One of the things that I usually do not comment on is the Union Budget. The reason is simple. I know very little about economics and I have mentioned that before. For me the budget is all about special-interests driven fiscal dribbling: tariffs lifted on consumer electronics, an extra cess on cell-phones and exactly the opposite the next year.

In other words, nothing worth commenting on or getting too worked up about.

But then once in a few years, usually right before election time, the government decides to make a grand populist gesture. It gets excellent press, is politically extremely correct, can be spun of as a “crowning achievement” in the coming elections, allows poster painters to put down “savior of the common man” below gigantic cut-outs of leaders, and most importantly serves a vested interest or two. What’s positively evil genius about such gestures is that once you take even a slightly close look at it— you see that it’s blatantly unfair, isn’t that much of a big deal anyways, helps people who don’t need it that much, does not help all those whom it is supposed to and does absolutely nothing to solve the larger problem.

Yes I am talking about Sonia mam’s historic 100% government loan write-off to farmers who own less than 2 hectares and 25% loan write-off for overdue loans for all other farmers (provided they pay back 75% of their loan as negotiated) irrespective of financial condition or location , an amount that will directly cost the exchequer, as originally reported, 60,000 crores.

Continue reading ‘Loanacy’