Kejriwal calls five politicians corrupt…..still none from the BJP!

How obvious it is that Kejriwal (and the whole of Team Anna) is nothing but a stooge of the BJP. Very sparing of its criticism of the BJP (and doing it only when it is absolutely necessary), Team Anna has found one innovative excuse after another to protect the BJP and attack the Congress.

Apparently, passing the Lokpal Bill is only the Congress’s responsibility. Why? Because it is in power at the Center. Fantastic! And what about ensuring the support of the other parties who seem not to be supporting the bill? Well, that’s the Congress’s problem to handle! What about their favorite party, the BJP? Now don’t say anything about the BJP please! When the BJP opposed the Lok Ayukta clause in the Lokpal Bill (a volte face on the Sense of the House Resolution given to Anna), Team Anna must have been acutely embarrassed. Guess what clever solution then found to avoid attacking the BJP? They found Mamata to blame instead! Thank god, there is always Mamata to blame! And for every accusation that people make that they are partisan in their support and opposition to select political parties (in particular towards their support to the BJP), they point towards Justice Hegde’s strong action against Yeddy. True indeed, but what about all the obvious omissions of the passions of the other BJP patriarchs and seniors? What about Narendra Modi’s stoic refusal for eight years to have a Lok Ayukta in his state? What about Pokhriyal of Uttarakhand fame who finally had to be sacked by the party just before the state elections? What about the murder of the RTI activist Shehla Masood in MP in which a BJP MLA is allegedly involved? Surely Anna could have spoken against the corruption in the BMC (Mumbai)?

But Kejriwal chose to ignore all this when he named four names yesterday at the joint rally with Ramdev. Mulayam Singh Yadav (now isn’t he the one propping up the Congress…..putting paid to all of BJP’s well crafted plans to topple the UPA?), Mayawati (another thorn in the flesh for the BJP), Laloo (one name perhaps rightly named) and Jayalalitha (now why doesn’t she formally join the NDA????!). No Naveen Patnaik (remember all the land acquisition for Posco and Vedanta charges?), no Nitish Kumar (remember the Rs 11000 crore “treasury” scam?), no Bal Thackeray (remember BMC roads scam???) and of course no BJP Chief Ministers.

The ganging up with Ramdev is curious. Ramdev wants the government to get back all the black money that has been stashed abroad by corrupt Indians. How about starting with him only first? What about the island that he allegedly owns near Glasgow, Scotland? What about the charges against his ayurvedic formulations (they contained human body parts?)? Isn’t it true that the Enforcement Directorate is after Ramdev too? Should he just clear his name first before mounting an attack at the government? Is it the government that is attacking Ramdev for his illegal businesses, or is Ramdev attacking the government to pre-empt any action against his businesses?

Team Anna is split on whether to attack Manmohan Singh personally or not. But all of them are united that whether he is culpable personally or not, he is surely guilty of not having acted against the so called corrupt ministers in his cabinet. Is he less or more guilty than Anna – who too seems to tolerate such wanton elements like Kejriwal, Bhushan and Bedi in his movement? Did Anna ask the tough questions when it came to Bedi’s travel statements (ripping the government the most in the process) or Kejriwal’s funds management skills and delayed payment of dues to the government or Bhushan’s favorable allotment of land in Noida? I doubt it….because if he had, he would have sacked the trio much the same way he wants the PM to sack 15 cabinet ministers.

Maybe Team Anna needs a lesson in basic economics. Maybe it needs to understand that its difference of views with the Congress’s economic policies doesn’t make it a case of corruption. Did the cheap or free allocation of 2G spectrum and coal blocks lead to super normal profits for the private companies that supposedly benefited from the government’s largess? Is the government’s role maximizing revenues (are we a purely capitalistic country), or allocating resources for the most optimal public good (see where 2G penetration has reached thanks to cheap pricing)? Because if Team Anna understood what governance is, they may perhaps understand why the coal blocks were allocated in a jiffy. It is this urgency of action that led to the addition of 20000 MW of power last year (more than what the BJP put together when it ruled during the 10^th five year plan). A little knowledge of economics would show Anna that not everything can be linked to corruption – the higher petrol prices now are not because of corruption elsewhere as they claim….

Team Anna may also want to read the newspaper reports about all the people who seem to be flocking to them for dubious reasons. General VK Singh is the latest in this list. But maybe Anna should read the Business Standard front page story of the 31^st of May “Army Chief slams BEML on Tatra, awards it Rs 1500 cr deal” – where it is alleged that the General signed a $275 million contract for 204 ARVs (Armoured Recovery Vehicles) in spite of BEML’s poor past record. It may also want to check out why the CAG made a mess out of the Antrix probe – alleging that it was a Rs 2 lac crore scam – when it made a huge mistake in comparing the price of S band spectrum (akin to the price of a house in Virar) with that of 3G (a house on Malabar Hill). Again, Anna may want to ask Medha Patkar which form of electricity she prefers because I am a little confused here. She’s spoken against hydro power in the past, continues to speak against nuclear power in the present and also keeps complaining about thermal power every now and then. So does she advocate we burn wood to run our factories? But knowing Team Anna, and its political motivations, it is unlikely to check these things out. That is why yesterday was another farce. Nothing but a farce.

The real truth is that when we refer to Anna’s movement, we should perhaps add the words “Sponsored by BJP” to it. In any case, the people of this country have figured this out. Why not acknowledge it publicly then???? There is no shame in being a political movement. But there should be shame in trying to hoodwink the public….

The real truth: As policies evolve, old ones cannot be called corr...

The real truth: As policies evolve, old ones cannot be called corr...:

Every time a better policy takes shape, should we conclude that the older one was "corrupt"???? That is what 2G and Coalgate is all about....

As policies evolve, old ones cannot be called corrupt…..

A TV anchor was building his case against the UPA government as he does virtually on every day by claiming that there were too many similarities between the 2G “scam” and now “Coalgate”. In his wise opinion (?), the government was corrupt in both cases since in both cases the earlier policy was changed (in 3G in telecom) or proposed to be changed (in coal mining) by the government, and hence – his intelligent argument went – this is proof that there “must have been” corruption earlier. Such a joker would be very funny if he was performing in a birthday party or as a stand-up comedian on TV, but as the anchor of a major news TV channel, he should be considered to be an element dangerous to our democracy.

To explain the subject matter of this post, let me take the example of the fuel subsidy that the government has been giving forever. Take diesel subsidy….at present some Rs 15 per litre or so. Let’s say, this comes to Rs 1 lac crore per annum. The government has been discussing for many years now (but lets say only since 2011) that even diesel should be de-regulated, and its prices should be determined by the oilcos themselves. Within the government, there are ministers who feel diesel should be de-regulated (say Jairam Ramesh, Pranab Mukherjee, the PM etc) and those who feel it should still be regulated (say the rest of the pack including the Congress President Sonia Gandhi). Every three months, they have discussions on this subject. Often, the Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia, as well as the Secretaries of various ministries including finance, transport, commerce and others have joined the discussion and expressed their views on the subject. Again, some believe diesel pricing should be freed up; some think otherwise. All said that there were no legal limitations – no need for a new law or an amendment to an existing one – to freeing up diesel pricing. The PM finally expresses his views that he believes diesel prices should be de-regulated, but political “compulsions”, the proximity of certain important political events, the reality of certain state elections on the horizon compel the government to do nothing about freeing up diesel pricing. For another four years, the pricing continues to be regulated and highly subsidized. Eventually (say in 2015), the government frees up the pricing. This is the background to the points I want to make regarding both 2G and Coalgate:

1)    Merely because the government has discussed freeing up diesel pricing in the past does not make the act of providing subsidies thereafter as corrupt. One cannot argue in 2015 that “See, the government discussed freeing up diesel pricing in 2011. Why did they not do it then? Surely, this is a sign of corruption”.

2)    The fact that different ministers had different points of view does not mean that the one who took the final call – say the PM – is corrupt. If that were the case, then what one is effectively saying is that if there is a difference of opinions within the government, the government should take the most conservative cover-your-ass decision. It should keep one eye on the wise anchor on this TV channel, another on the CAG, a 3^rd on the Supreme Court, a 4^th on the opposition, and then decide which decision will draw the least ire. In effect, a political decision such as freeing up diesel pricing would be taken by a concoction of unelected wise men in media, the auditor and the judiciary. Why have political parties then? Why not just let these wise men run the country?

3)    The fact that certain secretaries to the government were involved in discussions, and felt that diesel pricing should be freed up – without looking at the political or legal environment – does not make the government is corrupt. At the end of the day, the secretary is just that…..a secretary. The secretary cannot take political decisions. The secretary only brings a rational point of view forward; not a political one. Ultimately, all decisions are political decisions. Diesel pricing is a political decision. One party may decide to free it up (I cannot think of any party right now!); another one may decide to increase the subsidies on it. If decision making were to be taken purely on rational grounds, then we would be talking of the private sector, not the government.

4)    The government eventually frees up petrol pricing (not diesel) and the prices climb up to Rs 80 per litre. This “conserves” (stanches losses) of the government to the extent of Rs 50,000 crores per annum (say). This does not mean that petrol pricing earlier was a “scam”. Nor that diesel pricing today is a “scam”. Trust media to brand it “dieselgate” or some such inane thing! The government moves in baby steps, tests the political waters, and then decides whether to push forward or backtrack. If it can handle the political fall-out, it will try to increase diesel pricing a small bit and again test the waters; if it works, it will be encouraged to continue; else it will beat a hasty retreat. This is politics, not rationality. But this cannot be called corruption.

Let’s now come to the 2G and Coalgate “scams”. I always put the word scam in quotes, because I don’t think they were scams at all. 2G certainly was not. Yes, it looks like there was corruption that Raja indulged in, but the rest of it was just a policy that evolved with 3G. Likewise, Coalgate is mostly a policy matter, which is now evolving.

In 2G, the older regime was to give spectrum cheap. It doesn’t matter than post-3G auctions, this older policy looks odd. But that same older policy was followed by both NDA and UPA right until 2008. Just around then, the government tested waters with 3G auctions and found that it gave it great results. In fact, it got praise from one and all. It helped it contain the fiscal deficit. But it increased 3G pricing drastically. The 3G business is all but finished. Telecom operators have lost money hand over fist (their own fault!). 3G penetration is one-tenth of what their plans were. The government’s objective of high broadband penetration has not been met. The success with 3G was only financial; not social. Clearly, neither should the 3G experience compel the government (or the Supreme Court which has no expertise in economic matters) to auction 2G airwaves (since it doesn’t want penetration to fall and prices to rise), nor should it be inferred that the no-auctions earlier policy was corrupt. What were corrupt (if proven) were Raja’s shenanigans and that is what the court should restrict itself to.

In Coalgate, the fact that the UPA first considered auctioning coal blocks, later felt that legislative reforms were required…..the fact that the Coal Secretary felt that legislative reforms were not required….the decision got delayed by many years…..etc etc does not prove that earlier policies were corrupt. The earlier policy of “allocations” rather than auctions was followed since independence, including by the happy-to-claim-high-moral-ground BJP. In fact, one can argue why the BJP did not even think of 2G auctions or Coal block auctions…..leave alone implement. Policies evolve over time and newer ones make the older ones look suspect. Mamata Banerjee refuses to increase railway prices. But is this also “corruption” or is it just a flawed political policy? We still allocate land at concessional rates to SEZs. Is this corruption or policy? The various tax sops given to the IT industry in its early days and then later extended till today….is that corruption or an encouraging government policy? Branding everything as corruption is sensationalist; but also very stupid.

The ultimate test of corruption has to be if some person or some company gained personally. Check our the financial results of different private sector power companies. Tata Power: Revenue Rs 8496 crores. Net Profit Rs 1170 (13.7% margin). Bhushan Power: Revenue Rs 9941 crores. NP Rs 1024 crores (10.3%). Lanco: Revenue Rs 8605 crores. NP Rs 116 crores (1.3%). Jindal: Revenue Rs 13334 crores. NP Rs 2110 crores (15.8%). Adani Power: Revenue Rs 3949 crorese. Net loss Rs 294 crores (-7.4%). Check out the public sector NTPC for a benchmark: Revenue Rs 62053 crores. NP Rs 9223 (14.8%). So which private sector company has been making super-normal profits? If the “proof” of corruption is that these companies benefitted from the government’s “gift”, surely their margins should have been far higher???? Or does it prove the government’s point that the cheap coal was used to give power cheap to the poor? Just for the information of readers of this blog, there are still 300 million Indians who don’t have a power connection. Power consumption in rural India is just 64 KWH and in urban India just 288 KWH per annum, compared to a worldwide average of 2600 KWH. The European countries average is 6200 KWH. Does this sector need government encouragement or not????

The real truth is that giving national resources free or cheap has always been a conscious government strategy. We’ve always been socialistic in approach; never capitalistic. The end result of such policies has always been cheaper end consumer pricing. In a poor country, that should be the primary objective of government policy; not maximizing revenue as some capitalist zealots seem to now be professing. No company makes supernormal profits in telecom; no company is doing it in the power sector. Clearly the Coalgate discussion is nothing but a political one…..the wise and oversmart TV anchor’s views notwithstanding!

The shocking GDP numbers can actually be a blessing….

When the GDP growth rate numbers came in yesterday, my first thought was that they would send shock waves throughout the financial markets. The BSE and NSE would crash. There would be anguished faces and worried looks amongst investors and industrialists. The trade bodies would come out holding their heads in their hands. The opposition’s knives would be out yet again. All that did happen, but in a rather muted manner.I was at an investors meet yesterday when the news came out, and was rather surprised when many (in fact, most) investors actually felt good that the GDP growth rates had come so low. Why?

Because they believed that unless things came to such a pass, the government would simply not react. It would continue to remain in deep freeze. It would continue blaming the Euro-zone crisis absolving itself of its responsibility. Some even felt that it would have been better if the GDP growth rate had gone further down to 4% and forex reserves were again down to just 2 weeks of imports. Only a crisis of this proportion would wake the government out of its stupor, so that a new set of reforms could be started….reforms that would help India’s economy for the next ten years.

What these people were saying is indeed true. Nothing in India ever moves until it is absolutely forced to. Nothing is ever fixed until it is completely broken. Since the UPA delivered a good GDP growth in its first avatar, it felt that it didn’t have anything more to do with the economy. The economy had already moved into a high growth orbit and it would take care of itself. The Congress thought that it could now afford to go back to playing politics. That’s when the problem started. The role of the government in any economy – even in a capitalistic one like the US – is critical. If the government goes to sleep, the economy comes to a grinding halt.

The good thing about terrible economic situations is that it forces governments to muster the courage to take bold decisions. In this particular case, the government needs to worry less about the BJP; more about Mamata Banerjee. Talk reforms – especially those concerning foreign investment – and Mamata starts kicking and screaming. If the Congress cannot find a way to handle Mamata – or sidelining her – then it will find itself unable to move ahead with its economic agenda. And if it doesn’t move, it will surely lose power in 2014. If anything, recent poll results have shown that people have very little patience for non-performing governments. As long as the economy chugs along, they are willing to tolerate the muck of inter-party politics. But the moment the economy slows down, they are happy to kick out the ruling dispensation. The one that has the most to lose at present is the Congress. And it would only be helping itself if it did something good now.

What needs to be done at this stage? In large parts, it is the sentiment that has started to hurt. Industrialists, bankers, investors, MNCs and domestic entrepreneurs have stopped believing in the Indian government, even though they still believe in the India story. It is true that India is still amongst the fastest growing developing countries (since the others too have taken a hit), but these people believe that there is no reason that India should have fallen so low. In fact, many believe that this was the time for India to have gone past China. If we had had good economic policies, our GDP growth wouldn’t have slowed down so much. By taking the excuse that the entire world is in crisis, the government can perhaps fool itself, but it cannot fool the people.

Is it already too late to make amends? I don’t think so. The government needs to signal that it is in control. Yesterday’s decision to allow exploitation of two mine blocks in the forest areas of MP was received well by the markets. The petrol price increase was a very good move nothwithstanding the bandh organized by the NDA. The government now has to increase diesel, kerosene and LPG prices – even if by a very small amount. Railway fare increases – notwithstanding what the economically illiterate Mamata may think so – are long overdue. We need to stop talking about GAAR at a time when the world’s investors are already in a worried and risk-averse mood. There is absolutely no need to victimize Vodafone and scare away many other investors. It’s still not too late. The government can undo the damage of the recent past, and then start to move forward again. The Congress has to understand this – that it itself is the most important reason for the mess that we have on our hands today.

It’s also time also for the BJP to recognize its key role in India’s growth story. The one reason why the economy grew so consistently between 1991 and 2011 was that there was a broad consensus between the BJP and the Congress on economic policies. There were no major reversals of Congress’s policies when the BJP took charge in 1998-99; nor when the Congress took over again in 2004. Investors loved this continuity. The two major parties fought on political issues; but were largely united on economic ones. Somewhere along the line – around the 2009 elections – the BJP felt that supporting the Congress wasn’t helping its cause. It probably knew in 2008 itself that it was going to lose the 2009 elections. That’s why it needlessly opposed the Indo-US nuclear deal. That’s when it started playing opportunistic politics. Not supporting FDI in multi-brand retail (when it was itself in favor of this earlier) or the GST (again, first supporting it and then not doing so) or the amendments to the Banking, Insurance and Pension sector (allowing far lower levels of FDI or voting rights) or Land Reforms Bill (recommending that the government should play no role in acquiring land for private industry) and so many other economic bills has ensured that reforms don’t take place. It may suit the BJP politically – and it surely must be wringing its hands in glee to see the Congress’s discomfiture – but it puts the country behind several notches. And as Advani and Ram Jethmalani have been saying, it is not helping the BJP either.

It’s time now for the Congress to act. Not acting is no solution, since that is sure death. There is no point being afraid. Maybe the Congress should remember the Mountain dew tagline “Dar ke aage jeet hai”! Acting boldly can still keep it in the race for 2014. Working with SP and BSP in UP – sacrificing its own political interests there for the time – may be a good starting point. Taking one tough decision a week may be a good thing to do. Sitting with the BJP on bills that it broadly supports cannot be a bad thing to do. Reining in its urge to splurge should be a mandatory survival tactic. And most importantly – listening to Manmohan Singh’s gyaan on economics may be the perfect solution!

The real truth is that the next few quarters will decide what happens to India. It could well recover strongly as it usually does after hitting a miserable bottom. Or it could go further down in an inexorable descent. It’s time to stop playing politics; its time to stand united. Its time to say no to Anna and the CAG; its time to say yes to reforms. We can do it….provided we want to do it…..

Bharat Bandh? What Bharat Bandh? Bharat has been bandh for months….

How ironic that the opposition has to actually call a particular day the day for a Bharat Bandh. Hasn’t Bharat been bandh for quite a few months already now ever since the government went into a deep freeze? And the one move the government finally took to show that maybe Bharat was not bandh is being used as an excuse to bring bharat back to a bandh. How ironic and how irresponsible.

Those professing the bandh may want to keep the following things in mind.

1)    They should be clear about who they are calling the bandh against. The report in the Business Standard on 28^th May shows how state governments are benefitting far more than the Central government through this price hike. While the Central government now gets some Rs 14.78 per liter as excise duties, the state governments get between Rs 12.2 and Rs 19.83 per liter VAT and sales taxes. If anything, the ire of the protesters should be directed at the state governments. Or at the most, towards both the center and the state. But if they did this, the protest would soon fizzle out. Why? Because the bandh is a purely political move; and if the political move has to be directed against its own government, I wonder if any BJP wonderkid would like to be seen on the street (at least in the BJP ruled states)!

2)    The poor of the country – that is some 70% of the population – is not supporting this bandh. The precise reason why petrol prices keep increasing and the other fuels keep getting spared (a policy I don’t agree with) is that a petrol price hike doesn’t even so much as touch the poor. The poor don’t use petrol. If instead of hiking petrol prices by Rs 8, the government had only hiked diesel prices by Rs 3-4, and LPG prices by Rs 50 a cylinder, it would have collected more monies. But that would have hurt the poor. So it will never do that. It will do everything devious possible – like increasing excise duties on diesel cars (a move that will hardly correct the scenario, but will make diesel cars more popular for all the wrong reasons) – to avoid increasing the prices of diesel and other such fuels. It will do that for political reasons. The core constituency of the Congress is the rural poor. And the petrol price hike is not bad news for the rural poor. They have been spared. And further, the additional resources so raised will be used for schemes that help them directly. The BJP’s core constituency is the urban middle-class, not the rural poor. Clearly, the Congress’s aam aadmi is different from the BJP’s!

3)    The Left parties may well want to stay out of this bandh, even though they would find it very difficult not to heed a bandh call given their genetic disposition towards bandhs! They’ve been unable to hold a bandh in Mamataland for a year now, so they must be itching to do what they do best somewhere else. But they may want to remember that they owe their existence (for all the wrong reasons though) to the rural poor. Their constituency is the same as the Congress’s. By backing a bandh which is so pro urban-middle class, they are surely yielding ground to the Congress in the rural areas.

4)    The BJP may well want to consider why it is in such a ruinous state all over, even as the ruling Congress is faring so poorly itself. Populism has become the BJP’s core tenet; and the BJP has proven that again in Goa where its new CM has not only waived off the extra VAT that his state government earns through the price hike, but also the entire VAT the state earned. Yes….the entire VAT. So now, petrol actually costs some Rs 11 cheaper in Goa than it did last week; selling now at some Rs 61 odd. Wow. What a great leader Paricker is proving to be! In reality, he is an unmitigated disaster. How will he manage his state’s finances if he foregoes the biggest source of income? But again, out of the pressures of populism, a small state like Goa is being used as a metaphor to prove that the BJP is pro-urbanites. Just like the small state of Uttarakhand had been used to show its support for Anna’s ideal Lok Ayukta law. Again, the skullduggery is apparent. For every Uttarakhand that implemented the ideal Lok Ayukta, there was a Gujarat which failed to appoint a Lok Ayukta for eight long years and an MP and Karnataka from where the stench of corruption travelled far and wide. For every Goa that plays Santa on petrol prices, there is a Gujarat, MP and Karnataka that have gleefully digested the extra gains, even while launching the Bharat Bandh!

5)    The bandh call shows yet again the Congress’s main failing. It’s not bad policies, but simply bad communication with the public. Ideally, the government should inform the public about the need for the price increase; and make the price increases and decreases more frequent and in line with price movements internationally. It should also seize the opportunity to launch a strong program for development of public transport. If the government increased prices by another 10 rupees a litre, but diverted the entire 10 rupees in a transparent way towards developing the metro or the BRTS or any other form of public transport, it would earn the support of the urban middle class. At the very minimum, the Congress should inform the public that their rivals in the states pocket as much, if not more, of the taxes as they have. But the Congress has failed to do any such thing. It has instead preferred to talk about the minority quota, or be drawn into the silly and stupid Coalgate allegations of a misdirected “naxalite-minded crazies” (Subramaniam Swamy – a soon-to-be-BJP-leader called it, not me!) movement of the so-obviously-non-Gandhian Anna. It needs to get its focus right, but then getting the focus right is proving to be an impossible task for the Congress!

The real truth is that the Bharat Bandh is a mockery of common sense. Bharat is already bandh. Maybe the protest should have been to restart Bharat. Maybe we need a Bharat-chalu or Bharat-shuru or something! But then, who cares whether Bharat is bandh or is shuru. The Congress has lost the skill to run the government; the BJP cares little for the country. Politics rules everything, and the economy matters little. The bandh it shall be!

When will Team Anna understand the difference between corruption and policy decisions….

Team Anna is at it again. It is now threatening to go on a fast unless the government institutes investigations against 16 of its ministers, including the PM. At the heart of this charge of corruption against the PM lies the basic mistake in the understanding of the difference between corruption and questionable (to some people) policy decisions. Given its political nature, I have little doubt that Team Anna is intentionally confusing the two.

The reason to include the PM in this list is ostensibly that he was responsible for the Coal Ministry and the CAG has recently alleged that the coal ministry’s policy of giving out mining rights favored private companies.The CAG’s allegations is to the extent of some Rs 2 lac crores (yet another sensationalized figure!). Firstly, this is a CAG estimate which rightly or wrongly (mostly wrongly!) is again commenting on government policy and very little on process violations. Secondly, the report needs to be discussed in the PAC and action taken there. Unfortunately, given the competitive nature of media in our country, every CAG report is brandished on the front pages of newspapers and on prime time TV. With due Parliamentary process not allowed to play itself out, the people of this country are led to premature conclusions about the veracity of these reports. But such is the nature of our democracy at this stage. Politicians are assumed corrupt until proven innocent. And even if they are proven innocent, the impact has already been made on the minds of the people.

The charge against the PM is that the policy of allocating mines was flawed and that private companies reportedly profited from this. Team Anna could have argued that this was a wrong policy and it would well have been within its rights to do so. But given its overall positioning (of being anti-Congress), it chose to attach the C word with this matter. How is this a case of corruption at all?

Certain basic elements must be for it to be a case of corruption. The one who took the decision should have personally and monetarily benefited from the decision he took. Like in the Yeddy episode (and now Jagan in AP; and Ashok Chavan in Maharashtra), there is a direct charge being made against the accused. Is it Team Anna’s point that the PM profited from the decisions of the Coal Ministry?

Either the person should have profited personally, or at the very least, his party should have been the beneficiary. Again, is it Team Anna’s charge that the private companies paid kickbacks to the Congress party? If this is their charge, do they have any prima facie evidence to at least build a preliminary case against these ministers? Or is it the mere possibility of corruption having existed which has prompted them to demand an investigation. If I feel that some Team Anna member is corrupt, can I demand an investigation and will any court allow it, or will it ask for some prima facie evidence? And what preliminary evidence is Team Anna relying on to make the accusation? That the CAG pointed out to flaws in the policy? If that’s their point, then its a political point and we should let the PAC decide. That some opposition politicians have made accusations on this matter in media? Well, politicians do this all the time, but is that enough to start an investigation? If investigations were started at every allegation made, there would be no possibility of any governance left. In any case, governance has come to a standstill thanks to the hamhanded Anna movement….

It appears Team Anna’s only motivation – and the reason why it is suspected of being a BJP front – is to bring the government to a standstill. It has succeeded to a very large extent. Most bureaucrats and politicians prefer not taking any decisions only because of the fear that a decision (right or wrong) may later be construed to be a corrupt one. Team Anna must take credit for this! Single handedly, they have done what the entire opposition couldn’t do combined. They have managed to put the government in a state of deep freeze. The BJP must be wringing its hands in glee; as the economy sputters and as inflation soars…..and as the Congress’s fortunes plummet. How can decision making happen when every decision is questioned for corruption? Is corruption the only yardstick to measure government policy with? Has anyone ever asked a question on why government projects almost always get delayed? Is there any premium ever attached to speed and quality of execution of government works?

The Coal gate scam is a non-starter. How to allocate national resources is policy preference. A particular political party may prefer not to auction national assets, but pass them on to the public and private sector for exploitation in a transparent and fair process? And another party may prefer to auction the same? In such a case, would the party that preferred auctions be declared to be non-corrupt and the other one corrupt? Take the 2G “scam” for instance. Is this a policy (and hence political) subject or one of corruption? If it is about corruption, what charges have been made so far against Raja or anyone else? Nothing except for a Rs 200 crore allegation linking Raja’s party DMK with DB Realty. There is no quid-pro-quo charges against Unitech (nothing proven yet in any case); the charges against Reliance, Loop Mobile and Essar are of violating telecom policy (owning more than 10% in another telco in a circle in which it is already present); not of bribing someone (but of course, there is an assumption that someone must have been bribed!). Again, one could argue whether spectrum should have been given free or not and that would have made for a good public discourse from which the country could have benefitted; but some people (most notably Team Anna) believe every policy matter that doesn’t agree with them is a case of corruption.

The real truth is that Team Anna is political; so one now understands why it does what it does. That’s the reason the movement died so suddenly. But the damage the movement has done to India is huge. It will take us a long time to recover from it. Nor has the Lokpal Act been passed (because of Team Anna’s political biases and inflexible and unrealistic attitude). Santosh Desai – after taking a very pro-Anna line right through the entire agitation – effectively argues in yesterday’s TOI  (“The Lokpal Deep Freeze”) that Team Anna was perhaps wrong. That change cannot come about by just activism (“change is too important to be left exclusively to activists. Without activists, no change can begin, but with only activism, lasting change might not come about”). That change comes in steps. And it needs patience. Now does that sound familiar to readers of this blog?!!

Finally a bold and good decision….

Raising petrol prices by Rs 7.5 per litre is a gutsy decision no one expected the UPA to take. I am happy that the Government has finally decided to move on this festering issue.

There are clearly many dimensions to this subject. For instance, the tough decision indicates a new political alignment taking place. A day back, Mulayam Singh Yadav was the special guest at a UPA celebratory dinner. I haven’t heard too many comments from him today except some muted chiding of the Congress. Was the price hike discussed with him? Given his secure position at home, has he decided to back the Congress for gains elsewhere? Is this why the Congress has managed to cock a snook at Mamata? She claims she was not consulted. But curiously, the queen of threats and tantrums has not threatened to pull her support out. Why? Does she also realize that with Mulayam cozying up to the Congress, her own venomous sting has become a little less potent? Very interesting……and if this analysis is correct, we could be in for the passage of some more “reforms”. I put reforms in quotes since a petrol price hike can hardly be called a reform at all. The real reforms are waiting in the wings – waiting for Mamata to give the green signal. Will these reforms finally take off with Mulayam’s tacit support?

The steep price hike also shows how inept the Congress has become at basic politics. All the experience of the past 50-60 years has come to mean nothing. Why would they increase prices so steeply and after so much time? Wouldn’t it be politically more palatable if the same Rs 7.5 was increased over three or fours steps spread over a year or so? And if a cut or two was thrown in in-between? But somehow this political gumption has been missing for some time now.

One other thing is clear. In its choice of tough options, the Congress is happy to junk the urban middle class. It will do all it can to protect its core constituency – the rural poor. The farmers, the unemployed, the poor, the underprivileged. Those are not hurt by a petrol price hike. Only the urban middle class – mainly those who ride two wheelers and the few who are still left driving petrol cars are hurt. But in the political numbers game, this is the most easily sacrificiable lot. In any case, this lot was never a great fan of the Congress – the rare exception being in 2009 when it backed Manmohan Singh for his gutsy Indo-US nuclear deal.

Will the UPA government decontrol diesel also? No way. That would really hurt. That would hurt the farm sector. That would hurt the transport sector. And that would hurt the inflation. So those of us who drive diesel vehicles can – with lots of shame no doubt – continue to live in a world of fake make-believe.

Is the petrol price hike justified? I think so. I think petrol prices will and should rise to Rs 100 – so that petrol consumption drops. That and that alone will give a fillip to public transport in this country. Today, no one wants to travel by public transport. The government also doesn’t prioritize investments in public transport. Even the courts have directed the government many times to work on such schemes, but no real movement has ever taken place. The high cost of petrol alone will force the people to support an aggressive nuclear power policy. Nuclear power should fuel our public transport system. That is the only way to control transport costs. The truth is that crude prices are only going to increase in the future. That future is not very far away. It may be 5 years away; or a max of 10 years away. If we have to work on cutting our crude consumption, the time to start is now. But with the kind of political system we are seeing in the country, where every single decision is debated ad nauseum and usually shelved for want of a consensus, no decision making takes place. Even a ready power plant like Koodankulam is permanently under debate. Ridiculous.

Is Mulayam going to side with the Congress for the next two years? I can only hope so. The biggest political no-no for the SP (and even the BSP) in UP is to be seen doing anything with the BJP. If the BJP opposes a particular Presidential candidate, the chances are that the two UP parties will support that candidate. If the BJP complains about the petrol price hike, chances are that these two parties will keep their criticism muted. Between the Congress and the BJP, the Congress is a far more acceptable partner for the UP parties. IN many ways, the poor showing of the Congress and Rahul Gandhi in UP has ensured that the SP and BSP continue supporting the Congress. The myth of Rahul has been contained – at least for now. Supporting the Congress can earn rich dividends in UP – budgetary support for populist schemes being only one of them.

So I am happy the Congress has bitten the bullet. It’s a good decision. Maybe the Congress will dare Mamata a little more and push ahead with some more legislation – at least the ones where the BJP has agreed to support. The Banking reforms, the pension sector reforms can all be passed now. Mulayam’s and Mayawati’s support can also help pass the Lokpal Bill in Rajya Sabha, and that act should ease pressure on the Congress too. If all of this is done quickly, maybe….just maybe….we can have a government that takes decisions. The policy paralysis has been the biggest reason for our slowdown.

The real truth is that the decision to increase petrol prices is a good one. People will complain, but then these are tough times. Tough decisions need to be “sold” to the people….that’s where the problem lies…..