There is a roaring sale on at the United Progressive Alliance turtle market. Asia's live animal bazaars daily see healthy turtles cut up and sold by the piece - while they are still alive. That way the buyer gets them fresh.
One thing, though. The seller doesn't pretend to be doing it for noble causes. It's for the money. The UPA is more selfless. It is doing it to fund health and education. The Bharat Heavy Electricals Limited is a living, breathing (and profit-making) body. Going back on its own Common Minimum Programme, the Government has BHEL on the carving table. Chopping off a limb from this public sector giant might yield Rs. 2,000 crore. This, it insists, will be used to fund vital social sector programmes. It will even be used to ready more turtles for sale and live slaughter. Part of the funds raised, we are told, could help to revive other public sector units.
Aside from a dozen other reasons why it is wrong, the proceeds from this proposed sale are a fraction of what could be raised by different, less repulsive means. By not running the country as a welfare state for the wealthy, for instance. The amount written off as bad loans by banks is roughly 22 times what the Government would get from the sale of equity in BHEL.
The studied silence over the banks writing off some Rs. 45,000 crore "stuck in" non-performing assets (NPAs) persists. This was achieved in just five years. And the plunder of public money continued in 2004. But it's hard to find those scathing editorials on `inefficiency' that crowd newspapers each week. Perhaps because we all know it was a neat job. The banks were looted in a highly efficient manner by some of the richest people and corporates. With much help from the Government. The loans are deemed `not recoverable.'
Consider what you could do with that money if it wasn't gifted to the rich and famous. The Government could fund its entire employment guarantee scheme from that sum. A universal EGS, as Professor Prabhat Patnaik has pointed out, would not at present cost more than Rs. 25,000 crore. That's about half of what's been written off. With Rs. 45,000 crore, you'd have an EGS and a lot of money left over. More than what the Government will spend this year on rural development. More than what it would spend by way of Plan expenditure on agriculture and allied services. Maybe more than all these sectors put together.
Or let us say the Government sells rice to the poor at Rs. 2 a kg through the public distribution system. To do this, it would have to subsidise each kg it buys to the extent of around Rs. 5. Or Rs. 2.50 for 500 gm per poor person each day. We would be able to give rice at Rs. 2 a kg to 400 million hungry people every day.
Instead, we gave a free lunch to a mob of corporate hucksters. Even after giving rice at Rs. 2 a kg to the 400 million for a whole year, there would be about Rs. 9,000 crore left over. Besides, such an action would bring great benefits in productivity worth thousands of crores. Not to mention what it would tot up in savings on health spending. In a country that is home to the largest number of hungry people in the planet, this would be a huge step forward. The Rs. 45,000 crore written off by banks also comes to more than this year's subsidies for food, fertilizers and other items put together.
Or take that quest for the governmental Golden Fleece. The 6 per cent of GDP everyone wants set aside for education. The gap between the 4 per cent now spent and the desired 6 per cent is about Rs. 50,000 crore. A gap almost bridged by what the banks have handed out to a gang of corporate crooks. And fully bridged if we add the two per cent cess the Government was supposed to set up - but did not - for the `Prathmik Shikhsa Kosh.' Or suppose instead of writing off those huge sums per company, we just wrote off the lowest levels of farm loans. Maybe thousands of poor farmers who took their lives - crushed by debt - would still be alive.
But there are other sources, too. The UPA's employment scheme could be fully funded from the outstandings of just two worthies. Harshad Mehta and Ketan Parikh. According to the Central Board of Direct Taxes, the dues of these two stand at around Rs. 30,000 crore. Tax arrears totalled nearly Rs. 90,000 crore last year. Imagine how many health projects the UPA could launch with half that sum. If only the Government forced evaders to pay up. India has one of the worst tax realisation rates in the world.
Remember too that this Government once toyed with the idea of a 0.15 per cent tax on stock market transactions. But scurried for cover when stockbrokers expressed dissent. Had it stood firm, the Government would have in time got a lot more than it will by flogging bits of BHEL. As Professor Patnaik points out: "The country's tax-GDP ratio, already among the lowest in the world," sank with the coming of the "reforms." What if the Central tax-GDP ratio had stayed the same as it was in 1990-91? "Then the Centre," he points out, "would be raising an additional revenue of Rs. 30,000 crore annually at today's GDP."
Subsidising the rich
If we get into free gifts to the builder and corporate lobbies - in just Mumbai - there is no social sector project the Government cannot complete. Land worth crores can be leased out for one rupee for 99 years. All that's required is that you are already very rich. And while on Mumbai, consider the thousands of crores that Enron cost Maharashtra. A project all set to be revived so it can make more kickbacks.
Maharashtra, ruled by two UPA partners, is unique. What this State has doled out to corporate hucksters over the years would likely bridge the country's fiscal deficit. What it has sunk - quite knowingly - in cooperatives and co-op banks that are the fiefs of corrupt politicians would fund the best nutrition programme in the country. It is also the State where thousands of children, especially Adivasis, die of hunger-linked causes.
Ravi Duggal, researcher from CEHAT (Centre for Enquiry into Health and Allied Themes), sees the write-off in another way. "The current health budgets of [the] Centre and States put together come to about Rs. 25,000 crore. This is almost twice that amount - and about 2 per cent of GDP. That is the target for health spending in the National Common Minimum Programme! At present, India spends less than 1 per cent of GDP on health."
One of the lowest in the world
Our per capita health expenditure is one of the lowest in the world. India ranks 189 out of 192 countries in terms of how much the Government spends on health as a share of total health spending. But we don't scrounge off when it comes to keeping our millionaires healthy. Even when they run their companies to ground. A top official put it famously years ago: The sicker the industries get, the healthier their owners get.
Power sector expert Prabir Purkayastha has his own take on it. "With Rs. 45,000 crore we could generate close to 15,000 megawatts. That would wipe out the country's power shortage. It would also leave us with a surplus of some 3,000 megawatts. Or, better still, we could really upgrade all our transmission and distribution networks. This would sharply bring down technical losses which are a big part of our power problems. That way, you may not even have to generate more power."
If we chose the first method, we would save money worth 3,000 megawatts. This could be used to boost other sources of energy such as solar power.
But why do all those things when it is so much more fun carving up the turtles? One problem is that you run out of them. K. Nagaraj of the Madras Institute for Development Studies is clear on this.
"Disinvestment," he says, "is a self-defeating exercise. For both [the] Government and the national economy. What the Government `gains' today will be more than lost tomorrow since the returns will be ever lower. Secondly, the economy as a whole - even the private sector - gains from public `investment,' not from disinvestment."