India’s Big Government

by Vivek Kaul

  458 Ramesh & Khan, 2015.

  459 The Land Acquisition Act, 1894.

  460 Chakravorty, 2013.

  461 M Ghatak and P Ghosh, ‘The Land Acquisition Bill: A Critique and a Proposal’, Economic & Political Weekly, October 8, 2011.

  462 Ramesh & Khan, 2015.

  463 Morris & Pandey, 2007.

  464 Goswami, 2012.

  465 Ministry of Rural Development,The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, – An Overview, September 2013.

  466 Ramesh & Khan, 2015.

  467 Ibid.

  468 Department of Land Resources, Ministry of Rural Development, Government of India, Standing Committee Report on the Land Acquisition Rehabilitation and Resettlement Bill, 2011.

  469 Ibid.

  470 M Levien, ‘From Primitive Accumulation to Regimes of Dispossession: Six Theses on India’s Land Question,’ Economic & Political Weekly, May 30, 2015.

  471 Goswami, 2012.

  472 Ramesh & Khan, 2015.

  473 Department of Land Resources, Ministry of Rural Development, Government of India, Standing Committee Report on the Land Acquisition Rehabilitation and Resettlement Bill, 2011.

  474 Morris & Pandey, 2007.

  475 R Singh, ‘Inefficiency and Abuse of Compulsory Land Acquisition—An Enquiry into the Way Forward’, Economic & Political Weekly, May 12, 2012; and Goswami, 2012.

  476 Ramesh & Khan, 2015.

  477 Ghatak & Ghosh, 2011.

  478 Singh, 2012.

  479 Ramesh & Khan, 2012.

  480 J Sood, ‘Road to Disaster’, Down to Earth, June 15, 2011.

  481 S Ramanathan, ‘Vasundhara Raje wins the “title” on reforms’, Mint, April 8, 2016.

  482 Morris & Pandey, 2007.

  483 H de Soto, The Mystery of Capital—Why Capitalism Triumphs in the West and Fails Everywhere Else, Black Swan, 2001.

  484 Ibid.

  485 Ibid.

  486 A Tilotia, The Making of India—Gamechanging Transitions, Rupa Publications India, 2015.

  487 Chakravorty, 2013.

  488 Ibid.

  489 Ghatak & Ghosh, 2011.

  490 Ibid.

  491 Singh, 2012.

  492 Morris & Pandey, 2007.

  493 Singh, 2012.

  494 Ibid.

  495 Ghatak & Ghosh, 2011.

  496 Singh, 2012.

  497 Ibid.

  498 Tilotia, 2015.

  499 K Kulkarni, ‘Farmers’ SEZ face a rough ride’, Business Standard, February 5, 2008.

  500 Singh, 2012.

  501 Ministry of Rural Development, Standing Committee Report on the Land Acquisition Rehabilitation and Resettlement Bill, 2011.

  502 Ibid.

  503 Ibid.

  504 Chakravorty, 2013.

  505 Levien, 2015.

  506 Ibid.

  507 Chakravorty, 2013.

  508 Ibid.

  509 G Raghuram and S Sunny, ‘Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Ordinance, 2014 – A Process Perspective’, IIM Ahmedabad Working Paper, July 2015.

  510 Levien, 2015.

  511 Ibid.

  512 Ibid.

  513 M Levien, ‘Regimes of Dispossession: From Steel Towns to Special Economic Zones’, Development and Change, 2013.

  514 Ibid.

  515 Ibid.

  516 As quoted in Ramesh & Khan, 2015.

  517 Ibid. (Author’s translation from Hindi to English.)

  518 As quoted in Ramesh & Khan, 2015.

  519 Department of Land Resources, Ministry of Rural Development, The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 – An Overview.

  520 Ibid.

  521 S Sharma, ‘BJP’s claim that farmers would get four times the value of their land isn’t true in its own states’, Scroll.in, February 24, 2015.

  522 Ibid.

  523 M Ghatak, S Mitra, D Mookherjee and A Nath, ‘Land Acquisition and Compensation—What Really Happened in Singur?’, Economic & Political Weekly, May 25, 2015.

  524 Ramesh & Khan, 2015.

  525 Section 5 of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

  526 Department of Land Resources, Ministry of Rural Development, The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 – An Overview.

  527 Chakravorty, 2013.

  528 N Hebbar, ‘Land Bill debate: BJP fishes out Nehru quote to counter Congress’, The Economic Times, April 21, 2015.

  529 Chakravorty, 2013.

  530 Department of Land Resources, Ministry of Rural Development, The Right to Fair Compensation and T ransparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 – An Overview.

  531 Ramesh & Khan, 2015.

  532 Ministry of Rural Development, Standing Committee Report on the Land Acquisition Rehabilitation and Resettlement Bill, 2011.

  533 Ibid.

  534 Ramesh & Khan, 2015.

  535 Raghuram & Sunny, 2015.

  536 Ibid.

  537 FE Bureau, ‘India Inc Tepid to Changes in Land Act’, The Financial Express, December 30, 2014.

  538 Raghuram & Sunny, 2015.

  539 As quoted in Raghuram & Sunny, 2015.

  540 Ghatak & Ghosh, 2011.

  541 Levien, 2015.

  542 Section 10(3) of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

  543 S Saha, ‘”Prohibiting the use of agricultural land for industries is ultimately self-defeating”—An interview with Amartya Sen’, The Telegraph, July 7, 2007.

  544 Ibid.

  545 Ghatak & Ghosh, 2011.

  546 Ramesh & Khan, 2015.

  547 Ghatak & Ghosh, 2011.

  548 Morris & Pandey, 2007.

  549 Ghatak & Ghosh, 2011.

  550 Chakravorty, 2013.

  551 Ibid.

  552 RM Mukherjee and S Shekhar, ‘Failure to amend land law to exacerbate sense of “policy drift”’, Ambit Capital, August 10, 2015.

  553 S Singh, ‘Land Acquisition Bill: Congress readies to keep food bill momentum going’, Firstpost, August 28, 2013.

  554 Raghuram & Sunny, 2015.

  555 Ramesh & Khan, 2015.

  9. Black Money—We Won’t Get It Back

  556 As quoted in A Kumar, The Black Economy in India, Penguin Books India, 1999.

  557 Ministry of Finance, White Paper on Black Money, 2012.

  558 Ibid.

  559 S Baru, 1991—How P.V. Narasimha Rao Made History, Aleph, 2016.

  560 FICCI,Widening of Tax Base and Tackling Black Money, 2015.

  561 A Kumar, The Black Economy in India, Penguin Books India, 1999.

  562 M Balachandran, ‘Thomas Piketty just can’t understand India’s strange secrecy over income tax data’, Quartz, January 21, 2016.

  563 B Sivakumar, ‘Number of housing loan accounts dips 2.7 per cent’, Times News Network, January 3, 2015.

  564 Staff Reporter, ‘Average Home Loan Size Grows to Rs. 19 lakh’, Money Guru India, April 2, 2014.

  565 A Tilotia, The Making of India—Gamechanging Transitions, Rupa Publications India, 2015.

  566 Press Trust of India, ‘1.02 crore houses lying vacant in India, says CBRE’, April 29, 2015.

  567 Kumar, 1999.

  568 V Kaul, ‘What Do Car Sales Tell Us About Black Money?’, Equitymaster, May 9, 2016.

  569 Kumar, 1999.

  570 CK Prahalad, The Fortune at the Bottom of the Pyramid, Wharton School Publishing, 2004.

  571 Ibid.

  572 R Nair, ‘NDA plans to rewrite direct tax laws’, Mint, October 28, 2015.

  573 R Sharma, The Rise and Fall of Nations—Ten Rules of Change in the Post-Crisis World, Allen Lane, 2016.

  574 Press Trust of India, ‘ITR asset disclosure norm to aff
ect 1.5 lakh ultra rich: Adhia’, April 1, 2016.

  575 Sharma, 2016.

  576 Kumar, 1999.

  577 KPMG, Urban Indian Real Estate – Promising Opportunities, August 2016.

  578 HT Correspondent, ‘One lakh jewellers on strike to protest PAN rule on gold purchases’, The Hindustan Times, February 10, 2016.

  579 H-J Chang, Bad Samaritans—The Guilty Secrets of Rich Nations and the Threat to Global Prosperity, Random House Business Books, 2008.

  580 PR Lane and GM Milesi-Ferretti, ‘Cross-Border Investment in Small International Financial Centers’, IMF Working Paper, 2010.

  581 The Economist, ‘The missing $20 trillion’, February 16, 2013.

  582 Ibid.

  583 G Zucman, The Hidden Wealth of Nations—The Scourge of Tax Havens, The University of Chicago Press, 2015.

  584 Ibid.

  585 Ibid.

  586 Ibid.

  587 Ibid.

  588 P Rangaprasad, ‘Issues Related to Black Money’, Employment News, February 8, 2014.

  589 Zucman, 2015.

  590 Ibid.

  591 Ibid.

  592 D Graeber, Debt: The First 5,000 Years, Melville House, 2011.

  593 JG Gravelle, ‘Tax Havens: International Tax Avoidance and Evasion’, Congressional Research Service, 2013.

  594 Zucman, 2015.

  595 Ibid.

  596 Ministry of Finance, White Paper on Black Money, 2012.

  597 Ibid.

  598 A Kumar, ‘Amnesty by another name’, The Indian Express, October 6, 2016.

  599 Kumar, 1999.

  600 Ibid.

  601 Ibid.

  602 Ibid.

  603 P Mehra, ‘Black economy now amounts to 75 per cent of GDP’, The Hindu, August 4, 2014.

  604 Kumar, 1999.

  605 The Hindu, ‘Dark truths about money’, August 7, 2014.

  606 Chang, 2008.

  607 Ibid.

  608 S Subramanian, ‘HDFC’s Deepak Parekh wrong on land purchases? Here’s why’, The Financial Express, June 28, 2016.

  609 A Jaitley, Address at the 31st Annual Conference of Principal Chief Commissioners of Income Tax, May 25, 2015.

  610 Sharma, 2016.

  611 The Financial Express, ‘Black Money—Should the taxman crack down now?’, June 28, 2016.

  10. The Fiscal Deficit Fudge

  612 A Gulati, ‘From Plate to Plough: The Fertilizer Challenge’, The Indian Express, December 21, 2015.

  613 S Das, ‘Budget 2016: Food bill may see up to Rs. 20,000 crore over-run’,The Financial Express, February 10, 2016.

  614 R Rajan, Financial Reforms: Past and Present, RBI Governor’s speech at the National Council for Applied Economic Research, January 29, 2016.

  615 R Malik, ‘Fiscal Adventure, Monetary Dilemma’, Mint, February 4, 2016.

  616 H Hazlitt, Economics in One Lesson, Three Rivers Press, 1979.

  617 Ibid.

  618 Press Trust of India, ‘Govt to control LPG, diesel pricing’, November 18, 2004.

  619 S Chaturvedi and P Sahu, ‘India Frees Diesel Prices from Government Control’, The Wall Street Journal, October 20, 2014.

  620 The Financial Express, ‘Black Money—Should the taxman crack down now?’, June 28, 2016.

  621 SK Ghosh, If wishes were horses, Ecowrap, State Bank of India, March 17, 2016.

  622 Ibid.

  11. It’s Not the Interest Rate, Stupid!

  623 R Sharma, The Rise and Fall of Nations—Ten Rules of Change in the Post-Crisis World, Allen Lane, 2016.

  624 Ibid.

  625 O Goswami, ‘When “bad banks” work; when they don’t’, Business Standard, August 20, 2015.

  626 Ibid.

  627 P Agarwal and R Bahl, ‘For banks, no respite from bad loans this year’, CRISIL Ratings, May 12, 2015.

  628 A Agarwal, S Kariwala and S Iyer, ‘A Growing Need for Indian TARP’, Morgan Stanley Asia Insight, June 8, 2015.

  629 Indradhanush Press Release.

  630 AS Blinder, After the Music Stopped, Penguin Books, 2013.

  631 MA El-Erian, The Only Game in Town—Central Banks, Instability and Avoiding the Next Collapse, Yale University Press, 2016.

  632 As per the analyst’s presentation of the bank on March 31, 2016.

  633 S Gupta, ‘National Interest: India Stinc’, The Indian Express, February 15, 2014.

  634 R Rajan, Saving Credit, the Third Dr. Verghese Kurien Memorial Lecture at IRMA, Anand, November 25, 2014.

  635 A Singh, A Diwanji and M Shrivastava, ‘Unmasking India’s NPA issues – Can the banking sector overcome this phase?’, EY, 2015.

  636 A Gupta, K Shah and P Kumar, The House of Debt, Credit Suisse, October 21, 2015.

  637 Ibid.

  638 Rajan, 2014.

  639 Definition of the Principal-Agent Problem, from ‘The Financial Times Lexicon’.

  640 V Joshi, India’s Long Road—The Search for Prosperity, Penguin & Allen Lane, 2016.

  641 Singh et al., 2015.

  642 Joshi, 2016.

  643 LR Wray, Why Minsky Matters—An Introduction to the Work of a Maverick Economist, Princeton University Press, 2016.

  644 Ibid.

  645 Ibid.

  646 Rajan, 2014.

  647 Ibid.

  648 Ibid.

  649 C Mitra, ‘Rajan Appeared Uncaring about India’s Aspirations’,NDTV.com, June 20, 2016.

  650 R Rajan, Resolving Stress in the Banking System, RBI Governor’s speech at the ASSOCHAM Interactive Meet with Industry & Trade, Bengaluru, June 22, 2016.

  651 Ibid.

  652 Ibid.

  653 Ibid.

  654 R Rajan, The fight against inflation: A measure of our institutional development, Foundation Day Lecture at Tata Institute of Fundamental Research, Mumbai, June 20, 2016.

  655 Joshi, 2016.

  656 R Mohan and M Kapur, ‘Pressing the Indian Growth Accelerator: Policy Imperatives’, IMF Working Paper, March 2015.

  657 Ibid.

  658 Indradhanush Press Release.

  659 V Acharya and KV Subramanian, State intervention in banking:The relative health of Indian public sector and private sector banks, Project Report, NYU Stern School of Business, 2015.

  660 Ibid.

  661 R Kumar, GD Krishna and S Bhardwaj, Indradhanush— Banking Sector Reforms, Centre for Policy Research, 2015.

  662 Rajan, 2014.

  663 Ibid.

  664 Ibid.

  665 Ibid.

  666 Kumar et al., 2015.

  667 Ibid.

  668 SBI Analyst’s Presentation for 2015-2016.

  669 Bank of Baroda Analyst’s Presentation for 2015-2016.

  670 Punjab National Bank Analyst’s Presentation for 2015-2016.

  671 S Shukla, ‘JP development will lead to more firms deleveraging their books’, The Economic Times, July 6, 2016.

  672 BS Reporter, Banks on take-over drive of defaulting companies, Business Standard, December 5, 2015.

  673 P Pandey, ‘The biggest ever fire sale of Indian corporate assets has begun, to tide over bad loans crisis’, The Hindu, May 9, 2016.

  674 Kumar et al., 2015.

  675 Ibid.

  676 Ibid.

  12. The Biggest Government

  677 As quoted on the webiste https://bfi.uchicago.edu/news/ post/milton-friedman-his-own-words. Accessed on August 23, 2016.

  678 SA Ashraf, ‘IPL games will waste 60 lakh litres in a drought-hit state’, Rediff, April 5, 2016.

  679 KD Tare, ‘Latur—The Great Thirst’, India Today, March 30, 2016.

  680 Times News Network, ‘Mumbai loses 25% water to leakage theft’, The Times of India, March 15, 2016; and R Pinto, ‘”Why only water cuts? Why not curb theft, leakage?” citizens ask BMC’, The Times of India August 22, 2015.

  681 Commission for Agricultural Costs and Prices, Price Policy for Sugarcane: 2016-17 Sugar Season.

  682 Ibid.

  683 Economic Survey of 2015-2016.

  684 Commission for Agricultural
Costs and Prices, Price Policy for Sugarcane: 2016-17 Sugar Season and Price Policy for Sugarcane: 2014-15 Sugar Season.

  685 South Asia Network on Dams, Rivers and People, ‘How is the 2012-13 Maharashtra Drought worse than the one in 1972?’, March 30, 2013. Available at https://sandrp.wordpress.com/2013/03/30/ how-is-2012-13-maharashtra-drought-worse-than-the-one-in-1972/. Accessed on August 3, 2016.

  686 H Damodaran, ‘Another Maharashtra verdict: Sugar goes private’, The Indian Express, October 22, 2014.

  687 Ibid.

  688 Commission for Agricultural Costs and Prices, Price Policy for Sugarcane: 2016-17 Sugar Season and Price Policy for Sugarcane: 2015-16 Sugar Season.

  689 T Sawhney, The Current Sugarcane Pricing Policy and Its Critical Analysis, Indian Sugar Mills Association, 2016.

  690 Commission for Agricultural Costs and Prices, Price Policy for Sugarcane: 2016-17 Sugar Season.

  691 Ibid.

  692 Lok Sabha Questions, Distance Between Sugar Mills, December 20, 2011. Available at http://www.indiansugar.com/ Lokhsabhadetail.aspx?Lid=16. Accessed on August 4, 2016.

  693 Commission for Agricultural Costs and Prices, Price Policy for Sugarcane: 2016-17 Sugar Season.

  694 Ibid.

  695 Ibid.

  696 Ibid.

  697 S Sukhtankar, ‘Sweetening the Deal? Political Connections and Sugar Mills in India’, American Economic Journal, 2012.

  698 Report of the High Level Committee on Reinventing the Role and Restructuring of the Food Corporation of India, January 2015.

  699 S Saini and M Kozicka, ‘Evolution of Critique of Buffer Stocking Policy of India’, Working Paper 283, ICRIER, September 2014.

  700 KS Acharya, Food Security System of India: Evolution of the Buffer Stocking Policy and its Evaluation, Concept Publishing Company, 1983.

  701 Saini and Kozicka, 2014.

  702 World Bank, Rural Development Sector Unit, South Asia Region, India Foodgrain Marketing Policies: Reforming to Meet Food Security Needs, August 17, 1999.

  703 Ibid.

  704 Saini & Kozicka, 2014.

  705 Ibid.

  706 World Bank, 1999.

  707 Saini & Kozicka, 2014.

  708 Ibid.

  709 S Balani, Functioning of the PDS—An Analytical Report, PRS Legislative Research, December 2013.

  710 World Bank, 1999.

  711 Report of the High Level Committee on Reinventing the Role and Restructuring of the Food Corporation of India, January 2015.

  712 Ibid.

  713 Ibid.

  714 Ibid.

  715 Ibid.

  716 Ibid.

  717 Press Trust of India, ‘Food Security Act to be implemented in all states by next month: Ram Vilas Paswan’, June 26, 2016.