Saturday, July 18, 2015

How to fool a lot of people

Delhi Chief Minister Arvind Kejriwal's Aam Aadmi Party government is showing the entire country just how a large number of (dumb) people can be fooled very effectively. In their so-called Swaraj budget, they touted their ability to hand out freebies without raising any taxes; and just a few days later, in a brazen act, they introduced separate legislation to increase taxes across the board. By decoupling tax increases from the Finance Bill, Kejriwal basically tried to have his pudding and eat it too. Not only is this improper, it actual goes against their own manifesto that promised not to raise VAT, a manifesto that was made with much fanfare.

But that's not all. Even as Kejriwal raises taxes to fund his populism, the size of his administration is growing rapidly and alarmingly as he gives perks and positions to his cronies in the Party, both elected and otherwise. It is unseemly for a tiny city-state like Delhi to even have a Deputy CM whereas the number of departments with the CMO is so small that one person can handle it themselves. India has run quite well through both UPA administrations and the current BJP government without a deputy PM. Moreover, the number of Parliamentary Secretaries and commissions created and resuscitated by this government is shocking, with even a huge state like Uttar Pradesh struggling to compete with the municipality of Delhi!

Ah, but there is a parallel to all this. That parallel lies to the east, in the former CPM citadel of West Bengal, where the Communist Party inserted itself into every walk of life, eliminated all opposition, and turned the government into the party. That state, along with Kerala (another former CPM bastion), is the only state, aside from the mountainous states in the north and northeast that face a geographical/strategic disadvantage, to have a revenue deficit. Even a poor state like Bihar, which lost its entire mineral base to Jharkhand, has a revenue surplus. In simple words, it means the state was spending more on sustaining itself than the taxes it was able to bring in from economic activity. The state became the only economic activity, it did not pay any taxes, and it borrowed heavily to sustain itself, leaving West Bengal with a burning hole in the pocket that Mamata Banerjee has been complaining about for her entire term.

In West Bengal, we can see the future of Delhi, except that Delhi is supported by the rest of the country as the national capital, so everyone else is obligated to pay its bills. It is ironic then that Kejriwal wants statehood for Delhi, because it would then lose that safety net and be forced to pay up like everybody else. But then, all this heavy economics is impossible to understand for communists who are determined not to let something as unimportant as reality get in the way of their dreams!

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