Does money grow on trees or does it grow underground? Who has the answer to that question?
Let us congratulate our prime minister for speaking out his mind. It is difficult to counter Dr Manmohan Singh’s observations on the need for harder decisions or for that matter about the urgency in carrying out more reforms. So, I took a diversion and recorded the following comments online on some website:
“This speech could have preceded notifications. Not that it makes a big difference, as after all, trees do not grow on heaps of money either. Skipping legislative sanction in a routine manner gives an impression that the PM is sure of getting post facto approvals for even very important decisions. Eight years have gone after the introduction of New Pension Scheme replacing an existing social security system by an investment instrument and even today the action has not been approved by Parliament as the relative legislation is still before parliament. We are moving towards a ‘Notification Raj’”
When the PM was having a sound sleep on Friday night with the double satisfaction of having said things he always wanted to tell the people, but was prevented from speaking out either by the UPA leadership or the opposition in parliament and having received some assurance of support, albeit from ‘outside’ (which may cost more!), my sleep was disturbed as I kept wondering whether I had made a wrong statement that trees do not grow on heaps of money. A short nap in the early morning on Saturday cleared up my thought process and my thoughts on the trees, money et al, I am sharing with you.
White money really grows on trees. Most of the money underground in the form of oil, minerals and coal now being over-exploited and converted into black money gets depleted, whereas the money that grows on trees is available for ‘plucking’ perennially. To understand this, the PM may have to refresh some of his old school lessons on geography and economics. Trees like apple, palm, coconut, rubber and so on give money. Some roots like potato, tapioca, carrot, onion and so on also can be converted into money. In addition to this, a huge amount of black money also grows underground. But, for ensuring smooth conduct of the next session of parliament and pushing through all the pending bills and reforms, I would suggest a suo moto withdrawal of the controversial statement about growth of money on trees by PM himself, lest the opposition disrupts the parliament on that issue!
(MG Warrier is a freelancer based in Mumbai. He can be contacted at [email protected].)
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Manmohan Singh’s televised address is being criticised by his political rivals, including Mamata Banerjee. Several economists and political analysts, while welcoming the reforms announced by the UPA government said they should have happened much earlier
Warning against the country slipping back into 1991 economic crisis, Prime Minister Manmohan Singh on Friday said time has come for “hard decisions” to put the country on the path of high and inclusive growth. Seeking trust and understanding of the people in a televised address to the nation, the prime minister asked them not to be misled by those who want to confuse by spreading fear and false information like they did unsuccessfully in 1991.
Speaking against the backdrop of Trinamool Congress (TMC) withdrawing support to the government on foreign direct investment (FDI) and diesel price hike and the opposition from other parties, Mr Singh said, “we have much to do to protect the interest of the nation and we must do it now.”
According to economists and political analysts, the exit of Trinamool Congress has actually created space for the United Progressive Alliance (UPA) government for continuation of reforms. “The fact that the government has been reduced to a minority is seemingly negative, but in our view, TMC’s exit from UPA has actually created space for continuation of reforms. Besides, we do not anticipate a reversal of recent reforms (beyond a symbolic partial roll back of fuel price hike). Therefore, we continue to maintain our stance of ‘buy on dips’. Indeed, we feel that the coming months would offer several opportunities to buy given the political uncertainty,” said Edelweiss Securities, in a research note.
“Manmohan Singh has rediscovered his vim,” reads a story in the Economists, saying, “The initiatives that the prime minister announced on 13th and 14th September are nothing compared with the ‘big bang’ reforms of 1991 that set India growing and for which Mr Singh, then finance minister, was chiefly responsible. They do not even match the incremental reforms of Mr Singh’s first term as prime minister from 2004-09. Still, from an ageing man whose second-term performance has been feeble, they mark a welcome change.”
In a report, the Washington Post, said after pushing through unexpected economic reforms last week and refusing to back down in the face of protests and political threats, Mr Singh appeared to have rejuvenated a government thought hopelessly paralyzed. “Manmohan Singh’s coalition has splintered and his government is fighting for survival. But the Indian prime minister, who has been criticized for presiding meekly over a corrupt government, is suddenly being hailed as a bold, powerful leader,” the report said.
In the past, India has seen minority government functioning and completing full-term. Indeed, it was the minority government of Congress (1991-96) that actually initiated the first wave of economic reforms in India.
Opposition parties, however, are not ready to buy the logic put forward by Dr Singh. They said the prime minister is ‘misleading’ the country on FDI in multi-brand retail and appeared to be advocating interests of other countries while trying to “defend the indefensible”.
Bharatiya Janata Party (BJP), the main opposition party, described as “disappointing and uninspiring” prime minister Manmohan Singh’s address to the nation, saying that instead of rolling back the hike in diesel price and removing the cap on cooking gas cylinders he has only sought to justify them.
“The people were expecting some relief, that he will be taking back the hike in diesel price and the cap on LPG cylinders. But he has only made lame excuses,” BJP spokesperson Prakash Javadekar said.
Referring to the ballooning oil subsidy which would have touched Rs2 lakh crore this year, up by Rs60,000 crore last year, the prime minister, in his speech asked where would the money for this have come from.
“Money does not grow on trees. If we had not acted, it would have meant a higher fiscal deficit. That is an unsustainable increase in government expenditure vis-a-vis government income,” he said.
The BJP alleged that Mr Singh has only cited the economic crisis when the “real reason” behind the hike is corruption in UPA government. “The PM could have acted tough on corruption and announced cancellation of the coal blocks allocations and auctions which would have given Rs1.86 lakh crore to the government coffers,” Mr Javadekar said.
In a veiled criticism of prime minister Manmohan Singh’s justification of reforms tonight, TMC chief and West Bengal chief minister Mamata Banerjee wondered if the power of the chair is being misused to “finish aam aadmi”.
“I want to ask—what is the definition of aam aadmi? What is the definition of democracy? Is it not becoming clear that use of the name of aam aadmi, and misuse of power of chair, is to finish Aam Aadmi? Is it the game plan?” she said on her Facebook page.
Drawing comparisons with the 1991 situation when the Congress government unleashed a wave of reforms, Mr Singh said nobody was willing to lend even small amounts of money then.
“We came out of that crisis by taking strong, resolute steps. You can see the positive results of those steps. We are not in that situation today, but we must act before people lose confidence in our economy,” he said.
Shivanand Tiwari, spokesperson for Janata Dal-United (JD-U), however alleged that the prime minister was trying to “spread confusion” in the country on the issue of economic reforms.
“Everybody knows that a major share of petrol and diesel is imported. But what steps has the government taken to bring down the consumption. He is accusing the opposition of creating confusion on the issue but, in fact, Singh himself is doing so,” Tiwari said.
Left parties described the prime minister’s rare televised address to the nation on the recent measures taken by the government as an attempt to “defend the indefensible” and questioned how can it take such decisions when it does not enjoy ‘overwhelming’ majority in Parliament.
“The prime minister has sought to defend the indefensible steps taken by the government. The prime minister has not answered how he could proceed with these measures when it does not have the support of the overwhelming majority in Parliament,” CPI (M) General Secretary Prakash Karat told PTI.
CPI national secretary D Raja described the address as a “very very desperate” bid by the prime minister to reach out to people. He claimed Mr Singh “miserably failed” to answer any questions raised by common man and parties.
Congress spokesperson Rashid Alvi, however, dismissed the criticism.
“The prime minister has explained each and everything as to why under the present circumstances, tough steps taken by the government were necessary. This should be appreciated by other parties,” he said.