An enduring outcome of post-independence India’s neta-babu socialism which has bled the country white during the past six decades, is the huge 18 million strong parasitic incubus of government employees accustomed to feasting off the state which has grown within the body politic.
A case in point is former three-term Delhi chief minister Sheila Dikshit who beneath her benign maiden aunt image, has exposed herself as a fantastically greedy, corrupt and self-absorbed typical Congress politician. After the crushing defeat of the Congress party in the Delhi assembly election engineered by the neophyte Aam Aadmi Party (AAP) in December 2013, an application under the Right to Information Act revealed that during her term as chief minister of Delhi state, she had installed 31 air-conditioners and 25 electric heaters, 12 geysers and 16 air purifiers in her seven-room official household (since appropriated by retired prime minister Manmohan Singh for his already forgotten contributions to Indian politics) in the highest rent Lutyens zone of the national capital.
In the last few days before the Congress-led UPA government demitted office in New Delhi, this Nehru-Gandhi dynasty loyalist wangled a posting for herself as governor of Kerala, presumably to continue to enjoy the lavish lifestyle to which she has become accustomed. And subsequently, even when the newly-elected BJP-NDA government made it plain it didn’t want her as the Centre’s representative in Kerala, she stayed put citing the law until she was transferred to Mizoram where the lifestyle isn’t as lavish, whereupon she has reluctantly resigned.
Unfortunately, public leaders accustomed to offices of profit under the state with no outcomes to report, are the rule rather than exception (see book review p.238). Nothing is too good for them and no depths of poverty and despair can’t be endured by the people they represent.
Neta-babu banking
The arrest of S.K. Jain, chairman of the public sector Syndicate Bank on August 2 on charges of sanctioning risky loans for bribes, has aroused worst fears about the country’s 27 public sector banks which were nationalised by prime minister Indira Gandhi way back in 1969. From that time onwards, public sector banks (PSBs) became the private banks of politicians with the phone call from Delhi becoming the most important criterion for sanction and disbursements of large loans. For smaller loans, a 10 percent cut of the sanctioned loan amount to branch managers became the established norm.
Four decades later, India is among the most under-banked countries worldwide with less than 40 percent of the population having bank accounts and even a smaller percentage eligible for bank credit. Small credit flows to farmers and small businesses became possible only because of statutory lending mandates to PSBs to allocate up to 40 percent of total loans disbursed to SMSEs (small and medium-scale enterprises). But in such disbursements, willingness to make the 10 percent pay-off to bank officials was — and remains — the main eligibility criterion.
Consequently, bad loans of the Indian banking system dominated by PSBs have risen to 4.5 percent of GDP, among the highest of all banking systems worldwide. And if to officially admitted NPAs (non-performing assets), one were to add dicey rolled over or restructured loans, NPAs of India’s banks are likely to exceed 10 percent of GDP to approximate the NPAs of Greece and Portugal, countries whose financial systems have collapsed and are totally dependent on foreign aid.
Even as crooks and shady characters have few problems getting huge loans from PSBs because of politically directed lending, conversely, it took your editor over five years to be sanctioned a credit line of Rs.2 lakh against receivables for this publication. That’s neta-babu banking.
Poor leadership
Almost every development institution in India and abroad rates and ranks the south-western seaboard state of Kerala (pop. 35 million) India’s #1 state in terms of human development indices.
However, on one vital parameter — quality of political leadership — Kerala is among the most benighted states. This explains the paradox of India’s most literate state being one of the country’s most industrially backward areas of darkness. Prolonged inadequacy of a well-educated elite has enabled deep envy of the successful, disguised as Marxist ideology, to strike deep roots in Kerala. As a consequence, the state has acquired a notorious reputation for difficulty of doing business, and investors and entrepreneurs from India and abroad prefer to give it a wide berth.
With few opportunities for industry employment, Kerala has arguably become the country’s #1 exporter of human capital. Currently, an estimated 4.8 million blue collar workers from Kerala are employed abroad, especially in the authoritarian Middle Eastern sultanates where they have to endure horrible working conditions and human rights abuses.
The latest decision of the Congress-led coalition government of the state — which has the highest per capita consumption of alcoholic spirits nationwide — to impose partial liquor prohibition in Kerala immediately and total prohibition by 2024, is proof of poor quality leadership. Anyone with the faintest acquaintance with history is aware how the Mafia crime syndicate grew and spread its tentacles in the US during the prohibition era (1920-33). Likewise, the seed capital of nasty criminal gangs which have suborned Mumbai and Maharashtra, was generated during prohibition imposed upon the state in the 1960s. Similarly powerful, hidden crime syndicates with unchecked power are flourishing in Gujarat where liquor vending and smuggling has become big business.
Nor has the Kerala government bothered to calculate the impact of liquor prohibition on the state’s premier tourism economy and precarious employment situation, with an estimated one million citizens engaged in the liquor trade likely to be rendered unemployed, to say nothing of the Rs.8,000 crore the state will lose by way of taxes and imposts on liquor.