Why Robert Vadra is a better economist than Manmohan Singh

Ridiculous to probe Vadra, just end the patent on his wealth creation formula

bvrao

BV Rao | October 11, 2012




The national capital is in the middle of a reforms frenzy. There’s nothing wrong with that except that Manmohan Singh is seeking to package three years of utter failure as sudden virtue. Since his return to the finance ministry on July 31, P Chidambaram has been busy making the big decisions that will get the dollars rolling back into India: FDI in retail, insurance and pension, hike in fuel prices, power tariffs and train fares (for some classes).

Delhi’s English media is grinning like a Cheshire cat unable to hide the glee over the sudden zeal to reform everything in sight. Corporate India is ecstatic for being courted by the government all over again. Even visiting US economy honchos Bernand Bernanke and Timothy Geithner are pleased with the change in mood. And soon we can bet that The Economist, Time, NYT and WSJ will also praise the new spring in the Indian economy.

That’s a happy situation for the Congress and its government. Two months ago it didn’t seem like it would be possible for them to turn the tide so rapidly after three years of self-induced paralysis. No wonder Congressmen are strutting about like they have already won the perception game and 2014. You can tell that from the smugness on the faces of Congress spokespersons on evening prime time and its ministers all through the day. At least, till a few days ago that was the case.

But just when they seemed set for a rollicking party, they’ve discovered a fly in the drink. Normally, a fly in the drink does not a party stop. You just pick it and flick it away. Unfortunately for the Congress party, Robert Vadra is not just any ordinary housefly. So ministers, spokespersons and partymen, everybody dived deep into the glass to keep the fly floating. 

Congress’ initial reaction was one of irritation and disdain for interrupting the party for piffling matters. Deals between two private individuals cannot be the concern of the government. Should children and relatives of powerful politicians live in poverty? Vadra may have built a veritable real estate empire in the matter of four years flat without a product or a business but which laws of the land did he violate? DLF, a listed company, may have doled out favours to Vadra but how are the party or the government involved (oh, really?) and what is Vadra’s crime if DLF gave him Rs 85 crore to keep in his piggy bank for two years when its own coffers were not exactly overflowing, or to be precise, it was being weighed down by a Rs 22,000 crore debt?

As always, the Congress party is prone to misunderstanding the mango man. The question on top of everybody’s mind is not “what crime did Vadra commit?” The question on top of everybody’s mind is from where does Vadra source the timber for his magic wand that can turn Rs 50 lakh into Rs 300 crore in four years. All of us would love to have that magic wand. And if we have to bring down an entire forest for that, environment minister Jayanthi Natarajan, a fierce supporter of Vadra’s right to livelihood, would surely accommodate us and bend a few forest laws.

No, the question on everybody’s mind is not what crime Vadra committed. The question on everybody’s mind, at least on the mind of the millions of DLF’s shareholders, is what crime they have committed that DLF does not extend each one of them the same largesse it showered on Vadra. The crime is not to share the formula for creating assets just out of mutual goodwill and thin air.

If a formula exists, wherein we can grow our wealth by 60,000% in four years by:

a)  Not doing anything significant such as selling a product or service

b) Not breaking any law of the land

c)  Not causing any revenue loss to the government or a listed company

d) Not owing a dime to the government in any tax, wealth, income or otherwise

e)  Not leveraging the enormous clout of the First Family, and

f)  Not colluding with friendly state governments to deliver favours to munificent listed companies;

then, this government, of all governments that we have seen, has the moral duty to reveal the formula for the good of the mango man. Because, the essense of Manmohanomics, we have been told, is creating wealth. Vadra made loads of money but nobody lost any! That’s a perfect example of wealth “creation”.

So, instead of avoiding the topic and threatening Arvind Kejriwal, it makes sense for the government to bring Vadra’s copyright formula under the “compulsory licence”, that legal method to make life-saving drugs cheap. There is no life-saving drug more potent than easy money. No need for FDI, no reforms and no coalition compulsions. Prescription for a never-ending Congress party. Right doctor?

 

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