Saturday, March 17, 2012


A look at the world of politics, statecraft, diplomacy and books

The political crisis that has overtaken the UPA II is largely of its own making. The dynastic fascist party, the Congress, seems to forget that it not not the master of its own house and therefore behaves as though it has an absolute majority like the bad old days. It has learnt the very difficult art of making policy announcements only to sheepishly retract them later. The FDI in Retail sector and the National Counter Terrorism Center both ran into rough weather and the Center looked very sheepish. Now we have the fiasco of the Railway Budget with Mamta claiming a new constitutional provision. A minister from her party must seek approval from the party supremo to present the budget. The Railway Budget itself is a relic of the early days of Independence and we need toive up this senseless practice of having a separate budget for the Railways: it gives the Railway minister a false and illusory sense of his importance. Lalu Prasad Yadava as a Railway Minister made a mockery of the budget and the fellow even fooled the Harvard Business School.

Dinesh Trivedi has no legal or constitutional constraint to consult his Party supremo over the budget. He is accountable to the Lok Sabha for the budget and the Budget is a Cabinet document. If Mamata has any problems with the budget she should withdraw form the UPA and vote against the regime in power. But like every Congress politician, she too has learnt the fine art of barking and not biting. She wants to threaten the regime by attacking her own minister, but not the Government on whose behalf Dinesh Trivedi has presented the Budget. The present regime headed by ManMohan Singh and Sonia Gandhi set a wrong constitutional and political precedent when they succumbed to the old DMK gangster from Tamil Nadu, Karunanidhi, when he forced the UPA regime to sack his nephew Dayanidhi Maran from the Cabinet ehen there was a feud between the sons and daughters of the several wives of that old fossil from Chennai. Since Man Mohan Singh created a bad precedent both constitutionally and politically by sacking Dayanidhi Maran, he is now hoist on his own petard. Had that Karunanidhi not done that act of having his nephew sacked, then the 2G scandal may not have happened and one of his daughters, Kanimozhi, may not have been caught in the biggest scandal of Independent India. Serves that old bandicoot right. The Minister for Railways is accountable to the Lok Sabha and Shri Man Mohan Singh must have the courage to tell the cotton sari Didi from Kolkotta that she cannot demand the sacking of a Minister on purely partisan grounds. As usual the Regine will prevaricate and in a day or two Trivedi will be shown the door and the same budget will be passed without anymore storms in Bengali tea cups.

The Union Budget is caught between two diametrically opposite objectives. It want to slightly bridge the growing fiscal deficit and at the same time raise resources by way of taxes without incurring the wrath of the allies who will face the wrath of the people in the next elections in a few months from now. The Budget does little to enhance growth and stimulate the economy. In fact the Budget will add to the inflationary pressure that already exists. Inflation will push up interest rates and hence the overall growth of the economy will around 5 to 6 % only. Social spending must be curtailed and the badger does little in that direction. The move to amend the foreign transactions taxation provision retrospectively from 1962 is legally questionable but that is the only way the Government can come out of the Vodofone mess. I think this provision must be passed on the grounds of necessity and I hope the Courts concur.

The budget remains a flawed document and in all probability will be tha last budget of this regime. The sooner it goes the better.

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