Wednesday, March 26, 2008

Politics and not Good Economics Prevail

If over 300 million Indians who are grouped under the category BPL(Below The Poverty Line - an euphemism for the starving not in a position to get two square meals a day) continue to live in their misery despite two eminent economists being at the helm of economic power of the nation, and if the disparity between the rich and the poor has widened alarmingly despite their noble economic policies for the 'aam admi'(the common man), there must be something amiss. The Prime Minister and the Finance Minister are acclaimed all over the world as eminent economists and they are architects of India's incredible growth story destined to emerge as the world's second largest economic power by the year 2050. However, going by the spate of recent policy announcements, one wonders whether they have turned seasoned politicians abandoning their garbs of economists as the general election draws near. First came the mega loan waiver for the farmers costing the exchequer over Rs 60,000 crores.The Finance minister has so far been able to reallocate Rs 10,000 crores only for the loan waiver. Is he leaving the Herculean unfinished job of providing over Rs50,000 crores for his successor being sure that he would not have to burn the mid-night oil over the problem? Then the largesse for the middle class following the announcement of tax sops would cost the nation dearly. The 'aam admi' are already reeling under as inflation shows no sign of being reined in. On the other hand, with more disposable income in the hands of a small percentage of population the raging inflation is most likely to become worse engulfing more people. As if not satisfied with its own profligacy, the government appears to be patting its back for having got the recommendation of the Sixth Pay Commission just at the opportune moment. About forty-five lakh government employees will get 40-60% salary hike putting an additional burden of Rs20,000 crores. What would happen to the pernicious inflation and also the growing disparity between the rich and the poor? There is no time for the policy framers to ponder over these mundane matters now as vote-bank politics is ruling supreme. For those hapless millions who are not part of any pressure groups, such bonanza makes little difference to their lives and on the contrary, they are viewed as ominous signs of darker days ahead. History says when Rome was burning, Nero was fiddling! Is history going to repeat?