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The budget had no mention of deregulation, economic reforms, tax cuts to boost consumption, or privatizing our much worshiped and treated holier than thou (by the political class) public sector companies. In return all we got was more ‘schemes’, higher capital gains taxes, withdrawal of indexation benefit on property. As Shekhar Gupta puts it bluntly “In the real world, however, do businesses hire more just because the government may underwrite some fraction of the cost? It’s a naive and garden-variety socialist state that thinks it can drive up employment by offering incentives for hiring.
The process is complex enough to justify another ‘bhawan’ coming up in New Delhi.” Not to be left behind, many of the state governments are on a completely different level when it comes to economic populism. From free bus rides to women, free water, free electricity, subsidized gas cylinders, farm loan waiver, and a monthly allowance to different sections of the society. Never mind the fact that most of the state governments already carry high debt and in states like Andra Pradesh the previous administration struggled to pay the salaries of their employees towards the end of their tenure given how bankrupt the state was. In our current political context, no party is able to resist the temptation of distribution population. It is as if our political class has concluded that Socialism is our national economic ideology and the way to win elections is through ‘welfare schemes’.
And this begs the question, where are the reformist politicians? Is there anyone out there who can openly say they believe in a truly open liberal society and the way for India to grow is in a more free-market, reformed, deregulated economy. The government’s job is to build infrastructure, moderate taxation, and create the conditions for the economy to grow and unleash the ‘animal spirits’ of the entrepreneurial class and to get out of business.
If Indian economy was strangled by the license quota raj in the early decades of independence, it is now suffering with the populist raj. And in the past, at least there were voices offering an alternate in the likes of Swatantra party in the 60s with the likes of Minoo Masani and others. Later decades we had Manmohan Singh, and Jaswant Singh (who was India’s last genuine libertarian politician). Unfortunately, today all we get is competitive populism from all sides with no alternative.
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