Wednesday, March 22, 2017

Collective punishment protects the guilty.

Vodafone and Idea Cellular are to merge. The new entity will have 400 million customers, generating Rs 816 billion in revenue. The merger will bring down operating costs, reduce debt by sale of assets and, by pooling spectrum, will become number 1 or number 2 in prominent circles. Although it will start off with equal share for both companies, Vodafone will reduce its share to 26% by selling off rest of the shares. Idea will have first rights to buy the shares at an agreed price of Rs 130, otherwise Vodafone will sell them to other buyers. After spending billions of rupees on its operations in India why has Vodafone lost interest? Because it is not making profits as it should. Why? Spectrum costs were too high. said Vittorio Colao, CEO of Vodafone, in an interview. The government auctions spectrum to raise money. However, instead of awarding a combined licence for the whole of India, it has divided the country into circles which are auctioned individually, increasing costs manifold. In 2008, spectrum was allocated at low prices, causing enormous loss to the exchequer. The Supreme Court canceled all 122 licenses in 2012. Collective punishment is common in India. It obviates the need for painstaking investigation to catch the culprit, years, sometimes decades, of court cases, and it protects the guilty by spreading the blame to everyone, including the innocent. No wonder that foreign companies have largely exited the country. Docomo is trying to flee by selling out to Tata but the Reserve Bank is objecting to the method of payment. Demonetization of high value notes was a prime example of such collective punishment. It was proclaimed as a fight against black money and was loudly cheered by the majority of people, who saw it as a bloody nose for the rich. Not one criminal went to jail and the rich managed to launder most of their cash, prompting the government to announce an amnesty scheme. It caused enormous hardship for all citizens, as shown by 74 notifications issued by the government in 50 days. This was Modi's gamble for absolute power. The poor suffered the most but were happy and rewarded Modi with a thumping victory in the assembly elections in UP last month. There are 3 municipalities in Delhi, all of which go to polls on 22 April. The BJP controls all three but Modi has decided that tickets will be denied to all sitting councillors, including honest ones, because of allegations of corruption. Naturally, all of them are incensed and there are discussions of forming a new party to contest against the BJP. Now Aadhar will be mandatory for filing tax returns. So we have to provide fingerprints and iris scans, like criminals, to pay taxes so that Modi can enjoy a life of absolute comfort, with food, residence, travel, utilities, and healthcare provided free for life. No wonder Indians are the saddest people on earth.

No comments: