As having been one of the strongest pillars of your government, who communicated with moderation and wisdom, and frequent sound-bytes, a rarity amongst the Trinity that ruled, I pose questions you have possibly introspected upon. However, having been one of the victims of the institutional damage your party inflicted from PMO downwards, you must have been constrained to follow the path of your judicious, professional, economic calling. Just how do you audit the performance of a regime when its tenure is up for review?
“Madam, I think you are wrong!” Is what an economist felt India's crew of. Illustrious stalwarts like the PM, Montek Singh and yourself ought to have “had the spine to tell Sonia”, when she insisted on her profligate populist schemes. The 'Mary Antionette economics' of welfare extravagance, has extracted a near ransom from an economy in deep debt & deficit, in order to keep afloat its BPL vote bank. The imprudence of political arithmetic, overpowering economic wisdom!
Sir, is Strategy 1 of the exiting crew: make it so ugly for the successive regime, so UPA looks pretty?!
As UPA retreats, it is with a near vengeance it leaves behind a legacy of an inflationary economy and near stagflation, as its parting gift to the successive regime. One that undoubtedly will stymie growth and entail rebuilding the nation from the ruins of a slowing economy, necessitate restoring the credibility of institutions, and cleaning up corruption. The known blunders of scams, welfarism, unstable policies, repatriation of black money from foreign shores, inflation etc has been amplified unsparingly in every media. I will deviate a little from the 'knowns', and reverently seek your views on some other salient points:
1) Window-dressing the national balance sheet. By off loading shares in ONGC, and taking in those profits to portray that you depart with an economy in good shape, is like borrowing from Peter to pay Paul! It only cosmetically glamourizes a looming deficit. “To control fiscal deficit, you ask PSU companies to declare hefty dividends on the one hand, and now you are asking for crossholding. But was this a way to raise in money and rein in fiscal deficit? Not a very comfortable situation to be in!” Was this a desperate move to try and keep the figure in check, because we have a downgrades sword still hanging on our head, Sir?
2) My personal objections to disinvestment and proceeds of privatisement have been that the gains have never gone to augment treasury, but to plug recurring losses\ leakages in the economy. Like the case of selling the fabled family silver. What then happens when that treasure chest diminishes\ dries up?
3) Your government leaves behind an unholy grail of graft, the provenance of its footprints reaching the PMO, pointedly nailing the offenders, but with atonement, punishment or remorse far from sight. Be that as it may, because of the prevailing mood of suspicion, a proactive CAG and apex court, acting as custodians\fiduciary to the countries interests, acted out of jurisprudence to revoke\put on hold infrastructure projects, coal allocations etc. Decisions that were imperative for the CAG and Supreme Court to impose,which need never have been necessary, had the FM and his ministry acted as vigilantes of the tax payers custodial finances. The CAG and judiciary had ceased to play ball with your government, placing implementation embargoes, that revoked contractual orders given out to mining and infrastructure companies to check foul play.
As an example, we have the 3rd largest deposits of coal, but supply is a monopoly of just one state owned company. Now if allocations are being questioned due to opaque procedures, stalled therefore by the Supreme Court to check-mate arbitrary contracts, that's the reason for hampering thermal power generation and depriving us of energy.
What has that impacted? Energy costs,out-of-whack! Not only are citizens suffering, but industry is bleeding. Sir, we have receded by nearly a decade, as these were man- made blunders, not an act of God like floods and quakes!
4) Economic growth is a function of macro world factors, and adjusting to its cyclicals, as also internal fundamentals. We mistook the flow of easy money from QE1,2&3, to be construed as our own growth, to get into a self congratulatory mode, as India being ahead of the curve! That inflow of money was, and will always be like the migratory bird in search of greener pastures! It was fleeting money, not coming out of intrinsic 'organic' growth, which is profits that accrue from a economy in vibrant health. Had you left the economy in good shape, job creation would not have grown at a meagre 2 per centover a decade, nor would India's income inequality doubled, as “10 per centof GDP rests with just 55 individuals today”. The Economist reveals a stark finding that “gross illicit outflows from India averaged $52 billion a year since 2007“, from the elitist few who gained from your policies!
5) NPA s of banks is a full-blown scam about to explode in the next regime. The mostly government-owned banking system is in a terrible state. The IMF has reported that banking sector loans to India’s ten largest conglomerates alone account for almost 100 percent of Indian banks’ net worth. Banks are unable to extend loans for even good projects and ventures. Banks come under the purview of the Ministry of Finance. What was the minister doing while the nation’s state-owned banking system was on this suicide mission? A fresh investment boom necessitates bank lending at a lower cost of capital. Sinking under bad loans, government lacks cash to recapitalise, a factoid you know better than us.
6) Each time the government fell short of revenue targets, draconian instructions were given to extort from the 'known' base of tax payers,which is 3 per centof the population, instead of widening the tax base with a tax friendly regime. If government revenues fell due to its inept handling of economy, by giving a tax-man a “target” like one given to a salesman, it implied that lower- bureaucracy was mandated to perform, by pleasing their bosses. This, in affect, was an implicit, covert call to extract from tax- abiding industry and citizens, by slapping fines and cases, to air-brush deficits. I extend this view to your governments retrospective tax amendments, that severely dented business confidence, as precisely an effort to extort taxes to make good your deficit.
7) By what parameters do you audit fiscal the performance of an exiting regime? By taking a 'mean' average of a 10year performance?! No Sir. Each years balance sheet counts. In which case your dismal performance gets camouflaged by a few good years! Or does one view it in its finality of how future-perfect it has left us?
8) Inflation has led to a decline in the rupee, which fell to all-time lows last year. Only recently has it started to recover, the credit for this goes to the Reserve Bank of India and its proactive policies under governor Raghuram Rajan.
Yes, “The nation wants to know..”! Was silence a virtue, or a passive endorsement of the rampant kleptocracy? Or was it a triumvirate pact of omerta, imperiousness and indifference? If these questions didn't warrant a reply, its prudence to offer an exit-interview, one that a resigning Servant of the People, as a minister, and custodian of the nations coffers, ought to offer before he departs. Provenance of guilt, the ultimate beneficiaries of serial scams must be known, traced to its origins through transaction trails, booked, punished, and the illicit exodus repatriated into the cycle of mainstream economy. A measure that would have given every tax payer a reprieve, undoubtedly!
Sir, we don't deserve to be incurring a 30 per centhighest slab of taxation, if it was not for the scale of national heist by a predator government. This is NOT linked to the force majeur events of global slow down as an alibi, as you would have us believe. Tax rates should have been reasonable, in view of inflationary pressures you unleashed. It was highly do-able! Instead, the 3 Wizards of finance, gave us an inflation highest in living memory, with no instrument to park earnings at a safe 'inflation+return'. That pains!
The records speaks for itself. At the Congress Raj finally and mercifully comes to an end, rarely has an exiting regime deliberately left behind a legacy of such damage due to its profligacy. What you leave behind is memories of hardship, fear& intimidation, not one of hope and encouragement. Thank your regime for liberalisation,but NO Thank You for eroding every gain of opening the economy and regressing Indians by a decade , Mr FM, Sir!
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). Patience is the best ingredient to hard work and when we are entrepreneurs , we need lots of it.
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