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Author: Manasi Phadke

  • Will NOTA work for India?

    “Hi, Mom! What’s for dinner?” That was Teenager, back from his badminton practice at about 8:00 p.m.

    “Well,” I said enthusiastically, “there’s roti, beans, dal and carrot raita in curd!” That was me, happy and secure in my belief that I’m feeding all the right stuff to my family.

    “What? Beans? Uuuuuuuuuugggggggggggghhhh. NOONE eats beans, Ma, except us. And we eat it every third day! Beans, potato, beans, brinjal, beans, capsicum, beans
?”

    I looked at him speculatively. Teenager has taken this one thing from me, for sure. He can exaggerate. The boy can have a golden career as an economist, I started thinking. “The GDP growth rate of India is 7%, nnnno, its actually 7.3%, nnnnnnnnaaahhh, it’s more like 7.8%!” Yeah, he can really do a fine career out of this wonderful trait. Put him in the RBI, and your CPI will go crashing down to 4% or wherever it is that Urjit wants it to be. Put him in NITI Aayog, and you will get your growth numbers right. Put him in the Commerce Ministry, and India’s trade to world trade ratio will cross the dreaded 3% psychological benchmark in a matter of minutes! Heehee, the boy has potential, I tell you. He simply HAS to become an economist.

    “I am NOT going to eat this! Give me something interesting, Mom, I’m hungry! And I’m bored” That broke my reverie and jerked me back to reality. And the reality is that teenagers have absolutely no clue or interest in any career profiles. They have only two massive sensations. One, hunger and two, boredom. Sigh.

    “Beans are great for health! And 
”

    “Mom, why can’t you make Chhole-bhature or pasta for dinner?”

    “Because the former is oily and the latter is maida. Only calories. No nutrients. Beta, dinner has to be healthy! And this week, we’ve not really had beans for about
”

    “20 hours,” piped in the Hubs, with a sly smile. “This time she has really broken all records and cooked beans within the usual 24 hour deadline!”

    “Oh, shut up, both of you! And boys, you can’t declare a strike at 8:00 p.m. Food is ready, I am beat and I am not going to cook anything else. It’s too late for that.”

    “This is so not fair!” Teenager, indignant with rage and upset at the gastronomical disappointment. “If it’s not possible to change the menu at the last minute, then ask me earlier, Mom. Next time, ask me when you go shopping for veggies. ONLY the vegetables I approve should be bought next week. Else you’ll keep on dishing out what you feel is right
”

    That’s interesting! Thought Econ Mom, surfacing suddenly in Mrs. Phadke’s kitchen. Hmmm, isn’t that exactly what the State Election Commissioner had been saying, just a couple of days ago, in our meeting at Mumbai?

    “We need to take a look beyond our usual role.” The Commissioner, as always, had come well prepared with his ideas on what needs to be done. “The role of the State Election Commission of Maharashtra (SECM) is to conduct local body elections in a free, fair and transparent manner. And we do that, to the best of our capacities and abilities. But the real question is, even if the election is conducted fairly, are people really getting a fair choice to choose from?”

    For the uninitiated reader, let me just put in a little bit of gyan. When the candidates file their nomination forms for an election, that is when the voters come to know what is the mix of people from which they select a people’s representative for themselves. With great foresight and I must say, with a lot of gumption, the state of Maharashtra offers a “NOTA” i.e. “None Of The Above” option for its voters, so that the voters do not have to always choose the least of all evils. They are getting a choice to say that they want none of the candidates at all. And this, is supposed to be an absolute triumph for democracy.

    However, deeper thought tells you that while NOTA is great for freedom of expression, the fact that hordes of people have this expression is itself worrisome. Thus, what is happening is that candidates filing nomination do not match the expectations of the electorate. The authorities know this, but they can’t do much about it. So, they decide to give the NOTA option to the electorate so that their voice can be heard loud and clear on the day of the election. “We do NOT like these candidates.” The problem is, that it is kinda late to do anything about this, just pretty much like it was too late for me to cook a different recipe for Teenager at 8 p.m.

    “The true solution is to give them a voice before the elections.” That was what the Commissioner was saying in the meeting. Is it really necessary to do that? Even while this thought hit my mind, I got the answer. “Our job is to do everything in our scope to strengthen democracy. If the electorate is not happy with the candidature, we can’t just sit around offering NOTA. NOTA might bring the issue to light, but it certainly does not resolve it.” NOTA is the dressing on the wound. The team was brainstorming on why there is the wound in the first place.

    And out of that emerged one solution. Accordingly, we’re currently doing a snap poll on voter perceptions, or what the voters want. What kind of a candidate do they really want? Do they want people who are clean, or is the priority on efficiency? How many voters feel that candidates ought to be well-educated in order to be a good representative? What proportion of voters feel that women make better representatives than men? How many people are of the opinion that good candidates stay away due to criminalization of politics?

    Data analysis will soon reveal voters’ preferences. This is to be done prior to the filing of nomination forms, so that the political party heads too will get a pulse of what the common man wants. This will hopefully feed into a more scientifically designed ticket distribution process, with at least a few deserving candidates getting the tickets. Rather like buying only those veggies that Teenager approves of. This will truly give voice to the electorate and make the process more participative, which is exactly where we want to go, right?

    Right, but, will this work? Even if the data analysis brings out these trends, are political parties going to toe the line? Are they going to go by statistics, or by the simple chemistry of dynasty and money? We all know the answer, don’t we? Then am I doing something futile? Why should we create this data-base on voter perceptions when we know that the true users of this data, the political parties, can, but won’t use it?

    I sat in my chair, post dinner, brooding over the futility issue, when Teenager started a discussion with Daddy dearest on poetry. They were both arguing about what a line in some poem meant. I was far away from the discussion, disturbed and restless. Suddenly, Teenager propped his English text in front of my eyes. “Mom? Have you ever read these lines?” he asked.

    And Econ Mom found her answer. In a dog-eared literature text-book. The answer to why a scientifically designed statistical survey has to bring out voter issues, political parties be damned. “Tis better to have loved and lost”, said Alfred Lord Tennyson, “than never to have loved at all.” Bravo.

  • The Metaphorical Faux Pas of the Central Banker

    What happens when you cross metaphors with economic ideologies? Controversies, as the RBI Governor discovered after calling the Indian economy a one-eyed king in the land of the blind. Many an eye popped with disapproval, many an eyebrow was raised delicately, many a pert nose wrinkled in metaphorical distaste and all hell broke proverbially loose.

    The poor, poor man must have wondered what he’d said that was so very wrong. He was just trying to say that a 7.5% growth rate was not a bright spot by itself; it still was short of hitting the potential growth rate in India. So compared to a lacklustre world, we may seem to be quite the economic miracle, but well, a miracle that could get more miraculous. A one-eyed king in the land of the blind. Uh-oh!

    Miffed, the Commerce Minister sniffed at the choice of words. Jayant Sinha too got into the fray with gusto claiming that to confuse the shining star with the shining one-eye was so not done. The FM, who after the Budget debate on Times Now, has discovered the lethal power of silencing loud critics with statistics, merely chose to say in a clipped, dignified fashion that 7.5% growth rate is enough to get celebrating. It’s rather unfair, to get so righteous about metaphors after having used them profusely through sher-o-shaayari to take interesting potshots at the opposition during budget speeches. Remember this, folks? “Kuch to phool khilaye humne, aur kuch phool khilane hai. Mushkil yeh hai bag me ab tak, kaante kai purane hai.” Ha!

    Just as the NDA was busy meta-reacting to the poor Governor, Mani Shankar Aiyar, much to the delight of the UPA, chose to give his opinion on the issue. He cleverly and deviously converted the metaphor into an allegory to claim that the PM is in fact the one-eyed king of India, causing a kind of an allergetic or allegoristic reaction all across the NDA. The UPA must have, by now, gleefully decided that henceforth, every RBI monetary policy review will be followed by a press release personally crafted by Mani Shankar Aiyar. The RBI, which on normal days issues good monetary guidance, and on special occasions, well, issues good monetary guidance for variety, is really not used to such excitement and adrenalin. Recoiling in complete horror, it is said to be currently debating whether the Indian economy won’t be better off with only one review in every 8 years, rather than 8 reviews in every 1 year.

    In the meanwhile, there was a complete kahaani mein twist as P. Chidambaram, whilst reacting to the nation’s demands about Ishrat Jahaan, chose to declare full and final support to the RBI Governor. Does the excitement never end? The Commerce Minister dished back her criticism, no holds barred. State of the economy, Indian and global, notwithstanding, this has now become a full fledged fight between the Commerce Minister and P. Chidambaram, whereas the RBI Governor, I’m sure, has decided to quit giving speeches for a while and just stick to good old monetary guidance.

    Metaphorically speaking, the entire controversy is also perhaps indicative of the differences in the delivery mechanisms of the fiscal and monetary policies. The fiscal policy is passed as an Act of the Parliament; its tone does not lend itself to interpretation, its clauses have to be spelled out in black and white. The monetary policy in the Indian context, has always treaded that fine line between growth and inflation; in that sense, it has been more interpretative, more guidance oriented. It’s kind of a dĂ©jĂ  vu, that as inflation targeting pushes monetary policy into a more concrete format, the RBI Governor faces ire for having been metaphorical in stating the stance of the Indian economy vis-a-vis the globe.

    It was Alan Greenspan, a Central Banker from another time and another zone who had famously remarked, “I know you think you understand what you thought I said but I’m not sure you realize that what you heard is not what I meant.” The RBI Governor may not have been in concurrence of the expansionary monetary policy that Greenspan unleashed on the US prior to the crisis, but even he will not be able to find a fault line in this particular statement by Greenspan.

  • Budget Humour

    There are so many wisecracks about budgets. World over, budgets have managed to create madness, hysteria, protests, and satire. It is basic to the human mind that no other mind is possibly capable of carefully handling and allocating that joyous commodity, money. Add this sense of insecurity to the Orwellian point of view that all politicians are equal (in their incapability) but some politicians are more equal than the others, and you quintessentially have, what our Parliamentarians fondly call ‘The Budget Session’.

    Budgets are largely an exercise in philosophy; you deliver the numbers only to realise that they are never deliverable and never have been, to begin with. “Deficits satyam, Budget mithya” could well be the Indian take on the issue. Americans, those descendants of immigrants and revolutionaries, have scant regard for things as deep as the Shankara philosophy. Their philosophy about budgets goes about as deep as, errr, a bean bag. It was the inimitable Will Rogers, who in his loud style commented, “The budget is a mythical bean bag. Congress votes mythical beans into it, and then tries to reach in and pull real beans out.”

    American budgets have inspired perhaps the biggest quips and laughs. George W Bush, never quite revered across the globe for his intelligence, much to the delight of his critics, is believed to have said, “Of course it’s a budget. It’s got a lot of numbers in it.” Can’t get more dubiously Dubya than that, eh?

    Greeks, the other race that pride themselves on their philosophical underpinnings, have a different way of looking at budgets and debt burdens. When in trouble, they have a strange Greek way of using wonderful quotes by their forefathers in a most inappropriate fashion. “Speaking the truth and repaying your debts is not a correct definition of justice,” once said Plato. And now says Tsipras, to the great horror of Merkel and Co. It was humour in its blackest form that the Greeks recently passed an ‘austerity’ budget.

    Even the late Sophocles, that great master of tragedy who is believed to create despair even in Heaven, started laughing uncontrollably when he heard about that one. Merkel showed her technical German wit when she primly commented, “Austerity makes it sound evil. I prefer to call it balancing the budget.” Even the British raised their eyebrows in appreciation.

    Because, perhaps the greatest kind of budget humour can only come from the stiff upper lip of Europe, Great Britain. Unwittingly and unknowingly, George Osborne, the finance minister of UK, created complete confusion in Britain when he dared to claim last year in the British parliament, “This will be a budget for working people.” The Brits paused for a minute over their seventy-third cup of tea to exclaim, “I say, what does he mean, working people? We thought they were called Germans!”

    Back home at North Block, the entire team is getting serious about how to get funny. The FM has been braving suggestions on taglines that could scroll on the bottom of the TV screen whilst he would read the budget provisos. Senior advisors have suggested sher-o-shayari, but Ghalib makes you feel depressed, and Iqbal, Congressed. The younger interns are all for filmi taglines.

    Imagine, the FM would declare the fiscal deficit target for FY17 to be 4.2 per cent, markets would tank, only to be assured by the tagline scroll, “Bade bade deshon mein aisi choti choti baatein hoti rehti hain.” Or whilst talking of subsidies, “Hum AAP ke hain kaun.” The FM is hoping for an ‘Airlift’

  • Thought for food: Coco(a) Bonds and Dosa Economics!

    Economics just became a whole lot more edible this week. It all started rather unexpectedly, with a student asking the RBI governor why dosas have become more expensive despite the disinflation phenomenon in India. Pat came the answer.

    It’s not the dosa, stupid. It’s the tawa! It’s the tawa that has retained its price and reluctance to change the tawa technology has cost us, dear. Pun intended. And it doesn’t quite end there, does it? The hand that rocks the cradle, rules the earth. And the hand that rules the ladle, rules the worth.

    Simple! Labour prices have skyrocketed, so much so that they nullify the reductions we get from ingredients. Ahem, not that we are getting too many reductions from those ingredients there. Important to note that the dosa is primarily made from urad dal, after all.

    The statement from the Guv created quite a furore. The RBI has issued a new guideline saying that all future governors should necessarily be good cooks and have to know all ingredients going into major food dishes. The Bhumata Ranragini Brigade is now actively considering marching into the inner sanctum of the RBI saying they always knew that women would make better governors.

    The RBI has launched a new Big Dosa Index to counter the very popular Big Mac Index as the Indian contribution to quick-fix inflation gauges. The CSO, ruffled at being sidelined, cleverly pointed out that since dosas are only sold on retail, the BDI can only be seen to be a quick gauge of CPI movements and is hence, an incomplete index. The RBI reacted sharply by also announcing the creation of a Tawa-Index to understand wholesale price movements.

    Startup India has announced a new VC funding line to whoever gets new technology for creating dosas. It’s expected that support to this line of credit will be declared in the upcoming Budget through the Tawa Hatao, Dosa Bachao Yojana.

    Commercial banks now know what it takes to reduce their NPAs. Risk rating on the over-the-counter food service business units has gone down drastically since they are seen to be the only guys who can continue to charge high and make high profits, no matter what the inflation numbers. The new base rate or PLR will be termed the DLR, the Dosa Lending Rate.

    On a more international front, Deutche Bank made headlines with its coco(a) bonds ratings taking a beating from S&P. “Their standard is very poor,” said an RBI spokesperson. “We always knew that this cocoa business is very risky. Had they listened properly to the Hon Governor, they would have issued Dosa bonds. That is the only way ahead.” The Chinese are also thinking of replacing Dim Sum Bonds, which have in letter and spirit become Dim Sum since the devaluation, with Dosa bonds.

    In the meanwhile, the FM was fairly terrorised when he was asked to host the halwa ceremony. Despite the fact that no student interaction was allowed at all, he made sure that he knew the halwa recipe by heart before meeting the media. For good measure, he also learnt the prices of rawa, sugar and ghee, all by heart.

    Rumour is that after getting to know the phenomenal prices of ghee and dry fruits, he wants to create a halwa cess to fund such colossal expense programmes. It is estimated that this single move will move the fiscal deficit from 3.9 per cent to the magic number 3.6 per cent. The RBI governor is happy. Dosas sure work!

  • A brief history of the Greek crisis: A ppt format

    Hi All,

    I have been talking about the issues involved in the Greek public debt crisis at various fora and this is a baseline ppt I had prepared for my talks. A lot of the material on this presentation is collated from different sites and articles that I’ve been reading whilst preparing; the ppt is of value primarily to students or researchers looking for a quick reference on the crisis. The presentation covers main issues upto 15th July 2015.

    There is a lot of action that happens around this ppt when I support it with the talk, so in that sense, a new reader may find some gaps in it. If you want to know more about a particular issue, just write in and I’ll try to send you some material around it. Here it is..

    A brief History of Greece Crisis

    These are the main themes covered in the presentation:

    1. History on the formation of the European common market

    2. Maastricht treaty entry level criteria and movement towards convergence

    3. Problems associated with the Maastricht: Connection to Greece

    4. Euro launch in 1999

    5. Why Greece wanted to enter the Euro: Benefits from having a common currency

    6. Change in the growth profile of Greece post-entry

    7. How the yield spreads, fiscal deficits, CAD and other indicators for Greece moved pre and post entry

    8. Tipping point for the crisis in 2009

    9. Reaction of core group in the EU

    10. Bailout by the Troika

    11. Greek elections and effects of Tsipras coming into power

    12. Suspension of bailout and near-collapse of Greek banks

    13. The crazy referendum held on July 5th

    14. Why Tsipras HAD to accept bailout

    15. The new bailout terms by IMF, EU and ECB

    Hope you enjoy this study material!

  • Hard targets

    The Finance Minister is a worried man. It’s Budget time after all. The top season for unreasonable demands has just begun at the ministry.

    On hearing that the FM met with the “captains” of the Indian industry, Mr Bedi alleged that this kind of a “cricket huddle” should not be allowed in the budgeting process. After all, the Finance Ministry is the Deep Deficit Cutting Association aka DDCA. With personal blessings from AAP, he has asked that the FM step down from this DDCA as well.

    But the muffler has more to demand from the business suit. “Why is the FM suddenly backtracking on the fiscal consolidation path for the year 2016-17? We are against this. We are basically against everything that the government does. Book the Jantar Mantar for a Dharna! Be fiscally prudent, keep deficits in check. And be physically prudent, wear a muffler in Delhi.”

    “Hmph! Prudent or not, he is definitely impudent,” is what the FM was thinking. But then not for nothing is our FM known for keeping his temper in the most trying of circumstances. The good man sent an entire team from Delhi School of Economics to the AAP office to teach them the basic Keynesian model. “When the private investments won’t pick up, the Government spending has to spur the system. Hence, we may have to go soft on fiscal targets next year, so that growth can be on track.” AAP reacted by sending leftists from JNU to the Finance Ministry, causing a nervous breakdown amongst the younger, innocent economists at the Ministry.

    In a wild attempt to get some economic sense going, the FM gave personal assurances to AAP that fiscal targets will only be softened for those financial years ending in odd numbers. Thus, we will stick to the FY16 target of 3.9 per cent like a leech, but we go soft in FY17. AAP has finally okayed the proposal.

    The NCP in the meanwhile, believes that it has a master solution for the entire macroeconomic framework. It has asked that tax exemptions be given for not only buying the second home, but also the third, fourth and fifth properties. The moment you give these exemptions, people will start buying properties. Voila! Construction will begin anew and all problems concerning low private investment levels will disappear. Not only that, but as this huge inventory of unsold houses reduces, the banking system will also become robust. This is good fiscal and monetary policy, all rolled into one. Dr Rajan, who shuddered after receiving such out-of-the-bank ideas, has said curtly that there is no need for the NCP to get worried about banks.

    The UPA scion, fresh from the Europe sojourn, insists that the Indian states are like the European Union. “I know what needs to be done in the Budget! We need to have a common market and a common currency!” On being informed that we already do (just pass the GST!), the UPA has declared that all brand new ideas pertaining to Europeanising Indian markets will only be discussed on the Arnab Goswami show. Rumour is that Mr Goswami has gone into hiding and will only be seen post-Budget.

    The PM has suggested from a remote location in Antarctica, that the FM incorporate a “Lambi Udaan, Sasti Udaan” Yojana to give a boost to the airline industry. Subsidies could be declared for frequent fliers.

    The poor FM is left wondering how to handle flights of fancy.

     

  • A new Parliament building, please!

    Shah Jahan constructed the Taj Mahal at Agra. Sumitra Mahajan wants a new Sansad Mahal at New Delhi. If the former was an ode to love, justification for the latter is as techno-legal as it gets, ranging from the stiffly legal references of Article 81 to creating technological capacities. Such Parliamentary fervour after such amazing sessions! Really, they quite deceive us, our Sansad members.

    Why a new building?

    Top reason is Arvind Subramaniam. It’s he who has created this Shah Jahan-minus-the-love aka Keynesian furore in our to-hell-with-growth Parliamentarians. The man claims that the growth forecast stands revised downwards from 8.1% to 7.3%. So let’s make it in India and get the growth rate moving. After visiting nearly all countries that make anything at all, we’ve realized that no one wants to really make much to begin with (it’s a global slowdown, stupid!) and if at all they do, they certainly won’t make it in India.

    So let the Government spend some more. On what, is the golden question. Spend too much, and those firangi buggers at Moody’s will give us a downgrade. Spend too little, and Arvind threatens to release a new document with 7.0% growth. Do nothing and the Opposition will disrupt the Budget session. It’s quite a tricky little question.

    Hmmm. So here’s the answer. Spend on a project that gets the multipliers working, so that Arvind is happy. Spend on a project that has the capacity to raise its own revenue source, and Moody’s will be happy. Spend on a project that will be used by the Opposition as well, and keep them at bay.

    Hurrah! It’s the Parliament! Getting that going will create huge demand for steel and cement and construction material. Welcome, employment. This will push private investments as well, creating the impetus for growth. That takes care of the CEA. Next, impose a Sansad Bachao, Sansad Banao cess. What we really need is Sansad Padhao, but that’s another matter altogether. Surely Moody’s cannot get upset about such a deficit neutral project. What’s more, voters absolutely cannot resist Hindi-named taxes. Hehehe!

    As far as the Opposition is concerned, this project takes the cake. They’ll not only support it, but positively beam and urge the Government to spend more. The only condition is that we use Italian marble in the construction. Why, they may even behave themselves in the Budget session and finally pass the GST. Yeah, that the Government may have to re-name it the Great Sansad Tax is another matter altogether.

    Apart from the terrific economic benefits of the move, there are also those other, rather important issues that justify the new building. Ms. Mahajan claims that the current building is under “stress”. Being a mute witness to such high-on-adrenalin chair-upturning and yelling sessions does that to the strongest of stones.

    Making the new premises technologically capable will make the Parliament a paperless organization. That is truly a masterstroke and will end all possibilities of the Opposition flinging paper balls to disrupt the session. Wish they would make it pepper-free as well. Let’s put nation building on hold. First, the Parliament building, please.

  • Econ Mom as the Finance Commission, Hubby as the Planning Commission

    The topic of pocket money has suddenly become fairly hot in the Phadke household. I am frankly, not too sold out about it. Whenever Lil One needs funds (normally Rs. 10 to buy Lays), I give it to him and that pretty much is that. Since I am the single window for fund disbursal, I have an automatic tab on the frequency with which he eats Lays/ chocolates/ ice-creams. And hold on. I am NOT a control freak. I am just
mom.

    However, some parent in Lil One’s classroom has started giving pocket money and the trend has caught on. And (and this is REALLY important), Greg, the wimpy kid (groan!), apparently gets “mom bucks” too. Sigh! Don’t know why I am so proud of being mom to a reading kid. I sometimes pine for those non-reading, non-argumentative types.

    So, apparently, all kids in the class are currently divided into those with the funds and those without. Lil One has been increasingly vocal about “always” being part of the have-nots and the deep image beating he’s taking at school.

    “But you always get the money when you want it!” I tried to reason.

    “Yes, but since my friends get pocket money, they don’t have to ask their mom every time they buy wafers. I have to. Also, many of them save their money and then they are going to put those savings into a bank account.”

    Hmm. I raised my eyebrows at Hubby, who gave a tiny thumbs up from the other end of the room. “Ok, but it’s only Rs.10 a week. And it’ll be given weekly. No advance (Lil One didn’t really understand this bit but it sounded superbly official and he nodded, impressed with my financial intuition). And you have to do a small chore for me every week to earn your money.” Lil One was digesting this new information as well as the new official avatar of mommy, when Hubby piped in with a wink, “And if she is really being stingy, I’ll try to chip in. Ok? Umm
additional Rs.10 from my end occasionally if you are good! Of course, with mommy’s permission.”

    “Yaay!”yelled Lil One and rushed downstairs to inform all about finally having joined the elite “haves” club.

    Though I really smiled at that typical last sweet offer by Hubby, Econ Mom was uncomfortable. “Occasionally, if you are good” is BAD news. Period.

    Being fond of economics as well as politics, Econ Mom is kind of passionate about the fiscal federalism structure in India as governed by officially the Finance Commission, and over a period of time, also by the Planning Commission.

    The Finance Commission was set up by an act of the Constitution; the makers of our Constitution were acutely aware that States would need more funds for their development whereas their control over revenue sources, such as taxes, was typically restricted. Hence, the Finance Commission was to be set up by the President, every 5 years, to decide how much of the pool of the Central taxes could be shared with the states. The Finance Commissions have always worked out a formula based devolution of taxes; this year the Fourteenth Finance Commission (FFC) increased the States’ share in the Central tax pool from 32% to 42%. (You can read more about this in an earlier blog of mine dedicated to the FFC.)

    However, the (erstwhile) Planning Commission was just an arm of the Government and not really a constitutional authority. It was set up as an independent think tank to drive planning goals for the development of the country. Nowhere do its guidelines mention disbursal of funds to drive the plans as a part of its objectives.

    However, as the history of our Center-State relations goes, the Planning Commission also became an authority to sanction “Plan Support” to State Governments in accordance with the Plan objectives or schemes mentioned in their Economic Surveys. Now, the disbursals by the Planning Commission are not really in accordance with any formula; rather, they were need-based and hence, often found to be driven politically rather than economically.

    If one examines the trends in the disbursals of the Finance Commissions, one finds that they are often progressive in nature; poorer states get a bigger share of the Central pool of taxes. However, the same cannot be said of the disbursals by the Planning Commission; in fact casual observation of the data suggests to me that more funds are normally given in Plan Support to those State Governments which are aligned to the National Government.

    Dissolving the Planning Commission and setting up of the NITI took the country by political storm with plenty of observers interpreting the event to be a mistrust of Nehruvian institutions by the NDA. And whilst that may be true (I don’t really have a comment on that), the fact is that unless the Commission stood completely dissolved, it would have been very difficult to get it back to the format it was originally designed for. A think tank. Not an additional fund-tank.

    It was a good move and frankly, the only move to solve the issue. Fund disbursal has to be rule-driven. Only then is it possible to drive sound economic outcomes in a transparent manner.

    Lil One came rushing home. “Mom, I’m so, so, so thrilled about you giving me pocket money. Thank you!”

    “You’re welcome, honey. But..”

    “Don’t tell me you are cancelling it. You said yes! And you were convinced!”

    “Of course I am going to give you your pocket money. It’s just that I’m not okay with Dad giving you that additional bit.”

    “Oh! That’s fine with me, Mom. I don’t really need that additional bit.”

    And so that’s that. Hubby is now NITI, whereas I continue with being the Finance Commission.

  • Delhi traffic: At odds and evens

    Dunno if Delhi’s pollution will be controlled. But Delhi’s GDP is definitely set to go up as the Government will only allow even-and-odd numbered cars on alternate days. The multiplier effect will now explode, thereby creating jobs, employment, growth, and more number of cars for the Aam Admi, and a seriously good chance of getting re-elected for the Aam Admi Party. Ms. Sheila Dixit is ruing how she missed this bus, errrr, this passenger car.

    Just look at the numbers. There are 260 lakh passenger cars registered in Delhi as of March 2015. In 2014-15, Delhiites added 1.8 lakh cars to their already enviable and unviable kitty. At least 15000 of these must have been bought by those on whom P. Chidambaram wistfully dreamt of levying the super rich tax. At least 3000 of these will now make a beeline to the nearest Audi/ BMW/ Mercedes-Benz showroom, trying to buy a car which hosts that super number so that one can manage to reach the workplace even at odd times. Another 2000 may settle for an odd City or even a Jetta. Car makers are rubbing their hands in glee at the prospect.

    Those not having the budgets or the parking spaces to buy a new car need not despair. A new range of services are being offered by roadside repair shops, which will now sell instant plate-change offerings. Due to heavy demand, the price of getting another number plate done has increased from Rs.1000 to Rs.5000. The casts and moulds industry is experiencing heavy demand to fabricate such insta-change car accessories.

    Patanjali is thinking of seriously getting into the segment. The idea is that the one should be able to change the Patanjali number-plate in the 2 minutes in which the Patanjali noodles get cooked. Later, wash the hands with Patanjali soap and you are as good as new.

    The demand for new cars and accessories will thus act as the ultimate growth driver, pushing Delhi’s growth rate to an unbelievable 20%. And that’s not all. For every new car manufactured, 7 more people get employed. All those poor crooks who used to surreptitiously paint cars and number plates after robberies will now get to legitimize their skilful profiles. Such a surge in employment was not seen in Delhi even during the good old days of the Commonwealth Games.

    In all the merriment that ensued in the corridors after such cheerful thoughts, there came a more sobering, practical problem. How in the world will the Delhi Police, who stand steadfast in their duty at the traffic signal, read the number plates of those cars that zip through happily at 95 kmph? Visibility tests startlingly revealed that one can only read the numbers if the car passes at a more sedate pace of 25 kmph. Hence, in addition to the earlier even and odd guideline, the Delhi Government is now in the process of issuing a speed limit guideline as well. The number of cars will be halved and the time taken to office will be doubled.

    Schools are thrilled to bits with the new pedagogy with which to make Maths more interesting. They have appealed to the Delhi Government to also have days when only composite or prime numbers will be allowed. One school has raised an RTI against the RTO demanding an explanation as to why number plates cannot be issued in all rational numbers on the number line and why only positive integers have been allowed so far. A case for fractions is also being fought. A divisive number game on irrational traffic integration. It’s the limit!

  • Cop out at COP 21!

    Scene again opens in the Opposition Neta’s office, where Netaji is reading the newspaper and is confused with all the reports on Paris.

    Netaji: Tell me Guptaji, what is this COP 21? Even in the High Command office, they were all discussing this cop. What is the COP 21? It sounds like a new movie with Salman Khan in a cop avatar strong enough to beat 21 gundas.

    Clever Guptaji (startled): Sir! COP 21 is not a movie, Sir! It is an acronym for the 21st Conference of Parties. It is an annual forum where countries come together to debate and discuss climate change issues. It was held at Paris, Sir. Developed countries were worried as to how India would play her climate change card, especially with our PM keen on attending. But our team has made quite an impact and held their own in discussion with bureaucrats and technocrats and ministers from 193 countries.

    Netaji (disapproving): What! I am not impressed. I don’t like all these new-fangled approaches to politics, Guptaji. Discussing such deep, internal problems with Obama and hobnobbing with that Putin. Now tell me, why should we discuss our climate with other countries? No, no. We should have never attended this event.

    Clever Guptaji (startled): But Sir, this is an issue that we cannot resolve single-handedly. All countries will have to come together to take a position on climate change. We really have damaged the atmosphere badly.

    Netaji (chewing nonchalantly on his paan): I think everyone is now over-doing it, Guptaji. It is not the first time we are facing such a climate of mistrust and suspicion in India. Why, when we were in power, there was not a single day anyone trusted us on anything. This AAP created such trouble for us, I tell you. But did we tell the globe to assemble in Paris? Never. And just look at this Government. And the newspapers are saying we also made some commitment on power?

    Clever Guptaji (stuttering): Oh Sir, you are totally misunderstanding the issue.

    Netaji (loudly): QUIET! Just tell me what this power commitment is all about.

    Clever Guptaji: Well Sir, our stance is that India will change the way power is used, but developed countries have to lead the way in this commitment.

    Netaji (irritated): Hmph! Quite in the ivory tower we are, aren’t we, Guptaji? Change the way India uses power indeed! What a joke! Nothing can move in this country if we change the way power is used. We politicians have ensured that completely! If the Government wants more growth and development, they will need more and more power. Just to Make in India, they will need more power. Do you think any investment can be driven without power? And if they want to pass the GST, they’ll definitely need more power. Hee hee hee. Especially post-Bihar. And in the Rajya Sabha.

    Clever Guptaji (now completely horrified): We are talking about power, as in coal, Sir. Coal is bad for the atmosphere.

    Netaji (indignantly): First they said coalition was bad, now they are saying coal is bad. First they wanted power, now they don’t want to use power. In India they want more action on GST. And outside, they want more action on GHG. What a misleading Government, Guptaji!

    Clever Guptaji (exasperated): They should have sent you to Paris, Sir. Then, India could have really displayed a real COP out on commitments!