Black money: When the "trillion-dollar" mouse begins to roar
But for two assurances, even someone as reckless as me would never dare to use this story to explain the NDA's current predicament over black money, which is bound to get worse. One, that I know for sure you do not have a dirty mind, and two, that the story is so fittingly appropriate here that I will be forgiven what would normally be dismissed as silly sexist humour in our politically correct times.
It's the old story of the anatomy professor in a medical college asking his students a trick question: which part of the human body can expand several times its size under excitement? As the class waits, he asks a woman student to answer. She goes red in the face and declines to answer, saying it's unfair to pick on her.
The professor smiles and says three things to her: she hasn't been reading her notes, she has a dirty mind, and she is probably in for disappointment when she gets married. The answer to the question, of course, is the pupil of the human eye.
The most telling comment on the black money fiasco came last week from the former DG of BSF, and by no means a BJP critic, Prakash Singh, who simply said on Twitter, "khoda pahaad aur nikli chuhiya" (You excavated a mountain and found a little mouse). The NDA government, its law officers and its spokespersons all made laughing stocks of themselves turning over this "mouse" in a sealed cover to an increasingly furious Supreme Court which, in Jain hawala case-like overzealousness, has taken charge of bringing back the black billions, or who knows trillions (ask Baba Ramdev). But nobody checked the basic facts first, or put the claims of black money figures to the test of basic reasonableness. Any black economy could only be a fraction of the overall economy. Only Baba Ramdev would tell you it is several times your GDP over many years and that all of it is rotting in Swiss vaults. Of all the astronomical figure-work touted in the name of corruption, black money was the most inflated. Before making it the centrepiece of its election campaign, the BJP would have been well advised to remember that there was a real prospect of coming to power and having to deal with the mythical monsters it had conjured up. That there is no bigger embarrassment than being suckered by your own fantasies, however delicious and useful they might have been at some point.
Just how colossal were these fantasies? One "expert" put the figure at 50 billion dollars, another at 500 billion dollars. These were heady days when more zeroes guaranteed bigger headlines by a breathless media. And everybody hated, had written off, the UPA anyway. At the top end, Baba Ramdev promised to bring back so much that you could send a Rs 2.5 crore cheque to each Indian citizen. The BJP then toned it down by about 95 per cent, to Rs 15 lakh per citizen. I haven't seen what is inside that envelope, but from whatever sources tell me, and what you can presume from the government's squeamishness, it doesn't look like it would even be a minute fraction of the fabled amounts.
In fact, as noted economist Ashok Desai explains in this week's "Upfront", for Indians with black money, a Swiss or foreign bank account is no longer the preferred option. It is real estate, unrealised capital gains, satta (betting) bazaar in every conceivable thing, from cricket to elections to commodities to weather, bank vaults, and that most favoured place, under your bed or the mattress. The government has itself admitted many of these accounts may be legal. Which is why revealing all these names without establishing any culpability would be unfair, a principle the honourable Supreme Court seems to have also accepted. It has to be commended for keeping the envelope sealed and firmly passing the temptation to play to the gallery.
Some bit of exaggeration is fine in politics, particularly as one heads for elections. This overkill is also by no means the preserve of only one side. So any killings in any riots are called a genocide, ethnic cleansing, holocaust and the man in charge is condemned as Hitler, Milosevic, Idi Amin, never mind what the courts say. Similarly, the opposition everywhere exaggerates charges of corruption and incompetence on the incumbent. Problems arise when this assumes fantastic proportions.
The unfolding embarrassment over black money is only one, and at the moment the most evident, of the many the government faces as a result of these fantasies. Masayoshi Son, the fabled head of SoftBank, who was in India last week writing multi-hundred-million-dollar cheques for new Indian businesses, apparently asked Modi what kind of information highway he would build when spectrum released in India was like a bicycle track. Japan's population of 12.76 crore, he pointed out, had 200 Mhz of spectrum while India's 10 times as much had just 40. So why were we being so tight-fisted with a basic infrastructure need?
The reason is simple. When the CAG offered different figures of notional loss in 2G spectrum from Rs 57,000 crore to Rs 1.76 lakh crore, everybody, from Modi to the media, jumped for the highest amount. The media has gotten off that kerb now. But the BJP is stuck. With every round of spectrum release, it faces the same embarrassing challenge, to justify its Rs 1.76 lakh crore loss fallacy as new auctions yield no more than a fraction of that. That's why the shyness in freeing up more spectrum, a textbook case of shooting yourself in the foot. It was touching last Wednesday when Arun Jaitley cautioned the CAG against exaggeration and drew the line between activism and sensationalism.
The older readers of National Interest will say I have said this in the past as well, but then Arun Shourie taught us to never underestimate the power of repetition. So here I am again. Rs 1.76 lakh crore in 2007 was 4.4 per cent of India's GDP; it was a couple of billion dollars more than twice our entire defence budget for that year. Now think, could the value of a little bit of spectrum be that much? Could India's telecom sector have paid that kind of money for it? And if so, why didn't you simply abolish the defence budget and ask the armed forces to auction little bits of the spectrum they hoard every year and buy all the guns, submarines and jets they need? India's telecom growth has been held to ransom by that mythology and the BJP government will spend embarrassing months dismounting that tiger, particularly as the Opposition will shout blue murder each time there is a fresh auction.
Coal is an equally cruel example. Of course, there were scandals in coal mine allocations under the UPA as there were in 2G spectrum, Commonwealth Games and elsewhere. But was every allotment fraudulent? Again, was the loss the lakhs of crores that the CAG, with its "what's a few more zeroes between friends" approach, conjured up? Because the NDA, particularly BJP, gleefully jumped for the highest figure on offer. As a result, it had no manoeuvre room once it was in the Supreme Court as the government on "coalgate". It watched helplessly as all coal mine allocations, 1993 onwards, were set aside. This has given the government its first major crisis that affects a range of sectors from mining to power, metals, cement and fertilisers, banking, almost everything.
We have seen this sad movie more than once in the past, and we are fated to continue watching sequels and repeats. VP Singh and his supporters built Bofors into a monster and India suffered as a fine weapon system was damned while nobody has as yet been punished, nor any money recovered. The Congress similarly exaggerated the Gujarat riots, Modi's alleged role, then the injustices and inequalities of "India Shining", and became a prisoner of these exaggerations over an entire decade, unable to take credit for economic growth under its own watch or to even credibly prosecute anybody responsible for the riots. All they achieved was broken politics and Parliament (where the BJP became an enemy) and policy (where povertarianism substituted for growth). If it isn't careful, the BJP could be headed the same way.
Meanwhile in Mumbai: The election of young Devendra Fadnavis as Maharashtra's "clean" chief minister takes me back to the summer of 2007 as India headed for presidential elections. The paper I then edited was unearthing a series of embarrassing stories about Congress candidate Pratibha Patil. One late evening, after a quick phone call, two very senior leaders of the Congress party arrived at my home, bearing a gift nobody would refuse: a basket of Langra mangoes. The simple point was, they said, that for better or worse, "On July 25, Pratibhaji was going to represent the glory of the Republic, so why run her down now?"
"But every story is absolutely accurate," I said. "And each time we take her and her husband's version."
"We accept that," said the more senior leader. "But what have you got against her except a cooperative bank, a sugar mill and some educational institutions? Show us a Maharashtra politician who doesn't have these, and we will say, please carry on with your campaign."
That is the box that Fadnavis now checks. No bank, no sugar mill, no colleges. That is as good a certificate of being clean as you can find in Maharashtra, by far our most corrupt state.