Sucheta Dalal :Either govern or just go (1 April 2001)
Sucheta Dalal

Click here for FREE MEMBERSHIP to Moneylife Foundation which entitles you to:
• Access to information on investment issues

• Invitations to attend free workshops on financial literacy
• Grievance redressal


You are here: Home » Column Topics » Indian Express - Cheques & Balances » Either govern or just go (1 April 2001)
                       Previous           Next

Either govern or just go (1 April 2001)  


Leaders of BJP themselves have now turned on Finance Minister Yashwant Sinha and blamed his Budget for the party’s ignominious losses in the Delhi municipal elections. Predictably, Sinha’s reaction will be to repeat that it is not his duty to make us feel good. But then he can hardly boast about his management of the finances either, can he?

The blame game is irrelevant, it is just a way of avoiding serious introspection about the continuous loss of public support to the government. But finding a ready scapegoat allows the ruling party to remain oblivious to people’s disillusionment.

Sinha’s Budget has led to unprecedented anger among the wide swathe of middle class and working people, which extends from my hard-working maid to those who earn a multiple of my income and extending to senior citizens living on their post-retirement savings. It has also infuriated businessmen who have been the BJP’s main support base.

At the same time, the orgy of violence in Gujarat has raised the spectre of a saffron taliban whose bearded bigoted gurus spread the message of hate through their regressive view of Hinduism. This can only destroy the economy and reduce us to a backward, poverty stricken rubble like Afghanistan.

It is probably this realisation that is forcing otherwise circumspect businessmen like Deepak Parekh to finally speak out. ‘If they (the government) cannot protect innocent lives, then they should go,’ Parekh, chairman of HDFC had told this newspaper.

A little earlier, it was an anguished Wipro’s chairman Aziz Premji, who pleaded for peace at a convocation ceremony at Ahmedabad. Another leading industrialist, until recently an open supporter of the BJP admits that the BJP has been a failure on all fronts. Others are rather more discreet but feel much the same.

What these people are agitated about is that the wanton destruction of lives and property is only aggravated by the government’s utter disregard for public accountability and governance.

Every new crisis, social or economic, has found the BJP administration wanting. It has simply fudged issues and carried on in the belief that the people neither understood nor cared.

Well, we have bad news for you Mr Prime Minister. Nobody is fooled anymore, not even your diehard supporters. Right from the first time that it sniffed power, the BJP’s leadership has been marked by unabashed brazenness.

The renewal of the sovereign guarantee to Enron’s extremely controversial Dabhol Power project during the dying minutes of its 13-day regime was the starting point. And it has been downhill ever since. The people’s only mistake was in believing that the guarantee issue was an aberration and that sheer self-interest and survival needs would force the BJP to pursue economic reforms and improve public accountability.

This disregard for public opinion has only increased in the last couple of years, even as the country lurched from one financial problem to another and people’s hard earned savings dwindled. Yet, each new issue was dealt with in a cavalier manner.

When big stock bubble of 2000 went bust, a Joint Parliamentary Committee was cynically put together to achieve the least results. In the meanwhile, all disciplinary action related to the scam is at a standstill.

There is no attempt to recover ill-gotten wealth or to punish industrialists who colluded with Ketan Parekh in diverting bank funds to the stock market and fuel a fake bull run. The only actions in connection with scam 2000 are two inconsequential chargesheets.

One is against UTI’s former chairman and top brass, for a measly Rs 24 crore that it invested in Cyberspace Infosys. As against this the second bailout of various UTI schemes cost the exchequer over Rs 5,000 crore in the next couple of years alone. Yet, action against the former chairman P. Subramanyam depends on the outcome of a ponderous investigation.

As for Sebi, it says that no further disciplinary action is contemplated by it until the JPC finally decides who to indict for the scam.

Ironically, Ketan Parekh, the central figure of the scam is calmly hitting Mumbai’s nightspots, while negotiating a settlement of the second scam case filed against him by Bank of India.

As for the Madhavpura Cooperative Bank which went bankrupt by flouting all lending norms to funnel several hundred crores of rupees to Ketan Parekh; it was bailed out by none other than the powerful Home Minister L.K. Advani, that too against the wishes of RBI.

That Ketan Parekh has failed to fulfil his bail condition of a staggered repayment to MMCB has made no difference to him. Isn’t it a shame that the Home Minister’s arm-twisting tactics work in bailing out Madhavpura’s depositors but not in curbing the lunatic violence in Gujarat or disciplining its Chief Minister Narendra Modi.

Then comes the harsh Budget and the need to expand the tax base. A CAG report published by this paper has exposed the lack of seriousness by showing that over 80 per cent of hospitals and dispensaries in the metros do not even file income-tax returns.

Without a database of beauty parlours and fitness centres, its attempts to recover service charges from these will be just as ineffective. But what can one expect from a Budget when the Revenue Secretary is expecting transfer orders everyday, the post of Finance Secretary is kept vacant and the stand-in for Economic Advisor is forever resigning.

They had not the time to even assimilate what the Venu Reddy report said about eliminating tax shelters on long-term savings. And so the saga continues. Economic reforms have stagnated, and the disinvestment process has accelerated only after Arun Shourie took charge of the ministry.

A tough sounding Power Minister gives away Rs 45,000 crore worth of tax-free bonds to State Electricity Boards in a one-time settlement of their dues, but nobody would bet that it would end their unsustainable subsidies or losses. The cost of this bailout too could well be paid by the people sometime in future.

Is it any wonder then that most people are beginning to echo and amplify what Deepak Parekh said—if the government cannot govern or maintain peace, it simply must go.

-- Sucheta Dalal