Showing posts with label Import policy. Show all posts
Showing posts with label Import policy. Show all posts

Thursday, October 25, 2012

Congress’ Communism & Empress SoniaG’s Upkeep

Cho Ramaswamy's Tuglaq (the protagonist in the eponymous movie) says, ‘It is not possible to make the poor rich. Therefore make the rich poor and all will be equal!’ It is an unstated dictum of the communist proletariat. The communist elite (vlasti in Russian) had a different take on Marxist philosophy as George Orwell so vividly depicted in his Animal Farm. Irrespective of how they live, quite often the vlasti echo the proletarian edict, more to show that their heart is in the right place rather than because of an ardent belief that ‘all men should be equal’. Therefore it is no surprise to hear Mani Sankar Aiyar often cavil about Antilia, Mukesh Ambani’s 27-floor residence in Mumbai’s southern suburbs. Flaunting his knowledge of the Gini coefficient (a measure of inequality of wealth distribution) he often cites Antilia as an example of the deep chasm that exists between the rich and the poor in India. He did so again in the television debate, ‘Is India ripe for a revolution?’ hosted by Tim Sebastian on Bloomberg / Headlines Today recently. (Indian television anchors have much to learn from Sebastian, but that is a different matter altogether.)

One way to look at Mukesh’s opulence is to attribute it to his business acumen, hard work and intelligence. For, although he has inherited a large part of his wealth he must have worked hard to grow the rest. In a democratic society which at least theoretically provides equal opportunities to all, one should not grudge Mukesh his success. Much has been said about Mukesh’s father Dhirubhai’s business acumen. His life is the stuff that made it to case studies in business schools. The less uncharitable (but probably more accurate) view is to attribute Dhirubhai Ambani’s success less to business acumen and more to his ability to network with the ruling establishment. Even this may be characterised as business acumen, but to put it bluntly Dhirubai was able bribe his way through the Indira Gandhi and Rajiv Gandhi administrations to tweak government policy to suit his business interests. Dhirubhai’s Reliance Industries was perhaps the first example of crony capitalism on a gigantic scale. It had all the ingredients: funnelling funds through invisible sources, stock exchange skirmishes and manipulation of government policy. V. P. Singh who took on Dhirubhai to alter government policy on import of purified terephthalic acid (PTA) lost his job as Finance Minister! (See For this fighter, life was a big battle). On hindsight one might even suspect that the Bofors scam could have been a decoy. This being so, why does Aiyar constantly invoke Mukesh as a negative example of economic distortions knowing fully well that the seeds of the Ambani empire were sown during Congress regimes? More importantly, the Ambani empire reached its exponential growth stage during the regimes of Aiyar’s deities, Indira Gandhi and Rajiv Gandhi.

Be that as it may, if opulent living reflects a ‘vulgarity of greed’ to use an expression coined in the Films Division (of the I & B ministry) documentaries of the emergency era, how much does it cost to put up MPs like Aiyar in Lutyen’s Delhi? How much does empress Sonia’s upkeep cost the people of India?

[N.B.: What follows are only ‘back of the envelope’ calculations based on certain realistic assumptions.]

According to a recent Economic Times report, bungalows in Delhi’s Lutyen’s Bungalow Zone (LBZ) cost between Rs 111 and Rs 170 Crore. (See Delhi's most expensive realty deal: Torrent Group buys bungalow in Lutyen’s Zone for Rs111 crore). As No.10 Janpath is in an even more exclusive zone, it may be safely rated at the top end of the scale, i.e. Rs 170 Crore, assuming of course that it is of the same area and not bigger! At 1% of the price as rental value the bungalow costs Rs 1.7 Crore a year (as rent) to the people of India. [A] One might safely assume an expenditure of Rs 30, 00,000 per annum on staff and maintenance. [B]

Her electricity bills come to Rs 2. 49 Lakh a year. [C] (See Sonia Gandhi's power bill: over Rs. 7 lakh for 3 years). We are relieved to know, that of the Rs 7.47 Lakhs incurred in three years, she herself has paid all of Rs 0.09 Lakh whereas the Lok Sabha Secretariat paid Rs 7.38 Lakh!

As an MP she is eligible to salary and perquisites of Rs 36. 45 Lakh, excluding house rent which is already computed above. [D] (See SALARYOF MP'S - Indian Parliament members salary)

She is entitled to Z+ security which consists of 36 personnel of the NSG. An NSG Z+ team consists of various ranks from IG to constable. Assuming an average salary of Rs 3 Lakh per commando, the team cost Rs 1.08 Crore per annum. [E]

The total of [A]+ [B]+ [C]+ [D]+ [E] = Rs 3.47 Crore per annum. Based on a similar computation, Rahul’s expenditure to the exchequer (only salary and security included) comes to Rs 1. 45 Crore.

It is interesting to note that (if our rental computation is right) Sonia exceeds her rental allowance by 700% and her electricity allowance by 400%.

Is it not pertinent to ask, how many households in India can incur an expenditure of Rs 4.92 Crore per annum, especially in a country in which the BPL is set at just Rs 11, 520?