Tag: India

CAG and 2G

There is an attempt to discredit CAG Vinod Rai and question his credibility. CAG had put the loss due to 2G scam at 1,76,379 crore rupees. Some have got hold of a report of an official, R. P. Singh, Director General of Audit (Post & Telecommunications) who had put the loss at 2,645 crore rupees. R. P. Singh had corresponded with Department of Telecommunications. On 23/10/2011 CAG had commented on the file “I wish we had not written to DoT.” Deputy CAG Rekha Gupta had commented “Please convey CAG’s observations to DG (Singh). Also please reiterate that he is not to write to Secretary DoT on this or any other issue for the present.”

Congress has problem with leakage of CAG report but has no problems when leakages suit it. Being selective does not help. When the 2G scam became public TV channels had put the loss at 60,000 crores rupees. CBI’s estimate of loss is around 30,000 crore rupees. CBI is controlled by government. If Supreme Court had not monitored the case CBI would have said there was no loss as Kapil Sibal had said.

CAG is a constitutional authority. He is not a servant of the government of the day. If he finds any subordinate not doing his job properly he has the right to overrule him. In judiciary there are various courts but the decision of the Supreme Court is final. It can overrule High Court or other courts. High Court can overrule Sessions Court. In Supreme Court judges on the same bench disagree and judgments are by majority. There is nothing strange about CAG overruling DG.

Poverty alleviation

There is a debate about poverty line in India. NAC members have attacked Planning Commission. The debate is mainly about Rs.32 as poverty line in cities.

The definition of poverty changes according to place and time. Poverty can be absolute or relative. Absolute poverty may be removed but relative poverty will be there.

Planning Commission and NAC should be abolished. That will save lot of money. Auctioning of Yojana Bhavan will get crores of rupees.

There should be no subsidies and freebies. Various schemes meant to help poor increase poverty. There is corruption and wastage. Food grains rot in godowns.

Even when there is no corruption and wastage, expenses incurred on managing schemes lead to taxes and borrowings which harm the poor. Borrowings means RBI printing notes which leads to inflation which brings down the value of money. If any government buys rice for Rs.20 and gives it for Rs.2 the difference of Rs.18 has to be made up. Besides people employed for buying and selling need to be paid. There are transport and other costs. Either people pay more taxes to make up for shortfall or extra notes printed make the value of their money go down. If the government does not buy rice, people will buy it for Rs.20 or less and they will not have to pay indirectly for subsidy and other costs. Food grains will not be wasted in godowns. People will not have to starve.

Central and state governments should stop borrowing. That will end inflation and help the poor. Borrowing generally means RBI printing notes and giving to governments which do not return the amounts.

Petrol price hike unjustified

Petrol price has gone up once again. There is no good reason for the hike. It is a myth that oil marketing companies decide the hike. When there were elections in four states and one union territory petrol price did not go up. The hike happened after voting was over. That time LPG price also went up.

The government says hike is inevitable because of increase in price of oil in international market. When the price comes down in international market petrol, diesel or LPG price does not come down. Then it is said there is subsidy for diesel, kerosene and LPG. The government’s manipulation of exchange rate has resulted in rupee being weak and common people having to pay a high price. When rupee appreciates against dollar the government buys dollars and keeps the value of rupee down. When rupee depreciates the government does not sell dollars and keep the value of rupee. It is done to favour exporters at the cost of 121 crore Indians.

USA prints about a trillion dollars every year and dumps them in the market. That should have brought down the value of dollar. However India has printed notes and when USA goes down India goes down even further. If India had not manipulated currency the prices of petrol, diesel, kerosene and LPG would have been about one tenth of what they are today.

PM Manmohan Singh he does not have a magic wand. You don’t need a magic wand. You have to do the right thing. DMK, NCP and TMC opposed price hike but no one has talked of currency manipulation that is the root of the problem.