"Message to Sonia: reform or perish:"

 

The Indian Express:
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12/05/2013

 

Message to Sonia: reform or perish:

Surjit S Bhalla :
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Sat Mar 30 2013, 03:15 hrs

 

This is the second, and final, part of an evaluation of 15 years of Sonia Gandhi's leadership of the Congress party. The first part appeared last week ('Evaluating Sonia, the black box leader', IE, March 23) and dealt with the political aspects — this article deals with her economic leadership.
As we all know, an economic disaster has struck India for the last three years. A halving of GDP growth, a doubling of inflation rates, a 20 per cent depreciation of the rupee, and record current account deficits (latest, 6.7 per cent of GDP) are reflective of the deep rot the Indian economy is in.

The economy numbers are exceptionally bad and worse than most other countries. What, or who, is responsible for making the impossible possible? For sure, it is the Congress-led UPA government. But who within the Congress party? On economic issues, most fingers will point towards the prime minister, Manmohan Singh, an economist of international repute, and joint father of the economic reforms introduced under the leadership of non-Nehru-Gandhi Congressman Narasimha Rao in 1991. But this would be wrong.

For too long we have been made to believe that, within the UPA, the political decisions were made by Sonia and the economic decisions by Singh. This was the UPA's contribution to an "Indian" model of governance! Thankfully, and at long last, a major Congress leader, Digvijaya Singh, has exposed this myth. In a recent interview, he stated, "Personally, I feel this model hasn't worked very well. Because, I personally feel there should not be two power centres and I think whoever is the PM must have the authority to function." So we needn't indulge in shadowboxing any more — Sonia's own senior party officials (Digvijaya is also a mentor to Sonia's son, Rahul Gandhi) admit that all decisions, political and economic, have Sonia Gandhi's authoritative (authoritarian?) stamp.

In addition, there is substantial evidence that the economic decisions made by the UPA couldn't possibly have been made by an economist, let alone an economist of as much repute as Manmohan Singh. As an economist qua economist, he recognised, more than 50 years ago, the role that exchange rates played in generating exports, and did so when the fashion in India, and most of the world, was one of export pessimism. As an economic policymaker, he was the finance minister who helped initiate, and implement, the largest change in mindset reforms India has ever seen.

I have challenged, in every forum possible, whether in the last nine years of UPA rule there has been a single positive economic policy that the UPA has initiated. The answer is No; the "best" answer received is that UPA 1, and definitely not UPA 2, did no harm. It is logically not possible that the UPA's economic policies have any relationship to Manmohan Singh, the economist. If they do, then I am a Bharat Natyam dancer. So let's stop the charade — Sonia has been, and is, the boss on both economic and political policies of UPA 1 and 2.

Actually, Sonia's economic policies have their origin in the creation of the Congress in 1885. It was founded by members of the occultist movement "Theosophical Society". What does occultism mean? Occult comes from the Latin word "occultus" which means "clandestine, hidden, secret". According to Wikipedia, occultrefers to "knowledge of the paranormal as opposed to knowledge of science. for most practising occultists it is simply the study of a deeper spiritual reality that extends beyond pure reason" (emphasis added).

It is impossible to better describe Sonia's economic policies. Only something that defies pure reason would have led Sonia to promulgate policies meant to help the poor but which ended by hurting them massively instead. Sonia UPA's alchemy raised procurement prices of foodgrains beyond reason, helped a few rich farmers (say 20 million) and massively hurt ten times as many landless agricultural workers. And by generating super-inflation for four years, transformed the Indian economy beyond recognition.

Or take Sonia's self-advertised policy of providing employment to the poorest of the poor — the MGNREGA programme of providing backbreaking work employment to the poorest of the poor. To date, about Rs 1,70,000 crore has been spent on this occult programme. According to the detailed NSS 2009-10 data, the poor received only a fifth of this money as wages. Which means that about Rs 1,40,000 crore went to the non-poor. This is not economics, not even occult economics, nor even voodoo economics. This is alchemy economics a la Sonia.

A defining characteristic of this beyond-reason Sonianomics is "in your face populism". The huge fiscal deficits run by her government are near universally acknowledged (near because not acknowledged by the alchemists within the party) as responsible for the destruction of the Indian economy. So what does the latest UPA budget for 2013-14 do? It plans for 13 per cent GDP growth, 16 per cent higher expenditure growth, financed by 19 per cent tax revenue growth! This is meant to bring sanity into the fiscal deficit sphere?! Heard a better definition of occultism lately? Or take the announcement that the DMK is leaving the UPA. Sonia's Titanic response — have the cabinet pass her second favourite occult policy, the Food Security Bill.

A summary sequential view of Sonianomics is as follows. First, the policies have to be do-gooder in nature. Second, they have to have heavy state involvement. The first two are necessary and sufficient to achieve the third objective — encouragement of corruption.

More corruption charges have been levelled against Sonia's government than any in Indian history. Her late husband, Rajiv Gandhi, lost the elections in 1989 (after obtaining three-fourths of the seats in 1984) in large part because of his alleged association with the Bofors gun scam. The alleged bribe paid for that contract, Rs 64 crore, or $40 million at the then exchange rates. Even a conservative assessment of the cumulative corruption associated with Sonia's mistaken, misguided, and misapplied flagship MGNREGA job scheme — her universally acknowledged baby — is at least half of the Rs 1,40,000 crore estimated above. That is $14 billion, or an amount equivalent to 350 times the Bofors amount. Note that this is corruption in MGNREGA alone. Coal, telecom, foodgrains policy — the list is just as endless as the decline in India's fortunes.

So what is to be done, or what can Sonia Gandhi do to reverse hers and India's misfortune? She can start changing her occult spots — now — so that, by the time of the elections, the economy, and the poor, recover somewhat from the depths.

Or she can observe the wheels of history. Recall that Annie Besant became president of the Congress party in 1917. If Sonia Gandhi does not change, then she risks the following obituary of the party she heads: "It took a white, European, socialist, woman to help create the Congress party — and it has taken a white, European, socialist, woman to destroy it more than a hundred years later."

The writer is chairman of Oxus Investments, an emerging market advisory firm, and a senior advisor to Blufin, a leading financial information company