Friday, May 25, 2007

Pratap Mehta on neo-Manmohanomics
An instructive piece by Mehta on the non-PM's shocker about 'conspicuous spending'. The problem in India is not the well earning businessman - it is the poorly spending government. While they should really be working toward efficient (i.e. rightly targeted) & effective (i.e minimal 'leakage') spending of government funds - the political class in India has provided nothing but wasteful boondoggles. Although all political parties are guilty of this - the Congress-Left latcher's-on of the welfare state are the worst.

The highest paid people in India are now the B-school or IIT types - as opposed to the Sethji's & Nawab's of yore ; this represents the fact that inherited wealth is no longer the only game in town. The neo-wealthy make their money of wages (or stock options) as opposed to milking assets (interest or rent etc.). This represents a greater 'democratisation' of wealth.

The solution - as suggested by me many times before - provide greater tax-incentive for donations to independent, voluntary institutions working for the general good; and start Milton Friedman's School Voucher scheme where you subsidise the service consumer (student) as opposed to the provider (absentee government school teacher)