Thought for the day
“Where there is politics or economics, there is no
morality.”
-
Karl Wilhelm Friedrich Schlegel (German,
1772-1829)
Word for the day
Tittup (v)
To move, especially to walk, in an exaggerated prancing or
bouncing way, as a spirited horse.
(Source: Dictionary.com)
Teaser for the day
Nitish Kumar believes that he could be the beneficiary of
Congress benevolence, post election รก la AAP in Delhi, should NDA fail to cross
the 272 mark!
Are you ready for PM sitting on Dharna in front of
Parliament for special status to Bihar?
Economics, accounting and morality
The finance minister P. Chidambaram has raised serious doubts about
competence of the aspiring PM Narendra Modi in the field of economics.
This criticism coming on the back of universally acknowledged
disastrous performance of his “economist” prime minister naturally raises some
issues of morality.
I appreciate that given the “do or die” nature of 2014 general
election for both Congress and BJP, and most other parties on the fringes,
morality is something which may not prominently figure on lists of priorities
(including the self proclaimed flag bearer of morality AAP).
Nonetheless, it may not be completely out of place to highlight
the following points to Mr. Chidambaram:
(a)
The macro economic conditions could be improved
by anything but accounting. Managing fiscal deficit by accounting jugglery,
e.g., by holding income tax refunds, deferring payment of subsidies and other
payments to next fiscal year, effecting disinvestment by accounting entries
(cross sale of equities between PSUs); extracting special dividend from PSUs
even at the cost of their future growth plans; harassing government vendors and
contractors by unusually delaying payments due to them; and cutting vital plan
expenditure is something which only an account think of. Even a thoroughly
incompetent economist would not like to do indulge in this trivial gimmickry
that could only worsen the conditions.
(b)
Managing current account and currency deficit by
effectively transferring a large part of gold trade to parallel market;
borrowing short term Fx at exorbitant rate of 9.5% from NRIs; force oil
companies out of currency market; and distorting the debt profile of the
economy in favor of short term instable source of funds is also not sound
economics. At best it is immoral trafficking.
(c)
Basing your consumer price management strategy
on the vagaries of monsoon is also not economics. A common FM radio listener
will tell you that American companies are advertising not Facebook or Twitter.
They are propagating California apples, almonds, walnuts, and peers amongst
Indian masses. That should be cause of serious worry for those responsible for
managing trade balance and consumer prices. Please understand doing Yagna for
good monsoon every year will not bring food prices down.
(d)
Good politics is quintessentially good
economics. Politics for immediate electoral gains is not economics it is
immorality. It is robbing future generation to get few votes. If LPG subsidy
was bad two years back, it is criminal today.
(e)
Accelerated environmental clearance to US$40bn
worth of projects may also not be good economics, if it makes growth unsustainable
and inequitable. I feel Niyamgiri will not remain an exception. It will become
a rule if the government fails to protect people’s interest.
…to continue
tomorrow
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