Let’s be honest.....BJP, Congress, and each one of is corrupt, directly or indirectly.....

Now that the BJP government in Karnataka has been fairly and squarely indicted for corruption, its ability to do grandstanding on the Lokpal discussion is thankfully over. The Congress has anyways earned itself the tag of being a corrupt party. Its time now for us – the middle class and rich of India – those who read blogs like this one – to come clean with our own admission of corruption. So far, we have been pointing fingers at politicians who are corrupt. Let’s now point those fingers at ourselves.

A few examples should suffice.

The CM of Maharashtra today approved a new BMC proposal for calculating FSI for high rises in Bombay. There is nothing original about this plan, but there is a great deal of honesty about it. As everyone in this city knows, builders have been constructing larger flats and office spaces than officially declared by abusing the FSI formula. Things such as “flower beds”, “pocket terraces” etc – which were available to make the living areas look a little beautiful, were blatantly abused to increase room sizes. Flower beds are small areas adjoining the living area (any/all rooms of the flat) for growing plants. They are supposed to make the flat look a little beautiful (and green!). Except that in reality, none of these flower beds are actually used for the declared purpose. In almost all cases, the flower beds are “brought in” into the room. In reality, this provision has provided an easy way to increase flat sizes while still staying within the FSI limit. In many buildings in Bombay now, the flower beds are 8-10 feet wide! Imagine this much area being added to a room which may be 15-20 feet in width. That’s like adding 40-50% area without it being included in the FSI calculation! No one obviously verifies if the said area has indeed been used as a flower bed or if it has been taken into the room. No one can. Would you like the municipal authorities entering your house to check if the flower bed has indeed been used as a flower bed?! It was never supposed to be a flower bed....it was just an ingenious solution developed by the entire “system” to circumvent an archaic policy problem (of keeping official FSI limits artificially low) which it itself created.....and is loathe to change! Now all this is going to change. The builder will only be allowed small-sized flower beds and for anything above that, he will have to pay 100% premium. We all feel happy that corruption has been controlled.

But look at this more closely. Who all was benefited from this corrupt act of the builders? Firstly, the government itself. When the mill lands were auctioned in Central Bombay, builders paid exorbitant rates. Expecting the “flower beds” kind of concessions. Had these concessions not been there, the government would have made far lesser monies. The other beneficiary? People like us! People who buy flats will now have to pay much higher prices because the cost of FSI has just gone higher. All of us like to think that the builders pocketed all the money.....but in a competitive world, most of them passed on a lot of the savings to us buyers (just like many of us believe that the telcos pocketed all the benefits of the cheap 2G spectrum. In reality, telcos passed it all over to us in the form of cheap pricing). So we have been availing of illegal benefits all this while. We could claim that we didn’t know that it was illegal. Fair enough. But now, when we do know that it was illegal, will we willingly pay higher prices? No! We are already complaining. It’s starting to hurt! And wait and watch....we will collude with builders and together develop another way to beat the system! People who live in rented properties were similarly benefiting from relatively cheap rents....now with increasing property prices, their rents also will climb. All of us were part of the game, but we liked to point fingers only at the builders. Now all of us will have to pay!

It’s the exact same in every act of corruption. Let’s take the business of bribes as another example. The biggest “givers” of bribe are undoubtedly the middle class and the rich. Break a traffic rule – pay a small “token” to the cop and escape the pain of prosecution and a hefty fine. Who is corrupt? We like to say its the cop.....in reality both the cop and we are corrupt. Want a train ticket at the last minute? Pay off the train condutor and get your way. Both are corrupt. Have you ever bought movie tickets at those “old fashioned” theatres? Tickets are officially sold cheap.....so entertainment taxes are avoided.....in reality, someone outside the theatre is selling them at double the official price. Who’s corrupt? The person selling the tickets, the theatre owner (who has set up this racket in the first place) or we the people who buy the tickets (for the convenience of just walking in and for getting the ticket at much cheaper rates than available at multiplexes). It’s the same story everywhere. The biggest givers are people like us....and all of us have to accept our acts of corruption.

Many people discount bribes as not being acts of corruption. People like us like to call it a “majboori” – a necessity forced upon us. After all, we say nothing moves in “this” country without giving bribes. Nice! What about avoiding taxes illegally wherever possible. Most followers of Anna’s movement could reasonably be expected to be businessmen and businesswomen. Or students, who will invariably end up doing business later in life (After all, most people in India do business.....not salaried jobs). Maybe there was a chemist there, who preferred not to cut the receipt so that sales tax could be avoided? Maybe a restaurant owner who still does most of his business in cash? A school teacher doubling up as an insurance agent and forgeting to pay taxes on that income? A property owner failing to declare his rental income? The fact is that there are no Gandhis amongst us. How can we demand that there should be Gandhis on the other side???

Who suffers? Only the poor people. The train ticket that we acquired by paying a bribe should have, in fact, gone to some poor honest person who cannot pay that bribe. The bribe we paid to the cops should have gone to the government which should have put it into some social scheme. Tax avoidance is so rampant in our country it is not funny. The number of tax payers is some 3% of the working population. That’s it. And even those who pay, avoid as much as possible. That’s what my complaint with Anna is. His is a movement that does not even start to acknowledge the culpability of the ordinary person. Corruption surely exists in the political class; but it exists in equal or more measure in the common people all around him. That’s why he is no Gandhi. If he had been Gandhi, his first fast would have been amongst his corrupt followers urging them to give up their corruption before joining his movement. How many people would there be left then?  Politicians are easy prey. Everyone knows they are corrupt (Will write about why politicians are corrupt in a later post). But does Anna not know that each one of us is corrupt? What about the thousands of people who will work in the Lokpal set-up? Why will they not be corrupt? How can we assume that the same compulsions that make all of us corrupt won’t make them corrupt? Are they made in a different mould???

The real truth and one that is really ugly is that we are all party to the business of corruption. That’s why corruption doesn’t go. Because it serves the interests of the middle class people like us. We like to point our fingers at the politicians, smartly deflecting the glare away from ourselves. We are all guilty of hurting the poor....yet we like to mouth platitudes for them. Before Anna goes on his next fast, he may want to read this post.....

BJP “Bangalored” by corruption charges.....yet again

Clearly Karnataka is the state the BJP hopes it was not ruling right now! What has been known for long has now come out openly in the Lok Ayukta’s report on illegal mining. The CM himself has been indicted along with several other BJP leaders and ministers. Surely, the political leadership of the BJP in Delhi was aware of this tinder-box of a scam which was bound to explode one day. When it finally did explode, no senior BJP leader chose to come onto any of their favorite TV channels to answer questions! If it was Amar Singh who did the ducking job two days back, it was the BJP leaders’ turn yesterday! Genetically, all politicians are the same!

The biggest hurt caused will be to the positioning that the BJP was trying to build for itself. What the BJP doesn’t know is that to build a positioning for oneself, it’s not sufficient to discredit the opponent. It’s necessary to be a strong proponent of the idea oneself. In any case, the BJP was hardly the kind of party to build an anti-corruption image for itself. But forever reasons, it tried to do so. Now, whatever little gains it made from its purely political maneurvrings of the last several months (supporting Anna while harboring corrupt elements in its own house) has come a cropper after this report has come out. And here’s the shocking part. The loss of some Rs 1,800 crores in just 14 months is a “real” loss – not a “notional” loss related to some policy decision which the government has chosen to take. It is not “cheap kerosene” which causes loss to the government but helps the poor. Likewise (though people don’t understand this right now), it is not like giving 2G spectrum cheap – a policy decision that unleashed the telecom revolution and empowered the poorest and most unprivileged classes; though at a loss to the government (it is my belief that the 2G scam was a much smaller scam – a few hundred crores at most. It was mostly a policy decision which the CAG has no business to criticize). This is a real loss to the government. This is massive grand larceny.

I sometimes like to draw a distinction between corruption arising from a need to fund elections and the like and corruption to fill up one’s own pockets out of greed. Many politicians – even the most honest types – have to turn corrupt to a limited extend for reasons of electoral funding. Till the time the election funding laws are made more practical, this part of corruption will not go away. But it’s the other type of corruption that is particularly despicable. The type that is undertaken with the sole intention of filling one’s pockets by looting the country’s resources. The Karnataka scam of CM Yeddy and the Reddy brothers is of this latter type. These are rich people by any measure.....and for them to plunder the state to this extent is nothing but pure greed. I dont want to make this a political point. What Kalmadi did is also condemnable. He’s a rich man who didn’t need to do what he allegedly did.

Of course there are others also implicated in this scam. There is a Congress MP and there is also the ex-CM of Karnataka, Kumaraswamy. Every single person identified is corrupt and should be dealt with strictly, if found guilty. But in this issue, it’s hardly important that politicians of all parties have been implicated. The only thing that is important is that the BJP’s holier-than-thou attitude has been totally debunked by this report.

In a way, the episode also highlights the reason to have an independent Lokpal. One that does not need the permission of the government to sue politicians and press charges of corruption against a politician. In this case, all that the Lok Ayukta can do is submit his report to the Karnataka Government. Ironically, to the same person – the CM – who has been indicted. If the media glare on the story had not been there, it is nobody’s guess what the CM would have decided. He would have scuttled it. Now of course, it will be difficult to do so. So this much is clear – the Lokpal must be allowed to function independently without need for permissions.

It also brings out another point on separation of powers of the Lokpal and the judiciary.  Should Justice Santosh Hegde’s report be considered sufficient to call the CM guilty? Or should the report be considered as merely a chargesheet with the matter to be tried in a court of law? My view is that the judiciary should be independent of the Lokpal and should be allowed to take its own decision on the allegations. So the report should be taken as a chargesheet and not as a verdict. The verdict can only be pronounced by the judiciary. I also believe that till the verdict is announced by the courts, there is no “legal” reason for the CM to quit. But then, in politics, it is perception that matters. And on grounds of perception, the CM must resign because he has been personally accused in the case. The CM of Maharashtra was made to resign for much less.

The focus now shifts to the BJP headquarters. What will the party leadership now do? In the past, when the Karnataka CM was implicated for charges of helping his sons acquire state land at cheap rates, the BJP President gave a cocky explanation that it was “legally” right but “ethically wrong” for the CM to have done what he did. But the party did precisely nothing to get the CM out. Now, when faced with much more severe charges, what will the party leadership do? In my mind, the choice before them is obvious. They have no option but to ask their CM to go. But herein lies the rub. If the BJP gets tough on the CM, they risk losing a large part of the support base they enjoy because of him. They may not even win the state elections the next time around. Would the BJP like to risk losing the only state they rule in the South or should they try and “adjust” a bit with the CM? Even in the past, this was the reason why the BJP refused to act on the CM. It’s going to be a test for the BJP all over again now. And what about the real money-bags – the Reddy brothers? What will the BJP do with their chief banker in Karnataka? That’s going to be yet another test.

The learning for us common people is that all parties are corrupt. Let no one party take advantage of some other party’s discomfiture on this subject. Every party has skeletons in its closet. All parties take illegal monies. But since we don’t have an alternative to democracy, we must react in a calibrated way. Our objective has to be to clean up our democracy, not abandon it. Rather than cribbing and complaining about politicians all the time, we need to look at what needs to be done to clean up the mess. For starters, we need to look at the issue of electoral funding. A wise economist-turned-politician once told me that it takes Rs 5 crore per candidate to contest a Lok Sabha election. Assuming there are just 5 candidates per seat, that comes to Rs 25000 crores every five years just for the Lok Sabha elections. Add state elections, and the corruption adds up to a minimum of Rs 1 lac crores every five years. Can we make at least this known bit legal? Can we replace the “education cess” we now have (10% surcharge on Income Tax) with “electoral funding cess”. If the corruption in politics is removed, education will take care of itself. The monies so collected can be distributed amongst political parties using some formula based on electoral votes gathered in the last elections....or some such formula. Once electoral funding is cleaned up, we can rightfully demand that our politicians be clean. There are of course, many other things that we need to correct. Ministers and bureaucrats need to be paid much better – so that we can have better people (People like us!) joining the government and so that the good people who are already there (and there are many) don’t see any reason to become corrupt. We talk of the Singapore PM and government employees getting market-linked salaries. The US government pays a decent salary to Obama. Why then does our PM or our Cabinet Secretary get less than Rs 1 lac a month in take home salary (Don’t inlcude the house, the free phone calls, the free air travel.....all that cannot be taken home after retirement.....maybe all that should be removed).

The real truth is that all political parties are corrupt. It is impossible for the BJP to build its positioning on an anti-corruption plank. That also explains why the anti-corruption plank belongs to Anna and not to the BJP. All political parties need to clean up their act. The environment in this country has changed. The parties better change now.....

Teaching Gita in schools.....BJP up to its shenanigans again

It’s no longer surprising. The BJP simply cannot stay away from its core Hindu agenda. There are reports now that the BJP plans to introduce compulsory education of the Holy Gita in schools in Karanataka. The BJP education minister there apparently stated that “No Indian who has values can oppose the Bhagavad Gita. Only those who love to adopt western culture can oppose the Gita. Such persons may well quit the country". Now there is no denying the merit of the Gita being a prominent Hindu scripture, but this plan casts the BJP in a very orthodox and conservative mould. It shows that the BJP never moved ahead from its two-decade old agenda.

The subject raises some pertinent questions:

1)      Why is the party choosing to muddle in matters of faith when it has the opportunity of a lifetime to grab the corruption issue with both hands? Is it because the party realizes that it is as corrupt as the Congress or any other party? (Refer the Economic Times – Synovate study – published in the paper on April 17^th this year – out of the 13 “most corrupt” states, BJP figured in five, Congress in four and the rest were single-state parties. Another way to look at this is that the Congress was named in four out of its 12 ruled states (33%), the BJP in five out of its 7 (71%), and the rest were ruled in the single state that they ruled in (100%)). Is it because it has already lost the anti-corruption plank to the so called apolitical civil society?

2)      Since the party continues to deny its “saffronisation of education” charge all the time, why is it that such initiatives take place only in BJP ruled states? Prior to Karnataka, it was in MP that the BJP tried to teach Gita lessons in state schools. It had also tried to make the recital of “Vande Mataram” and performance of the “Surya Namaskar” compulsory....but was held back by the courts. And as we all know, even prior to this, the NDA government at the center – under the overtly saffron leader Murli Manohar Joshi – had tried to make Sanskrit language and the recital of “Sarasvati Vandana” compulsory in schools nationally. Is it mere co-incidence that such initiative originate during BJP rule and in BJP ruled states?

3)      Why doesn’t the BJP publicly and unashamedly state that it is a pro-Hindu party? Is it worried that it will never be able to form a government at the center with a strident pro-Hindu attitude? Is it worries of not being able to attract coalition partners that makes it mute its saffron agenda rather than adopt it out with full conviction? Is the party so power-hungry that it is willing to sacrifice it core agenda only so that it can have a good chance of coming to power?

4)      Why does the BJP mix politics into every discussion? Why does a discussion on terrorism invariably ending up discounting saffron terrorism as even a possibility? Why is the color of terrorism always green for the BJP if it were not for its politics?

In my mind, not only is the BJP harming the country, it is also harming its own prospects of ruling in the future. The party should have realized by now the limits of exploiting religion. In spite of the crescendo of support around the Ram Janmabhoomi issue, the party failed to scale the majority mark even once on its own. Even in 1999 when it came to power, it had to almost jettison its core issue in the effort to form a coalition. Even today, no political party – except the known saffron ones – want to tie up happily with the BJP. It’s only their anti-Congress stance that makes them do so. Even when they do tie up, almost all parties distance themselves from the BJP’s Hindutva positon. Take Nitish Kumar’s Janata Dal (United) in Bihar for example. It doesn’t want to go anywhere near the BJP during election time! Why, it even refused to allow the BJP’s poster boy Narendra Modi into the state during election time.....

My own view is that religion is an extremely private subject. It should be left there. There is nothing wrong in teaching the Gita or any other Hindu scriptures but what is wrong that this be done in schools. I also don’t find merit in the proposal that all religions should be taught in school – I am sorry but in my world view, schools are for learning modern subjects and a new way of life, not religion. That job is entirely of the parents to do. Even society should not dabble in religion. Unfortunately society does – and we see this in the way people like to be seen in religious places for more reasons than just seeking solace or blessings. Unfortunately, our society requires that we be seen prominently at religious places.....isn’t it almost a PR exercise for many our people? Isn’t this why we choose the busiest day of the week to visit religious places? This is true in all religions (Christians during Sunday Mass....Muslims during the Friday Namaaz and Hindus on select dates of the week like Thursday is for Sai Baba and so on).

The real truth is that the BJP is playing with fire by pursuing its religious agenda. It knows that there is a real danger in doing so. It divides the people up rather than uniting them. It makes people doubt each other rather than trust each other. It makes us parochial and takes us back in time. Religion should be kept inside the home.....not brought out in the open. My sincere request to the party is to abandon it. And take up something else that is more relevant to a modern society.....

In defence of the UPA.....

Everyone’s bashing up the UPA. Most of the comments I get on my blog are against the UPA government. Today, it’s fashionable to bash up politicians. It’s fashionable to bash up the ruling government. It’s fashionable to bash up bureaucrats. This is the season for bash-up. Very seldom however have I found people actually understanding issues before launching their tirades against the government. It’s all emotions and biased opinions. That’s why all that energy goes wasted. We are angry about what’s going on all around us and that anger has colored our perception. We see what we want to see. It’s a self fulfiling prophesy.

Let us see how many of us.....and how many media outlets..... applaud the deal struck yesterday between the Center, Mamata and the Gorkhas. We will choose to quietly ignore the significance of a deal which has eluded the region for several decades. The people who may get prominence will be the Left party leaders who have been unable to think imaginatively about this problem for so long.....and who will definitely have something to complain about in this deal. But then screaming and complaining leaders always make for a better story. Who wants to read about happy things.....that would go counter to our present mood? We keep complaining that the PM does not speak up. This was proven yet again yesterday.....it was not the PM but the Home Minister who represented the Central government in the signing of the accord? If it had been a dyed-in-the-wool politician PM, he would have rushed to grab all the TV footage. We know this PM is different. He likes to stay behind the glare of media publicity. Should we complain about it or take it as his personal style. Is poor oratory a sign of weakness? We tend to confuse a person’s aggressiveness on TV with his strength. We simply cannot understand that silent people can – and most likely are – stronger than those who yap yap yap all the time. Why do you think the popular phrase “Barking dogs seldom bite” comes around? In the case of the PM, his bark is silent, but his bite is not that bad. Here’s a contrary example. Advani is such a good orator....a fiery one at that. Why could he never become the PM in the first place? That honor was reserved for a much less aggressive Vajpayee. Vajpayee was also a terrific orator. Why then did he not win the elections again in 2004? So are we barking (why do we have so many phrases connected with barking?!) up the wrong tree here?

Since its unfashionable to defend the Congress or the PM, let me preface this defence of the party by clarifying that everyone deserves a good defence. Even Kasab gets a reasonably good defence. So why not the PM and the UPA?

I think that UPA’s and the PM’s track record on economic achievement needs to be highlighted. Since 2004, we have had the fasted growth this country has seen since its independence. We’ve averaged some 8.4% per annum (this is real growth....net of inflation. In nominal terms, the growth is some 15-17% per annum). There has been a fairly good distribution of this wealth, and much as the Left may not believe it, rural salaries have actually risen significantly. Swaminathan S Anklesaria Aiyar mentioned in a recent story of his that rural agricultural salaries have risen by 100% in the last three years in Andhra Pradesh and in most other states, by 60% or more. Another story in the papers yesterday (quoting NSSO data) shows that both rural and urban spends have risen significantly in the last10 years in real terms (taking inflation out). The NREGA is a scheme that may be poorly administered (with lots of leakages) but it has started showing results. Why do you think there is such a shortage of agricultural workers in states like Punjab? Bihari labor simply dont want to go out of their states now that they are getting work back at home. Of course, the Nitish Kumar government can also take credit for this. Look at the initiative of putting Nandan Nilekani behind a visionary project like the UID. We don’t see the results yet, but they will be stunning. If all Indians could eventually be covered, it would help put subsidies for fuel and food in the right hands (eliminating corruption in the process; raising the standards of living of the poor) and it could also eliminate crime.....after all, if we have fingerprinted and retina-scanned all Indians, the criminal is bound to be identified by the trails he leaves behind. And this would help deter future criminals. Our exports are booming. In the first quarter of this year, they were up 40% over last year. Is this not the government’s achievement?

Let’s be fair to the government. If we pan them for their mistakes, let’s give them credit where its due. The huge growth in telecom that we are all so proud about.....who should take credit for that? Sure, there have been process violations and corruption, but how big is it really? So far, all that has been even alleged by CBI (under direct supervision of the Supreme Court, I might add) is a corruption case of Rs 200 crores against Raja. Even this one has not been proved yet. (The CAG’s report was biased.....it commented on policy. By the same token the govt subsidy of kerosene and LPG also amounts to corruption because the government loses money there). So if we blame the government for the mess, why don’t we give them credit for the much bigger achievement – the telecom revolution that they oversaw? Could the corruption have been avoided? You bet it could have been and should have been. And let’s pan the government for that. But let’s do it in a measured and mature way. Most of the people that I see on TV shows come from either an emotional platform (with no solutions to offer) or a political one (with an obvious agenda). What about the growth in our IT and BPO business....the one that got in our first glory globally? Did that happen in a policy vacuum? People may not remember but the government had provided a tax holiday for the industry which made it so strong in the first place. Apart from several other initiatives.

So the UPA’s economic successes cannot be belittled, just because they have floundered recently. Let’s look at the NDA rule for a comparison. The average GDP growth rate between 1999 and 2004 was just 5.8% (compared to 8.4% under UPA rule since then). And by the way, in the 5-years of Congress rule before 1999 also, the average GDP growth rate was higher at 6.7%. We talk about the success that is Gujarat and attribute its stellar performance to Mr Narendra Modi. For the record, the GDP growth of Gujarat under Modi has indeed been an impressive 14% or so per annum.....but hold your breath, the growth in the 10 years of Congress rule before Modi was also some 12% per annum. The marginal increase seen in Gujarat since Modi took over has been seen all over India. It cannot be attributed to Modi. Cannot believe it? Just check out the numbers. In reality, it is the people of Gujarat who should be credited.....not Modi. Modi is extremely popular in Gujarat but not for reasons of economic growth. The perception outside Gujarat is of course that Modi is the champion of Gujarat’s growth story, not least because he himself has projected it that way.

The fashionable thing for opponents of the UPA to say is that GDP growth is not everything. Of course it is not. It’s the same philosophical belief that middle class people often tell themselves. Money is not everything. But everyknows in his/her heart that without money, there is no meaning to life. There is no freedom. There is no status in society. There is no decent education. There is no future. In the same way, for a poor country like us, my belief is that GDP growth (but accompanied by good distribution across classes of people) should be the single most important focus area for the country. We can solve the many other problems that face us – corruption for example – along the way, but no matter what happens, we cannot stop the engines of growth. And that’s exactly what has happened of late.

Unfortunately, all the politics of the last year is conspiring to put a stop to the economic growth. The GDP growth is slowing down. Inflation is up (largely due to global factors). Interest rates are being increased all the time. The government is so wary of any action that it prefers to take none. A right-wing party like the BJP (on economic affairs) prefers to oppose economic reforms that it would otherwise support, with no consideration to its impact is on the country. Unfortunately, we the people of India are not realizing the consequences of all this. The ones who will be hurt the most by another slowdown are the most underprivileged. The ones who are looking for getting out of poverty. We owe it to them to keep the engines of economic growth chugging along.

The real truth is that we are being drowned in the sea of politics. We need to lighten up a bit on the politics. We need to ask the government tough questions on the economy, not only on the politics. Just like we penalize the government for corruption, we must applaud it for good work done. Everyone knows.....motivation helps improve performance. Cribbing and complaining all the time serves only the political interests of some parties. It’s a trap and we should realize it.

The BJP must support the GST......mixing politics with economics hardly helps it

The announcement of Sushil Kumar Modi – BJP’s deputy CM in Bihar – as the Chairman of the empowered panel of state finance ministers on GST is clearly an attempt by the UPA to get the BJP’s support on the Bill. As many as eight states are ruled by the BJP and if the GST has to pass muster in Parliament by 2/3^rd majority and in half the states, then the BJP’s support is crucial. This is a fact well known to the BJP and the party has exploited this issue as a pressure tactic against the UPA in the recent past. It has to ask itself if this stand of its is not harming the interests of the country....

Essentially, the GST (Goods and Service Tax) will replace a plethora of central taxes and state-imposed taxes which have made doing business in India difficult. The GST Act proposes to remove several central and state taxes like Excise duty, Service tax, VAT, Octroi, Central Sales tax, State sales tax, entry tax, stamp duty, turnover tax, tax on consumption of electricity, tax on transportation etc etc etc and replace them all with one single GST. The GST will be levied at the consumption point rather than at both, the production as well as consumption points (depending on what the tax is). The other advantage of the GST is that it will reduce paper work and cost of collection of taxes. In the process, it will also reduce corruption as the tax department’s interface with industrialists will now be at just one point.

There are two “officially stated” problems largely in implementing the GST act. One is that this will take away the powers of the states to levy taxes and give those away to the Center. States worry that this will affect their autonomy. Their ability to use fiscal incentives to attract investments to their states will significantly reduce. Second, there are likely to be some states which benefit from GST because they are strong consumption centers.....while some others are likely to lose because they are stronger in production than in consumption. Obviously, the ones who could lose are opposed to the GST. The center plans to offset these imbalances at least in the short run through an assured transfer of funds from its kitty and hopes that things will iron themselves out in the long run. The “unofficial” opposition to the GST comes from the loss of state politicians to indulge in some money making on the side.....an activity that is key to our electoral process and the root cause of much of the political corruption that we see all around.

As everything else does, the GST also has become a political issue. The Act is an amendment to the Constitution and as mentioned earlier, requires a 2/3rds majority in Parliament as well as the support of half the states. The UPA knows that without the BJP’s support, the GST simply cannot be passed. The BJP instinctively supports tax reforms and has been supporting the GST in the past. It would perhaps try to get the Bill passed itself if it was in power at the center. But it has now decided to oppose the Bill. Why? Only the party can answer that question, but there are accusations that the party is giving it back to the Congress for turning the heat on Narendra Modi in the Sohrabuddin murder case.

The BJP is only harming its interests by mixing politics with economics. The general impression that people have (its “positioning”) is that the BJP is a pro-business, pro-market-reforms party. To that extent, there is no difference between the BJP and the Congress. That’s why India Inc is not so bothered who rules over India – Congress or the BJP – as both are pro-business parties. The BJP’s biggest and most efficiently run state – Gujarat – is a shining example of its preference for market reforms. When it was in power in the Center, the BJP had no hesitation in launching its own disinvestment program keeping a senior party politician (Arun Shourie) in charge of this department. Changing its colors now for political reasons doesn’t help the party’s case amongst its supporters who expect the party to be consistent in its approach.

The BJP shouldn’t worry about being the Congress’s B team on economic policies. It has an important role to play in the country as the chief opposition party. It’s clear that there is no other party that can play that role not only now but even in the years to come. The Left has been badly battered and even if it does come back to power, it is hardly the kind of the force that the BJP is. The rest of the parties are mostly regional parties who support either the Congress or the BJP. The BJP must thus get comfort from the realization that India is moving slowly but surely towards a two or three party system of democracy.

What should the BJP do to position itself as a different party from the Congress, if the two parties are aligned on economic policies? It has to position itself differently on political policies to find its own stable feet in the politics of the country. In the past, it positioned itself as the Champion of the Hindus – and got its first success on the back of this platform. But India is a complex and heterogeneous country and beyond a certain point, Indians are not particularly interested in the dangerous cocktail of religion and politics. The BJP has since been in decline. It now needs another issue with which it can position itself afresh. The big yawning opening that Anna’s movement against corruption has created today is the opportunity that the BJP should try to capture. Now the BJP today is anything but the clean party that it should be to take advantage of this opportunity. In an Economic Times – Synovate study (published in the paper on April 17^th this year), out of the 13 “most corrupt” states, BJP figured in five, Congress in four and the rest were single-state parties. Another way to look at this is that the Congress was named in four out of its 12 ruled states (33%), the BJP in five out of its 7 (71%), and the rest were ruled in the single state that they ruled in (100%). Building a positioning against corruption needs a lot of work....but if the BJP can successfully do that, it will derive long term benefits from it. For starters, the BJP needs to clean up its act in Karnataka. If it can do that, the mood in the country is such that it will benefit immensely from it. If not against corruption, the BJP can surely position itself as a hardline party against terrorism. Given the kind of neighborhood we are in, and the recent incidents, the party is sure to emerge as a distinct party.

But opposing economic policies that it usually is expected to support won’t do any good to the party. In the past, the party was embarassed by the stand it took on the Indo-US nuclear deal. Again, everyone knows that the BJP is by and large, a pro-US party and in its own days in power, had first mooted the concept of this nuclear deal. For purely political reasons, it opposed the deal in Parliament. Maybe, it lost the 2009 elections becaues of the side it took on this particular deal....In the same way, opposing the GST will only do it harm rather than any good.

The real truth is that the BJP may continue to block the GST. The party lacks good advisors. Those who understand the concept of positioning a brand (a party in this case) in the minds of people. If it did, it would not have conceded ground to Anna’s team in the fight against corruption. Today, the BJP is seen as just another cantankerous opposition party – one that keeps the ruling party on guard, but fails to capitalize on its misadventures.

The politics of statistics.....Read carefully before you conclude

Every single day, reams of data are thrown in our face. Various government and non-government bodies flood us with new statistics. Media tends to add its own “spin”.....first by choosing which of these stats to publish (depending on their political orientation) and then by either intentionally or unintentionally analyzing correctly or incorrectly the stats. Readers must remember that while the stats themselves are just numbers and apolitical, the interpretation and projection is an intensely political business!

The recent controversy stoked by the release of NSSO statistics about employment generation is one example. The story showcased by The Mint a couple of weeks back claimed that between 2004-5 and 2009-10, the total number of jobs created were just about 2 million. Now, if this were true, there would be serious consequences for India’s market-oriented reforms. These five years were amongst the highest growth years that India has seen averaging 8.4% per annum. If this high growth also could not generate employment, then surely, it was the wrong model for India to follow. Maybe socialism was a better model? There was also a fair bit of politics involved. The story said that there was much more job growth during the NDA’s tenure in the preceding 5 years from 1999-2000 to 2004-5.....almost 12 million jobs a year. The BJP issued a statement via Yashwant Sinha attributing the success to its infrastructure programme. Much later, Swaminathan S Anklesaria Aiyar in The Times of India explained the not-so-obvious reasons for the data. In reality, it was not what it was looking like. Job creation was happening at a fast rate, but there were no workers available. As a proof of this, he showed the virtual doubling of rural salaries between 2008-10 in many so called underdeveloped states of India like AP. He called it “workerless” growth rather than “jobless” growth. And he explained it by showing how women workers were going back to their homes since in India, a woman’s stature would rise if she was seen “at home”. Also with more female enrollment in schools and colleges, there was a shortage of women workers. This explanation positioned the same NSSO data so differently. In The Mint’s interpretation, India should have turned socialistic again. In Swaminathan’s interpretation, on the other hand, India’s market orientation was doing just fine!

Take the 2G scam. The CAG first pointed out that the scam could be as large as Rs 1.76 lac crores. Ever since, that number has stuck in our minds. In many ways, since we strongly believe that corruption in India is extremely high; we look for straws of data to peg our beliefs onto. The truth seldom matters. Since this blog is about the Real Truth, let me give you some real truths of the 2G scam. The CAG arguably failed to understand the difference between government “policy” and “processes”. It was the government’s policy to give 2G spectrum cheap. It’s as a result of this cheap spectrum policy that telecom pricing in India is so low. This has led to the exponential growth of the telecom sector. Today, at least 500 million subsribers – so many of them poor and under-priviliged – are enjoying the benefits of mobility and associated economic prosperity. As a result of the mobile phone, even “addressless” and “officeless” workers are able to take part in economic activity in the society. The CAG comment confused policy with process. Sure, there have been process errors. And corruption must have taken place in that sphere. But even so many months after the CBI has been working directly under the SC, all that they have been able to find is the Rs 200 crore link between DB Realty (alloted a 2G license by Raja) and Kalaignar TV (Raja’s party’s TV channel). There is nothing to date against Unitech. Nothing specific against Reliance yet. And nothing specific against anybody else. And it’s not as if the telcos have minted money because of cheap spectrum. Vodafone – the 2^nd largest mobile operator in India – reported its first profit after being in this country for more than 15 years. Only the number 1 operator – Airtel – has a healthy PAT margin of around 19%. Another large operator – Reliance – has been in losses for much of last year and Idea – has just about 6% PAT margins. The other proof of corruption cited is about Unitech offloading equity to Telenor at a high market valuation of some Rs 6000 crores. But people don’t understand that the money that Telenor brought did not go to Unitech’s pockets – it went into the company. This is the way most joint ventures are conducted. The investing foreign company puts in money and brings in technical expertise while the Indian company brings in other “assets”. Whether each party will make profits or not will be determined after many years – sometimes decades. Most business ventures lose money. But who is interested in these stats. The number of Rs 1.76 lac crores has stuck in our minds!

It’s the same story with the CWG mess. No doubt, there has been a lot of corruption in this. But Rs 70,000 crores? Excuse me; but I don’t think India has progressed so much that such large sums can be bandied around frivolously in this manner. The real truth here is that the order of the scam is much smaller – maybe less than a hundred crores. Check out all cases filed against Kalmadi & Co and this will become clear. I am not saying this is not serious enough; all I am saying is that the stats are wrong.

The Black Money numbers are similarly flawed. People with high levels of imagination have put a ridiculous number of $1.5 trillion on the estimate of black money abroad. One would have to assume that most of this would be in Swiss banks. I could never understand how a poor country (yes yes I know that we have some of the richest people living here.....but their wealth is no where close to these numbers) like India could put so much money abroad. India should have been a $10 trillion economy many years back for so much black money to have been ferreted out. The truth – to be disputed by some I am sure – came out today. The Central Bank in Switzerland stated that the entire Swiss banking system had only $2.5 billion attributed to Indians. Now all of this cannot be black money. And a lot of it could belong to Indians living outside India.

It’s the same story that plays out again and again. Partly, it’s because of the politics that has permeated even so called independent offices like the CAG. It wouldn’t be surprising if retired officials from such bodies later join political parties of their choosing. Part of the problem also is that media agencies hardly employ journalists today with sound economic knowledge. And with so much focus nowadays on economics, the journo becomes a puppet in the hands of maneuvring politicians and statisticians! Who is going to explain the nuances of today’s financial economy to journalists who have traditionally studied up on politics?

The real truth is that the reader has no option but to read multiple sources of news. It’s fashionable to say that the news chases the reader in today’s digital world. But the reader is well advised to chase the news as well – so that he/she is not played around with by either motivated or ignorant makers of news!

Good grief.....now Vilasrao Deshmukh is Mumbai Cricket Association President

As if his reputation in politics wasn’t enough. As if his involvement in the Adarsh scam wasn’t enough. Vilasrao Deshmukh is now chancing his hand at cricket. What he will bring to the table apart from plain old politics is something I cannot imagine. Perhaps the same thing that his son brought to films.....absolutely nothing except a lot of inane cacophony. But then why should we be surprised by his election. Cricket in this country has been ruled by politicians for long.

Let’s look at two off the biggest cricket associations in the country.....

The Mumbai Cricket Association (MCA) is arguably the biggest of all the cricket associations in the country. The President of MCA from 1992 to 2001 was Manohar Joshi of the Shiv Sena. Both before and after Manohar Joshi, the MCA has had political leaders at the helm of affairs. The legendary SK Wankhede himself was a politician of some repute in Maharashtra including being the Speaker of the Maharashtra Assembly for many years. Wankhede was concurrently the President of MCA for 25 years from 1962 to 1987. After Manohar Joshi of course was the famous (or ill....) Sharad Pawar who’s been President of MCA since 2005. And now of course, there’s Vilasrao Deshmukh.

The Delhi District Cricket Association is no different. Its President is Arun Jaitley, a lawyer and politician.

The BCCI of course is the parent body for all of cricket in India. Both the MCA and the DDCA are affiliated to BCCI and are its members. The BCCI is the most powerful and the richest of all cricket bodies in the world. The story of BCCI’s leadership is well known but it is worth recounting. Some of the biggest and richest politicians of India have been its Presidents. The list of luminaries (err....) includes Sharad Pawar, Ranbir Singh Mahendra (Haryana), Madhavrao Scindia, NKP Salve and as mentioned earlier SK Wankhede.

Clearly, cricket is one sport which has been ruled continuously by politicians Throw in a few corporate honchos and lawyers, and that pretty much completes the business side of this sports. And once in a while (and only once in a while), a cricketer has made it to the higher echelons of the cricket administration in the country. So when Vengsarkar lost the MCA elections yesterday, it should have come as no surprise to him himself. After all, the MCA elections are held in the way and manner in which any political elections are held. There are 368 clubs that are affiliated to the MCA and these clubs are the ones that vote for the President. It is not surprising that much of these clubs are controlled by politicians themselves. And when the likes of Sharad Pawar and Vilasrao Deshmukh get together, what can poor cricketers do.

The question is not about why cricketers don’t run the cricket administration in this country. After all, cricket is a big enterprise and it needs professional managers to run it. Most cricketers would be very good at the game but can be expected to poor at management (of course there are exceptions). So, I am quite happy if cricketers don’t run their administration themselves. The question to ask really is why politicians should run the cricket business.

Clearly, and there is no rocket science here, cricket is loaded with money and it acts as a pot of honey for politicians of all hues and color. The revenues of BCCI run into thousands of crores. That aside, the kind of clout that cricket leadership provides to a politician is qualitatively huge. It’s this combination of money and power that draws the politicians in. But do politicians really have the skills required to run the administration? To organize cricket tournaments, set up management teams, spot talent, build stadiums and in general foster the growth of cricket? Most of them have their hands full in several honey pots at the same time; so how can they possibly find time to do justice to the game?

I am very comfortable with the corporate types running cricket. After all, they have experience in attracting good and large management teams and running several companies at the same time. Usually, corporate head honchos tend to be cleaner (less corrupt) since they are financially well endowed in any case. And they don’t need to fight elections – so they don’t need to be corrupt themselves. And by and large, corporates are not criminally inclined.....and we do know a hell of a lot of politicians are. So if anyone has to run the cricket administration in the country, it should be the corporates and not the politicians.

Coming back to Vilasrao Deshmukh, I have very few.....in fact none at all.....good things to say about him. Yes, he is an extremely important politician for the Congress. He is one of the moneybags from Maharashtra. But as CM of Maharashtra for nearly 8 years, he did absolutely nothing for the state. Much of the urban decay that one sees in Mumbai can be attributated to inaction during his time as CM in Maharashtra. As Central minister of Rural Development, he had to be shifted out in the recent cabinet re-shuffle. I have been arguing for long that he should have been removed from the cabinet, rather than just shifted to a new ministry. What credentials does Vilasrao Deshmukh have to be the President of MCA? And it’s worth asking: What attracts him to this job anyways? Isn’t it the same things that attract all politicians? Money and Power? At a time, when his ship is sinking at both the state and central levels, what better leverage could he ask for than being the President of the MCA?

The real truth is that while cricket in India has prospered (monetarily and in global stature); it has a lot to hide in terms of the way the game is administered. Every few years, there are controversies that emerge from within its ranks. The recent Lalit Modi related ones, the ones related to Jagmohan Dalmiya....are all fresh in our minds. It doesn’t seem to matter now....but at some time in the future, the poor quality of administrators will start to hurt the game. At present, it is the money power provided by the TV channels and the sponsors that is helping conceal the infirmities. But if and when there is a slowdown, the cracks will start to show. I think there is an urgent need to protect cricket in this country. But to do that, we need to protect the clubs from the political administrators.....