Manmohan starts on the wrong foot

The new Prime Minister thinks that free power to Andhra Pradesh farmers can be given as a special case. Why UP, MP, Rajasthan, Gujarat, Chateesgarh and other states cannot be treated as special cases?

Is it because AP has paved the way for the Congress revival in the country that it has to be given a largesse? Manmohan's task is cut out now. Offer freebies to the Congress ruled states. Maharashtra will receive a huge gift in days to come. Shinde too may promise free electricity to the farmers of his state. He has to win the coming elections. The Congress has a history of winning elections by offering free power to the farmers. It won the Punjab elections a few years ago. The promise has also worked wonders in the AP.

Who cares for fiscal prudence as long as you keep winning elections? After all, democracy is all about winning elections. By this definition Lalu is the shining poster boy of democracy. The Congress plans to follow into his footsteps.

The much hated Narendra Modi did care for fiscal discipline. He increased power tariff in his state like a fool whereas the Congress state governments were promising free power to the farmers. Look what happened; the tally of BJP seats came down drastically.

Now, if the BJP Chief Ministers are wise enough, they must start giving free power to the farmers in their states before it is too late. They should also demand a special package to meet the shortfall in their revenue estimates from the centre. One can be certain that the farmers of Rajasthan are in a far worse state than the farmers of AP. If they fail to do so, in the next elections the Congress will make it a poll promise and the BJP will loose elections. Vasundhara Raje and Uma Bharati and Dr. Singh, have no options before them but to follow the Andhra example.

Till a few years ago job reservation was the favourite ploy of politicians to buy votes in competitive politics. It is replaced by 'free power' now. You give free power and water to the farmers, and your victory is assured. Very soon city dwellers will also demand free power and housing.

Why is the stock market going ga ga over Manmohan's appointment as the PM?

The industry, like the people, has very short memory. The other problem is that the Industry guys have become Idiot Box addicts. This dulls their intelligence and kills their memory. They are really impacted by loose talking clean-shaven morons and all those round faced, doe eyed, intelligent sounding, buxom beauties, oozing with a very special kind of sex appeal.
 

 How can the Industry forget Harshad Mehta? He was the most important contribution of Manmohanamics to India. The impact of Harshad was so far reaching and great that it took almost ten years for the stock markets to recover from it. His ghost continues to visit the markets every once in a while in some form or the other.

The UTI scam

Though the seeds of UTI scam were sowed by various Congress regimes of the past, it grew into a big tree during Manmohan/Narsimha Rao era and finally after having destroyed the trust of millions of investors, UTI crashed. The NDA government was not responsible for this. All the wheeling and dealings had happened much earlier, in a period when UTI directors were expected to do the bidding of Finance Ministers and the political establishment who in turn would do sundry favours to the industrial groups that were close to them. The UTI acted unprofessionally because it was asked to act that way by the Congress governments. And who were the back room boys entrusted with the task of such manipulations? Manmohan Singh must have been foremost among them. How else could you survive so long and rise high in bureaucratic and political hierarchy under various Congress regimes?  You had to be part of a personal fiefdom of the Congress leaders. This became much more pronounced since the emergence of Indira Gandhi. You had to be unabashedly loyal to the leader and the Family.

Economic reforms and Manmohan Singh

Manmohan Singh is being touted as the father of economic reforms by some of the ignorant media men. This is strange. What reforms are we talking about? If the divestment of public sector undertakings was one of the indicators that was supposed to signify the direction of the reform process, nothing much happened during Rao's regime. Modern Foods probably was the only public sector undertaking that was sold off. How was it done? One fine day the cabinet decided to give it away to Hindustan Levers for a piddly little sum. By the time people rushed to the court with a PIL, the matter was sealed. Manmohan promised to the court that he would be transparent next time. The rest of the so called reform process aided and abated the likes of Harshad Mehta. Manmohan's annual budgets remained the same old wine in a new bottle, some duties were lowered, others raised, depending on the capacity of the lobbyists to influence the Babus in the ministry of finance. No significant structural or policy changes were introduced to reduce the role of the government. Necessary safeguard mechanisms were never put in place. A lot of room was left for corrupt practices. The likes of Sukhram and Sateesh Sharma thrived during this regime. The governance lacked transparency. Some work was done at RBI level in monetary policy area. It was a half hearted move though. The political and bureaucratic establishment remained in charge.

The NDA government has done a lot of work as far as institutionalising the reform process is concerned, though they have been a bit foolish. They have reduced the role of the political establishment in the management of the economy. By doing so they have made the bureaucracy stronger which is busy making deals with India's corrupt business establishment. However, during the NDA regime we do not have many exmaples of the politicians in power filling up their personal coffers. We can say this with absolute certainty that Vajpayee, Advani, and others did not make money for themselves.

Stock market melt down, and the government response - return of the old mindset...

Since the NDA had been in power, it had hardly asked the RBI or LIC to intervene in free market operations. Look at some of the developments in the last one week. Manmohan Singh was not yet the Prime Minister but the first thing everyone could think of during the stock market crisis was to seek the intervention of domestic financial institutions like the LIC to stop the meltdown of the market. The age old mindset of the Congress was at work here. It has been blatantly using the financial institutions as a tool to carry on with their politics of favouritism in the past. Those who were picked up to head the institutions like the RBI, the LIC, and the UTI knew it well that they were there at the pleasure of their political bosses and thus they went out of their way to please them. They were not expected to be competent professionals.

These 'control freaks' have always done it. They have always used public money and mandate to control and manipulate various institutions - financial, democratic, and judicial.

We must not let our thinking be clouded by the crap we see on TV. This will be a stupid thing to do. Every move of this government will have to be carefully scrutinized. Though Manmohan Singh has been parroting words and phrases borrowed from NDA's and Jaswant Singh's lexicon, he has started on the wrong foot already by providing moral support to the decision of Rajshekhar Reddy. 'Free Power' policy is going to create hell for our economy in days to come. It is a bad precedent. The Prime Minister should seek clarification from his party man in Andhra  Pradesh. Why free power should be given to the farmers of Andhra Pradesh and not to others? Can he do it? He cannot. Reddy will ask him to seek that clarification from Madam, who in turn will ask him to shut up. This is how the new PM is going to function. He will be asked to invent smart arguments for stupid decisions. This is what he has always been doing. As long as he continues to do so, he will be happily there, and the Sardars will continue to do 'Bhangara' over the appointment of the first ever Sikh as the Rubber Stamp Prime Minister of India, who does the bidding of an Italian lady.

Winning elections by hook or crook and by making mindless promises is becoming the end and be all of the democratic system of governance. Can there be a marriage between good governance and populism? Are we fast moving towards 'Biharisation' of India where the interests of the caste, the clan, the community, and the party are put far above the interests of the nation? How can we stop this from happening? How can Indians be united as Indians in a democratic system which is inherently divisive in character?

Only a strong political leadership can seek answers to these questions. Manmohan Singh has already given indications to the contrary. His party's past record has been horrible. It has been worse when the communists have collaborated with the Congress.  Yet another dangerously destructive dimension has been added to this combination now - the Lalu and Rajshekhar Reddy dimension.

Are we looking at a recipe of total, irreversible disaster? Or are we being extremely sceptical? The established fact is that the sceptics are always proven right in this country.