Indian Taxpayer Is Not An ATM For Congress

Last year in August, when I saw Mulayam Yadav at Delhi airport, he looked like a politician who had seen better days. Accompanied by two ordinary looking cops with outdated carbines, he cut a sorry picture. Today, he is one of the most powerful men in the country (Thank You, voters of UP!). You see, unlike Mamta Bannerjee, he knows how to use his power. She is a rabble-rouser, he is a consummate politician who figured out Sonia Gandhi’s quandary, played Mamta for a fool and placed himself nicely in the “nautanki” that is the Indian presidential election. However, the biggest loser is not Mamta or the BJP. It is the aam aadmi.


The cost of Mulayam’s support is the money he needs to fulfill the promises made to the UP voters. It is estimated that the cost of the Yadav promise is 90+ thousand crores. He may not get all of it but will try to squeeze as much as he can out of a desperate Congress. Congress will cough up the money to prop up their lame duck government. The question to ponder here is – whose money is Congress going to spend to prop up their incompetent and corrupt government? It is the taxpayer money. The ruling party to keep their government afloat treats the Indian treasury like an ATM. The shameless Chandra Babu Naidu squeezed the Vajpayee government as an ATM with 23 MPs. Mulayam will probably win (Thank You Again, UP voters) 50+ seats in Lok Sabha. Imagine the kind of damage he is going to inflict on the Indian taxpayer!


I tried to find out how the Central government gives money to various states. There is a convoluted formula known as the Gadgil-Mukherjee (yes, Pranabda), which predictably assigns the highest weightage to population (55%). The vague Special Problems category is the loophole, which probably gets used by the central government to bribe the regional parties.


Criteria for inter-state allocation of Plan Assistance


CRITERIA                          WEIGHTAGE (%)



POPULATION                           55


PER CAPITA INCOME                 25


FISCAL MANAGEMENT                 5


SPECIAL PROBLEMS                  15


TOTAL                                   100


What this really means is that non-performing states like the BIMARU states get more money than they generate while high performers like Gujarat get punished. My efforts at getting real numbers came to a naught because statistics put out by the Indian Government Agencies are an impenetrable fog.


What I do get is that thanks to the demagogic regional Politicians and their ignorant supporters, the entire country suffers. Instead of learning the hard way and making tough choices, local politicians throw hissy fits and get what they want. Meanwhile the Central Government treats the treasury like their personal ATM.


A neutral party like the Supreme Court (and NOT like the election commission) needs to keep an eye on the money disbursed to the states. Responsible behavior and hard work should be rewarded. Irresponsible states should be shown tough love. That is the only way we can stop the abuse of our money. Recently, Manmohan Singh promised 10 billion dollars of Indian money to bail out European economy. Did he do so because of a possible negative impact of the EU downfall on the Indian Economy or so we can pretend to be a pseudo-superpower and that way he gets to shore up his legacy? We need an organization, which can ask these questions and be an impartial adjudicator in financial matters.

For more on the Gadgil Mukherjee Formula, please read: http://en.wikipedia.org/wiki/Gadgil_formula