There
is still a strong residue of the past and its practices. Now that three
years are over, we are entitled to expect much more Modi and less of
the past in the future.
News
reports are that some Members of Parliament (MPs) asked Civil Aviation
Minister Ashok Gajapati Raju for “automatic upgrades” to Business Class
on all flights, whether these be the national carrier or private
airlines. The journalistic fraternity needs to identify the names of the
individuals who made such a request. MPs, after all, are expected to be
Representatives of the People, and it must occur to even the less
curious of them that few of their constituents can even afford to travel
Coach Class, as air travel remains a luxury for the overwhelming
majority of citizens of a country that remains low income despite seven
decades of freedom. In case any MP were to initiate a Private Member’s
Bill limiting the moneys spent out of the exchequer for the total
expenses of each MP to an annual amount that does not exceed ten times
the per capita income of India, that would be welcome. Judging by the
SUVs they alight from, and the dresses and watches they flaunt, it would
appear that a large proportion of our MPs resemble US Senators, all of
whom—bar perhaps the forgiving (Hillary Clinton) Bernie Sanders—are
millionaires, if not billionaires. In memory of Mahatma Gandhi, it is
time our MPs ensured that their own lifestyles conform to those of what
Gandhiji termed the “dumb millions”. Television channels need to
regularly air the lifestyles of individual MPs and their families, to
check on how closely these reflect the realities of existence of those
who voted them to their high responsibility. Public service is precisely
that, service to the public, and this is scarcely possible if those
involved live in the way this country’s colonial masters did. Gandhiji
taught the value of sacrifice, but these days, the only “sacrifice”
those who constantly repeat his name indulge in, is to go once every
year to Rajghat and sit in mock contemplation, while the cameras roll.
As for our underpaid officials, an
amazing number of them seem to have mastered the art of sending their
children to study in expensive foreign universities, or ensuring that
their spouses regularly go to Europe for shopping expeditions, despite
the pathetic salaries that the Government of India pays even its top
officials. It is, of course, entirely coincidental that most of the time
spent by successful businesspersons in India is devoted to sharing
quality time with officials and politicians. Certainly our officials
need to be paid more, and a way of ensuring that would be to create a
“revolving door” through which jobs could be exchanged between
government and private sector, thereby allowing individuals to spend
some years in the underpaid world of officialdom, before replenishing
bank accounts in private entities. Those who claim in feigned horror
that such a move would encourage corruption, are being hypocritical, as
the present watertight silo system of official recruitment and staffing
has nevertheless led to substantial graft. Only leaner procedures and
greater transparency in operations (for example, through a deepening of
the RTI and in more hearings and processes being streamed over the
internet) will lead to a cleaner administration, not straitjacketed
recruitment systems that consider public and private service as mutually
hostile entities.
A businessperson takes a loan from a
nationalised bank, usually after being recommended to the chairperson by
a bank director appointed for the purpose. He then ensures inflated
prices for imported equipment, thereby getting back the money spent on
equity within a few months of the commencement of operations. Further
purchases for the entity go to swell external bank accounts, even while
the business gobbles up more and more tranches of funds. Finally, when
it becomes impossible to lend any more money for the sole purpose of
repaying old loans, the company goes “sick”, while the owners create new
“healthy” entities that enter the same cycle. A regulatory environment
of high taxes, North Korea-model regulations and lack of accountability
and transparency in decision-making has ensured that only crony
capitalists thrive on one company’s crash after the other, in their path
towards hyper riches hoarded abroad, while bona fide entrepreneurs go
bankrupt or leave this country. India needs a new class of entrepreneurs
not tainted by the practices of the past, but for this to occur, there
will need to be a substantial reduction in the difficulty of doing
business, and a fall in tax rates. Officials look only to covering the
current year’s expenses while fixing tax rates, neglecting the fact that
over a three- or five-year period, lower rates lead to much higher
collections. We need to exchange the Palaniappan Chidambaram model of
vexatious rules and constant harassment for the Narendra Modi model of
“minimum government, maximum governance” i.e., low rates and low
penalties, leading to high compliance. The absurdly high penal rates set
for black money disclosures during the past few years has led to the
pathetically low level of recoveries seen thus far. Less than one dollar
out of every two thousand dollars of illegal income banked abroad had
returned by 2016, when a more rational penalty structure would have led
to a manifold increase in such recoveries. Similarly, hyper-high
penalties for declared illegal domestic income have led to a similarly
low level of success of the black money mop up schemes.
There is still too little of Modi in
several of the fiscal, regulatory and monetary policies of a government
the people elected to power with a Lok Sabha majority entirely because
of their faith in the PM. There is still too strong a residue of the
past and its practices. Now that three years are over, we are entitled
to expect much more Modi and less of the past in the future. A
qualitatively new generation of entrepreneurship, of officials and of
politicians, is needed for India to succeed in becoming a middle income
country during the next decade.
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