NDA Needs A Big Idea

NDA Needs A Big Idea 

The NDA is in desperate need of a big tsunami of an idea to surge into power in May. Particularly, as it is to play its hand in a contentious, much fractured field. But a big idea has at last been mooted- abolish all direct and indirect taxes, both on individuals and corporations, it says, and replace it with a universal Bank Transaction Tax.  

That bank transactions currently account for just 20% of the total, actually tells you the size of the black economy. A 2% transaction tax on this lot alone could yield more money than the maze of direct and indirect taxes put together.  But, the embrace of this bold new idea needs to be just so, dramatically clear-cut. No timid tweaking and tinkering with the tax and exemption rates will suffice.  That will emasculate it and render it useless in electoral terms.

This abolish- all-taxes proposal, being considered by the BJP at present, is brilliant in its simplicity and can at one stroke, reduce the black economy both substantially and voluntarily, provide a major fillip to business, industry and employment, reduce prices and inflation, boost GDP, encourage fresh investment from abroad, and encourage the trillions of dollars in black money stashed abroad to return on its own.

It will also cut reams of red-tape, and necessitate the redeployment of armies of government employees into more productive functions. More and more economists in India are coming around to backing this idea, and several have swiftly laid out very attractive illustrative scenarios on its efficacy going forward. 

America too is coincidentally looking at calls to abolish corporate taxes in order to stimulate industrial investment and consequent job generation. It too has a marginal tax rate of about 35% for companies that, with the availing of exemptions and incentives, can be brought down to 23% or sometimes less, very much as in India.  And Indian industry, for different reasons, is falling behind every day because of lack of fresh investment, modernisation, and of course, the recessionary conditions presently.

India’s Congress Party has tried to play to the gallery to the hilt with its own big ideas, namely the Food Bill and the Land Bill, in addition to its many extant welfare schemes even though they are a big burden on the exchequer. Its aam aadmi plank may have been hijacked by its junior partner, but Congress has moved fast to keep the AAP within its own fold going forward. The AAP, beholden and subsumed by the Congress, means that whatever seats it wins at the general elections, will be used to back the UPA.

There’s also the wholly curious but noisy anti-corruption crusade, with everyone, in the Congress, BJP and AAP sounding bugles about it. The middle-class loves to fantasise about a corruption free polity but there is no magic wand available to bring it about. The yearning for it is both sweet and a little absurd at the same time, not because it is not a laudable objective, but because corruption is more of a demand and supply issue than a legislative matter.

Arvind Kejriwal of AAP is sure to choke on his anti-brastachar promises, sooner rather than later, as he is buried under an unmanageable avalanche of corruption under his very nose in the Delhi Government. The Delhi Jal Board stings by TV channel Headlines Today are just one little sample of what he has to deal with. It is not as if nothing will be achieved, but it is going to be a long and winding road to the finish-line. Even in totalitarian China, where corrupt people are frequently shot, corruption has grown apace with its development!

Besides, a thousand Lokpals can’t make India corruption-free, no matter how many people they prosecute. And there is the nagging feeling about the integrity of such Lokpals themselves, given their temptations. The Indian judiciary, right up to the top, sadly, has its own corruption problems too.

The very laws, too many of them, full of discretionary powers, create convenient bottle-necks to exploit. They are the root cause why someone in power can demand and extract a bribe. That, and the fact that our extremely over-burdened and slow judicial process has practically made it impossible to receive justice. The lack of accountability that comes from permanent government jobs and a closed club of elected politicians also makes things difficult. The public therefore would do better to demand growth and progress and let prosperity reduce the need to be corrupt. Cutting down, rationalising, and modernising our tangled jungle of laws, while increasing the size of the judiciary could also help.

BJP’s prime ministerial candidate Narendra Modi in scores of very well attended rallies has tirelessly pointed out the shortcomings of the Congress regime, its ineptitude, its failures on the security and economic fronts, its cynical vote-bank politics, the immaturity of its ‘Sahebzada’, its corrupt ways  and so on. But all this is essentially negative in character, as negative as the Congress constantly harping on  BJP’s alleged communalism.

Still, NaMo’s efforts have produced spectacular results, combined with those of the two incumbent BJP Chief Ministers and a former CM as challenger. But still, the Congress is down but far from out. It is working hard to keep the NDA, and Modi, out of power at any cost, by either positioning itself at the head or at the tail of a coalition, no matter how few seats they are able to bag by themselves. Its recent propping up of the AAP in the Delhi Vidhan Sabha clearly spells out its survival strategy. The articulate if untried AAP is expected to nevertheless cut into the urban vote with its high profile rhetoric against corruption and its passion for populist freebies. The restive regional parties have several prime ministerial aspirants of their own, and are chafing at the bit to form a front for the Congress to back-stop.

The BJP, always in difficulty when it comes to allies, because of its perceived, if false, anti-minority stance, is looking at the rivalries between the regional parties, such as that between the DMK and the AIDMK, to secure its post-poll numbers.  But, all analysts agree that it will find it difficult to form a Government if it does not win over 200 seats on its own. Particularly, given the current mood of the regional parties, who want to run the Government themselves this time. So, it needs to do something urgently to bring in the surge in popular support. Eliminating taxes could be this catalyst, to win the elections, cut the generation of black money, and unleash the development potential of the country.

(1,105 words)

January 7^th, 2014

Gautam Mukherjee