Sunday, August 05, 2012

Newton's third law.

Every action has an equal and opposite reaction. In 2008 the Congress resorted to bribery of the electorate by forgiving loans to farmers, increasing the salaries of useless civil servants by 80%, starting the MNREGA scheme which pays rural people for doing nothing and reduced tax rates by 2% to engineer a false sense of growth. The effect of lower tax collections combined with a massive increase in expenditure meant an enormous increase in fiscal deficit and double digit inflation. Elections in 2009 produced a hung parliament so the Congress bribed other parties by creating 47 ministries with 121 departments. With so many crooks wanting a share of the booty all work came to a standstill. Desperate for cash to reduce the deficit, so that more bribes can be given away next year to win elections in 2014, taxes have been increased on everything adding to inflation and reducing purchasing power of the middle class. Rumor is that Rs 100 billion was siphoned away in the telecom scam prompting the Supreme Court to cancel all 2G licenses. Now the same licenses will be auctioned off, the reserve price being fixed at Rs 140 billion. Foreign companies who have lost a bundle will retaliate through their governments at the cost of Indian companies operating in those countries. Minister of Telecom, Kapil Sibal said recently," 3G has not delivered because they paid such huge prices for the spectrum and there is no liquidity in the market for them to invest in the infrastructure and the devices to deliver 3G, for which 2G was successful and 3G was not successful." No longer. Telephone bills will jump. In the coal scam mining rights were given away to friends and cronies. Only few of the mines have been developed which means that there is just enough coal for 7 days of power production. Imported coal is expensive adding to the Current Account Deficit. So false were the projected traffic on highways that construction companies paid a premium to build them but are now finding it difficult to pay off their debts. There was no bid for recent contracts for road building. No one knows how much was siphoned off from the development of the Delhi Airport. Result: airport charges have been increased by 346% making Delhi the most expensive airport in the world. The Airport Authority increased ground handling charges from 13% to 36% of revenue last week. While Americans fly 1.8 times a year an Indian flies once every 10 years. Jet Airways and Spice Jet have announced profits after years because of the collapse of Kingfisher and strike by Air India. Foreign flights have been taken over by Emirates, Al Arabia, Finnair and so on. Fares on domestic airlines are so high that only businessmen and those in emergencies can afford to fly. Power companies are Rs 2 trillion in debt because of theft by friends of politicians and free power to farmers to win elections. Hence the blackout of 30 and 31 July. Who says there is no growth? There has never been so much growth. But only in crime.

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