Saturday, September 15, 2012

The Politics Of An Indian's Life

Disclaimer: These are solely the author's opinions. I request you to read this with an open mind. And I can assure you that I'm not a worker of, or paid under-the-table by any political party to write this post, trust me.

I'm not proud of being an Indian. I'm extremely proud. But, of one of the many things that prick me, on a daily basis, is how the game of politics influences the Indian's life, on a daily basis.

I write this post in a situation where there are high chances of the Government falling. With the coalgate scam reports all over the media and opposition parties disrupting the parliamentary sessions on a daily basis, the Government dropped the diesel price hike bomb on the people of the country 3 days back, followed by approving the 51% and 49% FDI in multi-brand retail and aviation sectors respectively, the day after.

By explaining my point of view on these 3 topics, I'd like to show you how influenced our daily opinions are to the politicians and political parties with no or half-knowledge of the subject they're talking about. In the sequence of events, I'll go with the diesel price hike first, LPG next, and FDI in the end.

1) Diesel price hike
My first reaction. Oh well, the prices are up again. Wasn't that so very expected?

a) Before you go any further, I'd request you to read about why the prices of petroleum products go up, here. (Note: The answer is to the question about what could Barack Obama have done to prevent the price of gasoline doubling in the last 4 years, his presidency term. Just to be clear, our petrol prices have gone up by only 50% in the same time-frame, and diesel around 20%.)

Did you read that answer? No? Please, read it. I appeal to you.

I hope you have, after me requesting you twice atleast (even if you were lazy to open another link and read that too the first time). This is the first time I'm requesting readers to read a link on a different page, that too twice, consecutively. That's for a simple reason. It answers the question beautifully, without any doubt, in laymen terms.

b) India doesn't have enough oil reserves to suffice the 1.2 billion population of ours. We have to import oil from other countries, at global crude oil prices.

There's a popular forward (which reached me atleast half a dozen times), that India's petrol prices are more than anywhere in the sub-continent or south-east Asia. Frankly, I don't know how true it is. I haven't checked those prices. But, I do understand the fact that the need for petro-products in India, on a daily basis, is atleast 10 times more than those countries. Enough said, I assume?

c) The Government provides us subsidized petro-products for our well-being, and to reduce the burden from our shoulders. The loss for the Government, per litre of diesel sold, has recently risen to Rs. 17/litre. That's a 40% subsidy on the price of the fuel in itself! You may ask, from where does the Government get the money to pay for such a massive subsidy, and how does it pay it off?

It comes from the income of the Government, mostly taxes. And the excess, adds to the bugdet deficit, which, simply means that is a loan that the country has to take.

What happens if the budget deficit increases? Growth stumbles. Foreign investment reduces. Unemployment rises. The currency suffers. Inflation rises.

So, how do you prevent all that? Increase the prices of subsidized goods. As simple as that.

Yes, it will increase inflation, temporarily. In the long run, it will lead to the inflation getting static, or even reduce. Increment in the industrial growth rates, and the rest follows...

d) I realized this when I saw the NewsHour debate the other day on Times Now. This is the gist of what one of the panelists, namely, Swaminathan Aiyar, Consultant Editor, The Economic Times, pointed out.

Government subsidies are a luxury, not the need of a nation. The sad part of an economy is when these subsidies become political pawns to earning votes. A Government which spends more on subsidies for oil products, than on its prime projects, will suffer.

There's a solution. But, it's a bitter political party, which I bet no party in the country can swallow. Fix a yearly amount of subsidies, if not remove them completely, that'd be given to oil products and then let them fluctuate over the world import prices. As freaking simple as that.

Result? An economy which wouldn't be burdened by nonsensical political moves over protecting the prices of the oil products, more than the important Government schemes.

This is something really bitter. But, it's a fact each one of us understands. And sadly, no political party in the country has the will or desire to make this happen and help the nation. I repeat, this would help the nation, immensely.

2) LPG Cylinder subsidy

Most of what I said above, applies here directly. There's not much of addition here, except one.

I wondered how this'd affect the budget of my home. Upon asking that question to mom, she told me that one gas cylinder roughly lasts for 2 months. And so, it won't affect us much.

If it doesn't affect my family, that translates into it surely not affecting most others in the whole country!! Those who do, pay the premium price to get it. The rule is fair, isn't it? To me, it seems so.

3) FDI in retail, (none of the political parties really care about aviation)

There are facts, and then there are random political arguments to make the Government policies look bad. FDI, sadly, has had more of the latter than the prior.

I want to emphasize on what I've read and seen as opinions of major political parties, and rubbish their claims with facts.

a) BJP: Claim: It will wipe of small businesses and local kirana stores.

Reality: The facts from most countries of the world prove that no major retailer can reduce the clout of local traders and stores. In Indonesia, almost 73% of people still prefer buying from local traders and stores.

b) Shiv Sena: Claim: Why not get the technology and we run it ourselves?

Reality: Don't we have enough failures of the likes of Birlas (more.) and Ambanis (Reliance Retail) in front of us already? Why not give someone else a chance who has worldwide expertise in it?

c) Trinamool Congress: Claim: The farmers will lose.

Reality: The farmers lose today. The middlemen eat away the money that the farmer should be earning. Also, almost 40% of India's produces get spoilt in godowns or never make it to the market in time.

Bigwigs have a simple method of picking up farm produce from the farmer himself, thus providing them with better, and thus the prices they deserve to get for their produce. Their storage techniques, as we already know, ensure that none of the produce they take under their hands, goes waste.

d) SP: Claim: They'll import most of their goods because they're supposed to have only 30% of Indian goods in their stores.

Reality: How does a business work? Would you import goods from 'your own country' or pick up goods from the local markets? How much would importing a container full of apples from USA cost Wal-Mart, in comparison to what they can buy it from India for?

It's simple business. They're here to earn profits. And so, their actions will be a simple desire to reduce their expenses to supposedly import goods.

Another point I want to make is, which one of these parties talked about the customer? Isn't he a critical part of the chain?

The customer gains, surely just gains. He gets more choice, he gets better prices, he gets world class products and service. Isn't that more than enough to make a customer happy?

Secondly, who talks about the economy? The falling growth rate? The falling rupee? The falling stock market? All of which, as we've seen on Friday, have got an enormous boost because of these decisions.

We live in a simple India. An India driven by politics. Politics which is promoted by presenting half-facts to the public. And a public which blindly believes that the Government will never want to do any good for it. In my opinion, such a projection of the country's Government, is highly destructive, in both the short and the long run. The last thing we want to see in India is a replica of the instability in Egypt.

Also, I know most of you will try to tell me about the innumerable 'scams' that this Government has seen.

Is this the only Government which is corrupt? No other Government in the history of the country has ever been? Rather, we should be happy that these scams are coming to light of the modern day. That ensures that next time onwards, every Government employee will think twice before accepting a bribe.

The reason I write this today is because I see people randomly blaming the Government for everything without even knowing what those things are, or what they mean. That, hurts.

In my personal opinion, Dr. Manmohan Singh is one of the best Prime Minister's this country has ever seen. And he is one of the best economists. And a politician who puts the nation before his own self. Whatever is said about him working under Sonia Gandhi, arises out of the speeches of political parties which couldn't make it to the Government. No PM can function alone. He has to have a cabinet for policy decisions, and the political party head for the party-related decisions. All the PMs till date have had, and all in the future will. There's no denying that. You can't blame a woman for the very same, just because she's of Italian origin.

And the PM proved 2 days back, why I respect him so much, by saying a sentence in the meeting of the Cabinet Committee on Economic Affairs,
The time for big bang reforms has come. If we have to go down, we go down fighting.
And you say this is a PM incapable of action? Shame on you. He doesn't mind being thrown out of the Parliament. He won't try to secure the allies' consents. He won't sugarcoat so that the country likes him. The fact that India needs reforms, terribly, are bitter but true. And to stand up to it, to take charge, takes courage.

No other politician in the country can say what he did. And for that, he deserves a standing ovation.

These issues are just the tip of the iceberg. And we have such inhibitions, such projections of politicians in our heads that we can't look beyond the petty issues into the real deal. We are so obsessed with having to support one goddamned party in everything they say, without even realizing the extent or truth of their claims. I hope that after reading this post, you will think twice before criticizing any politician, or any party, based on what someone else says.

Until the next post...

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