[ Economy ] Have fun, boys! It’s just politics–Deccan Chrolincle–20.11.2017

Way back in 1989, not much after the Congress was ignobly shown the door after holding a commanding majority of 404 seats in the Lok Sabha in a House of 533 with 49.10 per cent of the popular vote, I met Mani Shankar Aiyar for the first time at a party. Delhi is famous for these parties when the host wants to show the rest how well he or she is networked with the new political dispensation. Mani was sitting by himself in a corner looking quite desolate and depressed. Not very much before he was the shining wit of South Delhi’s parvenu society. This evening, as is typical in New Delhi, even the host was not disguising very well that a Congress nomenklatura belonged to yesterday’s people. (The nomenklatura were a category of people within the erstwhile Soviet bloc – Russia and eastern Europe — who held key positions the system.) Mani was then a mere joint secretary in Rajiv Gandhi’s PMO, but he seldom was outside the shadow of the PM, which made him a very sought-after guest at Delhi’s parties. Ministers, ambassadors and socialites bowed and scraped before him. Mani is a raconteur par excellence with an intelligent wit and deft turn of phrase. He is one of the brainiest guys I have known. I used to occasionally see him in such events from a distance, and I don’t think he ever noticed lesser beings like me — after all I was only Mahbub College and Nizam College and not anywhere near The School and The College epaulets that he wore on his battle dress. Anyway, that evening was my moment to show grace. I went over to him and introduced myself. I then congratulated him for now being in a position of great irresponsibility.

He was curious. I told him that for five long tears I was in the Opposition trenches and had the time of my life taking the mickey out of Rajiv Gandhi and his golden horde. Our criticisms often bordered on the outrageous and were mostly unfair. Even the Bofors charges were a bit misplaced. The Opposition had sold the people the notion that Rajiv Gandhi bought a defective gun — this fact being certified by India’s top artillery expert — Ram Jethmalani. Now he can have all the fun, while we have to defend official inabilities, cupidity and stupidities. I presume his sense of deprivation was even more compounded when he saw the new power elite made up mostly of people who drank their tea noisily and often from the saucer after blowing into it. We know what he thinks of tea vendors, but their customers are a level below. I tried cheering him up by telling him to have a good time instead. “Har roz inki pyjama utar do” — was my advice. Mani didn’t take that advice seriously then, but now his partymen are doing it with great gusto. I have noticed a new spring in their step, more so after Rahul Gandhi spoke extempore in Berkeley and sneeringly referred to GST as Gabbar Singh Tax. Have fun, boys!

In the past few days I have been on TV discussions where Congress panelists are clamoring for reducing the prices of petroleum products by bringing them under GST, with the peak rate of 28 per cent. They aver this is what their government intended to do when Narendra Modi and Shivraj Singh Chouhan stalled GST. They even quote Union petroleum minister Dharmendra Pradhan, who has written to Arun Jaitely about this. It would seem there is no love lost between these two? Who in their right minds would harbour kind sentiments for Mr Jaitely — perhaps with the exception of Virendra Kapoor and Suhel Seth? These then are the facts of life. The total revenues derived by oil products taxation are Rs 5.24 lakh crores. This is equal to 3.5 per cent of GDP. Of this, the Centre realises Rs 2.43 lakh crores, or 46 per cent of the total. The states get the rest. The Centre’s oil revenues account for 28 per cent of its indirect taxes of Rs 8.63 lakh crores. Clearly, to reduce the hole made in citizens’ pockets, the Central government will have to increase the hole in its budget. At present, the cumulative tax rates on petrol and diesel stand around 107 and 79 per cent, which are much above the highest GST slab of 28 per cent. This raises questions about the possibility of petrol and diesel ever being under GST?

Besides, economic growth has been badly hit by the unnecessary Namonetisation and hasty GST rollout. To get the economy out of the deep hole, the government needs to significantly increase capital expenditure to kickstart the economy. There is trouble at the other end of the household budget spectrum too. Vegetable prices increased 36.6 per cent in October, leading to food inflation more than doubling to 4.3 per cent in the same month. Fuel inflation also rose by 10.5 per cent in October from 9 per cent in September as international crude oil prices hardened. Remember how BJP and AAP spokesman would go apoplectic with simulated rage during the run-up to the 2014 Lok Sabha polls over the rising prices of vegetables? The prices of onions no longer bring tears to their eyes. It is the Congress Party’s turn now. This is what I call the perquisites of being out of power. You can eloquently castigate those in office. You do unto them what they did unto you! There can only be two reasons why prices go up like this. One, is you have too much money chasing too few vegetables. Such situations happen when you, for instance, pump in an additional Rs 1.23 lakh crores per year into the hands of government employees. The upper and middle classes are prospering. Or prices go up when production drops for the usual reasons – dip in rainfall, pest attacks or breakdown in transport infrastructure. None of which is true now. The bhakts and khambhakts can take cheer from this. One can now presumably buy an air purifier or new refrigerator for lower prices for inflation for manufacturing items eased to 2.6 per cent in October from 2.7 per cent a month ago! This is the time for the Congress to make hay while the sun of being in the Opposition shines. And for Arvind Kejriwal too. The facts of life be damned. After all, didn’t the BJP behave in exactly the same way?

via Have fun, boys! It’s just politics

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