Feb 27, 2010

Finance Minister and Budget 2010: Khao and Khilao exercise

Feb 26 was the Budget day. For several days, the electronic media had created an unprecedented hype. If you have been following the media, it looks as if on the Budget day Aladdin is going to reveal his magic lamp before the nation. I sometimes wonder why is the Budget treated like an annual carnival, and has turned out to be a media event like never before.

While you listen endlessly to the same experts parroting the same lines throughout the day, it is the TV channels actually who have the last laugh. They walk away quietly to the bank.

The Finance Minister goes to bed very satisfied. He has been the cynosure of all eyes, focal point of attention and enough admiration (for some days prior and after the event). He couldn't have asked for anything more. His advisors are happy at pulling the plugs silently. The senior lot among them are happy at being seen on the TV channels, something that would never happen if they were not associated with the Budget making process.

Listening to them, and realising that their bloated egos border on arrogance, I feel dejected at the class of people who prepare the Budget documents. They are more often than not, senior bureaucrats and economists, who have no idea how the country looks like. Often deliberating the fine prints with them on the TV, I have come to the conclusion that it is this set of advisors who need to be shown the door.

The same arguments. The same analysis. I mean the similarity with the corporate agenda is quite blatant. It is difficult to find out whether they wear the corporate tie or the government's hat. They are all part of the revolving door culture. Their economic understanding not going beyond business deals (call them discussions, if you like) at the regular corporate lunches/dinners.

Still worse are the economists. Over the years, I have realised that the mainline economists are the real problem. Right from Lord Meghnad Desai to Dr B B Bhattacharya (a regular on TV, which makes me wonder what does he do as a Vice Chancellor of the Jawaharlal Nehru University), I am greatly disappointed at the shallow understanding they have about economics.

I know they are distinguished in their respective fields, and I should be holding them in awe. This is what I have never done in my life, and this is what has actually made me stand up for the right cause. I have always questioned their flawed economic thinking (which does not go beyond the textbooks), and I hold them responsible for much of the mess the country is passing through. I can assure you that the world would be a much better place to live if we dump these main stream economists.  

Interestingly, I find most of the mainline journalists also have contempt for these economists (except for those who thrive as corporate voices). In person, they often tell me that they actually invite them because they have been directed to do so. They know that what these distinguished economists are telling is nothing but a pack of lies, but the tragedy is that no one stands upto them. No one has the courage to even disagree, politely.

I agree. The tragedy of modern times is that we have lost the ability to stand up and question. Even if we know that what is being told to us is simply a glib talk aimed primarily to patronise industry and business, we remain quiet. We do not stick our neck out, knowing that we might have to face the chopping block sooner than later. By remaining quiet, we actually become a part of the crime that we abhor.

Take the Budget 2010. You saw the Opposition parties walking out over the announcement of a petrol price hike. The economists on the TV shows repeatedly said that it was a difficult task for the Finance Minister, and he was left with no option but to raise the petrol prices given the burgeoning fiscal deficit. None of the political stalwarts, and the economists and analysts on the TV shows, told us that there was a way out.

Instead of passing on the burden to the masses, Finance Minister could have gone in for a more drastic cut on the stimulus package for the industry. More than Rs 3.5 lakh crore has been doled out to the industry in the name of economic stimulus (which is actually a subsidy), and the FM could have easily taken out Rs 1 lakh crore from this stimulus. But he didn't do it, because his advisors and the industry lobbied hard for retaining it. Instead he passed on the burden to the people.

In reality, there is no need for the economic stimulus package. To give you an indication, some of the Indian companies are looking for acquisitions abroad, and the sale of BMWs is picking up fast. Why do they need economic stimulus or in reality such a huge subsidy? This is what Noam Chomsky calls as 'tough love'. Tough for the poor, and love for the rich.

Yes, and it is primarily for this reason that annual Budgets have become a corporate exercise. As someone said, it has actually turned into a khao and khilao (eat and make others eat) exercise. No wonder, the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI) lay out lavish carpets for the print and electronic media.

Not only do the CII and FICCI provide space for the media to set up temporary studios, they also ensure that the media becomes their loudspeaker. Media has always returned the favour. It take two to tango.  

1 comment:

Prakash Pandey said...

Thanks for speaking the truth :) .It is a rarity these days.