It was more than a decade and a half ago, in 1992 to be precise, that I happened to hear an economist speak on 'sustainable integrated balanced development'. Just to reminisce, that was the beginning of the globalisation phase of India, probably just before India Inc. started receiving the limelight, or shall I say more positively skewed share of focus, from the powers that be. The internet boom had not yet started its ascendancy. We had just survived the fall outs from the liberation of Kuwait and the (first) Iraq war by Mr. Bush, the Senior. It was only a few months prior to that, that we'd been through the the Indian Express expose on the pawning of gold by our government under the stewardship of the then Finance Minister Yashwant Sinha, who was at that time with the Janata Dal (his pre-BJP days). Dr. Manmohan Singh (MMS) had unveiled his first budget. P. Chidambaram was commerce minister at that time. IMF doctrines had just began its influence on governmental policies.
This sets out the back drop.
It may be just coincidental that the 'economist-speak' (which I have referred to in the opening paragraph) was in Calcutta, in Narendrapur to be more precise. It took place during a refresher course which I was attending in my then employer's training complex at Narendrapur. Among several interesting things which he shared with us, he recounted his student days at the famed Delhi School of Economics, particularly the discussions that took place with MMS himself. He was tangentially indicating that there was a gradual shift since then in the economic postulates of Dr. MMS, compared to where he was in his DSE days, and he tried to make out a case that that was possibly due to the 'learning unlearning' process he subjected himself to in his is days at Washington. He (our speaker) felt that MMS got catapaulted to a totally different kind of doctrinated pedestal after his stint with the IMF.
Let us come back to our theme. His (our speaker's) one question was - why should we give primacy to industries and particularly so, at the cost of agriculture? His argument was that stimulated economic growth derived from enhanced industrial growth in a manner out-pacing agriculture may be less meaningful to a country like India. Politicians after politicians speak about the fortunes of industrialisation, but do not spare even an iota of thought on agriculture. Unless we have a sustainable environment-friendly integrated and balanced development where the primary, secondary and tertiary sectors are given balanced focus, it can only help widen the rift between the rich and the poor. As the saying goes, how does the rich becoming richer help the poor who is left with only one option - to become only poorer. Increase in the number of millionaires is by no means a good measure of what real development is. This was the crux of his rather thought provoking speech.
However, it is nothing but a bare fact that the story is no different irrespective of whether the state is ruled by the left or the right or those who take a middle path. Let us take the Tata project which was supposed to have gone to fruition in Singur. Have we spared a thought on how much financial assistance was promised to the Tatas by the Left-controlled WB government?Here's a snap shot of some of the "highlights" of the deal.
It may be just coincidental that the 'economist-speak' (which I have referred to in the opening paragraph) was in Calcutta, in Narendrapur to be more precise. It took place during a refresher course which I was attending in my then employer's training complex at Narendrapur. Among several interesting things which he shared with us, he recounted his student days at the famed Delhi School of Economics, particularly the discussions that took place with MMS himself. He was tangentially indicating that there was a gradual shift since then in the economic postulates of Dr. MMS, compared to where he was in his DSE days, and he tried to make out a case that that was possibly due to the 'learning unlearning' process he subjected himself to in his is days at Washington. He (our speaker) felt that MMS got catapaulted to a totally different kind of doctrinated pedestal after his stint with the IMF.
Let us come back to our theme. His (our speaker's) one question was - why should we give primacy to industries and particularly so, at the cost of agriculture? His argument was that stimulated economic growth derived from enhanced industrial growth in a manner out-pacing agriculture may be less meaningful to a country like India. Politicians after politicians speak about the fortunes of industrialisation, but do not spare even an iota of thought on agriculture. Unless we have a sustainable environment-friendly integrated and balanced development where the primary, secondary and tertiary sectors are given balanced focus, it can only help widen the rift between the rich and the poor. As the saying goes, how does the rich becoming richer help the poor who is left with only one option - to become only poorer. Increase in the number of millionaires is by no means a good measure of what real development is. This was the crux of his rather thought provoking speech.
However, it is nothing but a bare fact that the story is no different irrespective of whether the state is ruled by the left or the right or those who take a middle path. Let us take the Tata project which was supposed to have gone to fruition in Singur. Have we spared a thought on how much financial assistance was promised to the Tatas by the Left-controlled WB government?Here's a snap shot of some of the "highlights" of the deal.
- Tata's investment supposedly ~ Rs. 1500 Crore.
- Heavily subsidised lease of ~1000 acres of land to the Tata on an express way, supposedly worth upwards of Rs. 600 Crore. Here's what a 'Rediff' report says
Incidentally, land for the factory had also been provided at a subsidised rate with 645 acres being provided to Tata Motors at Rs 1 crore a year against market rate of Rs 19.3 crore a year in that area, and with 290 acres being provided for the vendor and related facilities units at Rs 23 lakh a year against a market rate of Rs 8.7 crore a year. This excluded the cost of acquisition of the land pegged at around Rs 120 crore.
- Concessional power @ more than half of the rates charged to any high tension industrial unit, and promise of offset should the tariff increase by more than 25 paisa per KwH.
- Soft loan to Tatas of Rs. 200 crore loaned within two months of inking the MoU in May, 2006 at an interest rate of 1% per annum repayable 21 years thence, in five equal installments. By way of aside, please do a small calculation how much this amount would grow to, if invested as an FD in a bank. On interest subsidy alone, this would mean something like Rs. 25 crores a year.
- Reimbursement by WB government of Central Excise Duties that Tata pays for 10 years.
- Reimbursement by WB government of all corporate income taxes in full for first five years and 30% for next five years payable by Tata.
- All sales taxes i.e.VAT and CST collected by the Tata Motors from the customers to be kept with the Tatas for 31 years at an interest rate of 0.1% per annum!!!
- Reimbursement by WB government of the loan interest payable by the Tatas to build the project. A 'Yahoo' group report reads thus:
This can be described in very simple words that who ever buys any car and pays
taxes on that, the money is retained by Tatas for thirty years and instead of
depositing in the exchequer within 45 or 90 days, will deposit after 31 years.
If the amount of money that the Tatas will retain during the thirty years, it
will amount to huge sums of money to which 1500 crore will look pigmy.
In addition to the above, the government would have had to open new sections within the government secretariat, only to run separate accounts for this project keeping in view the accounting complications involved in the deferment of loans, reimbursements etc. explained in the foregoing..
My initial thought on reading the related reports is - who cannot be starting and running a project given the sops and incentives? Is the public aware of all these? It is nothing but an absolute shame that nobody speaks about any of these, but will outrun the other in fixing the blame squarely on Ms. Mamta Banerjee, who for whatever reasons chose to speak for the farmers. She may have had her own political agenda behind it, but can that reason mask the facts behind the deal? And to get what benefit - tangible or intangible - in return?
More details about these here and here. Those who are inclined can read on...
PS: It will be interesting to do some research on the specifcs behind the likes of this - say the 'Smart City' project in Kerala, and see if similar things come up there as well.....
My initial thought on reading the related reports is - who cannot be starting and running a project given the sops and incentives? Is the public aware of all these? It is nothing but an absolute shame that nobody speaks about any of these, but will outrun the other in fixing the blame squarely on Ms. Mamta Banerjee, who for whatever reasons chose to speak for the farmers. She may have had her own political agenda behind it, but can that reason mask the facts behind the deal? And to get what benefit - tangible or intangible - in return?
More details about these here and here. Those who are inclined can read on...
PS: It will be interesting to do some research on the specifcs behind the likes of this - say the 'Smart City' project in Kerala, and see if similar things come up there as well.....
No comments:
Post a Comment