Something just doesn’t add up. Governmental gobbledygook tells us we’re doing fine. Big media bleats the same message most obediently while economist spin meisters do rounds of TV studios and trammel us with data. Nobody knows what to think. Are we in the grip of a recession or a recovery? Is the inflation good for us if it is bad for us? Better to save or better to spend? Should we borrow or should we lend? Methinks the government of the day has cracked it – when in doubt, just tax them out.
There is a vast body of evidence to suggest that we have bucked the international crisis of confidence in the financial world – read US economy – but there is growing unease that we may be hastening up the curve to be doing just the things that led to the meltdown elsewhere.
It seems ironic that for a country with such unique problems, we have chosen for ourselves a western model totally unsuited to our conditions, or indeed, temperament. These first-world solutions that we proffer to the entire country are so ineffectual in the real lives of the people, that the trickle down effect remains only an elegant theory while farmers continue to slit their wrists and our agriculture minister twiddles his thumbs.
The takeover of our cities by private investment for profit is a sure indicator of the ceding of governance and compromise of the social contract. Electricity is a case in point in Delhi. Water is expected to be next on the list to go into private hands. The abnormal rate hikes in water bills recently is reported be a sweetener to shore up the state utility’s bottom line – fattening the pig, so to say, for the next bidder. Transport is on the cusp: one corporate has already been handed over a profitable bus route, others will follow. Health has not been the state’s responsibility for long and now hospitals that look like malls are all there to serve you – at five star hotel rates too. Ditto for education – it’s pretty much your wealth that determines your child’s future, and that is that.
This is not perchance. There is design to it. The third in a sequence of wins for the Congress in Delhi, and a precursor to the second win at the centre last year has led to a sinister echo in the manner in which Delhi is being governed, and is governing. The similarity is not just semantic – there is a doctrine at play and it is most apparent in the absolute disdain for the cry of the common man as he struggles to manage his increasingly tenuous existence in the city. Note the total surrender of the state at the feet of big money. Notice the crick in the back of policy as it stretches to meet its brief – agendas set by capitalist cronies. See the disdain for social spend unlinked with populist vote catching and don’t miss the unabashed encouragement to spend, spend and spend while they tax, tax and tax.
Taxing our Patience.
Every item of consumption of an ordinary Indian has seen abnormal increases in the last one year; more, if you look at a two to three year time span. Every time we discuss this, there is a staid response from members of the ruling party suggesting that inflation and dearness is really no issue because the general increase in incomes more than offsets that. Even the Chief Minister of Delhi is guilty of that impertinence. What is being mistaken here for public unresponsiveness on this issue is really a passive despondency of the populace coming to terms with the incomprehensible financial minutiae that the Government spins out to paralyse public opinion – until the message sinks in. And the message is that you need to be qualified as rich, before you can claim this city; that your residency is subject to your ability to pay more for everything irrespective of your capacity.
Milk, it was reported recently by an industry confederation, has seen seven increases in price in the last three years which is unprecedented since Independence. Food stuffs, essential items of daily use, you name it, it’s twice or thrice what it used to be just two years back. A white collar is no longer white any more as it slides towards the blue; and the blue ? Don’t ask. Even well paid management executives speak in embarrassed tones of how the recent burst of governmental taxes is stripping them of the few perks they enjoyed as a family. Petrol and electricity costs in Delhi rate as the biggest hits to the family budgets in middle class homes. Add transport and food, among the lower middle class. The poor are much worse on all counts. Then the costs of keeping yourself healthy; a doctor’s prescription and a visit to a mall are strikingly similar. Eating at home is more and more equivalent to going to a south Indian joint for dinner. Transport is almost a luxury already for most commuters and out-station travel is equal to sin. The Metro is no longer the messiah it was meant to be – it crowds too much, crawls too much and costs too much already. Worse, with the new property taxes on the anvil in Delhi, staying in its shadow will cost you even more. There is a strange famine at work in our cities. The real estate is too high, the quality of life too low.
There is no argument against the advantages of fuelled infrastructural growth but where it becomes a financial pogrom to cleanse the citiy of its inhabitants and replace them with a new elite, you know you are preparing for a power shift. Then, that this spend will not impact the essential needs of the city – housing, water, health, education, transport, employment – and is being funneled into an 11-day event called the Commonwealth Games only adds more thrust to the suspicion that this is money going down the drain – at the expense of those which this city will then expel. It’s almost a Mafiosi warning: you voted us in, now pay the price.
Money for Nothing
A cursory look at the expenses of the CW Games would raise your hackles: at last count it was reported that Rs 80,000 crores will be spent on the games and allied improvements. A city which is unable to provide drinking water to half of its population; house two thirds of its population in decent homes; provide health services and education to a similar majority and which is battling crime and traffic chaos on a daily basis finds the money for this largesse, but a programme of national importance such as the UID Scheme headed by Nandan Nilekani has to be budget-halved because a trifling Rs 3000 crores cannot be found for his purposes.
The embarrassing spend on the CW games is just a case in point where an entire city is being juiced so that the facilities could be spruced in accordance with the wishes of a committee which fulfills its own criteria of success. The games, even if we were to ignore that they resemble a Roman spectacle where minions and slaves dress as gladiators to amuse the queen and royalty, are a liability in more ways than one. That they fuel depression in the quality of life of its citizens is but one of its manifestations; that it continues to haunt generations after itself, is the more clear and present danger.
Contrary to popular belief, the games are a loss making enterprise. They also leave cities financially unsustainable. They cater to conditions that cause inflationary trends to solidify. In Delhi, for instance, break neck expansion of the metro network and the speed to accommodate the deadline have caused property prices to already go up manifold on the Metro routes. Thousands of hutments have been demolished in the name of beautification, but actually the demolitions were used to vacate prime property. It is a recorded fact that event-based development tends to push up property and service rates which refuse to depress once the event is over and add to the inflationary pressures of city living. It has been proved that as a corollary of this, a number of city residents are pushed out of the city towards the suburbs as property prices and rentals become out of their reach.
The experience of Sydney after the Olympics is a case study. Thanks to the Sydney 2000 Olympics, the housing sector there saw a sharp escalation in prices. The acceleration of the sprucing up of the city, including renovation and rejuvenation of inner city housing stock, led to house prices more than doubling between 1996 and 2003. Between 1993 (when Sydney was selected as the host city of the 2000 Summer Olympic Games) and 1998, Sydney’s rents increased by 40 percent, compared with Melbourne, the Australian city with the next biggest increase in rents, which was only 9.6 percent over the same period. A report published in June 1998 found that 160,000 Sydney households faced little choice but to live on the city’s fringe, leave Sydney altogether or pay more than 30 percent of their income in rent closer to the city. Due to this, a “Homelessness Protocol” was introduced to ensure that homeless people were not subject to harassment. Sydney incurred an expense that was twice the original estimate of Rs 10,000 crore ($ 2.5 billion) and is likely to come out of the red only now.
Greece is a telling example. It never really recovered from organising the Olympics and many economists root its present financial crisis to a similar profligacy on this account.
Life in a Metro
Delhi is being punished inordinately too and it is not going to be any different. Living in a house in Delhi already costs more than in Paris for the simple reason that what is not accommodated in the property value here has to be paid in ancillary expenditure. Ever seen a house with water tanks on its roof and boosters in the backyard in Paris? Or a generator in London? Or its own RO water purifier system in a kitchen in Japan? Or a security guard outside a middle class house in Munich? Or a driver attached to owners to ease commuting and parking? Or two cars per house just because what else can you do if you have two working members and both have to go to work everyday? Here, you practically pay twice over what the Parisian or Londoner pays in just hardship!
What we have today is a doctrine of expenditure that runs through the pocket lining of a host of powerful players each jockeying for slice of the pie. The capital is finally a capitalist’s dreamboat, where our only worth is the number of zeros on our salary slip. Like a second partition of the country, this time it is the widening cleavage between the rich and the poor, except that a reverse migration is taking place as against the one where people from poorer parts of the country come to settle in urban centres like Delhi. Now original residents of the city are leaving to take up residences in suburbs simply because they cannot sustain the cost of living in our metros or that the economic landscape simply pushes them out while the city looks for wealthier inhabitants to fill up the opening void.
You pay. I play.
“If inflation continues to soar, you’re going to have to work like a dog just to live like one”. American comedian George Gobel’s quip there neatly sums up the common man’s conundrum. The UPA government’s approach to fiscal management is a myth, because there is none. It is like a kite riding the wind, dropping into air pockets, recovering and plunging as it retraces the old and failing theories of western economists who are becoming the butt of jokes the world over. What is worse, our Government says it’s all for our own good. The Planning Commission is still chucking GDP figures like dice in a casino, inflation figures look like a temperature chart in a summer month while our economist PM appears Buddha-like at conferences of beleaguered nations and comes away with a stronger sense of the rightness of his methods, which ironically are simply the same formulae that the besieged nations followed to their own peril. Yes, sure we are known to be conservative and bucked the trend, but for how long, before the long arm of capitalism gets to our throat. After all, globalization has its price. In our case, spending your way out of an economic downturn has been joined by taxing your way out of a crisis. In a recent comparative report on the performance of the Government in dealing with inflation under Dr Manmohan Singh, all six of the country’s prominent economists asked gave a thumbs down to the Government, and for good measure listed all the steps the Government could have taken to remedy the situation, and did not.
And yet, in all this, the greatest fraud that was ever played on us is still the slew of enabling social justice laws that have been thrown at us with such PR-sensitive precision that everyone is smacked into stupor. Mystified at their potential, we remain sedated by the scope and presentation of such shiny pieces of legislation with celebrity endorsers only to wake up and discover what we always knew – that they failed in implementation and were merely a conduit for currency transfers. But by then, it would be election time again.
Parts of this post were published in July in The Pioneer under a different headline. Other parts were used in an article for The Organiser.
Image courtesy: www.hindustantimes.com