Greetings from Stalinistan

Greetings from Stalinistan

The banks are stressed, according to the CII survey recently released. They have massive non-performing assets (NPA), presently the highest they have been in six years. This, combined with  the newly imposed, higher  mandatory capital requirements, will seriously erode their profitability at a minimum.

The much talked about Food Bill, a key thrust area of the UPA Government, on its way to becoming a food guarantee law under  an act of parliament, will place an additional 38.6% burden over and above the currently budgeted  Rs. 90,000 crore  subsidy for next year.

This will, it is reported, shoot up the subsidy to Rs.1,24, 747.1 crores at present prices, for next year alone. Not only are more people being included under its provisions, but there is a demand that the highly subsidised prices be maintained unchanged for 3 years, irrespective of the expectedly higher procurement prices of  the essential grains and cereals covered.

In addition, there is another, equally ambitious programme being developed for providing  guaranteed rural housing to the poor at state expense.

The banks are stressed mostly because of forced loans to economically weaker sections.  And the growing subsidies, transferring from petroleum products towards the public distribution system and so on, threaten to bankrupt the nation.

But, at the same time, it must be acknowledged that they seek to help the poor of this country and that is indeed a laudable objective. The only quarrel that anyone can have with such undeniably lofty ambition is the fiscal responsibility that should accompany such largesse. This is a new phase of affirmative action to help the bottom third of the population, but because it is being done so recklessly by way of straight giveaways, it is likely to cause considerable harm to our viabilities.

That many of these schemes will not fructify in the year or so that this Government will be in power before the general elections, makes them squarely aimed at the electorate. They are designed  to provide campaign talking points, and hopefully restore the UPA to power for a third consecutive term.

But in the event the UPA is not returned to power, as acts of parliament, these programmes will have to be implemented by any successor Government. Of course, it is yet to be seen if these initiatives pass into law in the time remaining.

This kind of institutionalised populism was very au courant in Stalinist Soviet Russia too where the mighty USSR was bankrupted eventually. And while defence spending was also part of the problem, everyday developments, shortages, failures, collapses, run- away inflation, came from the seeds of destruction sown by policies expected to deliver the longed for “dictatorship of the proletariat”.

But instead, the mega programmes largely failed in the implementation, or in the results they yielded.

Judging from the fate of the other huge poverty alleviation schemes instituted   by the UPA Government, these new ones too are likely to be mired in massive corruption, misappropriation and delay. A leopard cannot change its spots just on the basis of a wish, and it is doubtful if the efficacy of such programmes is the main objective at this time anyway.

But regardless, there is an attitude pushing these schemes with an unheeding arrogance. Any kind of Stalinism, post, pseudo or neo, invites sudden death if you disagree, dissent, or arouse suspicion, at least within the Party.  And yes, everything is political in Stalinistan, including economics, and the colours pink, red, green and saffron.

And the prerequisite to running Stalinistan is a simple hold on absolute power with plenty of government agencies that can be used to intimidate, subvert, deny, delay, banish and hound.

Also, the brazen ability to concoct reasons and justifications for the most outrageous circumstances while distracting attention by pouring scorn on and calling all opponents and rivals as many names as possible.

Our Stalinists are often sentimental, given to emotional outpourings that purport to bleed for people at any provocation. Or, like a haemophiliac, for no reason at all, except of course the inability to coagulate blood.

So which atrocity should we speak of first? Is it the sharp rise in new subsidies? Or is it the rampant money- laundering in several private banks? Or shall we talk, yet again of the food inflation? Or laugh at the red herring of becoming a leading manufacturing nation if it manages to account for 25% of GDP?  Or the soft attitude to terrorism, mayhem, corruption, insurgency, diplomatic snubs, law and order collapse? Or should we talk of the Opposition’s failures instead?

(763 words)

March 18^th, 2013

Gautam Mukherjee