What do we elect?

Michael Ignatieff is perhaps the only politician who’s written a memoir on his failure as one. And that makes the book worth reading. As a Historian with a penchant for popular media, he was parachuted into Canadian politics by his own admission. Of course, he lost badly and returned to teaching. But what interests the lay reader is his description of campaigning and its effect on the person who’s leading the campaign. He describes in amusing detail, and with a degree of honesty rare for a politician, how he thought everything was going swimmingly well in the run up to the elections; because his campaign events were all in friendly territory and he ended up believing the bubble his own party had created. It was very reminiscent and somewhat analogous to safe seats and size estimation of rallies in Indian elections.

What’s striking about the entire edifice of politics in Ignatieff’s telling is, how convinced the participants are in their own ability to do good. And how much their actual success is attributable to dumb luck. Much like professional athletes who get more lucky as they practice harder, politicians seem to find serendipity more often when they are deluded ever further. One realises, the political lexicon has a short hand name even for this kind: a conviction Politician. Such a politician will always be a bit of a demagogue. After all, the skill that requires one to be a conviction politician is also what defines demagoguery: to feel a decision in the gut, not arrive at it.

The import of that to the Indian context is: this politician’s ability to flout propriety or law or both is far higher. A dangerous combination of ability and conviction in one’s own importance to the larger good is what possibly contributes to all other lesser goods being sacrificed. It is for instance hard to find an OECD country with a Parliamentary system that has a Prime Ministerial candidate contesting from two different constituencies. It takes some brass to look the voter in the eye and say: elect me as your representative not because I want to represent you in Parliament but because it’s important for you that I become the Prime Minister.

From Indira Gandhi to Narendra Modi, what India has seen is not just politicians in such bubbles but paranoid megalomaniacs who assume one’s own Prime Ministership is more important than the ethics of democratic representation of over a million people in any given constituency.

2 thoughts on “What do we elect?

  1. hemen parekh

    Manifesto Misconduct ?

    In its manifesto released yesterday , Congress has promised to create 10 Crore ( = 100 million ) new jobs in next 5 years , if voted to power

    Now , EC’s Model Code of Conduct tells political parties ,

    ” If you make any promise in your manifesto , you must also spell out , how
    you are going to fund it ; how – and from where – you are planning to
    raise the money to fulfill your promise ”

    No such explanation / clarification in Congress Manifesto !

    Only EC can say whether this is a blatant violation of Code of Conduct

    Provided , BJP / AAP lodge a complaint with the EC

    But BJP / AAP can do better than just lodge a complaint

    In their own respective manifestos , they too , can promise to generate 100 million new jobs in 5 years , if voted to power

    But strictly , in

    > Organized Private Sector

    > Un-organized Private Sector

    > Self – Employed Sector

    Now each job will require an additional Capital ( fixed + working ) of Rs 1 million , on an average

    That means , these Sectors ( not the Government ) will need to raise ,

    > Rs 1 million * 100 million ( Rs 10 Lakh * Crores )

    If voted to power , we ( BJP / AAP ) will enable these Sectors to raise this amount of funds thru introduction of following schemes :

    > BLACK MONEY AMNESTY SCHEME

    These Sectors will be allowed to invest their Black Money ( whether stashed locally or abroad ) in specific , Government – Approved , ” Infrastructure Bonds ” . No questions will be asked as to the source of the funds and the interest earned will be tax-free for a period of 10 years

    > JOB GENERATION SCHEME

    Since the emphasis is on Job Generation , companies will be ” incentivized ” to hire more permanent persons
    The incentive will be in the form of reducing Corporate Income Tax ( % ) as a company’s employment goes up by setting in motion , ” INVERSION of JOB REDUCTION ” regime , under which ,

    ” The more jobs a company creates , the less Corporate Tax it pays ”

    Example :

    > Up to employment of 100 persons …………………………. 30 % tax
    > 101 – 500 persons……………………………………………. 25 %
    > 501 – 1000 persons …………………………………………… 20 %
    > 1001 – 5000 persons ………………………………………….. 15 %
    > 5001 – 10,000 persons …………………………………………. 10 %
    > Above 10,000 persons …………………………………………. 5 %

    Let us celebrate those who provide employment to large number of persons

    > DOWN-SIZE GOVERNMENT SCHEME

    * Government is already over-staffed . It is hiring 4 persons to do the work of one !
    Hence , no new jobs will be created in Government or in PSUs for next 5 years
    There will be a ” Recruitment Freeze ” in government – except for the defense services
    Government / PSU employment will be allowed to shrink thru resignations / retirements / deaths etc , by adopting the rule of ” No Replacements ”

    > SELF EMPLOYEMENT SCHEME

    Every unemployed person registering under this scheme will get an interest – free loan of Rs 50,000 / – from any scheduled bank where he / she opens a bank account , repayable in 10 years. Central Government will insure these loan-re-payments
    A suitable mechanism will be put in place to prevent misuses such as ,

    * Duplicate loans from different banks

    * Already employed persons applying for loans

    * A loan-taker taking up a job after availing a loan

    > HONESTY REWARD SCHEME

    ” Inverse ” the ” Personal Income Tax ” slabs as follows :

    > Up to Rs 5 lakhs………………… NIL tax
    > 5.1 – 10 lakhs………………….. 8 %
    > 10.1 – 20 lakhs…………………. 6 %
    > 20.1 – 50 lakhs………………… 5 %
    > 50.1 – 100 lakhs………………… 3 %
    > Above 100 lakhs…………………. 1 %

    This will encourage tax-payers to honestly declare their entire income and eliminate tax-evasion / black money generation at the very source itself !

    Under such a scheme , Rs 5 * Lakh * Crores worth of estimated Black Money will return to the official ” White Money ” banking stream , during FY 2014-15 itself !

    Can you imagine everyone wanting a ” Cheque Payment ” only !

    And this White Money will get deployed in the CAPITAL MARKET , officially !

    With this , we expect the SENSEX to cross 50,000 by 2019 !

    Listed ” Private Sector ” companies will be able to attract funds at very low interest rates and deploy these for creating productive assets / employment

    These funds will also encourage Private Sector companies to take up long duration Infrastructure Projects – without asking the Governments to guarantee ” Viability Gap Funding ”

    > CAPITAL ASSETS CREATION SCHEME

    Under this scheme , companies will be granted an ” Accelerated Depreciation ” on incremental Capital Assets created during the year

    This will encourage companies to plough back their profits into creating manufacturing capacities , thereby improving the contribution of manufacturing to our GDP

    Simultaneously , this scheme will give a huge boost to India’s Capital Goods Industry – the mother of all industries !

    I hope the Manifesto – Writers of BJP / AAP etc examine these schemes and ask of themselves ,

    ” Will these meet EC’s Code of Conduct ? ”

    And , will these Manifesto Authors dare to promise ,

    ” If voted to power , we will enact a law that makes each Manifesto , a legally binding Contract between the people of India and the party making the promises – breach of which , will be punishable by a jail term , of not less than 10 years ”

    * hemen parekh ( 27 March 2014 / Mumbai )

  2. hemen parekh

    Don’t Ask ” How ” ?

    At the bottom of the 42 page Election Manifesto of BJP , released yesterday , I tried to search , if in very small print somewhere , there was a footnote which read ,

    ” Please , don’t ask how we plan to implement these promises ;
    From where we plan to find all the money to execute these projects ”

    Here are my back-of-the-envelope estimates of what some of the MAJOR projects might cost :
    ————————————————————————————
    PROJECT ……………………………… Approx Cost ( Rs Lakh * Crores )
    ————————————————————————————-
    > 100 Mega Cities…………………… 90
    > Interlinking of Rivers……………… 60
    > Sagar Mala of Ports……………….. 30
    > Highways ( 25,000 Km )………….. 50
    > Housing ( 100 mill units )………… 100
    > Rivers Cleaning…………………….. 10
    > Other Infra Projects……………….. 100
    * Freight Corridors
    * Gas Grids
    * OFC Network
    * Quadrilateral Bullet Trains
    ————————————————————————————
    Total ……………………………………Rs 430 Lakh Crores
    ————————————————————————————
    Admittedly , not all of these money will be required in the very first budget that NaMo government ( – of course , only if voted to power ! ) , would present by end June 2014

    But a problem does not go away by postponement !

    There is only ONE viable solution to the FUNDING problem , viz:,

    > Union Government must NOT even try to fund these projects !
    There is NO WAY , it can find these kind of money thro taxation !
    There will be a revolt !

    ANSWER

    > Make it possible for the PUBLIC to invest into these projects by ” owning ”
    these projects – and earn a reasonable ” tax-free ” return on investments
    ( Bonds ? ) in these projects

    > Towards this end , create various INFRASTRUCTURE SPVs

    > Immediately modify PERSONAL INCOME TAX regime as follows :

    > Up to Rs 5 lakhs………………… NIL
    > 5.1 – 10 lakhs………………….. 8 %
    > 10.1 – 20 lakhs…………………. 6 %
    > 20.1 – 50 lakhs………………… 5 %
    > 50.1 – 100 lakhs………………… 3 %
    > Above 100 lakhs…………………. 1 %

    What is likely to happen with such ” INVERSE TAXATION ” regime ?

    Following few things :

    > Total personal tax payer base will go up dramatically from current 4
    crores tax-payers

    > with this ” INVERSE TAX REGIME ” , there will be no incentive to evade
    taxes and to generate ” BLACK MONEY ”

    There will be no resistance to accept ALL payments by cheque / electronic
    clearance

    The more you disclose as your income , the less you pay by way of taxes

    ( Of course , incrementally )

    > For a change , we will learn to reward honesty / efficiency / productivity !

    No need to bribe those Income Tax officers !

    > Suddenly , lakhs of crores of BLACK MONEY will become WHITE MONEY

    > There will be a huge surge in bank deposits ( – even with , the inevitable
    lower interest rates )

    > Banks will be awash with funds to finance businesses / infrastructure
    projects etc , encouraging entrepreneurs / self-employed to set up new
    businesses ( at 2 % interest rates of loans ) and generate millions of jobs

    In any case , BJP manifesto promises :

    > Rationalization and simplification of the tax regime – which is currently
    repulsive for honest tax payers

    > The process of bringing black money to India , what belongs to India , will
    be put in motion on priority

    > Minimize scope for Corruption

    Narendrabhai ,

    Here is your chance to ditch the ” Historical Baggage ” into the Indian Ocean
    and come up with an INNOVATION that will take India ahead of China !

    If President Kubitschek of Brazil ( 1956-61 ) – son of a poor salesman – could construct Capital city BRASILIA and a 1500 Km highway , in 41 months , surely , you can do better , 57 years later !

    * hemen parekh ( 08 April 2014 / Mumbai )

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