Saturday, March 1, 2008

Freeloaders' budget- a fraud of Enronesque proportions

Chidambaram has delivered the worst budget that India can ill-afford, or afford at its own peril. Let's see what he's done:

1. Debt relief for farmers-

It means massive deficit, slow growth and inflation. Plus you are rewarding bad behavior. Take loans and forget repaying them; the govt. will take care of it is the message. Besides, the money is not coming from Sonia or Chidambaram's pocket. They are borrowing from average Indian's future to pay for today's bills. Perfection of salesmanship is said to be when you make people buy nothing- hope for example, if audacity of truth permits. Sonia is doing charity with our money. It costs her nothing and she hopes to benefit from such largesse.

2. Oh, but they raised the taxable income bracket, didn't they?

Yes, but he has raised taxes elsewhere. The capital gains tax for example, which means penalizing productive people. India just became less investment friendly, rather investment punitive. Such hidden taxes are inevitably going to come back and bite the common citizen, however much we refuse to acknowledge.

First they made aam aadmi into a nakaam/nikamma aadmi (failure, invalid, useless fellow), and now that nikamma is more dependent on the govt. than ever for managing his daily affairs. We are fast approaching socialist utopia at this rate, where resources are scarce and do-gooders are the sole arbiters.

The govt. has kissed goodbye to fiscal discipline. Spend and make merry seems to be the guiding principle of the day. As before, the next generation's interests are being sacrificed at the altar of political opportunism.

And as before, the govt. has indulged in some 'creative' accounting (read fraudulent), is fudging up numbers in what amounts to cooking books by hiding behind arcane terminology to make the deficit appear less, within the scope of set target. The food and fuel subsidy are put under different name, separate from the normal deficit figures which are supposed to be under 3%. Those subsidies are a massive 1% of GDP, taking the overall deficit well beyond 4%. Deficits are nothing but loans and we're being forced to mortgage our future to cover up Sonia-led govt's incompetence. Four years of non-performance, sloth and sheer inertia is being slid under the carpet through short-term public borrowing.

All these losses are going to show up as inflationary tendencies a year or so later. Prices will be out of the control, but the UPA will have bought power(or not!) for itself, with our money. There will be nothing to show for the massive spending- no roads, no infrastructure, no industry. Prince Rahul might have his crown though.

The loser, of course, will be ordinary Indian.

1 comment:

prudent indian said...

Rs. 60,000 crore is a political bribe by Sonia and her cohorts, for few votes more.
It is a 'sleight of hand'
PI.