The cauldron of despair?

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India is a seething cauldron, where recipes of many politics merge and separate. As do recipes of economics. Who will stir this very interesting mix?

It’s a recipe undoubtedly made in India. The ingredients include:

1) Gods, one extra-large size and more than one medium to small, plenty of romanticised history, mix with paste of mythology. 2) A nation preferably large, resource rich, well populated. 3) Small social sector, and preferably frozen spending, particularly on poverty alleviation, public education and public health care. 4) Deeply hierarchical society, squeezed dry if needed, pound to remove any traces of sticky egalitarianism. 5) Put a band around liberty, soak in nationalism. Preparation of ingredients takes the longest time, possibly 25-30 years. The process is pretty straightforward thereafter; keep on steady flame of growth, keep adding liberalised rules and regulations, stir in vigorously and increase flame, keep removing public sector undertakings as they rise, watch till the classes separate, the bottom sticks to the base or close above it, and the top rises rapidly to near overflow. Adjust flame and manage the content, scrape the bottom occasionally to prevent some of it from burning too much. As the mixture becomes volatile, stir in spiced history, mythology, nationalism. All the time, take precautions that contents are not uncontrollable. Use technology if and as needed.

The passage of the Finance Bill/ Budget 2017 is the formal end of a change and is a landmark in itself. It discards any pretense of liberal, democratic debate in favour of control. The Bill has 189 clauses, but 55 of them have nothing to do with taxation. Neither are those 55 clauses consequential to the other clauses of the Finance Bill concerned with taxation. These questionable clauses have been sneaked into the Finance Bill because the Bill can be passed without approval from Rajya Sabha, where the ruling party does not have a majority. One of the clauses smuggled in reduces the rights of the income tax assessee to defend himself against arbitrary actions of tax officials with retrospective effect from 1962.
The income tax authority merely has to have a reason to believe that there has been an evasion; the reason does not have to be disclosed to the assessee. Basically, tax hounds can be set against anyone for political control. The tribunals that judge the case will also consist of appointees of the government. Next is the design to mop up political funds for greater political control, a donor may now purchase bonds and only the issuing bank(s) will know the name of the donor/purchaser. Without being identified, the donor can donate the bonds to one or more political parties. The limit of such donations from corporations has also been uncapped. Pay or face the hounds?

How does national purification project that began as demonetisation end up in legitimising more corporate control of political parties? Its record in mopping up black money is meagre, only `2,300 crores through its second tax compliance window post-demonetisation. It’s dislocation of huge informal economy, workers, and petty producers are officially unrecorded. We are told that it has not cast even a tiny shadow on the GDP, stock market, and corporate profits. The social consensus in 2014 after all was in favour of a strong, centralised power structure that cleans up the swamp to deliver development alias growth. This growth is desired by everyone because it will create jobs to eradicate poverty. After all, hadn’t the almost double digit growth of the past decade reduced poverty from about one third of the population to one fourth? At least, that’s what the Planning Commission said before it was disbanded.

Many economists felt the only thing that was slowing growth was too much democracy of the kind that involved endless debates, protected tribal forest land, environment, asymmetric information flows, incomes and consumption subsidies for poor people, high interest rates and taxes. These must be removed. The separation of reality and mythologies of various kinds now stand completely annulled, we find ourselves in the high noon of Indian capitalism. Where one percent of the population owns almost 60% of the wealth, and the largest pool of absolutely poor in the world exist – but vegetarianism and Gods win elections.


Anuradha-Kalhan

Anuradha Kalhan

Anuradha Kalhan is an independent researcher. She was earlier a Fellow at NMML, Teen Murti.

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