Monday, November 10, 2014

How to pay for 66 ministers?

In 2011, Rod Blagojevich, Governor of the state of Illinois in the US was sentenced to 14 years in prison on 18 counts of corruption, including trying to sell Obama's seat in the Senate, which fell vacant when he was elected President, for campaign contribution or personal gain. Apparently the state governor can nominate a person to a seat, that falls vacant due to unforeseen circumstances, until a bye-election can be held. Sadly, in India being corrupt is no bar to getting elected or becoming a minister. Becoming a member of parliament is so lucrative that it is worth an ' investment ' of Rs 1 billion. Imagine the returns on becoming a minister, especially someone who controls resources, such as mines, or public sector companies, such as railways or Air India. The previous Minister of Civil Aviation, Praful Patel must love his daughter so much that she was allowed to divert an Air India flight for a cricket game in 2010. Also in 2010 Air India used a bigger aircraft on a flight to Maldives to accommodate the in laws of Patel's daughter in first class. 47 seats in economy class remained empty on the outward journey and 52 seats were empty on the return flight. Patel is presently in the Rajya Sabha, a safe haven for anyone who does not want to face voters. Having promised minimum government with maximum governance the present Prime Minister has expanded his cabinet to 66 ministers. The United States, a $16 trillion economy has only 23 members in the cabinet while India, at less than $2 trillion needs 66. Why? How is it any different to the 73 member cabinet during the Congress regime which used posts as bribes to other parties to hang on to power for 10 debilitating years? Seems that the present Prime Minister is using cabinet posts to please different castes and interest groups with an eye to coming elections in important states. It is important to win state elections because Rajya Sabha members are elected by state assemblies and Modi needs a majority in the upper house to pass important legislation, especially regarding economic reforms. Opportunists who have fled other parties have been rewarded. All these ministers will need vast sums of money to do their work. Large bungalows, Z plus security, a posse of cars, various staff to carry their heavy workloads, study tours abroad and so on. Perhaps to pay for all that the government has decided to increase excise duties on petroleum products. On the one hand reducing the prices of petrol and diesel will bring down inflation so that politicians can pressure the Reserve Bank to reduce interest rates, while on the other hand it makes sense to increase taxes on these products because their prices have been factored in and if international prices rise suddenly taxes can be reduced to ease the burden. Also the extra cash will be very welcome indeed.

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