The republic is in deep crisis. on every norm of good governance and practice, the Congress-led UPA-II government which was returned to power in New Delhi in the summer of 2009 with high hopes and great expectations, has failed. The economy is in serious trouble with the current account deficit ballooning to a record 5.4 percent (cf. the normative 2.5 percent); the fiscal deficit (Centre plus states) to over 10 percent (5 percent); inflation — especially food inflation — in double digits, with the national savings rate set to fall from a high of 36.8 percent in 2007-08 to below 30 percent this year because of persistent inflation. With the country running dangerously high current account, balance of payments and trade deficits, there is real danger of a meltdown of the rupee which will drive up domestic prices of all imports, sparking a forest fire of hyper-inflation.
On other fronts of governance too, the outlook is grim. Scams and scandals involving mind-boggling sums and politicians and bureaucrats in the highest echelons of government, is deadly proof that the slow poison of corruption has seeped deep into all vital institutions of the republic. Simultaneously, repeated bomb blasts in public places countrywide and the continuously rising wave of crimes against women and children which the corrupt police force and ossified judiciary are unable to prevent or contain, reflects not only severe erosion of the law and order and justice machinery, but also an acute socio-economic crisis within the crumbling social order. This is the outcome of four decades of aimless and self-serving political leadership.
Tragically the rot is not only within the incumbent Congress party which has (mis)ruled the nation for over 40 of the republic’s 65 years (interrupted by ineffective periods in the opposition), but in all major political parties who have reduced this high-potential nation to this sorry condition. Even as the Congress has mutated into a coalition of dynasties, the BJP is afflicted with the majoritarian hindutva virus which threatens to alienate minority communities and plunge the republic into a situation of permanent low-intensity civil conflict which will stall all socio-economic development.
Against this backdrop, beyond writing futile editorials, the sole remaining option available to socio-economic reformers such as the editors of this publication who have been waging a long cold war for an equitable deal for children — the most neglected and vulnerable section of the nation’s population — is to venture into full-fledged political activism. It’s perhaps too late to save the adult population from the consequences of foolishly electing governments on caste, communal and dynastic considerations for over four decades. But it’s possible to save the next generation by transforming 21st century India into a child-centric society.
Therefore on March 8 — International Women’s Day — the Children First Party of India will become formally operational. Make no mistake, CFPI is a full-blooded political party with a complete agenda. For further details visit our website www.childrenfirst.in. Admittedly, we have set sail in frail bark venturing into a tumultuous sea, but our priorities are clear and resolve unshakeable. All like-minded citizens are invited to join us in this epic quest to restore sanity and equity within the republic.
Encourage private philanthropy instead
Confronted with a massive fiscal deficit which by the end of the current financial year is likely to exceed 11 percent (Centre plus states) of GDP, i.e. Rs.11,17,587 crore, and a discrete fiscal deficit of 5.3 percent at the Centre which throughout the disastrous tenure of the UPA-II government, now in the final year of its term, has gifted the nation with double-digit inflation, Union finance minister P. Chidambaram has mooted the idea of imposing additional tax on India’s super-rich.
The finance minister’s trial balloon on the subject of higher taxation of the super-rich undoubtedly has popular support. All around the world there is impatience and disgust with the reality that during the tumultuous past decade in which the global economy has remained mired in a prolonged recession, with unemployment hitting record percentages, the income gap between the rich and poor has steadily widened.
Against this backdrop, there’s a growing consensus that the affluent elite — brazenly indulging in vulgar consumption — should be taxed. In the US, Britain and across Europe there’s rising clamour for additional taxes on incomes of the top 1-5 percent plutocrats, and France’s socialist prime minister Francois Hollande has already raised the marginal income tax payable by the country’s super-wealthy to 75 percent on incomes above Euro 1 million (Rs.7 crore) per year.
But wait a minute. Imposition of taxes on the super-rich in France which is a genuine welfare state in which high-quality shelter, education, health and civic services are universally available to the population and in which the courts and law enforcement agencies ensure that public funds don’t disappear from the pipeline with unfailing regularity, is a different kettle of fish. High net worth individuals are assured that the higher taxes they pay will be utilised for public welfare, and not for the greater glory and comfort of politicians and venal bureaucrats who have appropriated a vast range of perquisites and allowances out of all proportion to India’s per capita income, for themselves.
In the circumstances, the national interest would be better served if instead, the rich are given tax exemptions and breaks for promoting education, healthcare and welfare institutions for the poor and underprivileged. Despite even modest incomes by global standards being subject to taxation, a sizeable percentage of the country’s 35 million income tax payers are ready and willing to make sacrifices to lend a helping hand to the 700 million citizens eking out pathetic lives below the poverty line.
But there’s pervasive fear within middle class India of higher taxes being converted for use of the country’s infamous neta-babu kleptocracy. Hence a better alternative to taxation is encouraging private charity. As for the finance minister’s laudable objective of containing and reducing the fiscal deficit, it has to be attained by cutting government expenditure and slashing unmerited, universal subsidies. Higher taxes without greater accountability and moral leadership is a prescription for capital flight.