From Licence Raj to Subsidy Raj

(The aim of this essay is about the gradual movement of Financial policies of India, from the Nehruvian times, till the recent government of Manmohan Singh. As we would see its a transition from the Fabian socialism to the liberalization, but now finally into the indiscriminate Subsidy Raj, which is supported by all the political parties in India. The author begs the pardon of the readers if he sounds harsh or illogical, but its in his best of intentions to keep things straight and try to take a rationalist view point towards the policies of Government.
This is the first draft of the article and would be improved sooner or later, depending on the availability of the author. He would like to end with a PJ: A blog a day, keeps your BTP at bay.)

It seems to me some of the policy decisions by Indian Government are like organizing rain dance during a drought, although it doesn't serve the purpose, it gives a feeling to the general public that the government is trying to do something seriously. Well, we shall see how Indian Government has been changed from the elaborate system of License Raj to the indiscriminate Subsidy Raj, which exists now.

"I want the corruptions of the Permit/Licence Raj to go. [...] I want the officials appointed to administer laws and policies to be free from pressures of the bosses of the ruling party, and gradually restored back to the standards of fearless honesty which they once maintained. [...] I want real equal opportunities for all and no private monopolies created by the Permit/Licence Raj.". These words are NOT from BJS (now, BJP ), Janata Party or anyother party. It is from the well known statesman, Bharat Ratna, C.Rajagopalachari, way back in 1960s in his newspaper Swarajya. Inspite of being a close associate of Nehru, and a ''conscience keeper of Mahatma", he was strong opposer of Fabian socialism and red-tape. But, it took almost 30 years for Indian Government for realizing the truth in his words. The license Raj is said to have been broken by Narsimha Rao's Government in 1990, due to macroeconomic crisis in India at that times.

The present Finance Minister, Mr.P Chidambaram, expressed his 'worry' over the extensive subsidies by the state and central governments during his short stint at the Office of ministry of Finance during 1996-98. Now, in April 2008, a jubiliant Chidambaram performs the 'impresario' act and comes up with the 'politicially' correct budget. The aim of the budget is to win back the 2009 elections for the Congress party, at the cost of the Government Exchequer. Ofcourse, with regard to the lack of time and space, I would dwell upon the budget subsidies for the two important vote banks of the Congress: the illiterate and the minorities.

The farmers are provided with Rs.60,000 crores, waiving their agri-based loans. The Punjab National bank, one of the leading lender of loans to farmers was left flabbergasted. Well, the central budget has the luxury of running over deficit, while banks cannot. The result: the banks will no more sponsor the funds for farmers, since their money is at risk in doing so. Please note that I am not against any reforms or help towards farmers. I hail from a farmers family, with stakes in the present agricultural sector. But, the farmers who generally hurt due to the loans, is not generally by the nationalized banks, but it is because of the high interest rates of the local money lenders. But, who cares? Afterall the 'rulers' need votes and political mileage, which they can safely derive at the cost of the tax payers. Ofcourse, we look for quick fixes, and assume that we have done 'enough' for the primary sector of Agriculture. The reforms in Agriculture would take another discussion altogether.

Next important votebank is minorities, which Congress is always successful in wooing at. The budget in terms of 'special' funds to the education and employment has increased from Rs.500 Crore in 2007-08 to Rs.1000 Crore this budget year. No questions asked from any political party, as usual.

Apart from this, subsidies rain from the state governments of Tamil Nadu, Andhra Pradesh, and nowadays Karnataka. The most interesting (or notorious) of them is free current, followed by the Rs.2 per Kilo rice. All the three state Governments talk about the above subsidies, interestingly the Tamil Nadu Govt. is always a step ahead. Free Color TVs, free Computers..surprisingly, everything comes virtually free in Tamil Nadu. All of the political parties in the states, both regional and national, not only deny the difficulty in implementing these policies, but also strongly advocate them. How do we do that? Simple, threaten the belt shops by setting high targets, where the same poor buy (rather made to buy) the spirits by paying 66% excise tax on them. Our leaders have understood Napoleon very well, who said the vices are strong patriots of his government, since they pay heavily for the exchequer.

Let me be clear. The aim is not the defame any party or any of the politicians. But, what we have been seeing over the past, and even now, is NOT because of real-politik of political parties, but because of our own sheer callous and irresponsible way of responding to the scenarios. In the words of Daniel Webster, "Nothing will ruin the country if the people themselves will undertake its safety and nothing can save it if they leave that safety to any hands, but their own."