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 | Spiral of populism: Using taxpayers' money for votes Our Correspondent A statesman, they say, thinks about the next generation; a politician, about the next election. Finance Minister P Chidambaram surely is no statesman; unfortunately for the ruling United Progressive Alliance (UPA), he is not even a good politician. For if the UPA functionaries believe that a strong dose of populism would bring rich electoral rewards, they are living in a fool's paradise. The biggest announcement in a budget reeking of myriad populist schemes is that of farm loan waiver. She-who-must-be-obeyed and her coterie feel that the waiver would be some sort of magic wand that, along with other tricks like the National Rural Employment Guarantee Scheme (NREGS), would make the electorate forget the misdeeds and misdemeanours of UPA rule. Chidambaram has obeyed their diktats quite enthusiastically. In his Budget speech, he said, "The total value of overdue loans being waived is estimated at Rs 50,000 crore and the OTS (one-time settlement) relief on the overdue loans is estimated at Rs10,000 crore." The Finance Minister can argue that the debt waiver is not a political move, that there was demand from various quarters for such relief, that other sections like the salaried people have also got something (in terms of hiked tax slabs), that the corporate sector has also got a few excise cuts. The fact, however, is that the Budget has been used by the UPA dispensation to further its political purposes. All the so-called sops given to industry, income-tax payers, etc, were long overdue. It has been ages since a substantial change in I-T slabs was made; what has come has come too late and too little, as the highest tax slab is still very low. The excise cuts are also not much. There was considerable buoyancy in tax revenues. Yet, he did not do much to bring down taxation. The reason is not difficult to find. Apart from the money-guzzling schemes like the NREGS, now there is the loan waiver. In fact, this is worse than the social sector schemes, for it explicitly rewards and promotes irresponsibility and penalises honesty. A news channel interviewed about a dozen farmers in the Vidarbha region of Maharashtra immediately after the Budget speech. One of them said that he felt cheated as he paid the loan. So, for the sake of fairness, what next should be done? Reimburse his money and those of others who paid up? Where will this populist spiral end? All the noble thoughts expressed in Economic Survey were forgotten within 24 hours. Significantly, none of the farmers were satisfied by the Finance Minister. He may end up wasting the taxpayers' money, for it would not get him votes. Posted on : 3/2/2008 Mail this article to your friend |