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Friday, March 17, 2017

Goa Journal: A sense of liberation

Tainted Congress is Turfed Out.

Driving in from the airport on the day of the election results, we passed caravans of pick-up trucks, cars, scooters and motorcycles. Draped in BJP colors, the caravans were celebrating the clear victory of the BJP in the recently-concluded Assembly elections. As they whizzed past towns and villages, people gathered on the edges of the highway, cheering them on. Like Woodstock, it appeared to me “everywhere there was song and celebration.”

I was struck by the sense of liberation that was palpable on the streets and squares. It was as if a dictator had been felled. “Sir, we are free from the corrupt Congress raj,” the owner of a shack on Morjim Beach told me as we walked in the next morning to laze a few hours away, swimming in the blue-green Arabian Sea and savoring the shack’s basic wares: shrimp curry and rice with fried fish and chips, washed down with fresh pineapple juice and Goa’s own King’s beer.

To get to this picturesque beach, you have to drive east from our house into Mapusa and then head north through Siolim across the bridge on the spectacular Chapora River. The drive from Mapusa, an ugly, Indian-style market town, to Siolim is over a forested hill with gorgeous valley views. The road is superb like most of Goan roads, except that over the years it has become a garbage dump. Mounds of garbage line either side of the road, detracting from the sheer natural beauty.

Even along National Highway 17, the major artery that crosses Goa north to south en route to Kerala, you see similar sights: piles of garbage on both sides. This odious development has come about in the past five years. The years from 2007 have seen Goa assaulted by real estate developers; exploited by illegal mining and stalled by crumbling infrastructure: no waste management, acute power and water shortages, traffic jams, eroding beaches and the growth of Bombay-style slums. Then there are drugs, the Russian mafia and vastly increased crime.

This has happened on the Congress watch. Clearly, these problems were building up over the years but neglected because of political instability. Between 1963 and 1990, there were just four chief ministers; since then, there have been 15. In 2007, the Congress formed the government and lasted the full term until March 3, 2012. It appeared as though a stable government might address the mounting problems. Well, it didn’t; what’s more, it was seen as a beneficiary of these ills. On March 3, Goans voted with a vengeance and turfed the Congress out.

One of the major causes of the Congress defeat is the defection of the Christian vote. Though they form just a little more than two percent of the Indian population; strikingly, Christians in Goa number nearly 30 percent of the state’s inhabitants. They have traditionally shunned the BJP because of its insular Hindutva agenda; this time they overcame their distaste for the saffron party and voted against the Congress.

There is euphoria in this bucolic little corner of India. The BJP has won handily so there should be no trouble for the next five years. Manohar Parrikar, the likable former chief minister, is set to run Goa again. Peoples’ expectations are high; but clearly it more an anti-Congress than a pro-BJP mandate.

Parrikar is a soft-spoken man, educated at the exclusive Indian Institute of Technology in Bombay. I happen to know him because he asked me to help publicize the first International Film Festival of India (IFFI) in Goa in 2004. In the course of the project, I met him several times and found him to be focused on outcomes. In the event, we worked together to make the festival a success and to make Goa a permanent home for it.

At the time, I was a member of the Congress Media Advisory Board but that didn’t make a difference to Parrikar. He wanted professional public relations support and so was happy to work with me and my firm. The brief was to make it into a South Asian Cannes.  The IFFI public relations project went south after he was ousted. Subsequent Congress governments had an opportunity to build on the national and international notice the festival attracted. Instead, as a former senior official of the Entertainment Society of Goa (ESG), the unit that ran the festival, told me: “It has become a den of corruption.”

I learned it the hard way when my firm responded to a tender for public relations support for IFFI 2011 put out by the ESG. We made our submission and I undertook a trip to Goa for the opening of the bids. The entire procedure was opaque. Three bids were opened: two firms including mine, made similar financial proposals. Within minutes, the bureaucrat, who read out the numbers (and he looked every bit vile and corrupt), dismissed us and awarded the project to a firm that bid one-fourteenth of the amount that we proposed.

This is the way Goa functioned under the Congress. Even though I am a supporter of the GOP, I found the party’s Goa dispensation less than transparent. I am not surprised they were booted out.
(This article appeared in The Times of India on March 14, 2012.)

Thursday, March 9, 2017

Budget 2017-18: Cover-up Gimmickry

Narendra Modi has often claimed that elevation to the prime minister’s office in New Delhi was historic and inevitable. Last November, he attempted to consolidate his position in Indian history by making a pre-emptive announcement that invalidated Rs.500 and Rs.1,000-rupee notes valued at Rs.15.44 lakh crore or 86 percent of currency in the Indian economy. To counter the rain of criticism that greeted this diktat, Modi and his band of propagandists fielded cheerleaders — journalists, academicians, publicists and businessmen — to obscure and obfuscate the absolute mayhem the arbitrary announcement caused.

In this context, it would be instructive to examine the consequences of demonetisation.

• It crippled informal sectors of the economy in which most dealings are in cash. Contrary to government propaganda, ‘black money transactions’ are simple currency exchanges outside the banking system. Reserve Bank and government of India data (2011-2015) indicate the cash economy contributes mightily to the national economy: 45 percent of gross value added; 40 percent of capital formation and nearly 67 percent of investible funds.

• A study by the Confederation of Indian Industry (CII) estimates that prime minister Modi’s demonetisation diktat knocked the stuffing out of the informal economy which employs more than 90 percent of the country’s workforce and generates almost 50 percent of national income.

• According to CIBIL, a credit rating agency, the formal sector of the economy was also badly singed. It reported a 30 percent decline in overall credit offtake with a 60 percent nosedive in November-December 2016. 

• CIBIL also noted that distress was acute in rural and semi-urban areas and within the lower middle class, citing a dramatic decline of 40 percent in loans for automotive two-wheeled vehicles.

• Union labour ministry data indicates a 20 percent increase in demand for unemployment relief under MNREGA, the welfare scheme for the poorest. This suggests a reverse flow of migration from city to country.

• In the country’s eight largest cities, the real-estate sector reported a decline of 44 per cent in housing sales, a 16-year low.

• The All India Manufacturers Association which represents small and medium enterprises reported a 50 percent loss in revenue and a 35 percent cut-back in employment.

• According to estimates of economists at the National Institute of Public Finance and Policy, national GDP growth rate is likely to plunge from 7.56 percent in 2015-16 to 6.1 percent in 2016-17.

Against this backdrop, the prime intent of the Union Budget 2017-18 presented to Parliament on February 1, is a cover-up to obfuscate the impact of demonetisation on the economy which was already slowing since 2014. When awareness dawned that the ill-conceived hasty demonetisation stunt would backfire, the Modi government became unhinged and unclear about its response. The prime minister’s justification was a weird analogy that just as surgery is best performed on a healthy patient, the currency ban was a timely move against black money because the economy was in good health. 

The Union Budget 2017-18 therefore betrays persistence of gimmickry: the presentation date was advanced to circumvent Election Commission restrictions on state-specific proposals; the railway budget was merged into the main budget and meaningless tax concessions were announced for the organised sector. A classic example of playing to the gallery was the scrapping of the Foreign Investment Promotion Board whose role has already been severely circumscribed to the point that less than 20 percent of all proposals are cleared by it.

The budget could have acknowledged that the currency ban made it impossible to predict revenue of the next fiscal year. It could have ignored the spending limits imposed by the Fiscal Responsibility and Budget Management Act of 2003 to boost economic growth. The government could have announced major cuts in indirect taxes as these levies have a cascading impact on the economy and substantial cuts would have helped hapless citizens whose livelihoods are threatened by the demonetisation diktat. Instead, the finance minister played around with rejigging direct tax rates and slabs and offered hollow concessions including tax rebates to small and medium enterprises.

In the final analysis, Modi’s budget simply continues the disinformation campaign surrounding the demonetisation bloomer. Initially, he sought to portray it as a “surgical strike” on black money. When it became clear that it had no impact on unaccounted cash, he billed it as a “masterstroke” against counterfeit currency and terror funding. When that too proved inadequate, he positioned it as a strike against the rich on behalf of the poor. When even that didn’t catch on considering the credible “suit-boot sarkar” charge made against him by the opposition, he simply dropped the subject. Budget 2017-18 reflects this.