UPA Govt - governing with a 20th century mindset

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In the 1972 Lok Sabha polls Indira Gandhi’s election slogan was Garibi Hatao. Thirty-two years later Sonia Gandhi’s campaign centered around the aam aadmi or catering to the poor. The Congress party’s poll slogan and review of UPA policies indicate that nothing has changed over the years. Some egs.

Fetish for Control: a nontaxable perquisite of the Liberalization process was a reduction in the number of trips Indian entrepreneurs made to Delhi. Things seem to be changing now. A July 2004 notification states that any construction project under certain defined categories based on sewage discharge, quantum of investment etc has to obtain environmental clearance from the Ministry of Environment & Forest, New Delhi. Regulate by all means but decentralize approving authority. Downlinking Policy 2005 too increases centralization. From time to time steel minister R V Paswan threatens to impose price controls on steel companies or fix wholesale/retail margins in the pharmaceutical sector.
This is a manifestation of the 1970’s mindset that induced centralization, price controls and mistrust of markets. This eventually leads to delays and corruption.

Increase Confusion, Paperwork: Fringe Benefit Tax (FBT) & Cash Withdrawal Tax were introduced without adequate appreciation of practical difficulties that lead to confusion. Taxation of expenditure was introduced in the 1970-80 period. The Finance Acts of: 1970 (disallowance of guest-house expenses), 1975 (ceiling for legal expenses), 1978 (limited disallowance of advertisement, publicity and sales promotion expense), 1983 (payment made to hotels) amongst others, disallowed expenditure above certain limits. FBT is payable on total expenditure incurred. The net result is more paper work and higher overheads to ensure compliance.

If revenue indeed was the sole consideration the UPA government could have instead increased corporate tax rate, withdrawn tax exemptions and levied service tax on lawyer’s fees.

Education: Recently the Union HRD Ministry first turned down and then agreed to a request from IIM Bangalore to open a campus in Singapore stating that the institute meets domestic demand first. This is like saying that India must not launch satellites till every Indian has enough to eat. It is inward looking policies as these that caused India’s share of world trade to fall. (1950: 1.29%, 1970: 0.68%, 1990: 0.52%, 2000: 0.67%).

A Singapore campus would give the faculty higher salaries and global exposure. Foreign postings are a motivational tool to lure/retain senior faculty/managers. This strategy is used by multinationals like Levers & Pepsi. The Reserve Bank of India (RBI) too is considered by many as a gateway to World Bank/IMF postings. (PM Manmohan Singh worked with RBI & World Bank).

Subsidising Exports made sense when India was a dollar scarce economy. With over $ 130 billion in reserves does India need to support exports with subsidies to the extent she does? According to the governments own estimates revenues forgone added up to almost Rs 40,000 crs in 2003-04.

Kerosene Prices are not increased to protect the poor. Never mind if it results in large scale adulteration of kerosene with diesel, pollution and illegal export to neighboring countries. At Rs 9.01, price of kerosene per litre in India (Delhi) is 48% of that in Pakistan and 58% of that in Bangladesh (Business Standard 10.11.04).
We are Poor: Inspite of the % of people living below the poverty line falling substantially (1973-74 54.9%, 1987-88 38.9%, 1999-2000 26.1%, source Statistical Outline of India) the Congress continues to tell the world that we are a poor country. Few countries are bereft of problems and poverty but to seek votes in the name of the poor for over fifty years is to belittle the progress made. I wonder if there is a vested interest in continuously telling Indians they are poor.

Court Judgments: In 1975 Indira Gandhi declared the Emergency to nullify the Allahabad High Court judgment that unseated her for corrupt electoral practices. In the 1980’s Rajiv Gandhi overruled the Supreme Court judgment in the Shah Bano Case. In 2005 the government issued an ordinance to avoid paying back ITC Rs 350 crs (plus interest) after it lost its excise case in the Supreme Court. Upset with Apex Court’s ruling barring quotas in unaided private professional institutions the UPA enacted a law providing for reservations in private unaided colleges. Lastly the UPA government is yet to implement an August 2004 Supreme Court order that asks it to construct the Punjab portion of the Sutlej Yamuna Canal.
Be it 1975 or 2005 the Congress has shown scant respect for Supreme Court decisions.

Foreign Policy: Indian policies were marked by idealism, taking a high moral ground. India paid for it dearly in 1962 (war with China). Citing military rule in Burma, India refused to deal with the military government there. This allowed China to get a foothold in that country and access to its gas reserves. Our Burma policy would be rued most by those responsible for India’s energy security. 
Ever since King Gyanendra took over the reins in Nepal the UPA government has insisted on return to democracy as a pre condition for normalization of relations. History it set to repeat itself with the Chinese getting very active in Nepal. 
Successive Indian governments have no qualms dealing with a military dictator in Pakistan but insist on return of democracy in Nepal. Should not National Interest pervade the need to promote democracy?

Secularism: Inspite of adverse verdicts by the Allahabad High Court the torchbearer of secularism Mr Arjun Singh believes it is secular to declare the Aligarh Muslim University a minority institution. This is similar to the Congress providing Haj subsidy since the 1970’s and its refusal to criticize the existence of Shariat Courts that run a parrarel judicial system in the country.
The word ‘Secular’ was made part of the constitution’s Preamble in 1976 but left undefined. Try asking the UPA to define the word Secular or benchmark with how secularism operates globally and you will be labelled Communal.

Dismissal of State Governments: A reading of ‘Open Secrets: India’s Intelligence Unveiled’ by M Y Dhar tells you how the Congress schemed to overthrow legally elected state governments. Birth and rise of terrorism in Punjab in the 1980’s is amongst others, believed to be a direct result of Congress-Akali Dal power politics. In 2005 the Congress tried in vain to prevent the formation of an NDA government in Jharkhand not to forget declaration of President’s Rule in Bihar. Has anything changed, one may ask?
Inspite of some achievements the Congress led UPA government continues to work with a 20th century mindset. That is unfortunate. Supported by a buoyant economy it could unleash the Indian entrepreneurial spirit through deregulation and creation of world-class infrastructure.

During the Emergency school buses were painted: ‘Talk less Work more’. This is a slogan every Indian would like the UPA government to imbibe in letter and spirit

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