Beware
of Greeks Bearing Gifts
Written
by Dr. Seshadri Kumar, 06 August, 2013
Copyright © Dr. Seshadri Kumar. All Rights Reserved.
Disclaimer: All the opinions expressed in this article are
the opinions of Dr. Seshadri Kumar alone and should not be construed to mean
the opinions of any other person or organization, unless explicitly stated
otherwise in the article.
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Yesterday, Rahul
Gandhi made a statement that “my one and only political aim is that I want
to tune my ears to the voice of the poor and the marginalised.” Translation: I do not care about economic growth, creating
wealth, or improving infrastructure, as long as I can loot the country in the name
of the poor.
Rahul Gandhi has made
statements like this before. In fact, his
now-infamous address to the Confederation of Indian Industry in March,
which everyone (including me) roundly and rightly ridiculed, carried the same message:
"But for
me the biggest danger is excluding of people. Excluding the poor, excluding the
middle-class, excluding the tribals, the dalits and I’m going to tell you why...we
have to carry the poor and the weak with us. India will only move forward with inclusive
growth that embraces everyone and is open and attainable to those inside this
room and those very, very far outside."
While it is fashionable
to ridicule Mr. Gandhi for his perceived lack of intelligence (e.g., Pappu) and his inability to grasp the seriousness or scope of the problems facing
India, few people understand how dangerous his vision for India is. He may be less stupid and far more sinister
than he looks.
The leftist clique of the UPA, consisting of the National Advisory Council (chaired by Congress
president Sonia Gandhi and formerly including well-known figures such as Aruna
Roy, Jean Dreze and Harsh Mander), Nobel-prize-winning economist Amartya Sen and, of course, Rahul
Gandhi, is determined to institute a rights-based paradigm in India, in which
free food rations (Food
Security Bill), free income (National
Rural Employment Guarantee Scheme), free education (Right
to Education), free mid-day meals (National Mid-day Meal
Scheme), and other entitlement programs are the mainstay of the economic
program.
The UPA government is taking India fast down the road that
Cuba and North Korea followed - to their ruin.
They are trying to reverse the reforms of
1992, and taking India back to the command-and-control, license-raj economy that created
the “Hindu rate of growth.” Today, the
net result of their actions to date is that a country that was growing at
almost 9% has
been slowed down to 5%. If they are
allowed to continue on this dangerous course, India will be in straits worse than it was in
1991.
They have already implemented all of the above-mentioned programs except the Food Security Bill, which is another major offender, which they plan to pass in the
current session of parliament. This bill will cost the nation 3% of its GDP - that is about Rs. 3,14,000 crores (about $52
billion) a year. We cannot afford this. Yet the government moves with reckless speed to implement this bill at the earliest. Why?
The reason is that bad economics is good politics. Declarations of sympathy with the poor, offers of freebies to poor people help win votes but don't make economic sense. Rahul Gandhi's statements of solidarity with the poor at the CII and the UPA's concern for the nutritional well-being of poor people should be seen in this light. This is why the UPA government wants to perform “acts
of charity” for the poor.
Charity may be a good thing, but it would behoove the Congress
party leaders to do it with their own money.
If the Gandhi family had used its personal assets parked in various
banks, whether in India, Switzerland or any other country, to perform charity,
I would have no objection whatsoever – and they would appear more credible
asking for the rest of us to be charitable.
But they are proposing to perform an act of massive, forced charity with your money, my money, and the nation’s money – money that does not belong to them. And, as they have already done a lot of “charity” with our money with all the other entitlement bills, it is time to put a stop to this.
But they are proposing to perform an act of massive, forced charity with your money, my money, and the nation’s money – money that does not belong to them. And, as they have already done a lot of “charity” with our money with all the other entitlement bills, it is time to put a stop to this.
Would you ever trust a person in your private life who
wanted to do charitable acts – but with your money? If not, then why would you trust a
politician? Anyone who talks of doing
things for the poor with public money should be viewed with the greatest suspicion,
as a possible crook. And Mrs. Gandhi,
Mr. Gandhi, Mr. Sen, and the rest of the UPA’s leftist clique, are no exception
to this rule.
“Helping the poor” is a slogan that tugs at the heart strings
but mostly doesn't work. The
current Food Security Bill is a perfect example. India has had 66 years of post-independence experience
with a failed and leaky public distribution system (PDS) scheme. Statistics show that of
the Rs. 75,000 crores ($13.6 billion) spent annually on the current PDS system,
only 40% reaches the intended poor, and 21% remain undernourished.
The rest goes into a vast network of middlemen, who indulge in
all kinds of cheating such as substituting the government grain with
substandard grain and selling the government grain at full price, printing fake
ration cards and taking out the grain themselves to sell on the open market,
hoarding supplies, and black-marketing, in order to enrich themselves at
government and taxpayers’ expense. And
now the UPA government want to increase the expenditure on this leaky and corrupt scheme from
$13.6 billion to $52 billion!!
The important thing for even the poor to know is that the “free” rations they are getting are not really free. There is NO SUCH THING AS A FREE LUNCH, as
the well-known American saying goes. They
will pay for it – as will all of us – in the form of increased taxes. Not direct taxes, of course, since the poor earn
below the taxable limit. It will hit us all,
the poor included, in the form of indirect taxes - excise and VAT taxes on every little thing you consume - be it books, clothes, soap, bicycles, pens, medicines - everything. So, in order to get this “free”
food, the cost of everything else, including even the matches used to light the
fire and the firewood or gas needed for the stove, will go up because of the
COST of the subsidy to the nation.
Furthermore, since there is only so much money to go around, the FSB will mean that there is less money for building roads, power plants, water supply systems, telecommunications, electrical grid systems, dams, parks, sewage, public transport, and the like. The money that might have been spent on such infrastructural needs will end up in the hands of middlemen and politicians, creating a new class of billionaires.
Furthermore, since there is only so much money to go around, the FSB will mean that there is less money for building roads, power plants, water supply systems, telecommunications, electrical grid systems, dams, parks, sewage, public transport, and the like. The money that might have been spent on such infrastructural needs will end up in the hands of middlemen and politicians, creating a new class of billionaires.
For the Congress party, the benefits are clear. Implementing a bill like this allows them to curry
favour with the poor. What they are
really doing is using taxpayer money to bribe the voters into giving them their
vote in the next elections.
Friends, this is the REAL cash-for-votes scandal. And it’s not party funds – it’s YOUR money that is being used to bribe you with a fake promise that they cannot deliver on.
The Greek epic, the Aeneid, of the poet Virgil, talks about the destruction of the city of Troy by the Greeks following their long war. Unable to defeat the Trojans by normal war because the Trojans are secure inside their fortress, the Greeks win the war by strategem. They pretend to leave the shores of Troy and leave only a huge wooden horse as a gift of peace to the Trojans. The Trojans, happy that the war has ended, bring the wooden horse inside the city fortress to celebrate. Unknown to them, inside the large wooden horse, Greek warriors are hiding. Once the celebrations are over, the Greeks climb out of the horse in the dead of night, massacre the Trojans, and win the war.
The current FSB of the UPA is a Trojan Horse. It pretends to give free food while in reality stealing from the very people it is supposed to feed through huge indirect taxes for an unsustainable expense. The fate of the FSB is bound to be the same as or even worse than that of the present PDS system.
Friends, this is the REAL cash-for-votes scandal. And it’s not party funds – it’s YOUR money that is being used to bribe you with a fake promise that they cannot deliver on.
The Greek epic, the Aeneid, of the poet Virgil, talks about the destruction of the city of Troy by the Greeks following their long war. Unable to defeat the Trojans by normal war because the Trojans are secure inside their fortress, the Greeks win the war by strategem. They pretend to leave the shores of Troy and leave only a huge wooden horse as a gift of peace to the Trojans. The Trojans, happy that the war has ended, bring the wooden horse inside the city fortress to celebrate. Unknown to them, inside the large wooden horse, Greek warriors are hiding. Once the celebrations are over, the Greeks climb out of the horse in the dead of night, massacre the Trojans, and win the war.
The current FSB of the UPA is a Trojan Horse. It pretends to give free food while in reality stealing from the very people it is supposed to feed through huge indirect taxes for an unsustainable expense. The fate of the FSB is bound to be the same as or even worse than that of the present PDS system.
What really provides security - employment security, food security, and the like - is not free handouts but a strong state that is built on a sound infrastructure and a free market so people can create
wealth. The only politician who seems to
understand this reality is Narendra Modi; even the party he belongs to, the main
opposition party, the BJP, doesn’t seem to understand this.
Consequently, the BJP, instead of
opposing this misuse of public money, is
willing to support it, provided it is made similar to the
food security system that it implemented in the state of Chattisgarh,
where it is in power. The Chhatisgarh
model is claimed to be much less leaky than the current PDS; that
may well be, and if true, it would be a good thing; but the fundamental
problem with it is that there is no way to pay for it, as
chief minister Raman Singh admitted in an interview.
Even if the system is leak-proof, there is
still no way to ensure that governments will have any way to sustainably pay
for a free-food scheme that benefits either 67% (the current FSB) or 90% (the
Chattisgarh model) of the entire population.
India should learn from Cuba, which had food subsidies
for the entire population from 1962 onwards.
During the cold war years, they could pay for it, thanks to subsidies
from the Soviet Union. But after the
fall of the USSR, it became much harder to maintain these subsidies and,
after the 2008 economic crisis, Cuba decided to gradually
end food subsidies and move to a market economy. Ironically, India seems to be moving in the
opposite direction, and seems unwilling to learn from one of the longest failed
experiments in subsidies in the world, not to mention its own failed PDS experiment for 66 years.
None are as blind as those who will not see. But we, the people of India, should open our eyes and not have
to pay for the blindness of our governments and leaders. 66 years of failed socialist policies is
enough. It is time to end this madness.
