[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

THE NEW ROBBER BARON



---------------------------------------------------------------------
Please help make the Manifesto better, or accept it, and propagate it!
---------------------------------------------------------------------
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.






--------------------------------------------------------------------------
This is the National Debate on System Reform.       debate@indiapolicy.org
Rules, Procedures, Archives:            http://www.indiapolicy.org/debate/
-------------------------------------------------------------------------