The RK Puram Budget

RK Puram is a determinedly down-market neighborhood in southwest Delhi. It is chockablock with government colonies for middle-level bureaucrats, schooled in the cruel education system that strips young people of hope and ideals; the cynics who have held the economy to ransom.

These housing settlements are pleasant enough with lots of shady trees and large green spaces. The apartment buildings, however, are a different story: built by the Central Public Works Department, they are shoddy and ugly; islands of bad design in an otherwise nice environment.

RK Puram sprang to mind as I reviewed the 2015 budget of the absolute-majority BJP government. In his budget speech, the finance minister presented us with an economic RK Puram, dressed up in rhetoric and intention but tacky, grotesque and dysfunctional in content. Bottom line: higher taxes, higher government spending and significant tax policy obfuscation to keep everyone guessing.

This budget is especially prone to criticism because the government leadership has mindlessly hyped its sermon of happy days: a new and improved “India Shining” with gleaming highways, bullet trains, smart cities, soaring stock markets, a tsunami of foreign investment, gainful employment and “gili-gili,” a waving wand to banish the reality of blight and deprivation. Instead, as the first major government initiative, not counting all the diplomatic event management, the budget is seriously disappointing.

The finance minister, not particularly known for his grasp of economics and somewhat shorn of a sense of irony, said in his budget speech, “It is quite obvious that incremental change is not going to take us anywhere. We have to think in terms of a quantum jump.” The rest of his speech was devoted to what might best be called bureaucratic tinkering such as raising deductions in taxable income, easing resolution of commercial disputes and what have you. All the words and sentences and paragraphs of the speech could not obscure reality: it was a bureaucrat’s do-nothing budget.

Claiming credit for the introduction of a Constitutional amendment to facilitate a nationwide Goods and Services Tax (GST), the finance minister appeared to sweep under the rug, his party’s opposition to GST when the UPA first proposed it.

His was also the voice that could be heard in the recent Parliamentary debate over the land acquisition bill, proclaiming disingenuously against the Opposition’s “politics of obstruction.” He seemed to forget that his party had supported the UPA-sponsored bill while opposing everything else including the proposal to allow global retail chains to set up operations in India and the one to permit multinational insurance firms to increase stakes in their joint ventures. During the UPA’s two terms, the disruptions forced by the BJP were frequent, extended and virtually paralyzed Parliament.

The finance minister’s lack of a sense of irony was matched only by his lack of grace. This was abundantly evident in his ad hominem attack on the previous government, calling it a “scam, scandal and corruption raj.” These are not just the finance minister’s failings; almost no one in his party has the sensibility or moderation that is required of statesmanship.

To get back to the finance minister’s budget proposals, several of them of them stand out for their potential to hurt the economy:

First, the increase in service tax from 12.23 to 14 percent. Though the increase is less than two percent, its impact on small and medium service businesses is likely to be huge. In its search for “happy days,” the government needs to give such businesses access to credit and tax breaks to smooth their cash flow. They are the key to “development,” the backbone of the economy. The budget proposals will simply make it harder and harder for them to function. That’s not all: the proposed increase in service tax remains in suspense because there has been no notification by the government.

Second, the proposal to allow the fiscal deficit to balloon to 3.9 percent of Gross Domestic Product instead of the restricting it to 3.6 percent targeted by the previous government is troubling. The finance minister seems to have thrown fiscal rectitude to the winds and has, perhaps unwittingly, endorsed the waste and redundancy that are hallmarks of the bureaucracy.

Third, the assumptions trumpeted in his speech are at best fantastic. The notion that economic growth will exceed eight percent next year is simply outlandish. So is the minister’s assertion that the global economic situation has turned adverse. On the contrary, as former Prime Minister Manmohan Singh pointed out, external factors are favorable for India to chart a high-growth orbit once again. The hurdles are all internal and if this government was serious, the budget could have focused on addressing them. Instead, the finance minister’s speech seems to have been caught between hype and bureaucratic tinkering, a sure sign of the policy paralysis to come.

(An edited version of this post will appear in Education World, April 2015.) 

  

Barbarians at The Gate

All Knotted Up

Necktie wearers of the world unite! You have everything to lose: your stripes and paisleys, solids and patterns, silks and linens, cottons and wools Heck, you stand to lose a whole lot more, including grace and elegance, style and dignity. And even more insidious, as this column will reveal, you stand to lose your personal freedoms to a bunch of fundamentalists, health fascists and faceless bureaucrats.

In the past few days, the news media have circulated reports trumpeting the steady decline of the necktie. According to these reports, fewer than six percent of men wear neckties to work any more. Consequently, sales have plummeted to just 50 million neckties annually from nearly 250 million in the 1970s.

An Associated Press reporter filed the story from New York in advance of Father’s Day, when ties fly off the racks and are presented to Dads, year after year; the famous “peg.” He sounded positively gleeful at the decline of the necktie. The piece was funny as obituaries go.

But wait, there’s more to the story. It will wipe the grins and stifle the chuckles this jocular-veined story may have evoked. It is no laughing matter for the journalist has made common cause with the three main opponents of the necktie couture. The three are strikingly different from each, united only by their hatred of the necktie.

To begin with, there’s the Islamic Republic of Iran, whose fundamentalist rulers have carried on a campaign against the necktie since 1979, when a religious revolution deposed the monarchy of Shah Reza Pahlavi. To them, the necktie is a symbol of decadent Western culture that could adversely affect their country’s pure Islamic traditions.

The Shah was condemned as an agent of Western imperialism. After his ouster, the new regime moved to purge Iran of all symbols of the West. A strict dress code was imposed for men and women alike. The necktie was discouraged as an insidious Western influence. Bands of revolutionary guards took to patrolling the streets to enforce the Islamic dress code. Even harmless barbers were warned and forbidden to entertain customers with neckties.

Then there’s the giant internet firm, Google. Its privacy lawyer took up cudgels against the necktie when he wrote to the Financial Times, asserting that the firm had “unofficially” banned the wearing of ties as part of its new privacy policy. The tie, Google’s learned counsel averred, "acts as decorative camouflage for the business suit, designed to shield the middle-aged male physique, with its shrinking shoulders and protruding paunch, from feeling sufficiently self-conscious to hit the gym."

Incensed by an article written by the newspaper’s fashion editor in favor of neckties, the Google lawyer wrote the letter nearly a year ago, just about the time when Iran’s ayatollahs were embarking on their crusade, also “unofficial,” against the tie. He went on to argue that a necktie constricts circulation to the brain. While the mullahs of Iran came at the tie from their intolerance of the West’s decadent culture, the Google official flaunted an attitude that’s become a concern in America; it’s called health fascism.

The difference between Iran’s totalitarian state and the health fascism of the emergent “nanny” state in America is just one of degree. In the former, the government wants to protect culture; the latter wants to protect our health.

That is not all. In their bureaucratic way, officials at European Union headquarters in Brussels also want to ban neckties. Mercifully, they limited their ambit to the summer season. The argument is nevertheless ingenious. They say that by not wearing neckties, men would be cooler in the summer. This would allow them to turn the temperature in their air-conditioned offices up a notch or two. The result: savings of significant proportions. They put a “green” angle on it and suggested that this would help mankind in its mortal combat with global warming.

The barbarians are at the gate. Their battering rams are totalitarianism, health fascism and global warming. Straighten your ties, gentlemen, the time has come to take the atavists on!

from the times of india june 25 2008