Heroic Buddhadev

February 25, 2007 on 10:20 pm | In Newspapers, Times of India | No Comments

When you have been teaching bad ideas to people for a couple of generations, they tend to catch up with you. This is poor Buddhadev’s Bhattacharya’s dilemma, as he attempts heroically to break with his desperate past. To begin with, he has to contend with the pervasive envy of peasant societies in places like Singur and Nandigram. Peasants believe that society’s wealth is more or less fixed so that one person’s gain must be another’s loss. They view the social system as a zero sum game and it is hard to imagine that the overall pie may actually grow in a way that everyone will be unbelievably better off through mutual cooperation (by selling land, for example, to Tata’s car factory). Continue reading…

Where society has triumphed over the state

February 25, 2007 on 6:06 pm | In Financial Times, Newspapers | No Comments

India’s mystifying economic rise bewilders Indians and baffles economists. No one quite understands why this noisy and chaotic democracy of a billion people has become one of the world’s fastest growing economies. It is looking at a fourth year of consistent real growth of around 8% a year, following upon 22 years of very respectable 6% average annual growth. What puzzles economists is that India is not following any of the proven paths to success. Compared to the classic Asian strategy—exporting labour-intensive, low-priced manufactured goods to the West—India’s economy is driven more by consumption rather than investment, its domestic market rather than exports, services more than industry, and high-tech rather than low-skilled manufacturing. Continue reading…

Check naka blues

February 11, 2007 on 10:18 pm | In Newspapers, Times of India | No Comments

So, a new irony is upon us–the speed of trucks has risen 40 to 60 percent with good four and six lane highways, but we remain mired in the old inefficiencies of bad governance. A transport system is at the heart of global competitiveness, and for a country with the second highest growth rate in the world, octroi nakas are a huge drag. They also prevent India from becoming a common market. Municipalities levy octroi in order to earn revenues, but it is an inefficient and obsolete tax that has been phased out in all modern nations. Vijay Kelkar had held out the hope of eliminating octroi. He proposed sensibly that all indirect taxes should be merged into a single, universal Goods and Service Tax (GST). From this tax, municipalities would be compensated for the loss from octroi. Mr Chidambaram followed up by announcing that the GST would come into force in 2010. The nation took the historic step towards GST by enacting state Value Added Tax last year. Since there are huge legislative changes and negotiations required if we are to meet the 2010 deadline, the government shouldn’t lose time and it should set up an Empowered Committee on GST in the coming Budget. Continue reading…

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