Condemned to Suffer

The Government has recently hiked the Diesel price by Rs 5. And now,

"Raise diesel price by Rs 4 a litre, govt panel tells Centre: India should try to completely deregulate diesel prices by the start of financial year 2014/15 as part of a strategy to cut its ballooning fiscal deficit, a government panel report made public on Friday said. The report, submitted to the government on September 3, before a hike in prices of diesel in mid-September, also recommended increasing the price of fuel by 4 rupees a litre. It also suggested cooking gas prices should be raised by 50 rupees per 14.2 kilogram cylinder"

Till the last hike, the reason given for hike of petroleum products was the high oil prices, that leads to a foreign exchange outflow. Now Government is very quiet about this, because the Crude oil price is less than $ 90 per barrel.  If rise in Crude prices is an attributable reason for hike in Petroleum products price, then the corollary should be true. The oil companies have always parrotted that market price should define the price of petroleum products, and as such should we not be reducing the prices rather than increasing it?

Our Government is flat broke. It gave concessions worth $ 1 Trillion to the Big Industries during the recession in 2008-2009. And has continued to refuse taxing the rich. Wasteful schemes like NREGA and many others, initiated by Sonia Gandhi and her irresponsible leftist 'advisors' in the National Advisory Committee has destroyed the Country's finance. Government wants the common man to tighten his belt, while refusing to even make a token effort on its part or the industrialist's part to do so. The highly subsidised industrialists have siphoned off profits made in India to invest outside the country.

The FDI in retail, civil aviation followed by Insurance and Pension will not help Westerners as many thought. The Western companies and countries are broke themselves. They dont have money to pay their debts, forget about investing in India. What will happen is the Black Money stashed outside the country will find its way back to the country as FDI, FII through the opening up of the economy, and this will lead to higher inflation.

We have never seen a Government that is as apathetic to its people as the current one- and that includes the ones led by Indira Gandhi, and later by VP Singh et al. And this is saying a lot. It takes special skills to damage an economy to crumbs in 8 years, as Manmohan Singh has done. He can get his second Ph.D writing a thesis about how he did it.

But when the Country is run by a school drop out dumbo like Sonia Gandhi and a guy with a brain the size of a peanut - Rahul Gandhi, ably supported by downright idiots like Montek Singh Ahluwalia and a team of World Bank (which itself is in doldrums) experienced 'economists' who doesnt know Trivandrum from Aizwal, what else can you expect?

When Mahatma Gandhi returned from South Africa and wanted to join the freedom struggle, the great Balagangadhara Tilak asked him to travel across India to understand the problems faced by the countrymen across the length and breadth of the country. Gandhi was wise enough to follow the advice, and the rest is history.

If you look at the decision makers, Sonia Gandhi, Radhul Gandhi, Manmohan Singh, Montek Singh Ahluwalia, Subbarao, Ahmed Patel, Ghulam Nabi Azad, Ambika Soni, Pranab Mukherjee (till recently) and of course the NAC members, one thing common is that not one of them have any experience at grassroot politics nor do they have any contact with the common man. They just sit in their ivory towers and churn out western theory based text bookish solutions that is far away from the ground reality.

Only when our country is ruled by grassroot politicians, will we have an empathetic government. Till then, we are condemned to suffer.

Reforms? The Government must be joking

The so called 'reforms' supposedly unleashed by the UPA Government is the biggest joke of the year.

How come increasing the Diesel prices that lead to inflation (argument against is that not increasing diesel price will lead to fiscal deficit increasing, which leads to inflation - so it is a case of heads I win and tails you lose to the Government- it is inflation either way - one now, other defered) be categorized as a reform? In the first place why are we not asking the question "What led to the spiralling of the fiscal deficit in the first place?". Why are we not even talking about reducing non-plan expenditure, curbing the cost of the bureaucracy, discarding with the unwanted ministries? Why are we not doing a cost benefit analysis of the porous NREGS, where only less than 15% reaches the beneficiary? NREGS is the single largest culprit for the spiralling fiscal deficit. Why should only the common man pay for the profligacies of a wasteful government? Why are we not hearing about Ministers, including PM and the NAC Chairman doing a cost cutting on their security detail? We may not save much, but at least it gives a feeling that everyone is tightening their belt.

In the first place we need to be transparent about the claims of under recovery that leads to notional losses in the oil industry. I am an ex-oil industry guy myself. With oil prices remaining stable during the past one year, how come the subsidy bill is spiralling day by day?

What is required are sacrifices made by everyone, starting from the top, including industrialists. There are so many ways to raise revenue. Increasing tax collection ( tax evasion is very high in the country, especially sales and corporate tax), reducing expenditure, spending more money on infrastructure that generates employment, restructuring the government and the bureaucracy, abolishing at least 40 ministries at the centre and many more in the States, reducing interest rates that allows entrepreneurs and small businessmen to invest more instead of banks pampering the big industrial houses......... ............the list is endless............

We talk about FDI retail in another post.....................

Mid term polls in January -February 2013???

Few apparently unconnected incidents/policy decisions indicate Mid-Term Poll in India.

The Coal Scam in which the PM is heavily indicted. Sonia asking Congressment to be aggressive in taking on the opposition (Because the Scam hits close to home???). BJP has upped the ante and has not allowed the parliament to function till MMS resigns, not will it the next session too.

Mulayam Singh Yadav questioning Rahul Gandhi's credentials and announcing the decision to go alone in the next Parliamentary elections, thereby scuttling Congress's plan to form an alliance in UP. Also, the disasterous performance of Akhilesh Yadav's government means every day delay in SP pulling the plug on the UPA Government means loss of seats for SP, reducing its bargaining power in the post poll scenario.

Government deciding to hike the diesel price by Rs 5 and putting a cap on subsidised LPG cylinder to 6 a year. UPA is sure this policy decision will force some of its allies to withdraw support as it is so blatantly anti aam admi. Trinamool Congress and NCP have already made their displeasure known, and both are itching to walk out of UPA.

Now the final nail in the coffin.By allowing 51% FDI in retail, broadcasting and aviation, Congress has left SP, TMC, BSP with hardly any room for manouvre. Their opposition to FDI in retail is well known. They just cannot take this humiliation any more, which means they have to walk out.

Congress knows it will get less than 50 seats if it waits till 2014, knowing how discredited the current regime is. Better to get 100 odd seats now, and hope to support a third front from outside than be irrelevant in 2 years time. And they can take the high moral ground of having been forced to go to the people because of SP, BJP, TMC, BSP claiming they were victims of being reformist, after destroying the economy for 8 long years.

I will stick my neck out and predict that the General Election will be held in January- February 2013, so that Congress can confine Modi to Gujarat, whose Assembly election will also have to be held with it, rather than losing Gujarat now badly, and then having to face a stronger Modi in 2014.

Watch out for January-February 2013!!