It's now reasonably clear to all that whichever way you do the math, Rs 60,000 crore (Rs 600 billion) will not go where it's supposed to go. It's also increasingly evident that the number was inserted post-facto though the intent was quite clear.
If Finance Minister P Chidambaram is struggling to find a good explanation, read this insightful report of a conversation between journalists and Agriculture Minister Sharad Pawar as reported by agencies on Sunday.
"I cannot tell whether they (suicides) will stop as we do not know who commits suicides for what reasons," Pawar said when asked if the loan waiver will stop farmers' suicides in the Vidarbha region.
But, Mr Pawar, said, he met some farmers in Maharashtra's Marathwada region and they were happy. He said the package was historic and "it was for the first since Independence that farmers have got a good deal".
And he repeated the figures. About 40 million farmers would benefit. Moneylenders account for more than 70 per cent of the credit given to small farmers at interest levels ranging from 20 to 36 per cent - similar to my credit card except that I have the choice. And small farmers account for more than 80 per cent of the indebted. So the numbers are all there.
I have thus concluded that it's largely pointless to do any more maths here on. Because this is about something else. It's about the joy of giving. Partly, it's to do with this being an election year. Partly it's to do with the fact that at least a small part of the UPA Government is feeling genuinely guilty about the benefits of the raging economy not flowing to most of the population. You may not believe it but I do. Maybe the Prime Minister leads this group as might become evident in a moment.
First, let's imagine a discussion between the prime minister and his key cabinet ministers in the first week of February. A cursory glance across Indian media headlines shows that all is well. There is unprecedented economic growth, levels which most developed countries are envious of, even if there is slight cyclical dip.
Wealth continues to accumulate, billionaire listings are now a daily affair. You can even track where the richest stand every day, though until quite recently this was only done once a year.
Further, it appears that for many in urban India, a critical issue was which Ambani brother was doing well today, depending on who you were backing. Nevertheless, every industry and company within it is growing, despite the occasional knocks from the appreciating rupee.
Land or wait to take off in Mumbai and Delhi and you are caught in a traffic jam. Even stockbroking firms boast their own private jets. It's not the cost that stops many others, it's whether a rival will cast an evil eye. There was air and now there is the sea. An ongoing boat exhibition in Mumbai promises to double and triple business in luxury yachts, though there is no marina to speak of.
So our broad policies have ensured the rich are taking good care of themselves, all present concur. What about the rest of the country? Oh, well, farmer suicides are now averaging one in 30 minutes ( P Sainath, The Hindu). Worse, suicides went up further despite ongoing state and central relief efforts worth Rs 4,825 crore (Rs 48.25 billion) in the Vidharbha region of Maharashtra were in progress.
So what are we going to do, gentlemen? It's not about elections alone, what do we do so that people feel that we are doing something? How do we get a good night's sleep thinking we've done good. And by the way, Mr Finance Minister, your Budget proposals seem to show even more give-aways to the corporate sector. What's to balance all of that?
Yes, yes, say the rest. India Inc is benefiting to the tune of over Rs 200,000 crore (Rs 2,000 billion) by way of concessions, benefits and incentives. We've got to transfer some of this elsewhere. More so since tax revenues will continue to grow this year as well, on the back of strong corporate performance. And yes, individuals within companies are earning more in stock options (proportionately) than most of Global Inc.
Somewhere then, the die was cast. A decision was taken to announce a giveaway. How the number was arrived at is a bit of a mystery to me, more than how it will be bridged. Because that is a mystery to those who put the "package" together as well. One thing I am sure of, everyone felt happy after the decision. That's the power of the joy of giving. Even if the money is not yours.
On February 15, at his inaugural address at the Federation of Indian Chambers of Commerce (FICCI), the PM said, "We cannot have a situation where 80 per cent of this sector is outside the formal financial system and suffers from excessive indebtedness. We are trying to resolve the problem. I hope this would be done soon."
Over the weekend, I spoke to one of the drivers in our office pool. His family in a village near Allahabad in Uttar Pradesh will benefit from the waiver. This is not the first time, he tells me. Previously in 2006, he recalls, two pending loans for small horse power pump sets were waived by the state government. One was Rs 18,000 and the other Rs 20,000, he said precisely.
It did not appear that his family was reeling under a burden of debt, then or now. So they were happy. Nor did they have any loans outstanding now. He could have used the windfall (because he would have to send less back home) to buy a motorbike.
