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Gandhi had a radical approach to clothes. He abandoned them. This did not make Gandhi naked. He was always wrapped in poverty. Marx's proletariat may have driven out the Romanovs from Russia, but mendicant Gandhi's starving Indians dismantled the mightiest empire known in history. How could Gandhi, who smashed the chains of fear that had shackled India into so many prisons, who was caustic about greed and egalitarian about need, who owned very little himself, be ever considered right-wing?
The Indian left scorned Gandhi with unforgiving ardour because Gandhi subsumed economics into nationalism. Gandhi's horse was Hindustan; the cart, its economy, came later. His model for governance, developed at Tolstoy Farm in South Africa and published in 1910 as Hind Swaraj, was a potpourri of shibboleths linked by the rigidity of an ashram. The only economy it exhibited, frankly, was an economy of words; its length was no bigger than a preliminary chapter in any Marxian treatise. And yet the workers of Britain, whose cloth he had burned in 1920, cheered him to the rafters when, flashing his toothless smile, he visited them in Lancashire in 1931.
In 1945, as Gandhi and his heirs prepared for self-rule, Jawaharlal Nehru dismissed Hind Swaraj as "completely unreal". Nehru had 'confessed', as early as in December 1929, that "I am a socialist and a republican and am no believer in kings and princes, or in the order which produces the modern kings of industry... whose methods are as predatory as those of the old feudal aristocracy". Gandhi got on pretty well with kings and princes, contemporary or old. Jamshetji Tata sent him donations for his heroic South Africa campaigns; G.D. Birla and Jamnalal Bajaj picked up Congress bills through the freedom movement. Nehru's critics were convinced he wore foreign underwear under khadi, but could never be certain whether it was purchased from Harrods or the socialist cooperative down the road. Gandhi was tart in his response to Jawaharlal: "He likes to fly. I don't. I have kept a place for the princes and the zamindars in the India that I envisage."
The inevitable compromise followed: Co-existence, without any sharp lines. But it was uneasy private-public relationship. The private sector hit below its weight; the public sector added weight without muscle. Stagnant or desultory economic growth encouraged exploitation in one and waste in the other. The state paid for its mistakes with tax cash, and changed the rules arbitrarily to curb its competition. The private sector howled when leashed, and cut every corner when it thought no one was looking.
Indian Marxists, from their cubby hole in Bengal, specialised in ambivalence, arguing that since socialism was impossible in a bourgeois democracy pseudo-socialism would have to do. Cross-dressing is a peculiarly Indian political alibi. Those who understood the deception shrugged off their dilemma. Jyoti Basu was once asked why he flew first class. Because, he answered, he was a first-class Communist. Wit is a formidable defence mechanism.
A crisis was inevitable. In 1991, the government finally stepped back, but liberalisation was soon to encounter a far more dexterous and dangerous rival than weedy socialism: Populism. This anarchic demon swallows money that doesn't exist in an insatiable desire for votes. Ideology cowered briefly, and then disappeared. Both right and left now survive on a wing and a prayer, bereft of serious or even comical ideas. The UPA Government is honest when it says it has no clue why the rupee is shrinking; the citizen has no clue as to why UPA wants to be in power for two more years.
An ideological vacuum inevitably makes politics personal, and decisions become whimsical. The emperor, as in the familiar fable with a moral, believes he has appeared before the people with new robes. He bows to the applause. Only a child knows what he does not; that he has none. That child has a vote.
What does our in house economists have to say on this?Don't waste a good crisis, learn from the 1991 lessons
Gurcharan Das
The arrest of Jagan Mohan Reddy, MP from Kadapa in Andhra Pradesh, is another reminder of a lesson that Indians have failed to learn so far. And this is that the root cause of corruption lies in the excessive discretionary authority in the hands of politicians and officials. The reforms in 1991 took away some of that discretion but many sectors of the economy are still unreformed. Thus, scams happen in the dark alleys of unreformed sectors such as land transactions, mining and government purchases. So, the answer to corruption may well lie in actions of the 1991 variety.
Soon after his arrest, the counsel for the CBI said, "Jagan Reddy grew enormously rich in a short span of four years after influencing his father Rajasekhara Reddy (who was then chief minister of Andhra Pradesh) by getting ill-gotten money into his own firms from investors who were doled out favours as part of quid pro quo." Reddy's declared wealth rose from Rs 1.7 crore in 2004 to Rs 77 crore in 2009 and to Rs 365 crore in 2012. Those "doled-out favours" related to the same unreformed sectors.
The real crime of the UPA government lies in not initiating the second-generation reforms. These would have significantly reduced the chances of scams in mining, 2G spectrum, Adarsh housing and purchases for the Commonwealth Games. Anna Hazare's team has rightly blamed "crony capitalism" but it has not explained that the nexus between business and politics exists because there's still too much discretion with public officials. Countries free of corruption do not allow discretion to officials but rely on the impersonal forces of the market to decide economic outcomes.
The 1991 reforms succeeded in wiping out crony capitalism in many parts of the economy and replaced it with rule-based capitalism. There existed much greater corruption before 1991. The numbers were not as large because the economy was smaller. But the state intervened in almost every business decision. An official virtually decided a factory's size, location, technology, the capital needed and the machine to be imported. His power lay in a piece of paper and he extracted a bribe each time he signed it. This continues in the unreformed sectors. A power plant even today needs 118 approvals, and a politician or official extracts a bribe for each piece of paper. Reforms in the power sector would remove 118 opportunities for corruption.
Evidence from around the world shows that a citizen's 'freedom to do business' is negatively related to the 'corruption index'. In 2011, seven of the world's 10 'least corrupt' countries were ranked in the top 10 for 'business freedom'. Among these were New Zealand, Singapore, Denmark, Canada, Sweden and Finland. The 10 most-corrupt countries had the lowest rank in business freedom. India ranked very poorly—167 in 'business freedom' and 95 on the corruption index. The Scandinavian countries, from which India has borrowed the concept of Lokpal, had the greatest 'business freedom' and were the least corrupt. There is irony here — Indians think they are free because of their proud democracy, but economically they are still unfree.
Our unprecedented corruption today is matched only by an economic crisis which has brought the nation to its knees. Inflation is unacceptably high, the rupee has weakened more than any currency in Asia, both fiscal and current account deficits are in a dangerous zone, and growth has plummeted from 9% not so long ago to 5.3% in the last quarter—the lowest in nine years. Many fear that we are at a tipping point similar to the one in 1991. We blame the eurozone debt crisis, but in our hearts we know that it is a crisis of our own making. The culprit is paralysis in decision making, especially the lack of approvals for land acquisition in the steel and power sectors, combined with the lack of reforms and high interest rates.
So, what is to be done? They say, 'Never let a good crisis go to waste', and this is the best advice for Manmohan Singh. A 1991-type crisis needs a 1991-type response. So, reform, more reform and still more reform. Not only will this bring enormous prosperity but it will scare away the corrupt.
Don’t waste a good crisis, learn from the 1991 lessons - The Times of India
But hey, on the good note, atleast the rich poor divide will not increase. Who the Fcuk cares if poor people remain poor, as long as the rich dont become richer? Leftism is the way to go. We need the states of India to become like west bengal. Whats their biggest achievement, the rich poor divide is in check, because the there is no growthInstead the dreary conclusion is that India's feeble politics are now ushering in several years of feebler economic growth. Indeed, the politicians' most complacent belief is that voters will just put up with lower growth—because they supposedly care only about state handouts, the next meal, cricket and religion. But as Indians discover that slower growth means fewer jobs and more poverty, they will become angry. Perhaps that might be no bad thing, if it makes them vote for change.
Actually thats rubbish. India's problems are domestic and not foreign. Last time I checked, we are an economy driven by domestic consumption unlike China which has export oriented economy , hence the slower growth it posts is agreeable in the global economic slowdown.This impasse / slowdown is also due to global economic downturn.
India cannot keep up spectacular growth if the global economy is experience a downturn. We are still experiencing 5-7% growth, our unemployment levels are low.
And second major reason is co-alition politics, and lack of political will. The global and local situation warrants urgent reforms. MMS unfortunately cannot take such a decision without the support of his own allies and that of opposition.
India's slowdown is entirely the fault of the ruling coalition the UPA, it has nothing to do with the global economic condition and is caused entirely by sloppy economic policies.u replace 'indian and indian' with 'china and chinese' u get the same sense and views from chinese too.....
Ignored......So India is soon going to join greece and pakistan.I had always maintained that india cant escape Indo-Pak hyphenation however hard you try.
Discretionary powers are the bane of our system. IIRC there was a discussion a few years back on the damage these did, I was flabbergasted.Gurcharan Das, has rightly pointed out that these discretionary powers should be done away. We have recently seen that in Maharashtra, three successive CMs have doled out over 200 flats to their relatives, former bureaucrats and people in the media ( not difficult to understand).
However these discretionary powers IMO are not the only source of corruption. It is the way we conduct the affairs of the state, shrouded in secrecy and following opaque laws is the reason why we have the hydra headed monster called corruption.
Various corruption cases exposed by RTI have shown that, our politicians have full faith in the current system to protect them from any penal action, and with our legendary short, selective memory, we will end up re-electing them time and again.