MIGS or PIGS

Rahul Gandhi has sought to up the ante in election rhetoric promising Rs.72,000 per annum to the poorest 20 % of families. If proposed by a government, this will be hailed as a welcome social security measure that seeks to banish 'absolute poverty'. If proposed by an opposition party with all relevant calculations and plans on raising requisite funds, it will be praised as a sincere attempt to convince the electorate as to why the party deserves a chance to govern. If proposed by an opposition party at the last minute just ahead of the elections sans any sincere attempt at economic arithmetic, it will be dismissed as nothing more than deceitful election rhetoric.

NYAY (Nyuntam Aay Yojana - Minimum Income Guarantee Scheme [MIGS] ) announced by the Grand Old Party on March 25th is long on promises and short on planning. 50 million poorest families are promised Rs.72,000 p.a. each to enable them to have a minimum yearly income of Rs.144,000 each. Those families falling short of annual income of Rs.144,000 despite the government's proposed assistance will be assisted by the Congress party with additional funds to bridge the gap. Assistance by the Congress party was mentioned only in one report. Many reports of the scheme have emerged with inconsistent details.

It is a top-up scheme ,assures one and therefore it will not be fiscally taxing. It is not a top-up and all these families will be given Rs.72,000 p.a. as claimed by another report. Further details will be provided by the architect of the scheme, P.Chidambaram in due course. It is really funny that different leaders come up with different versions. (Chidambaram has since confirmed that Rs.6,000 per month will be provided to each of the poorest 20% of families. He has discounted any difficulty in identifying such families. An expert committee will be appointed if the party comes to power and the MIGS scheme will be rolled out in stages. The amount will be directly credited to the bank account of a woman member of the family. Poverty abolition and women empowerment at one stroke! )

It sounds more like a battle cry with military metaphors thrown in. "It is the final assault on poverty." "It is a surgical strike on poverty." We are led to believe that India will become a poverty-less (Garibi-mukt) nation within five years if only the Congress party is voted to power. What the grandmother could only promise but not deliver ('Garibi hatao'), the worthy grandson wants to deliver!

P.Chidambaram is confident that the scheme will not require more than 2% of GDP for its implementation. So, if the scheme does not lead to withdrawal of any subsidy scheme and if additional taxes are not levied, fiscal deficit (that is the amount to be borrowed by the government as % of GDP) will increase by 2%. Fiscal Deficit is now 3.3%

Direct income transfer to the poor cannot be questioned on ethical grounds. Even the most fiscally imprudent social welfare scheme can work well if accompanied by administrative efficiency and political rectitude. At the same time, even a fiscally prudent social welfare scheme will come a cropper if accompanied by administrative bungling and political duplicity.

We are not sure if the Congress party is chastened by the debacle it faced in 2014 on account of its multiple scams. If it has not learnt any lessons, MIGS will degenerate into PIGS (Political Income Guarantee Scheme). As of now, it looks as though NYAY or MIGS is a desperate gamble by the Congress party to oust Modi from power. Even if there is a change in government, Congress may at best be a coalition partner in the government. "Coalition Dharma" will provide an excuse for non-implementation of poll promises. The much wanted relief for the poor is not likely anytime soon.

N.Ram's miscalculation

As Mr.Ram continues his tirade against the Rafale contract, the chinks in his armour are becoming more transparent. He has repeatedly and vigorously argued that Modi's government is paying more for the aircraft than what Manmohan Singh's government wanted to pay but never paid. Comparison between an event and a non-event is ridiculous enough. On top of this, Mr.Ram has used an inappropriate figure to arrive at the conclusion he wanted to reach.

Under Table 2 : Comparison of Costs, the media baron points out that the aligned cost under the UPA's otiose proposal was 7488.58 million Euros including the cost of bank guarantee. In the actual contract under NDA, the comparable cost without bank guarantee is 7168.57 million Euros. So, the savings, the argument goes is only 320.01 million Euros. The learned journalist compares this savings with the cost of bank guarantee in terms of commission payable to guarantee-issuing banks which he reckons at 574 million Euros. This is where the miscalculation has occurred. (The allegation is savings to Dassault arising from avoidance of guarantee is not fully passed on to GOI.)

574 Million Euros is the cost if SBI issues the guarantee. But the guarantee was supposed to be issued by French banks and not by SBI. Commission on guarantees chargeable by the French banks was 143 million Euros which Mr.Ram has mercifully and hesitantly quoted, though with much less prominence. So, in effect, though the French company would have saved only 143 million Euros by avoiding the bank guarantees, GOI could extract cost reduction to the extent of 320.01 million Euros from the French.

It is said that if you torture the data enough, you can arrive at any conclusion. Apart from torturing the data, Mr.Ram uses the wrong data to suit his politically motivated conclusion. In the process he continues to mislead the reading public. As if this deviation from journalistic ethics is not enough, the Attorney General has now said that The Hindu is using 'stolen data'. N.Ram pleads that his exercise is in public interest. Is misleading the public in wily ways really in public interest?

There is another major problem arising from Mr.Ram's 'exclusive reports'. He has named the 'three dissenters' whom he calls the 'domain experts' in his reports. This jeopardises their security given the fact that the reports relate to competing players in arms and ammunition who because of their enormous reach are potentially capable of causing grave injury to person and reputation of bureaucrats. Mr.Ram has violated the right to privacy of these dissenters which includes the right to public anonymity of bureaucrats as far as their file notings are concerned.

This has another deleterious effect. If a newspaper chooses to publish names of officials who took a particular stand in an important issue, bureaucrats in future will opt to play safe by not articulating their views in the file. Any responsible newspaper will not indulge in this scandalous game. There are ways of presenting a report without causing possible hurt to officials. The Hindu chooses to hide 'Secret' from the face of an extract from a confidential Defence file, it chooses to publish deliberately truncated extracts, but feels free to give unnecessary publicity to names of 'dissenting officials'. Is this journalistic ethics?

N.Ram has accused a former Defence Secretary of being 'economical with the truth'. Mr.Ram is using wrong data and thereby distorts truth. I do not know which is a graver offence: an alleged economy with the truth or a deliberate distortion of data.