On The Rule Of Incompetents

Professor Arvind Panagariya has just written of the “fall of the holy trinity” – how the dream team comprising Manmohan, Montek and Chidambaram has failed India, the Indian people and the Indian economy.

Talk about their total failure is now quite rampant: here is an ET editorial of today on how the government’s borrowing program is going to backfire. The editorial notes:

“Government’s failure to manage its finances prudently, despite the golden opportunity presented by booming revenues in the first four years of UPA rule, is going to cost us dear.”

Niranjan Rajadhyaksha’s latest column in Mint focuses on the bond market, which he says has “spooked.” He writes:

“The Indian economic policy debate is at a dangerous crossroads. Fiscal caution has already been thrown to the winds—and there is now a growing clamour for equally irresponsible monetary policy. The total government deficit is now close to the levels that pushed us into a full-blown macroeconomic crisis in 1991.”

He concludes:

“The problem here is that an unacceptably large fiscal deficit has spooked the bond markets and will most likely crowd out private sector borrowing when the economy recovers.”

In simple terms: Our The State is Broke. If they try and borrow money, interest rates rise. If they engage in printing money, this will spark off inflation and further financial instability. Yet, they have announced a skew of spending programmes, more giveaways, and more freebies – all with money they do not have.

And they don’t have the money to build roads.

The conclusion is stark: The “holy trinity” of Manmohan, Montek and Chidambaram have let the nation down.

There are three aspects of economic science that anyone senior in government must be conversant with: the first is economic theory – and theirs sucks real bad. The second is economic policy – and theirs sucks real bad once again. And the third is public finance – and here they suck real bad a third time. Looks like ignorance rules the land.

India is being mismanaged. These “experts” at the helm have just been ciphers and yes-men. They have not stood up for any principles. They have muddled along – and now the economy is exactly where it was in 1991.

What really gets my goat, considering the mess the nation is in, is paying taxes to these morons to fritter away on petty politics. The other day we had a splendid meal at a restaurant in Panjim. The bill was a modest 160 rupees, VAT was about 20 rupees, and the waiter was tipped 10 rupees. I concluded that the owner of the restaurant probably made a profit of 20 rupees. For this he had to work real hard, supervising every aspect of the restaurant’s functioning. The waiter also works hard to get tipped. But our The State collects 20 rupees, double the hard-working waiter’s share, for doing precisely nothing. All these taxes are spent in Kashmir, on the NREGA, the wasteful fertilizer and food subsidies, and on other freebies for the poor – which, of course, never reach the poor.

The conclusion: The destiny of 1 billion people in is the hands of incompetents.