Same old disease will have the same old end.

The first act of Mr Chandrababu Naidu on taking oath as Chief Minister of the new truncated Andhra Pradesh was to announce a raft of freebies. Last time he was chief minister he had focused on development but lost to the Congress who promised freebies. After 10 years in the wilderness he is taking no chances, he will ' get his retaliation in first '. He has waived crop loans for farmers, women's self help groups and weavers. He has increased pensions to Rs 1000 for widows and the elderly and to Rs 1500 for the handicapped. He has promised to supply mineral water at Rs 2 per 20 liters to all villages. In short he is destroying the economy of his state even before he starts working. In an angry article one Mr Aiyar, with a masters degree in economics from Oxford no less, advises our new Prime Minister Modi not to give Rs 540 billion to Mr Naidu for this ' super-freebie '. He writes that writing off loans helps only those with bank accounts and not the real poor who borrow from local moneylenders. It punishes the honest who have already paid off their loans while rewarding the crooks who had no intention of repaying in the first place. It will destroy micro-finance for women which is based on responsibility to a peer group. Mr Aiyar is absolutely right in what he says. It is a pity that he did not write the same article in 2005 when the Congress started the MGNREGA scheme which paid the rural poor for 100 days a year for doing nothing or in 2008 when the Congress forgave all loans to farmers at a cost of Rs 700 billion and increased civil service salaries by 30% to win elections in 2009. These moves resulted in retail inflation of 8.6%, a growth rate of 4.7% and a fiscal deficit of Rs 5.08 trillion. Manufacturing actually contracted by 0.7% as extortionate taxes, to pay for the social schemes, have taken away purchasing power from people. This meant that few new jobs were created and most of these were in poorly paying services such as construction, restaurant waiters or household servants. Despite such poor numbers the RBI Governor is unable to lower interest rates which is at 8%. He lowered the Statutory Liquidity Ratio to inject more liquidity into banks hoping to increase lending to customers which may kickstart the economy. Other countries can take more robust measures because their inflation is low but not here. Strangely no one asked any questions of Ms Sonia Gandhi who ruled the country for 10 years with her communist advisers in the National Advisory Council. So who to blame? The Congress for ruining the economy or the highly educated pseuds who suffered intentional blindness?