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We, the rather wealthy, people

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Are those standing for election to the Lok Sabha capable of relating to the needs of those they claim to represent? Many measures exist for testing that claim, and the most base amongst them concerns income and assets.

If your candidates are very much richer than you are, once elected how much of their energies will they devote to enriching themselves (and their sponsors) rather than attending to your civic needs?

The area of the circles represents assets in rupees for 2014. The twin circles for rural and urban households' assets is based on NSSO studies, with upper and lower circles being estimates of household assets using higher and lower growth rates to provide comparisons with candidates' declarations for Lok Sabha 2014.

The area of the circles represents candidates’ assets in rupees for 2014. The twin circles for rural and urban households’ assets is based on NSSO studies, with upper and lower circles being estimates of household assets using higher and lower growth rates to provide comparisons with candidates’ declarations for Lok Sabha 2014.

This chart shows why this should be a matter of democratic procedure. The data has been taken from the excellent work done by the Association for Democratic Reform, which runs the ‘My neta’ website, which has tabulated the statutory declarations of the candidates. Among the set of declarations is the candidates’ assets.

To show the relation between what the candidates to Lok Sabha 16 have declared and the assets of those they say they represent, I have included national averages, rural and urban, for household assets.

There are 12 assets averages to be seen. The candidates (more than 3,200) have been divided into deciles (or tenths) ranked by their declarations. Thus the eighth decile would have candidates in the 80% to 70% positions ranked on rupee value of assets, and the fifth decile would have candidates in the 50% to 40% positions, and so on.

RG_Lok_Sabha_2014_assets_7In between are the average household assets for rural and urban households in India. These are taken from studies based on the National Sample Survey Office (NSSO). The chart displays these averages as a pair (lighter and darker coloured circles) to indicate a range. We find the assets of the rural household are between the eighth and seventh deciles of what candidates have declared, and the assets of the urban household are between the seventh and sixth deciles of what candidates have declared.

This chart tells us very quickly that from the sixth decile of candidates onwards, their worth is already at least twice that of those they claim to represent. At the fourth decile, their worth is a stratospheric eight times that of the average rural household. At the second decile, their worth is an astounding 20 times that of the urban household. At the first decile, the equation is meaningless.

This is not based on an exact mathematics. The asset averages for the rural and urban households I have used are broad estimates, and are no doubt skewed by the richer rural and urban deciles and quintiles themselves. But the relative differences are seen starkly, and help indicate why the inequality between Member of Parliament and electors we saw in 2009 has deepened in 2014.

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The common good of India and the Planning Commission of today

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Montek_Singh_questionThe Deputy Chairman of the Planning Commission, Government of India, has in an interview starkly emphasised the priorities for the current government, priorities which accord no importance whatsoever to the principles governing the work of the Planning Commission itself, principles that were clearly enunciated 63 years ago.

In the interview, titled ‘We can’t get on a 9% growth path if we underprice energy’, Montek Singh Ahluwalia, the Deputy Chairman of the Planning Commission, has been asked a series of questions by reporters of one of India’s English-language business and financial dailies.

Q 1. Of late, there have been moves to correct the under-pricing of energy. Is the government moving the way the 12th five-year Plan document wanted it to? [In this question the reporters provide as a given the idea of ‘under pricing’ of energy in India.]

A 1. If prices do not reflect the real cost of energy, why will anyone invest in energy-saving equipment? Also, if prices don’t reflect the marginal cost of supply, which is imports, why will people invest to produce energy? Our problem is that energy is generally under-priced. Diesel, cooking gas and kerosene are under-priced.
We need a complete rethink on energy prices and align close to world prices. We cannot close the gap at one go but phased adjustment is necessary. Nobody likes to pay a higher price but we must recognise that we cannot expect to get on a nine per cent growth path if we don’t align its energy prices with global prices.

Ahluwalia wants nine per cent annual growth of the Indian economy at all costs. That these costs are social, ecological and ruinous are of no concern to him. He is only interested in the ‘marginal cost of supply’ of energy, of investment to produce more energy. He has ignored the data from the Government of India (in fact the Central Electricity Authority) which shows that the transmission and distribution losses between power generation and consumption are still 24% averaged for the last five years. Ahluwalia is either ignorant of or unmindful of the steep rise in the ‘fuel and light’ sub-index of the All-India Consumer Price Index. Over a single month, from November to December 2012, the fuel and light index for agricultural labourers rose from 760 to 769 and for rural labourers it rose from 758 to 766. What will this index reach for these two groups if Ahluwalia (and his supporters) has his way? What fearful cost will be exacted from India’s agricultural and rural labourers when our prices are ‘aligned’ with global prices? For whose benefit is this alignment being promoted by Ahluwalia?

Q 2. What should be the direction in coal?

A 2. We need some difficult decisions there. In the Plan, we have clearly said the nationalisation of coal needs to be reconsidered. There is no economic logic in keeping the private sector out of coal if it is allowed in petroleum and natural gas. Why do we allow the private sector in these areas? Because we want to bring in as much investment as possible into energy production and we want new technology.

Ahluwalia is (a) contemptuous about the Planning Commission’s own ‘Low Carbon Strategies for Inclusive Growth’ direction paper, in which the adoption of renewable energy sources and the steady reduction of coal and oil as primary fuels is advocated, and (b) conceals the truth that in India there are 455 new coal-powered generation plants under construction or have been approved (who needs clearances from the castrated Ministry of Environment and Forests? who needs environment impact assessments, pesky things that hinder our gallop towards GDP growth rates? who needs public consultation when the Prime Minister’s Office itself rams through projects?) or being planned. These 455 coal burners are to generate some 519,396 megawatts. For whom? For those agricultural and rural labourers struggling to buy kerosene for a stove on which to cook their evening meals? No, for the urban middle classes  who are being gathered together by India’s unspoken social engineering project that herds the income-privileged into towns and cities.

Many of these new coal burners are private sector already. I mention coal burning power plants currently under construction in three states only to overturn Ahluwalia’s economy with the truth. In Andhra Pradesh who are VSF Projects, Thermal Powertech Corporation, Indu Projects Limited and Dr. RKP Power? In Bihar who are AES India, Mirach Power Pvt. Ltd, Triton Energy Ltd and Buxar Bijlee Company? In Maharashtra who are Indiabulls Power, Ideal Energy Projects, Mantri Power and Lenexis Energy? Who are they if not private?

The World Resources Institute’s Global Coal Risk Assessment explained: “International public financial institutions are important and long-time contributors to the coal industry. Since 1994, multilateral development banks (MDBs) and industrialised countries’ export credit agencies (ECAs) have helped finance 88 new and expanded coal plants in developing countries, as well as projects in Europe. Together, MDBs and ECAs have provided more than US$37 billion in direct and indirect financial support for new coal-fired power plants worldwide. The World Bank has actually increased lending for fossil fuel projects and coal plants in recent years. An analysis by the Environmental Defense Fund concludes that the lending strategies of MDBs and ECAs in the energy sector do not sufficiently consider the environmental harm wrought by fossil fuel projects.”

Q 3. There is a talk of a food security law and there is a five-year map for the fiscal deficit. Can both go hand in hand?

A 3. Yes. If food security is a critical programme, we can give it top priority and cut something else. We have talked about reducing subsidies from 2.4 per cent of GDP to 1.5 per cent. We have not said there should be no subsidy. There is enough room in the limit indicated to accommodate a sensible food security bill but it does mean other subsidies will have to be cut more.

Why is Ahluwalia using an ‘if’ to misqualify the need for the Republic of India to provide affordable food to its citizens? What is meant by “cut something else”? Who is to decide what essential programmes need support if not the citizens of India through their representatives and through public participation and consultation? Ahluwalia’s are the statements of a ruling regime that has abandoned every last shadow of democratic practice.

To turn to the Planning Commission itself. In its description of its functions the Planning Commission has provided this information:

“The 1950 resolution setting up the Planning Commission outlined its functions as to: (a) Make an assessment of the material, capital and human resources of the country, including technical personnel, and investigate the possibilities of augmenting such of these resources as are found to be deficient in relation to the nation’s requirement; (b) Formulate a Plan for the most effective and balanced utilisation of country’s resources; (c) On a determination of priorities, define the stages in which the Plan should be carried out and propose the allocation of resources for the due completion of each stage;” [There are four other functions mentioned.]

Worryingly, what has been omitted is far more significant. What do these functions relate to? The answer can be found in the introduction to the First Five Year Plan:

“The Planning Commission was set up in March, 1950 by a Resolution of the Government of India which defined the scope of its work in the following terms:

‘The Constitution of India has guaranteed certain Fundamental Rights to the citizens of India and enunciated certain Directive Principles of State Policy, in particular, that the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life, and shall direct its policy towards securing, among other things—

that the citizens, men and women equally, have the right to an adequate means of livelihood;
that the ownership and control of the material resources of the community are so distributed as best to subserve the common good; and
that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment.’ “

Citizens, welfare, people, social and economic and political justice, control by the people of the material resources of India, the common good, no concentration of wealth, no means of production to the common detriment. These have now been hidden by the Planning Commission of today, shamefully. And it is from that base act of concealment that Montek Singh Ahluwalia speaks.