Monday, February 13, 2012

UPA's Stars Reflect the Light of Their Company/The Sunday Standard/February 12, 2012


UPA's Stars Reflect the Light of Their Company, Not Aam Aadmi

A leader is known by the company he keeps. Or by the company he avoids. Last week, two prominent pillars of the UPA betrayed the nature of the company both have been keeping lately. Finance Minister Pranab Mukherjee is one of the most respectable political leaders who rarely spoke for the classes and kept the company of the masses. Salman Khurshid, the Oxford-educated legal eagle and Union law minister, is known for his secular and pragmatic approach to politics. But both Pranabda and Khurshid sprang a surprise when one spoke for the classes and the other for a community.

As India’s beleaguered Chief Financial Officer, Pranabda is expected to plan national expenses according to income. He, however, seems to be less concerned with raising income by withdrawing concessions from the rich and mighty and taxing them heavily. Instead, he seems to be plumping for the easy option of making the poor poorer by cutting subsidies on food, petroleum products and fertilisers. There is no doubt that subsidies, which now account for `2.25 lakh crore, need to be rationalised and pruned. But what stunned Pranabda’s admirers was his emotional opposition to the principle of subsidies. “As finance minister, when I think of the enormity of subsidies to be provided, I lose my sleep,” he announced at a recent official meeting. If the finance minister was spending sleepless nights over rising subsidies, the law minister was invoking emotional appeal in the name of his leader, Sonia Gandhi. Khurshid took Uttar Pradesh voters by surprise when he claimed the Congress President actually wept over the Batla House encounter in which a couple of youngsters and a decorated cop were killed. Khurshid claimed: “I was not a minister at the time, but still took the issue of the Batla House encounter to Sonia Gandhi. When we showed photographs of that incident to Mrs Gandhi, she wept bitterly.” Since the Congress hasn’t taken to his statement kindly, it is clear Khurshid was speaking for his votebanks. For the party, the Batla House deaths were as much a matter of concern as those of the securitymen who were also killed by terrorists during the 2001 Parliament attack. Moreover, Khurshid conveniently forgot even Home Minister P Chidambaram has ruled out any investigation in the Batla House matter and made it clear that the Government doesn’t subscribe to any fake encounter theory.

Both Pranab and Khurshid are known for their articulation and intellect. However, Pranabda seems to be under pressure to speak the language of the marketwallas who don’t want him to target them for the purpose of raising resources. For the past 15 years, corporates has gained from both the NDA’s and the UPA’s policies. The finance minister doesn’t lose his sleep when his revenue department gives tax concessions worth over `4.6 lakh crore to India Inc as against just `2.25 lakh crore worth of subsidies. During the UPA’s last six years, `21 lakh crore has been gifted to corporate India as concessions in customs and excise duties. The finance ministry wrote off `90,000 crore as corporate tax last year alone.

A study of returns filed before 2010 by 4.27 lakh companies shows the effective tax rate was only 23.53 per cent as against the statutory rate of over 33 per cent. Moreover, smaller companies end up paying higher taxes than industry giants. While companies with profits up to `1 crore ended up with an effective tax rate of 25.52 per cent, the ones with profits of over `500 crore paid 22.05 per cent on an average. The finance minister should actually be losing sleep over the rising death of infants, burgeoning unemployment, the rare availability of drinking water and the hopelessly low quality of health facilities for the rural and urban poor. A recent FICCI study on healthcare infrastructure revealed India barely has 0.9 beds per 1,000 people.

The finance minister should be spending more and more sleepless nights over the growing number of unemployed youth in India. During the past seven years of the UPA rule, the unemployment rate has risen from less than 7 per cent to almost 10 per cent now. The number of people living below the poverty line has gone up. While the number of Indian billionaires listed by foreign publications may have gone up to 300, the per capita availability of foodgrain is much lower now than what it was five decades ago. The law minister should be crying over the denial of justice to the poor because of poor legal infrastructure and killing of innocent poor people by terrorists and Naxalites. Unfortunately, both august ministers seem to prefer speaking the language of only those who have easy access to them, than of those who put them in power. Follow me on Twitter @PrabhuChawla

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