A hollow edifice.

India is ranked as high as 19th, in a list of 178 countries, ranked according to their vulnerability to external shocks in a study conducted by risk analysis firm, Maplecroft. TOI, February 21. Russia is at 30, China at 58 and Brazil way down at 97. According to the report high corruption, terrorism and political violence are some of the most prevalent risks for India. " Continuing poor governance is evidenced by the endemic nature of corruption, especially in India and Russia where the political process is undermined by an inability to tackle the problem," the report said. The report does not point out the biggest source of corruption which is using public money for social schemes to win elections. Subsidies on food, fertilizers, rural employment scheme, education schemes for girls and a myriad other schemes to bribe the poor to get votes. This leads to uncontrollable fiscal deficit, which in turn, leads to very high taxes which affect the same poor. Being illiterate, the poor do not realise that they are being conned. Also the pressure to survive in the short term makes them grateful for any help they get not realising that they will have to pay back many times more in the long term. Some sectors such as cars, airlines, hotels and entertainment are singled out as luxury and taxes on these sectors are exorbitant. Except Indigo all airlines in India are making colossal losses. Jet Airways lost Rs1.01 billion in the third quarter and Rs 9.37 billion from April-December, 2011. Kingfisher's plight is almost comical. It has lost Rs442.6 million and is unable to pay salaries. Every employer in India is supposed to deduct tax from staff salaries and deposit it with the Income Tax department. Kingfisher has not deposited this money so the IT has attached its bank accounts. Unable to buy fuel Kingfisher has been cancelling flights, 80 on Sunday, 20 yesterday and 25 today causing hardship to passengers. Not good when elections are going on. However, there is nothing the government can do. Any fines imposed on the airline will to immediate bankruptcy. A collapse of the domestic airline industry will lead to loss of faith in the Indian economy and will be a severe embarrassment for the government. " Let us not talk of punitive action at the moment. We are more interested to see the airline back on its feet," said DGCA chief, EK Bharat Bhushan. In short we have an enormous bamboo up our backside and do not know how to get it out. Best to grin and pretend.