Tuesday, 7 February 2012

All is fair in Love, War and Indian Elections

The campaigning for the UP elections would be funny if it wasn't for the fact that we are talking about the governing of a nation here and for the fact that India's economic growth has been slowing down over the last 3 years, enough to make Standard and Poor sit up and warn India that it's rating is under threat

The latest promise by the Congress in UP says it will give out a mobile bill subsidy to the tune of 20% in the rural areas of that state. I have two objections here - the first is the giving of a subsidy itself, irrespective of which commodity it is for. Any government, if it genuinely wants its people to progress, should focus on creating infrastructure and employment instead of wasting it's budgets on subsidies. The former has a far more long lasting impact on the lives of people and is sustainable as the government can slowly withdraw (after creating basic infrastructure) and let the private sector take over. Given India's precarious fiscal situation, committing budgets to subsidies is foolish and possibly economically suicidal. 

My second objection is that mobile connections are hardly an essential service that they should be subsidised. If there is a market for mobile services in rural UP, market forces will ensure that services are provided at a rate that is affordable to the people. If not, mobile services are not the first priority for government intervention. It is useful technology no doubt but schools, roads, electricity, sanitation, good hospitals etc are far more useful and would go a long way towards improving the standard of living of the people. If the Congress party HAS to talk about subsidies, I'd rather it subsidise good quality education or health care. A mobile subsidy is merely a placebo for the populace and an avenue for dozens of middlemen to make profits.

But then the Congress is not alone. Parties have talked everything from subsidised laptops to erection of statues this election season. A clear sign that governance is no longer a question to be raised in election campaigning. In the aftermath of scams and corruption allegations, political parties continue to insult the electorate by talking handouts and subsidies making beggars of us instead of creating opportunity for production and productivity to thrive.

We, the electorate, are unfortunately foolish enough to fall for it. We forget that these benefits will disappear, like the smoke after the fire. We forget that we ARE paying for it - in the form of taxes, in the form of inflation, in the form of poor economic growth. The only people getting anything for free are the corrupt politicians and middlemen. Such is the state of Indian democracy today - touted as the world's largest democracy, we are nothing but a sham. Some day, the free lunches will come to an end.

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