Sunday, January 08, 2017

No one can be anti-poor in a loincloth economy.

The poor are the greatest elite in India. Every leader, starting with MK Gandhi, every political party, starting with the Congress, and every policy by every government, including VP Singh's infamous OBC reservation, works most diligently for the poor. So successful have we been that we have the largest number of poor people in the world, earning less than $1.90 per day, by Purchasing Power Parity. Naturally, being anti-poor is the worst crime any politician can commit. So, Rahul Gandhi has angrily accused Prime Minister, Modi for being anti-poor for banning high denomination notes. The BJP had been off the mark much earlier, branding Gandhi as anti-poor, accusing him of being born with a golden spoon, which is post-truth because he is living on Rs 900,000 borrowed from his mom. When in opposition the BJP denounced a ban of notes printed before 2005 as anti-poor. To prove that he is not anti-poor Modi has brought the annual budget forward by one month, which will release funds for the poor one month early. Naturally, the opposition has objected. They suspect, perhaps correctly, that it is an attempt to announce more handouts for the poor just before assembly elections in 5 states, including UP and Punjab. Logically, if they start spending early the funds will finish early, so the government can be accused of being anti-poor. To preempt that the BJP has said that accusing the government of being anti-poor is anti-poor. Demonetisation is going to cost the economy in excess of Rs 1 trillion in printing and transporting new notes, in man-hours wasted on standing in queues and in loss of business. The poor are happy because the government is mounting surgical strikes against all the anti-poor elements in Indian society. Farmers cannot pay their laborers so they cannot prepare their fields for the next season. Wholesale prices for vegetable have crashed, so farmers are losing money, while retail prices are still high, so the middlemen are making windfall profits. But there is MGNREGA to help the poor by providing dole for 100 days every year. It does help the poor but, by depriving factories of labor, it may drive automation, which will reduce employment in the long term. As farmers earn less for their produce they will reduce planting in the new season to raise prices by creating scarcity. Meanwhile, the informal sector, which avoids paying taxes, by operating in cash, will be forced into the open . Modi says it will increase tax collection which he can then distribute to the poor. The number of poor will increase even more, proving Modi is not anti-poor. MK Gandhi is the Father of the Nation. MK Gandhi dressed in loincloths. If everyone is in loincloth no one can be anti-poor. That is why ours is a loincloth economy.  

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