Austerity for the affluent – P.

Sainath

Pranab Mukherjee's stirring call for austerity tugs at the national tear ducts. Prime
Minister Manmohan Singh has pleaded for it in the past and watched his flock
embrace it creatively. With the Finance Ministry even acting on Dr. Singh's call in
2009 (economy class air travel, spending cuts), we are now in the fourth year of
our noble quest.

There are, of course, several kinds of austerity. My pick would be the variety
practised by Planning Commission Deputy Chairman Montek Singh Ahluwalia.
No one can challenge Dr. Ahluwalia's commitment to austerity. Look at the way
he's stood up to the populist demand for a poverty line that makes sense. No
pampering people here. Spend Rs. 29 a day in urban India or Rs. 23 in rural India
and you are not poor. He's even asked the Supreme Court to uphold the imposition
of such rigour on hundreds of millions of his fellow citizens. One affidavit filed by
the Planning Commission defended a line of Rs. 32 (urban) and Rs. 26 (rural) a
day. Since then, the Padma Vibhushan awardee and some of his colleagues have
stuck their necks out to lower that further.

RTI queries

That Dr. Ahluwalia practises austerity himself is evident from two RTI queries.
Both fine examples of RTI-based journalism, but failing to get the attention they
deserved. Both exploring the anatomy of his austerity. One was a story in India
Today (covering Dr. Ahluwalia's foreign trips between June 2004 and January
2011) by Shyamlal Yadav. This journalist (now with The Indian Express ), has
done outstanding RTI-based stories in the past as well.

The other, in February this year, came from The Statesman News Service (reporter
unnamed). This one took out details on Dr. Ahluwalia's global forays between May
and October 2011. In that period, he undertook “four trips covering 18 nights
[which] cost the exchequer a sum of Rs. 36,40,140, an average cost of Rs 2.02 lakh
a day,” says the SNS report.

At the time this happened, that Rs. 2.02 lakh would have been worth $4,000 a day.
(Gee! Lucky for us Montek was into austerity. Imagine what his expenditure might
have been otherwise). That is a daily spend almost 9,000 times greater than the 45
cents cut-off point at which rural Indians would be doing okay, in his view. Or
over 7,000 times greater than the 55 cents cut-off point for urban Indians that Dr.
Ahluwalia would find “normatively adequate.”

Now his spend of Rs. 3.6 million (or $72,000) in 18 days might well have been his
personal stimulus to global tourism in that year. After all, the industry in 2010 was
still recovering from the ravages of 2008-09, as the United Nations World Tourism
Organisation points out. The U.N. agency found, on the other hand, that 2011 saw
global travel revenues cross $1 trillion. The largest revenue increases were seen in
the U.S. and Europe (where most of those 18 days were spent). The Indian public
can rejoice over its money playing a humble part in that recovery even while
scorched by austerity at home.

The stats from the Shyamlal Yadav's RTI are fascinating. To begin with, his
findings show Dr. Ahluwalia made 42 official foreign trips and spent 274 days
overseas during a seven-year tenure. That is “one in every nine days” abroad. And
that's excluding travel days. The India Today story found that his excursions cost
the exchequer Rs.2.34 crore. However, it points out that they received three
different estimates of the costs of his trips and charitably went with the lowest.
Also, said the India Today story, “it is not clear whether the figures include the
expenses incurred by Indian embassies abroad on frills such as hiring limousines.
The actual costs could be a lot higher.”

Since the post he holds does not require so much foreign travel — all of it done,
though, with “the permission of the Prime Minister” — this is puzzling. That 23 of
the 42 trips were to the U.S., which does not believe in planning (but then, perhaps,
neither does Dr. Ahluwalia), is even more puzzling. What were these trips about?
Spreading global awareness on austerity? If so, we'll have to spend more on his
travel: look at those revolting Greeks killing the Cause on the streets of Athens.
And even more on his trips to the U.S. where the austerity of the affluent is
striking. CEOs in that country took home billions in bonuses even in 2008, the year
Wall Street tanked the global economy. This year, even the media journals of the
super-rich in the U.S. write about CEOs destroying their companies, jobs and more
— and gaining personally from it. Millions of Americans, including many who
suffered home mortgage foreclosures, saw a different kind of austerity. The kind
the French increasingly fear and have voted against.

When Dr. Singh pleaded for austerity in 2009, his Cabinet rose handsomely to the
call. Each member added a modest million rupees a month thereafter, on average,
to his or her assets over the next 27 months. All the while, hard at work as
Ministers. ( >“The Union Cabinet gets healthier,”The Hindu , September 21,
2011). Praful Patel excelled, adding on average, half-a-million rupees to his assets
every 24 hours in that period. Workers in Air India, under a Ministry he headed
much of that time, struggled to get their salaries for weeks on end. Now with
Pranab cracking the whip, there'll be even more austerity going around.

Note the bipartisan spirit of this austerity: in the past few years, Praful Patel (UPA-
NCP) and Nitin Gadkari (NDA-BJP) have hosted two of the costliest weddings
ever, with far more guests than seen at any IPL final. Gender-balanced Spartanism,
too. That was for Mr. Patel's daughter and Mr. Gadkari's son.

Their corporate counterparts take it further. Mukesh Ambani with his 27-floor (but
higher than 50 storeys) costliest residence in living memory. And Vijay Mallya —
whose employees in Kingfisher struggle for their salaries — who tweeted on May
5: “Having dinner at Atmosphere on the 123rd floor of the Burj Khalifa in Dubai.
Never been so high up in my life. Awesome view.” That's probably higher than
Kingfisher is flying right now. Both own teams in the IPL. Which body has
received public subsidies (by way of entertainment tax waivers, for example). That
is, until the matter went to the Bombay High Court. There are other public-funded
austerities linked to the IPL — watch this space.

Wall Street model

The corporate world here generally follows the austerity model of Wall Street.
There, nine banks including Citigroup and Merrill Lynch “paid $32.6 billion in
bonuses in 2008, while receiving $175 billion in taxpayers funds,” reported
Bloomberg in 2009. It quoted New York Attorney General Andrew Cuomo's report
on the subject: “When the banks did well, their employees were paid well. When
the banks did poorly, their employees were paid well. When the banks did very
poorly, they were bailed out by taxpayers and their employees were still paid well.
Bonuses and overall compensation did not vary significantly as profits
diminished.”

Note that Pranab's austerity prayer last week saw the soothsayers of the super-rich
raging on TV that the deficit was all due to “one populist measure after another.”
That is, stupid things like trying to give people work, reduce hunger or send
children to school. No mention of the Plutocrat Populism which saw about Rs. 5
lakh crore (roughly $100 billion at the time) being gifted mostly to the rich and the
corporate classes by the same Pranab budget in concessions on Corporate Tax,
Excise and Customs Duties. (See >“To fix BPL, nix CPL,”The Hindu , March 26,
2012). Sitaram Yechury pointed out in Parliament that these write-offs for the
super-rich exceeded the fiscal deficit by Rs. 8,000 crore. But it is the ‘populist
measures' aimed at the poor that get panned.

Amartya Sen ( > The Hindu, Jan. 7, 2012 ) ruefully asks “why there is hardly any
media discussion about other revenue-involving problems, such as the exemption
of diamond and gold from customs duty, which, according to the Ministry of
Finance, involves a loss of a much larger amount of revenue (Rs.50,000 crore per
year) than the additional cost involved in the Food Security Bill (Rs.27,000
crore).”

Indians outside the charmed circle of the meritorious know a different austerity.
Food inflation in double digits. Vegetable prices rising 60 per cent in a year. Child
malnourishment double that of sub-Saharan Africa. Families cutting back sharply
on milk and essentials. Massive increases in health costs bankrupting millions.
Farmers unable to afford inputs or access credit. A drinking water scarcity for
many, as more and more of that life-giving substance gets diverted for other
purposes. How much nicer to practise the austerity of the elite.