Ignore Swamy at your risk
Subramanian Swamy is an intriguing guy. Turning 80 this September, he remains as feisty and controversial as ever. and even though he is a BJP Rajya Sabha MP, unlike most of his party colleagues, you are unlikely to find him crawling on all fours before those who run the party. Swamy is clearly his own man. This allows him to speak out on all issues, not bothering about who he is offending. This may not make him popular, true. But it draws him the attention he requires to stay afloat.
I disagree with Swamy on most issues, but I always find his ideas interesting when it comes to matters of economics. He is well informed and stubbornly original. Like his favourite politician Donald Trump, Swamy speaks from the extreme right and proposes ideas so simple that they provoke outrage. You may ignore his Hindutva chants and his rants against the Gandhis– but listen carefully when he speaks on economics. For whatever you may think of him, remember this: Swamy understands economics better than most politicians. Amit Mitra, my Presidency college classmate and West Bengal’s finance minister, once told me over dinner in Aveek Sarkar’s residence that of all the people who had taught him in Harvard, Swamy was by far the best. And Mitra, remember, studied under Manmohan Singh and Paul Samuelson.
Thirty years ago or more, Vir Sanghvi put Swamy on the cover of his magazine as the man who may be Prime Minister one day. Even I did a cover story on him during the Chandra Shekhar days when, as a minister, he was proposing radical reforms. But the government fell, sadly before its time, because of Rajiv Gandhi’s silly contretemps. That was, alas, Swamy’s last brush with serious power. But he continues to give the best and most provocative quotes to journalists which is possibly why he is still around while others from that era find themselves retired perforce. Yashwant Sinha, who was Chandra Shekhar’s finance minister as well as Vajpayee’s, has just written his memoirs while Swamy remains in the thick of things, sometimes surviving barely by the skin of his teeth. Clearly the current dispensation feels a Swamy within the fold is safer than a Swamy outside, chucking barbs at them.
Swamy also has this habit of fighting with everyone at the slightest provocation. This has left him a glorious singleton in Indian politics. Even within the BJP, he remains his own master– with his own brass band tooting away. His dream of becoming finance minister was never fulfilled because he was always a risky option. An intrepid individualist who mocks discipline. What he wants is to be listened to. And very often what he says is worth listening to—on matters of economics for sure. Some of it is lost in the white noise that surrounds him. Even on social media where he commands a big following— over 8 million followers on Twitter– not everyone takes his views seriously.
At the core of Swamy’s reformist agenda is one simple idea: Abolish personal income tax. He argues that this alone can sort most of our problems. It could give a huge boost to savings and help revive the investment cycle. At a time when private investments have fallen to an all-time low, Swamy’s theory that income tax has become redundant and must be scrapped does not sound all that outlandish any more. Politically it is a humdinger. Also, his idea of a consumption tax—that appeared weird when he first expounded it—is pretty similar to what we call GST today, minus its awful complexities.
The bureaucrats who implement the Prime Minister’s vision plan have made everything horribly intricate. The ordinary citizen is stuck between a rock and a hard place. Even the most astute tax advisers will tell you today that they have no idea what will pass muster, what will not. Smart tax planning, perfectly legal everywhere in the world, is seen as tax avoidance here. So is angel investment. Overnight, start-ups got tax notices for perfectly legitimate investments in their business. On the other hand, business failure is seen as a criminal act and those who once built India’s best brands are now treated as random crooks. Companies that were doing so well till recently are now caught in a sudden debt trap created by the intransigence of the very banks that the government is trying to cleanse and revitalise through mergers.
When Narendra Modi was first sworn in, we thought he would keep his promise of less government. But that was the first promise that went out of the window. The current government has intervened more in our lives and business than any other. People are now backing away from investing in India. Businessmen are fleeing overseas, and not necessarily to tax havens. The newspapers sound like a dirge every morning.
It’s time to set aside politics and go back to real economics. Things are going very wrong and no amount of headline management or fake stories can lead us to believe that a revival is just around the corner. What is actually around the corner is a monster bigger than recession and if we don’t slay it quickly, there will be hell to pay.
So why not take a chance and listen to the Mylapore Brahmin for a change?
DISCLAIMER : Views expressed above are the author’s own.