Friday, July 31, 2015

If thugs beat up crooks does it help?

Having been thrashed in the general elections last year the Congress is determined not to let the present government function, by disrupting both houses of parliament so that no bill can get passed. The Congress is terrified that the amendments sought by the BJP will result in a boost to manufacturing, millions of new jobs, a growth in the economy and a feel-good effect on the people, which would result in another loss in the elections of 2019. Loss of power means a loss of opportunities to make billions of rupees so the government must not be allowed to work at any cost. Trouble is that the BJP adopted the same nasty tactics while in opposition and cannot take a moral high ground. Arun Jaitely, present Finance Minister and a very high-priced lawyer, said in 2012," If parliamentary accountability is subverted and a debate is intended to be used merely to put a lid on parliamentary accountability, then it is legitimate tactic for the opposition to expose the government through parliamentary instruments available at its command." Which means that if the government consists of crooks then it is alright for the opposition to behave as thugs. Does he advocate that citizens should also take the law into their own hands? Never mind that it costs the nation millions of rupees on each of them, surely they have some duty towards the nation and the idiots who stood in queues to elect them. But the BJP can still beat the Congress. The most important is the Goods and Services Tax bill which they should concentrate on. If necessary call a joint sitting of parliament and make it law so that it can be introduced from next year. Once taxes become homogeneous companies will stop looking for ways to minimise tax bills and business will boom. The amendments to the Labor Law and the Land Acquisition Act maybe left to the states. States can amend laws to suit their industries, as Rajasthan has shown. Rivalry between states may translate to a race for growth, to earn bragging rights, as the intense hostility between Chandrababu Naidu in Andhra and Chandrashekhar Rao in neighboring Telengana is set to prove. Instead the government seems to be confused on what to do. The price of diesel has been reduced by more than that of petrol so that there is a Rs 20 difference in prices. With international crude prices at very low levels this is a golden opportunity to equalise the prices of the two, as in the US and in Europe. A low price encourages people to buy diesel cars which are much more polluting. By increasing the price of diesel the government will earn billions to spend on infrastructure and reduce ill health by cutting pollution. Keeping diesel cheap to engineer a low retail inflation to pressure the RBI to cut interest rate is perverse and will backfire. Do not keep Air India viable by drip infusion. Put in a large sum, restructure it and privatise it. Right actions will have a multiplier effect. Just needs logical thinking.

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