Sunday, February 24, 2013

A Budget speech you will never hear

It is Budget time again and next Thursday the finance minister will address  parliament with a speech which you will never hear except from my auto-wallah: 
            Madam Speaker, I rise to present the Union Budget for 2013-2014. This is a pre-election year and the people expect give-aways and bribes-for-votes. But this is not going to happen in this Budget. So, here is my advice to citizens. Go home; on the way, pick up the garbage that you threw out the window. Wash the street. Teach your children about their duties, not just their rights. Tell them to spend an hour each week on their neighbourhood, learning democratic habits of the heart.
 India does not owe you cheap diesel, cooking gas or subsidized food.  Nor does it owe free electricity, make-work jobs, loan waivers, or even reservations. The only thing the state owes is good governance. This begins with law and order, as Nirbhaya has reminded us. Btw, none of you stopped to help her on the road. We also owe you public goods--roads, clean drinking water and other infrastructure; plus, functioning schools and health care. After that, it is up to you to work hard, pull yourself up, pay your taxes and make India a great nation.
            A few years ago India was the envy of the world. We were growing rapidly, creating masses of jobs, and lifting millions out of poverty. All this happened because of our reforms. All governments after 1991 kept reforming, albeit slowly, but even the slow reforms added up to make us the worlds second fastest growing economy. The reforms stopped after the UPA came to power because we made a false trade-off between equity and growth. Instead of investing on growth we started spending on the poor. We also stopped approving new projects. This has led to high inflation, low growth, and an unsustainable fiscal deficit, which threatens our nations sovereign rating.
            Madame Speaker, our growth numbers hide real misery that has been inflicted upon the Indian people as growth has plunged from almost 9% to 5%. One percentage point of GDP growth means roughly 15 lakh jobs; each direct job creates three indirect jobs; and each job supports a family of five. If you do the arithmetic, Madam, you will find that a four percentage point drop in GDP has brought pain and suffering to around twelve crore Indians.
            Here are some examples of what went wrong. If we had continued the momentum in road building after we came to power, we might have been looking at a different India. A recent study by Ejaz Ghani and others for the World Bank shows that the highways built or upgraded by the Golden Quadrilateral have brought enormous gains in new manufacturing activity, jobs and productivity within ten km of the new highways. Land acquisition has been a problem. But we have made it worse now. To acquire an acre of land under the new Land Acquisition Bill will take at least two years as the proposal would have to pass through about a hundred hands.. social assessment would be carried out and its report would be vetted by an Expert Group...there would be an R&R Committee and a National Monitoring Committee to pontificate over the reports of the junior committees...The bill is anti-farmer and anti-growth, but it is certainly pro-civil society, says a respected member of the National Advisory Council.
            What keeps me awake at night is that many of our policies have corrupted the morals of our people. When we cancelled loans of Rs 60,000 crores in 2008, a farmer who had just repaid his loan, sadly said, What is the use of being honest? Human society is based on trust. We learned as children to keep our promises and repay our debts. Tulsidas reminded us, praan jaye par vachan na jaye. Loan waivers wound our moral universe in the same way as make-work jobs, adulteration of diesel with kerosene, and the vast theft of PDS food.
The economic rise of India has been the defining event of our lives. But we let it slip. Today I shall promise to push reforms and try to restore the old magic. With this, I hasten to conclude, Madame Speaker. 


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