“Country is being run without a govt”, says Jayalalithaa?
It is indeed an achievement—governance deficit for the UPA-II. Tamil Nadu Chief Minister J Jayalalithaa goes a bit further and says the country is being run without a government. “The average citizen feels there is no government at the Centre; the government is at drift,” Jayalalithaa said.
The problem is over-bureaucratisation and decision-making process left to the officials extends on all fronts. They say everything has to adhere to rules made by them. They forget that rules are for the people and people cannot be for the rules.
Bulky files move when wheat for export is rejected for its poor quality. It is left to rot but not released in the open market. It could have sanguine effect on food prices. It could have crashed. But the officials either in cahoots with the grain merchants or too naive to understand the consequences prefer it not to release it causing loss of lakhs of tons of grains and thousands of crore of public money.
The blame has to be shared by the political establishment as there is inertia in taking a decision to correct the system. They only act when it has to be a vindictive political action against opponents. They can be prosecuted on flimsy grounds or opposition MLAs could be lured to resign to save a shaky government as it has happened in Uttarakhand this week.
The government is least interested in correcting grossly incorrect bureaucratic decisions that are leading the country to a political and economic mess. The latest rise in petrol price by Rs 7.54 a litre is only a testimony to the political wisdom. The decision forwarded by Petrol Ministry bureaucrats has least reasoning. Petroleum companies are earning huge profits and giving large doles to their employees. But the political masters do not have the courage to fight it out at a time when the country is once again witnessing over 10 per cent food price hike.
Inflation in this country is man-made. The unwillingness of the government to act has only exacerbated it. Since 2009 there has been a cumulative 30 per cent increase in prices of all commodities and manufactured goods.
Petrol was at Rs 40 in 2009 and now it is selling at Rs 73.18 in Delhi. At other places it costs much more. All food grains and vegetable prices are going through the roof. Even manufactured goods be it toothpaste or air-conditioner are doubly expensive. A toothpaste tube of 50 grams used to cost Rs 10 even a year back. Now a 30 gram tube costs Rs 15. An air-conditioner two years back was available for around Rs 12,000 and now it is priced at over Rs 25,000.
This is happening as competition in the market is being reduced through cartelisation or mergers of large entities. In cosmetic manufacture it is almost the monopoly of one multi-national, which has been allowed to successfully acquire its rivals through various machinations.
This has happened in the soft drink sector as well. A drink that was sold for Rs 15 for 200 ml last year is being sold at Rs 25.
The government in the name of free market never acts to keep the prices close to the production cost. Profiteering is the bye word of the market economy. It does not happen even in the wry capitalist US. There government keeps a close tab and applies anti-trust (monopoly) laws to force the corporate behave. In this country, they are allowed to run wild.
Nobody talks of pharmaceutical prices. Cartels are mushrooming there as well. Acquisitions and mergers are being used to end competition. Drug prices have in many cases more than trebled during the last two years. The companies raise prices with impunity as they are aware that there is no political authority to control them.
An average Indian avoids visiting the physician lest it bleeds his pocket. This is happening at a time when the government claims it is universalising health facility through National Health Mission. The mission is there on the paper. Government hospitals have turned sick and decaying. The poor man is wailing.
It has also turned the small and medium industries turn sick. Many have closed down and many are gasping as bureaucracy makes their functioning extremely difficult. The taxmen swoop on them and attach their accounts making them virtually inoperational. This has even happened with private airlines and other companies.
The government never questioned the authority and method of taxmen. If a business is not allowed to function how it would pay its tax. Quixotic methods thrive as no decision is taken at political level.
In Delhi itself, many small traders had to close their shops under the so-called operation sealing, which benefitted many malls and the son and relatives of a former judge. If the judge was at fault in issuing orders for sealing to benefit his son’s company, the government faulted in not seeing through the game and demanding review of such weird judgements. The list can multiply.
The wrongdoings in allotment of spectrum, coal mines and many other resources are well-known. It has benefitted those who should not have got it. But it must be remembered that is also the route for donations for election purposes.
All the same it also raises a finger at the Comptroller and Auditor General’s methodology for calculating losses. The figure provided by CAG is on speculative basis. The premise that had these been auctioned this would have accrued to the exchequer this much. Speculative methods have severe practical problems.
The CAG has not calculated that the auctions, as it is being seen now, would have increased tariff manifold. It also did not visualise the problem it creates in investment. The withdrawal of Norwegian company Telenor and Saudi Arabian Etisalat are symptomatic of that greater malaise – that Indians cannot take a firm decision.
The wobbly methods of the government have shaken the confidence of investors worldwide. It is resulting in flight of foreign investors, even short-term investors like the foreign institutional investors (FII). It is leading the country to a difficult phase of foreign exchange crisis. Decisions resulting from bureaucratic rule-books are not being corrected at the political level.
The political will and expertise is missing in handling the bureaucracy, virtually running a riot. The bureaucrats like Arvind Jadhav and Raghu Menon messed up Air India and have gone scot free. The nation is being made to pay a heavy price for running an airline that only looks after the comforts of top bureaucrats.
Political wisdom should have leased it out to any bidder to save a drain of at least Rs 6000 crore public money a year. Air India now wants the latest Dreamliner from Boeing though it has shattered the dreams of every Indian.
Vodafone case and the bid to introduce retrospective tax is yet another folly that has shaken the confidence of the industry. The folly is foisted upon the political masters by the taxmen. The political leaders, including an astute finance minister, do not have the wisdom to do away with such Tughlaqi moves.
India ranks at the lowest rung in comfort for doing a business. During the last three years it has worsened. Since the decision-making process has rot it is leading to the decay of the entire system.
Corrections are not being seen except in trying to showcase in terms of “poverty reduction” by projecting unbelievable figures of sustenance a day – be it Rs 32, 26 or any other. The reality is disparity is increasing. Poors are becoming poorer. The middle class is getting closer to poverty line. Purchasing power is eroding.
Consequently industrial and manufacturing growth have taken a never-before dip of almost zero per cent. In some cases it has gone negative.
This has another fall-out. The severe political and economic mess is having its toll on law and order. Social tensions and strife are increasing. The scenario is turning murkier every day. A great achievement of a great nation!