Dr R Balashankar
Prime Minister Dr Manmohan Singh, at last, seems to have mastered the art of growing money on trees. If his idea of transferring Rs. 4 lakh crore annually to ensure a Congress return in the 2014 election is taken seriously there is no other sensible explanation. Reports are that he is going to soon address the nation to canvass support for this obnoxious political extravaganza. Can the tax payers’ money be so brazenly misused for bribing the voter to ensure a win for the Congress? Doesn’t it qualify for an election malpractice petition?
The moot point however is neither. It is the hidden agenda. The sly manner in which the UPA is planning to subvert the Indian economy, end poor man’s subsidy, kill the small farmer, ration shops, ration cards, procurement of food grains and roll out the red carpet for the foreign retail monopolies for market domination.
In September when Manmohan government unjustifiably raised petrol, diesel and cooking gas prices and limited the supply of subsidized LPG cylinder to below poverty line (BPL)families to six per annum, Singh had pleaded that “money doesn’t grow on trees.” He had said the government was facing a huge fiscal deficit, the economy was undergoing the travesty of a recession and that the condition of the economy was akin to the one in 1991, when India had to pledge its gold with the IMF to tide over the balance of payments crisis. Nothing has changed in the last two months except the Congress party’s priorities. A major and immediate consequence of this scheme is its cascading impact on prices of essential commodities like food grains, cooking gas, kerosene, petrol, diesel, fertilizer and so on which are now covered under the administered price mechanism. With the subsidy withdrawn, private players will be free to engage in profiteering and there can be no check on them. It’s the non-BPL common man who will bear the brunt the most.
The cash transfer scheme has no fiscal logic other than that the Congress is facing certain defeat in the next general election. It hopes this promise of a regular cash dole to poor families across the country for all times to come will fill up the ballot boxes for the Congress. The UPA that botched up governance in all fronts in the last eight years has nothing to showcase; and nothing to talk to the voter when it seeks a renewed mandate. The cash transfer scheme will at least give it a talking point. Otherwise no economist worth his salt can justify the scheme. It is a fiscal scandal, a political fraud and a treacherous conspiracy to permanently ruin Indian economy and push it to the ranks of the spendthrift European economies.
Nobody has so far asked Dr Singh, whose money is it anyway he is proposing to distribute for free to buy votes for the Congress. Has the Congress declared a war on the hard working, taxpaying middle class Indian? Where is he going to get the money except by further taxing the middle class and reducing the plan expenses—which has already touched stagnating low—and bringing development activity to a standstill. It’s politically immoral, for the government is comparing it with the Rs 1 lakh crore farmer loan waiver of 2008 which the Congress claims brought it back to power. This is an election stunt which the Election Commission and the Opposition have a legitimate reason to question.
Capitalist economists and the pro-FDI in retail media who are so opposed to subsidy for the poor have hailed the Rs 4 lakh crore annual down the drain scheme as a “game changer.” And declared it the best guarantee for the Congress in the next poll. Is it that they are so committed to a corrupt Congress regime or because they know that the cash transfer serves their bosses best? Manmohan’s is a cynical enterprise. It has to be read alongside the FDI plank in retail. The foreign retailers have bribed their way into Indian political circuit, which makes it easy for the Congress to launch a hi-tech poll campaign. Simultaneously it has to ensure that the market is made more conducive for the foreign retailers to reap windfall profit. How does it work?
The cash transfer will terminate all existing welfare schemes in food, fertiliser, fuel, job creation, health and education. This translates into closing down of all retail fair price shops leaving millions of Indians jobless. This will further cancel the need for food grain procurement, administered prices, which will leave the farmer entirely at the mercy of companies like Walmart. They will eliminate middleman again leaving millions jobless. The absence of the fair price shops and the cash in hand will generate a more captive market for Walmart. In the event of high fertilizer and fuel prices small farmers will be forced to sell away their small farm holdings and migrate to the urban clusters in search of employment. The IMF’s design to force a minimum 30 per cent of Indian rural population to leave agriculture and force urbanise at least fifty per cent of the country is thus fulfilled. What insidious games these World Bank retainer economists play with the future of India? On the face of the monstrous subsidy there hangs a tale. Hence the pink press does not discuss the disastrous endgame of cash transfer.
The crass political opportunism of Manmohan Singh is that at the fag end of his lacklustre tenure he has introduced this half-baked scheme with the ulterior intent of hoodwinking the voter. The cash is supposed to be transferred on the basis of the UID card number. So far only 21 crore people in 51 districts have been issued the UID. The UID is no record of the economic status of a person though the cash transfer is entirely based on the BPL criteria. The government is yet to define and identify this category with finality. The ridiculous Planning Commission definition for fixing the BPL status has only complicated the issue.
The transfer is supposed to take shape through banks and post offices. The two sectors the reform enthusiasts have systematically besmirched. Indian Postal system, like banks is facing acute shortage of manpower because of the two decades of job freeze and globalisation which put a moratorium on recruitments. The ploy was to boost private sector entry in these areas. Even normal banking and postal transactions these days are a painful experience for the commoner. How these institutions will respond to dole seeking BPL customers is a million dollar question. In the name of eradicating corruption in subsidy disbursement Manmohan Singh has opened new vistas of corruption. And more agony if not humiliation to the target groups. It is in all probability destined to boomerang.
A factor the UPA has not perhaps considered is simmering anger of the Indian middle class. This in present day India is the most vibrant, vocal involved political game changer. Electorally they are more decisive segment. They have been in the last eight years under persistent attack from UPA misrule. The failure of Manmohan Singh to combat corruption, hold price line, contain inflation, reduce interest rates, create better education environment, develop better infrastructure, generate employment and improve consumer services have taken a heavy toll on this segment. And most certainly they will write the course of the next electoral outcome. Farmer loan waiver perhaps worked because the beneficiaries came entirely from this class. The BPL voters in any case have traditionally sided with the Congress.
Nobody is against helping the poor in a developing economy. The cronyism in the name of economic reform has made the rich poor chasm unbridgeable. The huge pilferage in the schemes meant for the weaker sections is because of political corruption. The Congress hopes that poor will eternally remain grateful to the party and cement the dynasty permanently on Indian soil, forgetting that it is headed by a foreigner, who is out to destroy and break the backbone of the national economy like the British did two centuries earlier.
No economy can sustain such a large scale non-productive expenditure month after month. This will only create a large destitute population living on freebies. It is such mindless welfarism that has brought America and European countries on the brink of economic collapse. Welfare subsidies are to be targeted and designed in such a way to create employment and generate growth. The Congress has designed liberalisation as a means to perpetuate elite loot, transfer of natural resources to corporate exploitation, vengefully fleecing and disincentivising the hard working middle income group and keeping a poor captive and helpless vote-bank to brazenly misuse for banal political benefit.
The cash transfer is neither practical nor economically viable. On the one hand through privatisation and forced corporate unsecured loans the UPA has drained the Indian nationalised banks dry. There was a provision of Rs 15000 crore bank recapitalization in this year’s budget as then Finance Minister Pranab Mukherjee was eager to restore the health of these banks. Chidambaram has a different agenda. His farmer loan waiver to win votes for Congress was the first major blow to the banks. They had not recovered, now comes yet another crushing blow from the same man who wants the Indian financial sector to be perpetually mortgaged to foreign money sharks.