Centrally Planned Citizens in Market Driven Economy

The drama around the railway budget was absurd, if not hilarious. Here is this one man who wishes to put his image at stake to ensure the health of the Indian Railways and what he gets in return is simple - a political middle finger. Mamata Banerjee, the ‘pro-people’ ‘messiah’ of India, shocked everyone by doing something which has no precedence before; protesting against one’s own party’s railway budget. Such bizarre arguments make one wonder whether the Indian population is even aware that from the dawn of 1990s, the Indian economy has positioned itself as a market based economy.

I think the problem lies in the history of Indian economy. I vaguely remember the stories which our history teacher would tell about his childhood and the post independent India. About how they would stay on a queue in front of a ration shop to get ones share of wheat, rice, oil, kerosene etc. The quantities of these goods were rationed (fixed) based on the number of people in the household and the prices were tightly governed by the government. From a macroeconomic perspective, the economy was run in soviet-style centrally planned manner. The five year plans, which were a brain child of Pandit Jawahar Lal Nehru, had a huge impact on the macroeconomic and microeconomic condition of India. Lets fast forward to the early 90s and there we have this Indian economy on the brink of filing chapter 11. Narsimha Rao brings on board a soft spoken economist, Dr. Manmohan Singh, as the finance minister of India. He pushes ahead with a series of reforms and hence started a transformation from a socialist economy to a socialist flavored economy.

Let us fast forward even further to the India of today. I would not dare to call India a capitalist country, but it surely is hugely market driven. Government has exited many of the markets where it shouldn’t have been present on the first place.  There is still way to go with the disinvestment plan. The reason you have so many options while buying a cold cream is because of the reforms of the 90s.

Coming to the current debate of prices, what I fail to understand is the kind of expectations which people have with budgets and government. They still want the prices to be controlled like the old days and don’t realize that India has moved on from that. Politicians are thoroughly responsible for such perception. It seems like a norm that politicians would turn economic illiterates and irrationals, the moment they are forced to sit on the opposition chair. I can vouch for it that a majority of MPs wouldn’t even know the meaning of ‘fiscal deficit’.

Even the media, in its attempt to raise TRPs, portrays the budget as a simplified diktat of the government on what prices will go up and what will go down. The newspapers sum up the budget with excellent infographics on the same.

Price rise is a serious concern and it should be thoroughly debated. I totally understand that even a slightest shift in prices pinch the lower strata of the society very badly. And for this very same reason, we want our politicians and even the media to debate on the issue of price rise in a more rational manner. I would be really proud of the Indian economy when the opposition party would come out and appreciate a bold decision of the ruling government.

Misfit Ministers, Vision less Ministries and a Stunted Growth

A. Raja is either a big crook or has some misplaced nerves in his cranium. There have been reports which have claimed that he has cost a damage to the exchequer worth Rs 1,60,000 crores. To give you a contrast, the official figure of CWG budget is Rs 15,000 crores, i.e. 9.375 % of the damage which Raja cost. So, if Raja had not done this, we could have hosted CWG 10 more times in 10 different cities or could have fed millions, or could have reduced our fiscal deficit  by a considerable margin.

It is so disheartening to see that even after such serious allegations; A Raja still thrives as a minister in the centre. This can be directly attributed to the multi – party coalition government evil.

A look at A Raja’s profile would tell you that he studied law and is an advocate by profession. Now this is where I lose track; He was apparently made a minister because of the ‘dalit’ tag which he carries with him. I fail to understand that why a ministry like the Ministry of Communications and Information Technology was allotted to a person who is an advocate. India is a world leader in information and technology and has the second largest mobile phone subscriber base. This field is undergoing immense changes which could be calculated on a per minute basis and the financial matters associated with these industries are unique and has no precedence in any other industry.  It would have done a world of good if we had an engineer or an economist or at least a person who knew what spectrum meant, to have been running the ministry.

So the question remains; what criteria decide the person for a portfolio. I understand that portfolios are distributed among allies. But, can’t a party decide whether there is someone from their party who is ‘capable’ to handle a particular ministry. Why does the Indian democracy see the allotment of portfolios as a reward to one’s political achievements? I’m sure DMK could have found an able candidate from its party(or at least from their supporters) who would have met the criteria I mentioned before. But Mr. Karunanidhi was more interested in gratifying his own family and his immediate political crutches. This is a trend which could be seen across all parties irrespective of their ideologies.

Another thing worth noticing is the preferential treatment given to different ministries. India would not have seen many law ministers who had an engineering background, or a Hindu Minister heading the ministry of minority affairs or an urban technocrat running the rural development ministry. However when it comes to ministries like IT & communication or health etc people seem to relax the allotment sensibilities.

The way A Raja has handled his ministry; it has reiterated the fact that we need specialist ministers. We need ministers who have the ability to conceive visions for their respective ministry.

If we could somehow get the first cabinet of our country, which had people like Nehru, Sardar Patel, Ambedkar etc. who were people with conviction and a master of their own fields, back into the present India, we could achieve more… much more.