Saturday 27 June 2015

Will Modi Get Free of Lutyens Delhi (Pakistan Observer)

M D Nalapat

Friday, June 26, 2015 - Although his words gave a promise of comprehensive change, once sworn in to office on May 26,2014 Prime Minister Narendra Damodardas Modi apparently decided to continue with the personalities and policies of the past. The Union Cabinet chosen by him - and it must be said that he had complete freedom to select whoms over he wished, and did - could have been chosen by his bete noire within the BJP, Lal Krishna Advani. Indeed, much of Team Modi is actually a repeat of Team Advani, with the members of the latter leader seamlessly moving to the side of the former in stages after events in 2012 showed the inevitability of the

then Gujarat Chief Minister emerging as the Prime Ministerial candidate of his party, elbowing out Advani and his chosen substitute Sushma Swaraj ( now Minister of External Affairs). How and why Modi expected that those steeped in the tradition of Lutyens Delhi would alter their ways of functioning is a mystery. Suffice it to say that they have not, and that several components of the Modi government act and react in the same manner as its predecessors have. Indeed, this columnist has more than once characterised the Modi-led government as being a compound mixed with 40% Vajpayee,40% Manmohan Singh and only 20% Modi. Overall, rather than cut away at the many regulations and laws that have constrained progress of India over the past two centuries, thus far new government has instead sought to increase hold of state over citizen. 

Although a Digital India has been promised, there seems no visible effort by the Department of Telecom (headed by a Permanent Resident of Lutyens Delhi who is also a lawyer, Ravi Shankar Prasad, the brother-in-law of former Congress Party minister Rajiv Shukla) to increase internet surfing speeds, which in India are lower than in almost every other country in Asia with the exception perhaps of Afghanistan and North Korea. At a time when the world is moving into 5G, in this country even 4G has yet to be implemented except within very narrow bands. The other country with a billion-plus people has no fewer than 800 million people online, while in India the figure is below 200 million. While China has its own versions of Facebook, Twitter and other internet applications, in India, foreign companies have a monopoly. 

In India, the primary purpose of much of the laws and regulations enacted in a flood since 1947 are not to improve the lives of the population but to ensure more and more avenues for the collection of bribes. Doing anything worthwhile in India is to run an obstacle race with the authorities, with officials placing roadblocks in profusion so as to force the hapless victim to pay a bribe. In many segments of the economy, the shifting to online systems has become a farce. Take the situation in the Passport Department, where it is a miracle if an individual can get his or her passport online. Each time, some excuse or the other appears onscreen, necessitating a visit to the Passport Office, the very chore that online systems were designed to obviate. In the Passport Office, those (mostly from travel agencies) who keep the staff happy in ways unnecessary to define get served quickly. The staff pay very little attention to documentation in such cases, although in the case of those who do not pay up, they call for document upon document to be produced, wasting several hours of the applicant’s time in the process.

The hell continues to the present day, to the dismay of those who expected the coming into office of Narendra Modi would bring about change. Government offices are still lethargic and still cash-hungry. Indeed, some departments such as the tax authorities are these days raking in even more money than in the past, for the simple reason that Modi has blocked political interference in their functioning. This was done to reduce corruption but the effect has been to free officials of the worry that they will be held to account by politicians and hence have become bolder in their demands on taxpayers. Lutyens Delhi regards itself as the colonial master of the rest of the country, and in the manner of such an agency, focusses on making as much money as possible from the people. The focus of activity in Lutyens Delhi is the enrichment of friends and family, often to the level of billions of dollars. 

A similar mindset prevails among significant sections of the business community. For example, a businessperson imports a $40m equipment for $ 100m, sharing the loot of $ 60m with officials and politicians but keeping enough to offset the investment he has made in the company. Cleared of this, and relying on borrowed funds to run his enterprise, businessman has zero reason to prevent company from going sick, as he has already recovered his investment through over-invoicing of imports. A common scam is to purchase in bulk items from One Dollar Stores through a dummy company and for this company to resell goods to another at much higher prices, thereby squandering foreign exchange through the importing of goods at prices way above those actually paid. Money gets made equally through under-invoicing of exports, where goods are sold at low prices to a dummy entity that immediately resells them at a huge mark up to genuine buyer, balance going into an offshore account.

It would be a simple matter for the authorities to examine suspicious imports and exports and to make an example of those cheating the exchequer, but of course, this is not done except in cosmetic cases. Instead, more and more laws get passed, and regulation upon regulation gets added on to mix, making it a hell on earth to not just do business but to go about ordinary business of life. Every say there is risk of some corrupt official using a law or a rule to create complications for a citizen. With his promise of ‘Minimum Govt’, it was expected that Modi would change such an ugly reality. However ,this far, Lutyens Delhi appears to still be in driver’s seat. Taxes remain high as do regulations and interest rates, while sector after sector remains choked and clogged by worst bureaucracy in Asia. PM Modi has very little time before people of India lose faith in his promises, to free himself of Lutyens Delhi and instead govern on behalf of the entire country. Each day, his government is losing public support, as each day, citizens await the day when PM Modi will run at least a 40% Modi government rather than the current 20% version .

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