Bureaucracy defines the March of any Nation. Govt can make policies and Bureaucracy can defeat it with impunity. To get the result the Government has to be extra cautious to rein in Bureaucracy often with carrot and stick policy.
Govt of India has already offered carrot to Bureaucracy by way of pay hike as recommended by pay commission. Time has come to crack the whip. Interestingly the most corrupt department of Govt is Income Tax department but unfortunately, Prime Minister has a blind side which is Income Tax. As regard Finance Minister, his quality as a lawyer can not be disputed but he is not an administrator and certainly not an economist. As regards his administrative capabilities, post demonetization chaos, is a proof of absence of administrative capabilities.
Martial law by Beurocracy:
Example of corruption by PSU while doing ‘legal’ thing:
Socialism brought into existence industries owned by Govt. Some of these are monopolies of sort and are also in profit. The companies which are in profit are given a lot of autonomy by Government and in India such Companies are called and given a status called ‘Navratnas’ or one of the nine jewels. One such jewel under Ministry of Railway called up our office to seek legal opinion in respect of a matter which was patently wrong.
This is the reply given by us to them:
We have strict policy of not to be part of any corrupt practice. Opinion shopping is one such corrupt practice. Though we do not imply any corruption on your part at all.
Some PSU officials resort to seeking opinions from a number of lawyers but use one opinion which favours their cause. Since they can’t keep other contrary opinions on record, others are destroyed. And the lawyer who gave favourable opinion gets paid.
Accordingly to discourage this corrupt practice we have as a policy insist on upfront payment so that the opinion given be us remains on record.
In the year 2012 your predecessor took an opinion and was not happy with it. Hence our bill is still unpaid. We were not given any reason for non payment. Emails ignored and phone call refused as busy.
If you desire details of that transactions can be made available.
Under these circumstances we insist advance payment and can not render opinion without an advance payment.
We regret if it caused you any inconvenience.
Main Stream Media is now a propoganda machine for hire. Independence of journalism is a concept which is out of practice. It seems this is true not only for India but also in USA. One newspaper twisting same news headlines in two different ways! See the picture of Wall Street Journal below:
Editors & Journalists:
Editors who used to be humble beings now live in sprawling Mansions, travel in executive class and stay and dine in five star hotels. TV anchor driving Porsche is a new norm. Do news papers sell more now? How these journalists are making money?
Yesterday I read an article about economy which does not have a single numeric character. It suggested as if India has curfew like situation. But actually it is not. It is a business as usual for small transactions. Indian business is run on credit though settled in cash. Now people are making habit of carrying plastic or mobile wallet. See the market yesterday: Continue reading
Demonetization revisited India after 38 years. The large denominations of old currency has been disowned with a window period to exchange it with new currency within 50 days from any bank and thereafter from Reserve Bank in another 3 months. The secrecy of the plan and sudden announcement may make it success. Though doubts are raised that Indian Jugaad may hurt the objective. But there are other questions as well e.g. Would it eliminate black money?
What is the objective?
In short it is a soft reboot of economy by replacing entire cash in circulation with new one. But the implication is that person holding the cash would have to come forward to deposit it with disclosure of his identity. Thus a person having huge amount in cash would in turn have to explain, how s/he earned it.
For ordinary people who are regularly paying taxes and filing income tax returns, this is a mere formality but those who live off the radar, this is a serious trap.
There are groups of smugglers, Mafia thugs, politicians who have rooms full of currency notes for their operations. They are the real target of this operation. Of course neighbour Pakistan churning counterfeit currency is also the target.
But this exercise was undertaken in 1978 and it was a failure. What makes it work this time?
Why demonetization failed in 1978?
In 1978 Morarji Desai was prime minister as the leader of all opposition alliance called Janta Party. Morarji Desai was an upright man who had remained in Congress until Indira Gandhi made it impossible. Congress party has an illogical bias in favour of legislations. So did the Morarji Desai. They thought that legislation’s have Divine force and executive order is evil. There is no other reason to explain it. Hence Morarji Desai used an Ordinance to declare withdrawal of high denomination notes and in the process too many people had advance knowledge of the move. Continue reading
Narendra Modi, the Prime Minister of India, a man well-travelled throughout India and now the world, has a penchant to throw solutions at people as examples of change, while exhorting them to accept challenge and find solutions. Modi may be accused of anything but not lack of sufficient knowledge about any subject. The reason is clear, as shared by him publicly, he likes to keep himself uptodate by seeking knowledge from books/net or people alike.
Modi has for the first time shown himself to be clueless about one subject: Income Tax and black money generation. He has no clue how large is the off the book or cash economy of the country.
In the last episode of radio talk ‘Man Ki Baat’ or Talk from heart he has warned people to declare their black money by last day of September 2016, the date fixed or else there may be severe consequences. May be he knew yet he chose to bluff to people! Or may be he believed in what he said!
If it is the second then Modi does not know the extent of problem. People may declare some or may be coerced to do it by Income Tax Officers, especially in small towns. Reports are pouring in that rich communities of traders e.g. Jewellers are being threatened to declare some black money lest there will be consequences. Somebody claimed it happening here in New Delhi as well but more of a request not coercion.
There is nothing new in the declaration scheme. Such schemes of declaration of black money are launched every decade and meet marginal to moderate success but black money grows as usual. Why?
Problem of black money.