Your taxpayer rupees paid for this

I’m still in India, Calcutta to be precise, one of the best cities in the country for many varied reasons.

Newspaper subscribers in the city were greeted by this paid front page on one of their main broadsheets (if you’re not familiar with Indian numerical terms, 1 lakh = 100,000, 1 crore = 10,000,000);

I’m not going to poke fun at the Indian version of English deployed within the infomercial, there’s more speakers of the language here than in any other country so it’s as much their language as ours after all.

I will, however, examine the insidious way the reader is encouraged towards gratitude for the efforts of a certain publicity-shy state minister over the last couple of years in his job of spending their money.

Picking out a few example statements;

Free Power to Agriculture“; someone is paying for it, just not the farmers.

Telangana exceeds national per capita consumption“; is that a good thing? Interesting difference between India and a western country where the former might see increased usage as a key metric of modernisation. In the west, we’d just feel bad about it.

This is the most instructive part though;

One assumes reliable and cheap electricity supply is the requirement most rate/taxpayers would express, not employment, promotions, changes to employment status, etc.?

This is how India differs from most other Anglosphere countries however.

India is an amazing country. Firstly, it never should have been a country in the first place; the British conquered, bribed or annexed a lot of disparate kingdoms (none of which were anything close to a democracy) into what then became lumped together and known as “India”. The mutiny in 1857 is now referred to in India as the First War of Independence, but in reality, it was no such thing, if the British had lost there would have been an inter-regnum which would have seen various Maharajas competing for top dog status, the population wouldn’t have been consulted or considered. The Partition of 1947 was a disaster that was perhaps waiting to happen as a consequence of this unnatural joining of many different kingdoms.

India is amazing also because it is simultaneously the epitome of a capitalist economy and also a centrally-planned state. You’re probably wondering why and how this can be.

The vast majority of transactions,  95% in fact, in India are cash. As a consequence it’s hard to get a breakdown of the values but one could reasonably assume most of the volume is below US $10 in value. The important point is that the Government doesn’t have much opportunity to be involved in these transactions. This is why a paper cup of masala chai still costs roughly what it did 20 years ago (10 rupees), a shave at a barbers’ still costs about 60 rupees and an autorickshaw journey of a few kilometres is still less than 100 rupees. The input costs are the major factor in the price, not the government overheads, and these have remained flat or reduced over time.

On the macro level, however, the taxes paid in a country of a billion or more people still total a very large number. As with politicians the world over, this money is then diverted to pork-barrel projects that buy short term votes; dams, electricity distribution projects, highways, border skirmishes with Pakistan, etc.. However, because of the 95% cash transaction issue, the politicians usually steer well-clear of the full Communist central planning drive for utopia as it’s obvious to anyone with half a brain that the oppressive infrastructure just isn’t in place to enforce it. It’s a nice halfway house really; the politicians can get comfortably wealthy through the usual methods but are happy enough to let most people simply get on with commerce. And commerce works; the middle class here has grown 20 fold in 25 years.

Bill’s Opinion

One of the main brakes slowing India from becoming a centrally-planned disaster is the inability of a government to intervene in the minutia of the population’s lives. Unmonitored transactions is a key foundation to this freedom.

As the American Founding Fathers and Hayek’s Road to Serfdom warned us, concentrations of power and information in the hands of government officials always leads to abuse. Just because  your guy got voted in and used the additional power in a relatively useful way, there’s no guarantee the next guy will be benign with the increased reach.

It’s for this reason, I hope cash, gold and cryptocurrencies have a long life ahead of them. Imagine a world were every single transaction is tracked electronically and then consider what that information would be worth to a malicious leader.

Oh, and irony of the day; Calcutta isn’t even in the state of Telangana.

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