Rahul Gandhi's anti-business rant is largely off the mark

Discussion in 'Politics & Society' started by Rowdy, Apr 22, 2015.

  1. Rowdy

    Rowdy Co ja kurwa czytam! Senior Member

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    The Congress Veep, Rahul Gandhi, may have rejuvenated his flock by launching feisty attacks on the Modi government after a 57-day disappearing act, but he should ponder over the damage he is doing to business sentiment in the process.
    In his efforts to paint the Modi government as pro-rich, he is tilting too heavily against industry and business, who are vital for job creation. Business cronyism was rampant during the UPA regime, but the flak and mud-slinging against corporates is happening now, when crony issues are being fixed one by one – as evidenced in the success of the coal and spectrum auctions.
    It is fair to say that India Inc cornered a lot of rent-seeking opportunities in the past during the UPA regime, and when the game was up, banks were left with a high volume of bad loans. But this does not give the Congress crown prince a licence to tar business in general just to score political points against the government.
    The other day, while taking a strong stand against the modified Land Acquisition Bill, he alleged that the NDA government was a “suit-boot ki sarkar” which favoured corporates. He seemed to imply that the government was batting largely for corporates.
    In today’s question-hour (22 April), Rahul batted for “net neutrality” and again alleged that the government was on the side of corporates in this fight too.
    Rahul Gandhi speaks in the Lok Sabha on Monday.
    The facts unfortunately are not on his side. Even though the net neutrality debate was set off by a Trai paper on the subject, and the Airtel deal with Flipkart (later abandoned) to give free access to users of the e-commerce company’s website, the fact is the government has taken no decision on this issue. After Trai makes its recommendations, the matter will go to the Telecom Commission and then the cabinet. It is highly unlikely that any favours will be shown to corporates, especially given the strongly negative sentiment generated among netizens on the subject. As one of the biggest users of social media platforms and the internet, a net-savvy PM is unlikely to side with corporations in this fight.
    But the more important rebuttal needs to be on the Land Bill. Rahul Gandhi claimed the bill was anti-farmer and pro-industry.
    The fact is the bulk of the land acquired in the past went not to industry, but irrigation and dam-building.
    According to a factsheet put out for members of Parliament based on available literature in the public domain, more than 50 million people were displaced by development projects undertaken since independence.
    This is a large number, and would prima facie seem to buttress the anti-industry argument of the Gandhi scion. But here’s the point: the overwhelming bulk of the displacement happened due to irrigation projects and dams, and not industrial projects. It is the rich farmer who benefited most from irrigation projects, and not industry, except by way of higher power supply.
    Says the factsheet put out in 2013: “In India around 50 million people have been displaced due to development projects in over 50 years. Around 21.3 million development-induced IDPs (internally displaced persons) include those displaced by dams (16.4 million), mines (2.55 million), industrial development (1.25 million) and wild life sanctuaries and national parks (0.6 million).”
    The factsheet gives details only for 21.3 million of the 50 million allegedly displaced, but assuming the remaining displacements are in the same proportion, it is clear that it is farmers’ interests – dams are used largely for irrigation, and for power, which again is subsidised for farmers and not industry – that prompted the bulk of the land acquisitions in the past. Industry had very little to do with it, whatever be the popular myth-making about it.
    The second major area for land acquisition is coal mining, but here too the figures do not show any alarming acquisitions; even if one deems the figures as alarming, it is the government, which owns Coal India, that has to take the blame.
    The factsheet shows that Coal India has, over the years, acquired 1,54,386 hectares of land for mining, and this is hardly a huge dent on available agricultural land. The coal mining acquisitions of 1,54,386 hectares convert to 1,543 sq km of area acquired by Coal India – which is less than 0.1 percent of total agricultural land in India, even assuming all the land acquired was agricultural land – which is unlikely.And remember, agricultural land is around 60 percent of India.
    Or take another calculation. The changes made by the Land Acquisition Bill of the Modi government allow for acquisitions without social impact assessment if they are made for defence, industrial corridors, infrastructure, rural roads and housing for the poor. It is difficult to estimate how much land is required for the first four activities, but housing requirements are not difficult to estimate since the Modi government wants every family to have a house by 2022. How much land will be acquired for this?
    A calculation made by Ajay Shah of the National Institute of Public Finance in The Economic Times some time back has this to say: “If you place 1.2 billion people in four-person homes of 1,000 square feet each, and two workers of the family into office/factory space of 400 square feet, this requires roughly 1 percent of India’s land area assuming an FSI (floor space index) of 1. There is absolutely no shortage of land to house the great Indian population.”
    If one were to make an arbitrary allocation of another 1 percent of land for defence installations, roads, industrial corridors and industry, we are talking about a total potential acquisition of not more than two or three percent of available land for all possible purposes in the foreseeable future.
    And remember, any land acquisition – even assuming it is done forcibly for public purposes – ends up enhancing the value of the land for the remaining 98 percent of land owners. Any development does that.
    The Land Bill that Rahul Gandhi says favours corporates may – even in the worst case scenario – end up affecting 2-3 percent of land-owners (and they will get two- to four times market prices, anyway) but will benefit the rest.

    Scare-mongering affects everybody, but a sober analysis suggests that the beneficiaries will vastly outnumber the losers – even assuming land acquisitions are done as ham-handedly as in the past. But that too may be an unfair assumption, given the heightened state of alertness of all farmers today.
    Rahul Gandhi is clearly crying wolf, and defaming industry for purely political purposes. Assuming he wants to come to power at some point in his career, he should not be giving business that bad a press just because he wants to attack the Modi government

    Net neutrality to land bill: Rahul Gandhi's anti-business rant is largely off the mark - Firstpost @Mad Indian @Singh @maomao @Rashna @Srinivas_K etc
     
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  3. Singh

    Singh Phat Cat Administrator

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    Poorly argued piece by Reliance owned Firstpost's editor Jaggi.


    Few fundamental points

    1. Why is Govt acquiring land at particular prices and then distributing them to corporates ?

    This is the state bullying free market into submission. This is a leftist/jholachap move.


    2. How did Jaggi assume that they will get prices 2-4 times over market prices ?

    There is a concept of circle rate (as determined by Govt) and market rate (as determined by market). The former is what is called the "white" component and the latter is called the "black" component.

    And if the Govt knows the market price and is willing to pay 2-4 times that then why not let corporates buy the land at market prices or marginally above it ?

    3. If only 2-3% farmers are going to be affected, than why enact such a law only ?

    Let corporates pay 2-4 times the market price and buy it themselves. Certainly 2-4 times the market price is a very juicy offer and certainly 2-3% of the farmers can persuaded with such an offer.

    4. Eminent Domain

    What right does a Govt have to acquire a citizens land/property without his consent at an arbitrary rate ?

    5. History of Land Ownership in India

    Self-explanatory.
     
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  4. Rashna

    Rashna Senior Member Senior Member

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    From what i have understood of this land acquisition ordinance the salient points are :
    1) This bill is already in existence but needs to be renewed with the changes as given below
    2) The reason why the govt. is pushing for it is because of the industry needs for make in india initiative. Making land available for industry is a major requirement.
    3) The main cause of dis-content of course is displacement and compensation to land-owners who may or may not be farmers. The govt. seems to have retained the compensation structure and has removed the consent and social impact assessment for 5 sectors. These are given below.
    4) The bill will face problems getting passed in RS because of opposition.

    Coming to RaGa's rants the farmers in his rally were clueless about Land Acquisition, most had come to attend the rally because their crops have been destroyed by unseasonal rains. RaGa may be alienating industrialists while not gaining any real ground with the farmers because he doesn't really seem to have a clear idea which way to go.

    Read article 2 below for more.


    Article 1
    Decoded: What changes has the Narendra Modi government made in the Land Acquisition ordinance

    The government has decided to introduce an ordinance to make major changes in the existing Land Acquisition, Rehabilitation and Resettlement Act 2013. It is in many ways aimed to be a course correction after the Act passed by UPA was deemed as restrictive by industry bodies. But it has also increased apprehension that the poorest of the poor, who often cultivate lands but are not the owner, may be left high and dry with no compensation.Government's ordinance has attracted major criticism from the oppositon and Anna Hazare is currently holding a protest in Jantar Mantar against it.

    Here's what has changed and what has been kept unchanged:

    Removal of consent clause and Social Impact Assessment

    The government has amended Section 10(A) of the Act to expand sectors where assessment and consent will not be required. For five sectors, the consent clause has been removed. So the government or private individuals/companies will no longer need mandatory 80% consent for land acquisition in those five sectors. According to Arun Jaitley, the mandatory "consent" clause and Social Impact Assessment (SIA) will not be applicable if the land is acquired for national security, defence, rural infrastructure including electrification, industrial corridors and housing for the poor including PPP where ownership of land continues to be vested with the government.

    Jaitley said that rehabilitation and resettlement packages will be available as per the new Land Acquisition act. What Jaitley didn't mention was that by omitting the social assessment part, the government in essence has got away with a very important hurdle. In the earlier law, the assessment was meant to find out how many people will be impacted. So apart from the land owner, all those who are dependent on the land also needed to be compensated. But the new ordinance ensures that only land owners will be compensated.

    Also whether the land is fertile or not will also not be taken into consideration while acquiring it for these five specific sectors. Thus even if the land is extremely fertile like it was the case in Singur, it can be acquired if it fits the criterion of these five sectors, no question asked.

    'Pro-farmer step'

    The government has balanced out the ordinance by including 13 so far excluded Acts under the Land Acquisition Act. It is hailed as a pro-farmer move as with this decision, rehabilitation, resettlement and compensation provisions will be applicable for the 13 existing central pieces of legislation. Till now land could be acquired under these Acts and there was no uniform central policy of rehabilitation and resettlement.

    These Acts include the Coal Bearing Areas Acquisition and Development Act 1957, the National Highways Act 1956, Land Acquisition (Mines) Act 1885, Atomic Energy Act 1962, the Indian Tramways Act 1886, the Railways Act 1989, the Ancient Monuments and Archaeological Sites and Remains Act 1958, the Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act 1962 and the Damodar Valley Corporation Act 1948. The Electricity Act 2003, Requisitioning and Acquisition of Immovable Property Act 1952, the Resettlement of Displaced Persons (Land Acquisition) Act 1948 and the Metro Railways (Construction of Works) Act 1978 are also brought under its purview to provide higher compensation, rehabilitation and resettlement benefits to farmers whose land is being acquired.

    Compensation remains the same

    The compensation package remains the same. It is four times the market price for rural and and two times for urban land. The government despite pressure from various groups has decided to keep the package intact.

    Mint quotes former NAC member NC Saxena who welcomes the changes made to the land acquisition act as he felt Jairam Ramesh's bill was both anti-industry and anti-farmer.

    The erstwhile bill may have had its heart in the right place, but was too rigorous, making it difficult both for industrialists and farmers. In a way, the new ordinance tries to address this problem.

    Why did the government passed the ordinance now?

    The official reason given by Finance Minister Arun Jaitley is that under Section 105 of the Land Acquisition Act, a clarity was needed on what provisions apply to the aforesaid 13 legislations and it had to be done before January 1, 2015.

    The political reason is that the government is looking to give a message to investors that they're trying their best to free up procedural bottlenecks which are almost a hallmark of any infrastructure investment in India. The government is looking to boost up manufacturing to make Modi's ambitious Make in India project a reality and this is a big bold step towards it.

    Congress's opposition

    Congress has strongly opposed the ordinance saying anybody who is pro-farmer should raise their voice against it. But according to an Indian Express report, Haryana and Kerala wanted to remove the consent clause for PPP or bring it upto 50%. States like Assam, Haryana and Himachal Pradesh felt that the definition of affected family is too broad.

    On social impact assessment, Karnataka, Kerala, Maharashtra and Manipur all demanded that the process be restricted to only large projects.

    Other opposition parties like JD(U), Left and AAP have strongly expressed their reservation about the ordinance. So it will be an uphill task for government to pass it in Rajya Sabha where the government is in hopeless minority without Congress's help at least.

    Thus, in a way, the government went through a broad consensus by making the changes. Now it is to be seen if they can get it passed in the parliament eventually and if the revised ordinance will indeed serve the purpose of bringing fresh investment and boost the manufacturing sector without trampling on the rights of the poor.

    Decoded: What changes has the Narendra Modi government made in the Land Acquisition ordinance | Latest News & Updates at Daily News & Analysis

    RaGA Article 2

    The land acquisition Act is technically called the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act. Rahul Gandhi didn’t really spell that out at his first rally after a long vacation.
    If he had, it’s not clear how Jabar Singh from Mathura would have reacted. Voicing what other farmers such as him waiting for over two hours for Rahul’s speech at Sunday’s rally felt, Singh said, “I am not aware of any changes to any law. I came here because my crops have been destroyed.”

    No political leader had visited them to see the extent of the damage and therefore they had decided to come to Delhi themselves, said Badshah Khan from Aligarh. “I grow wheat. It has been destroyed in the recent rains and no one knows what farmers there are going through. I came to Delhi so that I could tell someone about our condition.”
    No, he didn’t get that chance, he added.


    However, Khan didn’t think the Congress’s Kisan Rally, to articulate its opposition to the Modi government’s proposed changes in the land acquisition Act, was a complete waste of time. He had been “educated” on the changes and what they could mean for his family, smiled Khan.

    A few agreed with Rahul when he accused the Modi government of eyeing their land, nodding that the Centre was “driving farmers towards suicide”. “Land is all that farmers have. Times are difficult, we are paid Rs 200 for sugarcane that we earlier sold for Rs 600, urea is not available… If our land is taken from us, what will we eat?” Jaswinder Singh, who came to Delhi with “20,000” farmers and Congress workers from Punjab, said.
    The point at which Rahul got unanimous applause was when he held aloft a plough gifted to him. “Rahul tum sangharsh karo”, rose slogans.
    But as the cheering wound down and he prepared to leave, Nanalal Gurjar, who came from Rajasthan, summed it up best. “No farmer knows,” he shook his head, “what laws the government is making about land that we have owned for decades.”
    - See more at: A reality check for Congress: Farmers at kisan rally clueless about Land Acquisition Act | The Indian Express
     
  5. sasi

    sasi Senior Member Senior Member

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  6. blueblood

    blueblood Senior Member Senior Member

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    Then I suppose you know how job creation and corporate tax collection works. A 10 hectare farm will provide livelihood for a family of 8-10? who will pay no tax whatsoever. A SMSE on the same land will provide employment to 100-200 people and will pay tax, will pay for the electricity it will consume and will provide indirect employment from transportation, security to chai-bidi ki gumti outside the premises.

    I don't know about agricultural land but govt. prices in my city has been revised to mirror the market rate so as to stop builders from acquiring land in the name of farmhouses and pay taxes accordingly.

    You have no idea how India works, do you? Not your fault, you are a Delhiite after all. Conventional wisdom, if you can call it that, dictates that you never ever sell your land, especially if has been passed down to you by your ancestors. For years my grandmother refused to sell the old village house where neither she nor my mother or her siblings ever lived because she built that house when my grandfather was deployed in Nagaland. She is emotionally attached to a house she never lived in. So go figure.

    If that's the case, then I think we should revert back to Gandhi's idea of village economy. Where can I find a charkha to spin some khadi. Who needs power plants and universities?

    Not really, a significant amount of land was redistributed by the very same government which abolished Jamindari.
     
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  7. Sakal Gharelu Ustad

    Sakal Gharelu Ustad Detests Jholawalas Moderator

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    If you understand the reasons behind the bold part, may be you will get answer to your other (non)fundamental points.

    Certainly, it could have been done easily if land in India was a market friendly commodity. The offer is juicy but how about the willingness. If Indian farmers had owned large lands it would have been the easiest path. But sadly, India is stuck with the most fragmented land holdings.

    What it does is just create enough incentives for one or the other farmer to make the whole project unviable. It is a classic hold-up problem and there is no way out other than state intervention. One, two or a small coalition of farmers can easily block any project as they expect higher gains by holding on their land for longer. Since it is a case of market failure, govt. can intervene if there is no other way out.
     
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  8. Singh

    Singh Phat Cat Administrator

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    I didn't expect you to turn leftist illiberal so soon ?

    1. India's landholding is fragmented because of Govt Intervention.

    2. Indian Govt has fixed land rates via circle and allotment rates. Indian realty market had to devise an alternative mechanism to realize the true value of land against this unfair Govt Intervention.

    3. The only real right a landowner had was his ability to refuse sale if he didn't want to. This also is in the process of being taken away from him by the Govt.

    4. Now you are arguing that this landowner who is forced to sell his land at an arbitrary price is for his benefit so it is justified. (Illiberal jholachap move)

    Realty is a great example of how (underground) this free market genuinely helped Indians become wealthy. And this was despite the Govt and its stupid interventions.
     
  9. VIP

    VIP Ultra Nationalist Senior Member

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    Not that only, certain NGOs with wasted interests also stimulate the coalitions or block of farmers to fulfill their political agendas.
     
  10. Singh

    Singh Phat Cat Administrator

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    @blueblood

    1. You are countering a pro Jholachap Move by citing another Jholachap move.

    Forcibly acquire land (jholachap) for what we say is right for you (jholachap)

    2. Why would anyone sell if black rates and white rates coincide ? And why would Govt pay 2-4 times extra price in such a case ? What is the model for compensation ?

    3. This was what I meant in #5

    4. Why have such high prices of land then ? It is obviously an useless commodity. (Rhetorical Argument)

    5. Hence forcibly reacquire land at an arbitrary price without anyone's say.
     
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  11. Mad Indian

    Mad Indian Proud Bigot Veteran Member Senior Member

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    You are not addressing the most important negative aspect of this bill - the actual market rates and the rates on paper are widely different - sometimes on a logrithimic scale!

    This was of course due to stupid govt policy of taxing the ---- out of land transanctions. And also, the inherent problem with the black economy.
     
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  12. Singh

    Singh Phat Cat Administrator

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    Actually nobody argued the two most simplest solution to this whole fiasco :

    1. Stop giving subsidies incentives, doles, high MSP to the farmers - looking at the farmer suicide thread nobody really cares about them. Make farming unattractive.

    2. Bring Real Estate market away from the black money by ways of legislation. Unleash true value of real estate, bring huge underground economy into white, and then devise a fair compensatory price.


    Invoking eminent domain and destroying a well functioning free market suggests that this Govt is not interested in addressing fundamental issues. And I wouldn't be surprised that cronies will make a killing in this.
     
  13. Sakal Gharelu Ustad

    Sakal Gharelu Ustad Detests Jholawalas Moderator

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    I did not turn leftist illiberal. I see a market failure here.

    So historical government mistake i.e. 1), needs no correction. (Although people can argue whether it was a mistake at that time or not).

    2) How about all the black money which also corrected this mistake?

    3) Pointless

    4) Yes it is arbitrary. And there is no reason to even give 3-4 times the market rate. But that takes the debate in different direction. We can talk about how to compensate, what constitutes market rate etc etc.

    So none of your points give the solution to:

     
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  14. Mad Indian

    Mad Indian Proud Bigot Veteran Member Senior Member

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    Also, people who analyse this issue in depth would understand how complicated the Black money issue is - people hold on to it when they think they are unfairly taxed and not all black money is detrimental to India or its progress.

    For eg. A person with black money of 10 lakhs, which he has invested in a company(startup or business) which employs over 20 people, but only shows the accounts for 5 lakh rupees is actually holding 5lakh rupees in black money. But , becuase he was able to hide 5 lakh rupees as black money, the 5lakh is directly invested back or returned back into the economy and will stimulate the economy with the job creation and spending and further wealth creation. Also, he might provide jobs to 10 more people instead of 20 and in some cases, the entire business venture and hence the 20 people getting employment in the first place would not have been possible if not for that 5 lakh black money.

    But if the alternative is that he show 10 lakh money to the govt and pay 3 lakhs to the govt as income tax/whatever tax, but the tax money gets wasted due to govt bureaucracy and inefficiency - is the black money more evil to the nation than the govt inefficiency? Please note that, in India govt spends 4 rupees for every 1 rupee to reach the poor. Now tell me which is more evil in such a climate - black money or taxes?
     
  15. Mad Indian

    Mad Indian Proud Bigot Veteran Member Senior Member

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    1. I actually said the same in that thread.

    2. This solution is worse in the current situation where the taxes are much more evil than the black money!
     
  16. Mad Indian

    Mad Indian Proud Bigot Veteran Member Senior Member

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    And that is the reason I agree with the whole LAB though I am a hardcore libertarian
     
  17. Sakal Gharelu Ustad

    Sakal Gharelu Ustad Detests Jholawalas Moderator

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    The only legislation is low tax which is a big revenue source for the government. I am not sure what would be the best tax rate from tax collection point of view, but as long as that exists, there would be black money in real estate.
     
  18. Sakal Gharelu Ustad

    Sakal Gharelu Ustad Detests Jholawalas Moderator

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    There are many things that can be done. Remove the arbitrary FSI(floor space index) or increase it substantially and you will send the prices crashing(sorry unleash true value) in all cities.
     
  19. blueblood

    blueblood Senior Member Senior Member

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    Which JNU did you went to? How was my point a jholachaap one? Did I somehow tell you that the owner of that hypothetical SMSE will share his wealth with the poor?

    I think you are confused about the term "jholachap", which is ironic because of your AAPship.

    Why does it matter? Because some "gareebo ke masiha" like your Patkars, Bhushans, Pillais came along and kept harping in front of international media that Soviet India is crushing honest farmers and the compensation is not enough, it is never fuvking enough.

    Cannot understand your argument. Maybe I am not smart enough.

    Let me share a story, I know it is true because I was there. When Harsud came under the submerging limit of Indira Sagar people were not just compensated for the agricultural land but also for their homes. So before the evaluation, people started
    building new houses under different names. These houses were built with such shoddy materials that their shelf life wasn't more than a few months even weeks.

    Also, esteemed AAP member Medha Patkar along with the die hard patriot Arundhati Roy were the champions of the cause.

    Moral of the story: Villagers are as.sholes. The sooner everybody learn it the better.


    Harsud - Wikipedia, the free encyclopedia
     
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  20. Singh

    Singh Phat Cat Administrator

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    There is no winning against you, saar . You are always right even when you are left ;)

    I gave a background of Govt Intervention which forced a parallel market and not some historical ills which need to be righted.

    I have also shown how this policy is about as left as a policy can get.

    In another post I provided a very reasonable 2 point solution which just requires political will and will solve half of the ills:

    Edit: Here is the reproduced post

    " Actually nobody argued the two most simplest solution to this whole fiasco :

    1. Stop giving subsidies incentives, doles, high MSP to the farmers - looking at the farmer suicide thread nobody really cares about them. Make farming unattractive.

    2. Bring Real Estate market away from the black money by ways of legislation. Unravel the true value of real estate, bring huge underground economy into white, and then devise a fair compensatory price.


    Invoking eminent domain and destroying a well functioning free market suggests that this Govt is not interested in addressing fundamental issues. And I wouldn't be surprised that cronies will make a killing in this. "
     
  21. Sakal Gharelu Ustad

    Sakal Gharelu Ustad Detests Jholawalas Moderator

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    Btw, this is what you mentioned:
    And I answered it above:
    1) It is already unattractive. Ask any farmer who can afford his kids' education.

    2) Discussed it in one of the post above. Tax is the most important reform. Highly unlikely that any govt. will give it up any time in the near future.
     
    Last edited: Apr 23, 2015
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