There is nothing new to laud or critique in Prime Minister Narendra Modi’s latest address except that the taxpayers of the country must thank him for expressing gratitude towards them. Governments, including the current prime minister in many public rallies, have always claimed they ‘give’ rather than admit they relay money from one section of the population to another. Keep aside the marginal improvement of the money not getting lost in transmission due to DBT, this government appears incapable of thinking beyond subsistence financing for the poor. The validity of a ration card for an individual across the country is a good step, necessitated by the situation the migrant worker crisis threw up. Now the poor wouldn’t be hassled, applying for a fresh card wherever he goes. But PDS, after all, remains a support system and this measure does not transform it into a booster. The sixth address to the nation by Prime Minister Modi should have covered aspects that his exhortations to bang utensils and illuminate lamps had missed. Not spelling out India’s China policy is not a failure, though — a military strategy or even a punitive economic policy against a hostile country should not be available in the public domain before its complete execution.
Importantly, taxpayers do not protest against sharing a part of their legitimate, hard-earned income. It’s because they want to help the poor — not by means of handing them cash but by way of providing them with enabling education and healthcare. If India had a system of referendums, or if either house of the country’s bicameral legislature were to function as the US Congress, union and state governments alike would struggle to get the sanction for the impression of ‘benevolence’ a prime or chief minister wishes to create with every announcement of a welfare scheme. Tax is supposed to fund the making of public schools and hospitals, roads and bridges, canals and a host of other infrastructural projects. It is not meant to be taken from Paul to pay Peter directly, which is what Modi is doing now. And yet the condition of Peter refuses to improve. It won’t ever; for when the money to sustain is exhausted, a poor man is poor all over again, and the better-off are psyched that Modi will approach them, seeking more, all over again.
By this yardstick, the package of Rs 20 lakh crore that Modi had announced last month was more significant. The welfare part in it apart, the rest could be broadly categorised as easy loans. If it did not enthuse the industry, it is because this government does not touch one of the three aspects of governance with a barge pole: administration. Out of the other two essentials, police and judiciary, Arun Jaitley had tried as much as he could. If the NJAC failed, the Insolvency and Bankruptcy Code succeeded — as did the effort to reduce litigation in businesses. But nothing disturbs the managements of companies more than the red tape and inspector raj, the shadow of which looms large on every private office. The downsizing, restructuring and fresh training of the bureaucracy are needed not only at the central level but also in the administrations of states, municipal corporations and panchayats. The contention of Modi that he can make the very system which failed the people under decades of INC rule work is myopic. It’s not a permanent, irreversible change and, even within the healthy practice of accountability now, we can see unaddressed issues like unprofessionally drafted affidavits filed by the governments in courts or inter-governmental rigmarole affecting projects. There are also aggravated problems like the overbearing taxman the Indian businessman is now mortally scared of.
The UPA regime had realised towards its final years that welfare was sustainable only when it rode on good revenue collection which, in turn, would happen when companies would earn happily and pay taxes readily. If then Prime Minister Manmohan Singh had to plead with UPA chairperson Sonia Gandhi that there was no option but to open the retail sector to FDI, for existing businesses were not paying the state enough, the idea did not work because markets function as per the mood of the government in the mixed economy that India has, and the overall mood of governance in those 10 years was socialistic. It was why Buddhadeb Bhattacharjee could not make Bengal turn around. It was why Akhilesh Yadav could not transform Uttar Pradesh. One fine morning when the head of the government issues an appeal, ‘Change now!’ people refuse to change; the market refuses to change and, hence, the state of the poor refuses to change. Harping on his already established pro-garib ādmi credentials on the one hand and the importance of tax on the other does not create the right mood of investment, business, employment and the consequent greater incomes and better living standards of the people — Modi should have realised in the past six years in which growth of the GDP has been sluggish in four. Wealth distribution is not wealth generation. Once the world is through with the coronavirus-necessitated lockdown, the wealth that could be generated in India will be generated in ASEAN countries. The difference in corporate taxes of the two investment destinations may have vanished, that in the size and clout of the state has not. The difference between an Indian’s love for the status quo and the ambition of a citizen of Vietnam, where investments withdrawn from China are rushing to, has not.