From the Desk of the Chairman

In the recently concluded elections to the Maharashtra State Assembly there were some anticipated winners and some sore losers.? However, the biggest winner of them all was the ruling dispensation’s “Ladli Behna Yojana”, a giveaway to the voters in anticipation of their voting for the party in power (in this case), otherwise known as “freebies”.? The Prime Minister refers to this as “revdis”.? According to him such handouts are nothing but harmful welfarism.? Today, two years down the line political parties without exception are competing with each other to top up these revdis. Revdis today are the most high-profile tool to woo voters.? Noone was willing shoot himself in the foot by opposing this popular extravaganza.? During the campaigns all political parties are routinely coming up with competing promises, both innovative and mundane; but involving enormous costs to the exchequer with their promises.? When the press called them freebees, the Prime Minister preferred to christen them “revdis”.? In today’s India if you have to understand Indian elections, you have to understand what revdis is and how it affects our elections and how it skews our democracy. Revdi’ is a Rajasthani sweet dish, often gifted as a symbol of love and gratitude during festivities.? The taste of revdi characterises the essence of sesame seeds along with the sweetness of sugar or jaggery.?? Revdi, in general, is not an essential commodity but plays a significant part in the lives of middle and elite classes who share Revdi boxes with their near and dear ones.? In fact, Narendra Modi is the first person of consequence who opposed this and preferred to call this practice derisively as “Revdi Culture” – freebies in return for votes. “Political parties practicing the?Revdi?culture will never build new expressways, new airports or new defence corridors for you”, he exhorted his followers. “People of the?Revdi?culture think that by distributing freebies, they can buy votes – together we need to defeat this thinking and practice as it is very dangerous for the development of the nation.”? That was the PM in the aftermath of his landslide victory to the Lok Sabha in 2014. However, Modi today is in no position to oppose this Scheme as his own Party is promoting the Scheme in a big way and it has fetched the BJP and its allies the prosperous state of Maharashtra.? If you can’t beat them; join them. At last, Modi has found his match as the ultimate ‘vote catcher’ – the humble, albeit sweet, Revdi!? Revdi comes in many forms – sewing machines, sarees, nutrition kits, free electricity, free water supply etc., etc.? If you ask an economist, he will tell you, how wrong it is to bribe the voters through these freebies. Theoretically, he may be right.? But in today’s India with so much of abject poverty, these freebies are like manna from heaven for a lot of people below the poverty line just managing to eke out a living! Before you criticise the politician for promoting such schemes (even if you prefer to call them revdis) spare a thought for them even though significant amounts of revdi would simply result in additional borrowing, and further hikes in the share of interest payment in the Budget and the GDP, leaving the government powerless to spend on the things that would make the economy stronger and more competitive.? The political economy redesigned through revdis for the ruling alliance’s victory in Maharashtra is, in other words, injurious to national prosperity.? But permit me to quote a Rajasthani proverb with a minor tweak. “Bhookh meethi ya revdi?”

Elections tend to obscure a lot of developments including important information that affect all of us.? Here is one such.? Judgments coming out from the higher courts in India tend to alter the way we decide our own views on important matters that affect us.? The apex court delivered an important judgment that had not been discussed by many in India because of our preoccupation with the recent elections.? It was delivered by a nine-bench presided over by the then Chief Justice D Y Chandrachud.? The court does not constitute large Benches like this unless the gravity of the subject demands the congregation of such a large gathering of wise men in the apex court.? The recent judgment delivered by the Bench was intended to question (and overturn) previous verdicts on the same issues delivered by their predecessors.? You may agree or disagree with the observations made by the learned judges; but you have to appreciate the sagacity displayed by some of those sitting on the Bench.? As it is difficult to analyse the verdict in detail and to substantiate the nuances expressed by them in a short paragraph, I leave it for the legal experts.? However, in order just to whet your appetite, I will merely say this much.? The verdict not only covered the legal aspects on the subject of private property and the primacy that such properties enjoy when the government also expresses an interest in them.? As if that is not enough, the Order also happened to contain some controversial expositions questioning the wisdom of their predecessors. Simply put, the judges were called upon to decide whether the government indeed has unfettered right to take over your property and more importantly, how should the government go about the process while doing so.? Answer to this very question came in this case titled Owners Association & Others vs State of Maharashtra & Others.? Are our private properties indeed “common community resources” with the state having a say whether it could be acquired by the government of the day.? In a 7:2 decision, the Court clarified that the government cannot simply take over all private properties by calling them "community resources."? In the process of delivering this judgment the CJI called into question the wisdom of one of the most erudite judges who had dispensed justice sitting on the very same Bench – Justice V R Krishna Iyer way back in time.? Justice Iyer quoting from the Directive Principles of State Policy had eloquently opined that “the ownership and control of the material resources of the community are to be so distributed to subserve the common good.”? Further he had added, “In essence, the interpretation of the relevant Article 39(b) adopted in these judgments is rooted in a particular economic ideology and the belief that an economic structure which priorities the acquisition of private property by the state is beneficial for the nation.” ?In his judgment referring to Article 39(b), Justice Chandrachud, disagreed with this view expressed by former top court judge Justice Krishna Iyer in a 1978 case that private properties also fall within the "material resources of the community." The CJI observed that Iyer had done a "disservice" to the broad and flexible spirit of the Constitution.? Justice Nagarathna though agreed with the majority view and held “Neither can there be canonisation of the socialist policy followed by the State nor can the principles akin to laissez faire economics be ignored at a time when they have been resurrected by the state itself to suit the developments of the economy in the country and for the benefit of the people of India.”? She continued further “The observations of the Judges in those decisions would not call for any critique in the present times. Neither is it justified nor warranted.” ?Justice Dhulia another dissenting judge strongly disapproved of the remarks made by the CJI calling the criticism harsh and unnecessary”.? In the end the Court's decision effectively protected the private property owners while still allowing the government to acquire certain resources if they are truly essential for the community's well-being. The ruling strikes a balance between individual property rights and the greater public good. This decision sets a clear precedent for future cases about property rights and government acquisition of private resources in India.? You can agree or disagree with the decision of the Court till the cows come home.? But what appealed to me here was the quality of the process as much as the wisdom behind the decision.

The delimitation of constituencies both for Lok Sabha and State Assemblies that was scheduled to be done immediately after the Census is now all set to take place in 2026 if reports are to be believed.? It is long overdue already.? Now that the Census is scheduled to be taken up in 2026, it is safe to assume that the delimitation exercise is also sure to follow thereafter. India's delimitation exercise is a complex process aimed at ensuring fair and equitable representation in the country's legislative bodies. The process involves redrawing the boundaries of electoral constituencies based on the latest population data from the immediately preceding census. This ensures that each constituency has a roughly equal number of voters maintaining the principle of "one person, one vote".? The delimitation exercise is crucial for maintaining the integrity of India's democratic system and ensuring that all citizens are fairly represented in the legislative process.? Our delimitation process is overseen by a Delimitation Commission that is set by an Act of Parliament.? Earlier this exercise had been done after the 1951, 1961 and 1971 Census. This time, the Central Government is on the horns of a dilemma – undertake this arduous task now or kick the ball down the road.? Look at this.? Chandrababu Naidu recently expressed concerns about his state’s aging population and called on the people of his state to have more children!? A few kilo metres away, Stalin, his Tamil Nadu counterpart exhorted his people in a jocular vein to have a rethink on continuing with smaller families, now that the delimitation exercise is around the corner.? How relevant are these posturing? Sample this.? In Bihar, one member of Parliament represents about 3.1 million citizens as against 1.75 million in Kerala!? That is because Bihar’s population has grown, and Kerala’s has stabilised.? Southern states by and large have been successful in limiting their family size whereas in the Northern states the families have increased their size by ignoring the government’s family planning initiatives.? In the delimitation exercise, the Southern states would find themselves getting punished for good behaviour and the intransigent Northern states would get rewarded despite being delinquents, in a manner of speaking - punishing the achiever and rewarding the errant!? Now that the time has come to pass, you can expect considerable discussions on this subject shortly.

The United Nations Climate Change Conference at Baku at Azerbaijan ended acrimoniously (at least from India’s perspective) on 22nd November 24.? India’s opposition to the proposed financing arrangement at the Conference was that it feels that the proposed scheme of financing of $300 Million is far below the actual needs of the developing countries to combat climate change.? This amount is too meagre to support the transition to clean energy, adapt to climate impact and address the consequential loss and damage.? India highlighted the failure of the developed countries to fulfil their previous commitment of providing $100 Billion annually in climate finance.? This lack of trust undermines the credibility of future pledges.? India feels aggrieved that the proposal would be inclusive of loans and private investments in the calculation of climate finance.? This dilutes the amount of actual grant-based aid that developing countries deserve and receive.? India demands greater clarity and transparency in the definition and better accountability of climate finance.? There is a need for a robust mechanism to ensure that funds are used effectively and efficiently.? Another important issue pointed out by India was on the principle of "common but differentiated responsibilities" and "respective capabilities" of member nations.? This principle holds that developed countries, as historical emitters, should bear a greater burden in financing climate action.? However, it is possible that India's stance may also be influenced by domestic political compulsions, including upcoming elections and the need to balance economic growth with climate action.? India's opposition to COP29 financing arrangement reflects its concerns about the adequacy, transparency, and equity of the proposed funding mechanisms. India seeks a more ambitious and equitable approach to climate finance that addresses the specific needs of developing countries and promotes a just and sustainable transition.

In one of the earlier issues in these columns I had indicated that I would all but recommend the name of Javier Milei, the President of Argentina to a Nobel Prize subject, of course, his implementing the revolutionary economic reforms including the Dollarisation that he had propagated when he came to power.? I did check on the internet as to how he is governing his country to deserve this prestigious award.? Lo and behold – he has not done that bad, after all, though he may have to wait a while for being conferred the honour!? Argentina had experienced humiliating economic decline caused by rampant inflation, absurd government spending and handouts and thickets of unwarranted regulations all round.? After he took over, the scourge of inflation has come down sharply in the background of 30% lower government spending.? Based on his unconventional economic philosophy, people compare him with Donal Trump especially since he has an aggressive style and is skeptical about anything woke.? He, in fact, adores Trump and admires late Margaret Thatcher, former PM of Great Britain.? After coming to power, he has more or less halted spending on public works, cut transfer of money to provincial governments and has slashed salaries to the faculty at universities. With all that, he has relieved the pressure on the country’s central bank that was tasked with the job of finding ways and means to finance the government all the time!? He has managed to bring dollars back into the formal banking system with some success.? At last count, he still has some 3000 structural reforms on his to-do list. The markets are celebrating.? When he took office, inflation was running at 13% month to month.? Today, that figure is down to 3%.? Some achievement this. He has helped ending the recession in the economy though the poverty rates are tending to be higher. Considering all these factors I feel that my bet on him was right; but the right moment is yet to come.? Moreover, there was another angle to his being in the limelight – Dollarisation, the elimination of the Peso, the currency of Argentina and its replacement with the US Dollar. That part of Milei’s agenda remains unfulfilled.

Thank you.

Venkat R Venkitachalam