I saw an article from David Frum in Daily Beast on India
Instead of leaving a small comment there, i wanted to expand on it and showcase that the disaster in India is going to hit the US shores very quickly and the reasons, symptoms for the same.
I track US and Indian politics very closely. A long ago, when i was naive, i started to follow US politics because i felt that it was the road that India should take (yup! i was that naive!).
I want to share these 4 insights:
1. Inequality: India has one of the worst economic inequality in the world. India is home to one of the richest men on Earth - Mukesh Ambani (he of the $1 billion home fame - when it costed him a more saner $100+ mn to build it!) as well as some of the most distirbuingly poor. In fact, one of the top beaurocrats in India recommended that we fix Rs 32 per day - $0.65 a day or $19.5 a month or $234 as the poverty level - 20 times lower than the current per capita income (equivalent of $2000 in US as poverty standard definition) and there will be 15% POPULATION BELOW THE $0.65 a day income.
India is a vision of where US is headed in 10-20 years if economic inequality isn't corrected where the ultra rich keep making money and the poor continue to live on less than a dollar a day.
2. Corruption is unbelievable in India. There are elections to be Members of Parliament (equivalent of Congress Rep) where folks have spent upwards of $8-10 mn. In fact, i know of local body election in a metro suburb where winner of council membership receive Rs 6 lakhs ($15,000) for voting a particular person as council chairperson. With Indian per capita income at $4,000, this is the equivalent to $150,000 payment for a local body election in US. During elections to state and federal govt congressmen, it is common for candidates to pass around Rs 2000-5000 ($40-$100) to buy votes. What voters dont realize is that folks who spent $5-10 mn on elections will look for at least 10x return through corruption and favorable govt contracts. At least 50% of Indian MPs (Congressmen) have business interests and mostly dealing with government contracts. The actual cost of a federal election in India, the upcoming 2014 one, is expected to be around Rs 30,000 crores - $6 billion dollars. Rs 30,000 crores is 7% of Federal government receipts. In US parlance, it is the equivalent of spending $177 BILLION DOLLARS on the 2012 elections with the elected representatives looking to loot at least 10 times - $1.77 TRILLION from favorable contracts to black money operations.
Are you revolted by these numbers? These are coming to the US shores shortly. That's what happens when you legalize inequality. Greed has no bounds. The mega-billionaires are not doing social service by injecting billions into the 2012 Presidential election. If Romney wins, they will extract their pound of flesh - nope, they will settle for a billion dollars cash, thank you very much!
3. Government Subsidies: India lives on government subsidies. From Mukesh Ambani to the last person, everyone receives subsidies. Petrol is extremely expensive while diesel, cooking gas, fertilizer, electricity, water is all subsidized. The 2 ill-effects is that most of the subsidary is garnered by upper-middle and middle class (Upper middle class homes have 2-3 LPG cylinders and use upto 15 cylinders a year. With Rs 500 ($10) subsidary, that's $150 dole to the upper middle class). Subsidary can be provided only because these operations can be run by government. This leads to a constant shortage in power. Right now, in peak summer, ALL metro see at least 1-2 hours of POWER OUTAGE. Smaller cities see 2-4 hours of POWER OUTAGE. Towns and villages with 10-12 hours of power outage isn't uncommon. And CAG (the equivalent of Inspector General in India) has recently released a report where he has claimed 1,86,000 crores of loss to Indian government and gain to private companies in a recent coal block allocation scheme. THAT'S $36 BILLION DOLLARS OF NATIONAL MONEY TO PRIVATE PLAYERS THAT INCLUDES THE RICHEST AND MOST POWERFUL COMPANIES IN INDIA
It would be funny if it wasn't tragic to read the story of a recent election where the CM candidatepromised laptops, ceiling fans, mixie, grinder, 20 lt mineral water amongst hundreds of other sops. Why? Because the previous CM announced and implemented a scheme of providing free color tv to all voters in the previous election. That's how my taxes were wasted!
4. INCOME TAX LOOPHOLES. I come from a very middle class family. My father had to mortgage my mom's gold many a times to take loan for my education, speedy closure of home mortgage and general liquidity situation. It wasn't uncommon for most middle class homes till recently as credit cards remained tabboo. I went to a decent under-grad school but one the top 5 graduate schools and consider myself extremely lucky for the kind of opportunities that come my path. I am truly on my way to 1% - either in India or US though i will never get to 0.1%. The side effect of my large salary is 30%+ of my salary always went away as income tax so that the government can blow it away in some harebrained scheme. That never railed me! I always thought of Income tax as my repayment to the society. What really ticks me off is to see doctors, lawyers, CFA consultants who earn millions pay an absolute number lower than mine! What rails me is the endless schemes and sops that companies receive for creating no or minimal jobs. Does this look familiar? The same is creeping in US. Loopholes are gateways to income inequality
This is not a partisan message attacking one of the two parties. This is a bi-partisan message so that US remains wary of becoming the worst of India. It is in the hands of each US voter to decide the long term future of this country - is it benefits to 1% or uplifting of everyone? Let your ballots speak this November!!!