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Zara Yaad Karo Qurbani - Views on News from Equitymaster
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  • Dec 1, 1997

    Zara Yaad Karo Qurbani

    Just think about it. Fifty years ago India won its independence from the British mostly due to the leadership of a man who believed in serving the people and getting their backing for everything that he did. When religious riots threatened to engulf the country, Mahatama Gandhi said he would go on a fast till the people gave their verdict: stop the riots or be responsible for the death of the Mahatama. The riots stopped. When freedom was won but at the cost of partition, a saddened Mahatama accepted it because it was the will of the people and no fasting, or expressions of grief seemed to change the mind of a country adamant on winning its independence. Mahatama Gandhi always asked for and accepted the will of the people.

    And now we have politicians, elected to Parliament who, by their actions, are telling us that they will do anything to avoid an election. They have no desire to seek the opinion of the people. They claim they want to save the country from another election because we can't afford it. Some, cutting across party lines, have even formed a group with the stated objective of avoiding elections. But the truth is that all these actions are actually reasons for frightened politicians to keep their seats. They are not saving us from another election, they are just saving themselves.

    An election is supposed to be expensive, these preservationists say. It will cost the country Rs 5,000 crores. Maybe even Rs 10,000 crores. And, the critics of another election say, this is too much money for a poor country. Really? Put this in perspective. It took this coalition government 8 months to decide what to do about the oil pool deficit (however fake it may have been) and that one decision cost the government, Rs 1,000 crores in extra interest because of the delayed remedy. More recently, indecision and conflicting views about the direction of foreign exchange rates is already inflicting a cost on the country and the economy. Obviously, the export lobby and import substitution lobby within the 13-party coalition is winning and exchange rates have already reached an all time low against the US dollar. Every 1% fall in the exchange rate makes the country "poorer" in dollar terms by Rs 11,000 crores. Since August, 1997 the exchange rate has fallen by 6% and it has cost the country Rs 66,000 crores - an erosion of wealth that will take one year of 6% GDP growth to repair. And now that this correction in fx rates has started, stopping at some pre-defined limit will be impossible so the country will have to face more translation losses over the next few months. And there is the cost of not having local or foreign businessmen, or even consumers, making decisions because they perceive instability in politics. All these are costs of having a government run by factions with no common policy and no united platform.

    There must be an election. There must be fifty more elections. We must continue to hold elections till we the people decide who we want to vote for and give some party a majority. This attitude of trying to save the country from "yet another election" is dangerous and, as explained, more costly than holding elections. If the verdict of the people results in no majority, yet again, let the political forces regroup themselves and face the electorate again. Don't get me wrong. Coalitions are fine, provided they are set up before an election and not as a seat-preservation device. This regrouping of political parties after an election is wrong and results in the kind of stupidity we are seeing today. These meetings, new alternatives, and letter-writing fits are a joke and an insult to the people who fought for our independence.

    Maybe someone needs to go back to Parliament and sing "zara yaad karo qurbani".



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