Congress manifesto reinforces 'mai-baap sarkaar' culture. It's time to end it

When you can’t solve problems, just make tall - very tall - promises. Never mind if ultimately it really amounts to admitting your failures.

If the Congress has, indeed, in the ten years it has been in the government `achieved in substantial measure’ socially inclusive economic growth with a focus on jobs and livelihoods and social justice’, why did it feel the need to talk about a right to entrepreneurship in its latest manifesto? The latest right - there are five others -will apparently “protect and assist all those who seek to become entrepreneurs”.

But what is stopping people from becoming entrepreneurs? Entry barriers in the form of high capital costs, infrastructure, licences and permits and sundry other clearances. How will legislating a right to entrepreneurship solve these problems? Will money become cheaper automatically, will infrastructure be created overnight and will state governments and local bodies start cutting down on red tape? At any business conference, the main grouse is that single windows (one-point clearance mechanisms) usually mean the first window or a closed door.

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Within the manifesto, there is a promise to improving India’s ‘Ease of Doing Business’ ranking from the current 134 to 75 within five years, by streamlining the process for starting a business, getting various permits, easing access to credit, streamlining the tax enforcement system, and various other interventions. So why not focus on these, instead of legislating a right?

High interest rates push up capital costs for new and small entrepreneurs. But it is fiscal profligacy by the central government which expands the fiscal deficit and thus pushes up interest rates. Though the manifesto talks about bringing down the fiscal deficit, there are enough paternalistic promises in it to ensure that government spending is skewed more towards consumption than capital creation. Forget cheap money, then. So capital will remain a constraint even if you and me have a right to become entrepreneurs. Unless the next step is to give cheap loans with huge interest rate subventions, which someone else will have to pay for. Or public sector banks will be forced to dole out, giving short shrift to due diligence about the creditworthiness of the borrowers.

But paternalism is the running theme of the manifesto, with the government promising to take on sundry burdens, instead of initiating and implementing more reforms to will create conditions that will address the root cause of problems. Other rights are those to pension, social security, dignity and humane working conditions. There are already a slew of laws covering working conditions in factories and offices and if these haven’t served the purpose, legislating an overall right, certainly won’t.

This reluctance to engage with root causes is evident also in another promise - the appointment of a Special Envoy to track down and recover black money. That could perhaps be an attempt to steal the thunder from the BJP which has been promising to bring back black money stashed abroad.

But both parties miss the point. Sure, it’s bad that people are not paying their taxes and are stashing money abroad. But that’s not the only place people are stashing money. Bank lockers across the country have thousands of crores hidden away in them, despite the many measures taken to discourage cash transactions. What’s needed is more taxation reforms to discourage the evasion of taxes. The real estate sector is a huge generator of black money and cash transactions in this sector continue to be upwards of 40 per cent per transaction in large parts of the country. Undervaluation of market rates of property to avoid paying taxes is rampant. Wouldn’t it be far better to address these issues, perhaps thorugh lower stamp duty rates, more computerisation of records than appointing special envoys and other meaningless bodies?

And the obsession with job reservations continues. The manifesto promises to seek a national consensus on affirmative action for schedules castes and scheduled tribes in the private sector.

It’s perhaps time for a national consensus against paternalism and the continuation of the mai-baap sarkar culture.