On Chacha's Grand Delusion

A news report today says that Chacha Manmohan S Gandhi believes that his “first task is to restore growth.” He adds that “we have to protect our growth.”

This makes it seem that there is some magic wand at the PM’s command by which economic growth can be “restored” and “protected.” This is a delusion. Chacha is deluding himself. And he is also deluding the nation.

In reality, the only way by which economic growth can transpire is if The State gets out of the way of enterprise.

Rukawatein Hatao, Gareebi Apnay Aap Hutt Jayegi.

Remove all the obstacles; poverty will vanish on its own.

These are the obstacles of the customs, excise, police etc. These departments of the government are like thorns planted on the path of every entrepreneur. It is these thorns that have to be removed. Pronto. There is nothing else that the PM needs to do to restore and protect economic growth.

Examine the scenario:

If customs barriers are removed, foreign trade would be free, there would be increased commerce, and growth would rise.

If excise and police barriers were removed, restaurants, bars and the nightlife industry would boom. There would be casinos. I would open a hash café.

Similarly, if the government’s barrier to FDI in the retail industry was removed, capital would flow in, supermarkets would erupt, adding to real estate and construction activity.

In other words, economic growth can only occur if the economy is free.

Chacha has a different ideology. According to him, economic growth is a State Subject.

Yet, 100 ministers in New Delhi, supported by planners and assorted baboos, cannot do anything more than spend tax revenues. All this is money other people have earned – the hard way. It is these other people who have to be freed, so that they can continue to generate growth.

Liberty Under Law – that is what we need.

Free trade, free markets, economic freedom – these alone can make the nation grow.

The State is just a massive hindrance. It is also a destroyer of wealth, an agent of “capital consumption.”

Economic growth depends on markets and entrepreneurs. Chacha is batting for the wrong side.