – a phrase coined by Jawaharlal Nehru -- to ensure the

economic power of India to be controlled by him and his progeny.

Politicians generally do not believe what they say, but Nehru did – and

that is why he was dangerous – as the last fifty years have proved.

During these years, good governance was never the primary task and the

raison d’être of the Government. Reaching the commanding heights of the

economy became its only goal, for through economic power, and economic

power alone, could the State ( for ‘State’ read the political and

bureaucratic executives ) dictate what was good for the citizen and

control his life in a manner known only in totalitarian regimes like

Soviet Russia and Nazi Germany. Nehru was no half-baked visionary as

many of us would believe. His desire to reach the commanding heights of

the economy was but the natural outcome of protecting and preserving

what has now become known as India’s first family and perpetuating

dynastic rule. That his grand scheme has now come unstuck is a tribute

to the people of India.

 

Is this judgement of Nehru harsh? Perhaps not, in the light of the sheer

size of the ‘investments’ out of the citizens wealth in (mostly loss

making) public sector units in the central sector:

 

Investments in the Public sector ( Rs. in crore)

 

Period Without adjusting for inflation

After adjusting for inflation

1947-64 : Jawaharlal Nehru

2,000

35,000

1966-77 and 198-84: Indira Gandhi

40,000

2,30,000

1984-89: Rajiv Gandhi

58,000

1,35,000

1989-1999: After the Nehru-Gandhis

15,000

23,000

TOTAL

1,15,000

4,23,000

 

This in essence sums up the account of the wealth stolen from the

citizens to make the State – for ‘the State’ read the ruling elite – to

enable them to reach ‘commanding heights of the economy’, which has now

become a rubbish heap. The figures shown above represent the citizens’

wealth appropriated by the Central Government. The wealth hijacked by

the State Governments has to be added thereto to arrive at the total sum

taken away from us for the benefit of the politicians, their dependents

and their connections. The resulting sum will be truly astronomical.

 

Nehru laid the seeds of this larceny: his successors – namely, his

daughter and his grandson – nourished these seeds into a full and

blossoming economic disaster for India. The point to note here is that

without such vast economic power in their hands, the Nehru-Gandhi clan

could never have ruled India in such a high-handed manner and for such a

long time.

 

During these years the State made one after another ‘investment’ that

did no good to the citizen. The State was into practically every facet

of the economy: the business of insurance was taken over to provide the

State with enormous sums of our money and cash rich banks were

‘nationalized’ in the name of the people. With this vast reserve of

capital at its call, the State went on to create financial behemoths

like the IFCI, IDBI, the UTI and the like, which could, and did come to

control the money markets of the nation. Thus, share prices could be

brought crashing down or sent booming up to dizzy heights, investors and

entrepreneurs could be created, made prosperous or ruined -- all as the

State willed. Petroleum processing, civil aviation, hotels, food

processing, bread making, soft drinks, construction, heavy & medium

engineering, machine tools, time keeping, electrical power, road

transport, tractors, scooters, bicycles, jute goods, textiles – almost

everything the citizen wore, consumed or used was made by the State and everything that he

wore, consumed or used was also taxed by the State. And when Nehru’s

‘temples of modern India’ ate up their capital, the citizens’ money, in

a never ending stream, was poured into their bottomless buckets – in

what became known as ‘budgetary support’ to the PSUs – to pay wages and

salaries, bonuses and other perks and to enable them to embark on

further economic misadventures with the aid of public funds.

Competition was regarded as wasteful: State owned monopolies provided

the perfect escape route to reach the mirage of ‘commanding heights’. In

the process the State created huge monopolies, which, in turn, created

artificial shortages of practically everything the citizen needed, by

design and not by accident. Such shortages were of course very

beneficial to certain privileged employees of these monopolies and their

political masters with their ‘discretionary quotas’. Remember the

scramble for airline seats, the rude ticketing agents and the scowling

airhostesses, the arrogant marketing managers of the nation’s steel

makers, the customer unfriendly staff in ITDC hotels, the unhelpful

insurance executive and the unfriendly banker – the faces of those

officious and rude bureaucrats posing as business persons that you and I

had to contend with?

 

During these golden years, the private sector had a cosy relationship

with their masters -- the State apparatchiks. Since competition was

nonexistent, they could sell shoddy goods at premium and get away with

it. Remember the little extra you had to pay to buy a third rate car or

a scooter if you wanted it without having to wait a lifetime?

Just imagine what would have our country been like if this wealth was

not stolen from us and siphoned off into ventures that were never

intended to yield any returns to the citizens. We would have much better

rail and road networks; many more and better equipped village schools,

rural health centres and hospitals; electricity and water for all;

better telecommunications…… and a host of other necessities that would

have made life more bearable for the poorest of our citizens.

 

After nearly fifty years of being ‘at the commanding heights’, the

nation’s per capita income stood at $310, while a small & relatively

less affluent country like Peru had a per capita income of $1,600. I

shall not talk about war torn Japan for fear of blasphemy, because the

per capita income there was around $22,000.

 

At the same time, the Indian rupee fell sharply against the US dollar:

from about Rs. 4.00 in 1947 to around Rs. 43.00 now.

 

These are the stark realities and the achievements of the grand larceny

called the ‘commanding heights of the economy’.

 

With the collapse of the communist regimes in the USSR and in Eastern

Europe, it at last dawned on our pseudo economists at the controls of

the State’s economy that a surrender to the dynamics of a market economy

– the system that had made the ‘decadent’ West prosperous – had become

inevitable. A process of ‘economic reform’ was taken in hand. What galls

me is that those very votaries of a centralized economy with complete

stranglehold of the State on it suddenly became our economic liberators;

new terms like ‘Manmohanamics’ came to be coined in praise of their new

avatars. Now came talks about the pace of economic reform. First, you

travel on the wrong road for fifty years; then you discover you are on

the wrong road because almost everyone else who matters has overtaken

you, and then you start arguing that you must not run too fast on the

right road lest you catch up with the rest of the world! How silly can

you get?

 

Even now, after eight years have gone by after the dawn of our so-called

economic liberalization, the State routinely continues to monopolize and

create shortages in critical sectors – electrical power connections,

telecommunication and infotech for example. It is hard to get a power

connection from a State Electricity Board, a water supply connection

from a Municipal Board or a telephone connection from DOT within any

reasonable time frame without bribing someone unless you are a VIP or

have connections with one. The approach road to the information highway

is blocked by another State monopoly, the VSNL. Low voltage, sudden

power outages, low water pressure or no water, silent telephones and

Internet connections that are almost impossible to access and that get

suddenly disconnected are the results of this State monopoly that is

very efficient in creating shortages for the benefit of the its

employees and their political masters. What else is this but grand

larceny?

 

Our country has to rid itself of this curse of State monopoly and its

resultant black market economy. The party appropriated by the

Nehru-Gandhi clan for its own perpetuation is no longer in office, and

hopefully, it will not see the corridors of power for the next few

years. The present government affords us a chance of true economic

liberalization, but it must eschew economic dogmas like ‘swadeshi’ for

the sake of gaining cheap popularity in the short term. If we have to be

swadeshi, its has to be so through competition and not through

protection by monopoly, permits and licences. If this government also

subverts the economy like its predecessors, then India will surely end

up as yet another basket case in this subcontinent.