Why parking needs more than proof of space

The big idea in urban transport is to get users to pay for parking and suchlike. Not another piece of paper.

The Union government is considering a proposal to make car ownership contingent on the prospective buyer producing an “adequate parking space available certificate.” M Venkaiah Naidu, Union urban development minister stated that he was keen on this and promised to persuade the Union surface transport minister and the state governments on the need to do this. A recent magazine article claims that this is an “absolutely sensible move” as it has been implemented in Sikkim and Mizoram, and has is compulsory in Japan and in one place in South Korea.

Mr Naidu means well, but by itself, the requirement of a parking space certificate will open another source of corruption without doing much to reduce traffic congestion. Anyone who’s visited a local road transport office (RTO) or obtained a pollution under control certificate will know how this works.

But let’s spell it out nevertheless: it is easy to ‘show’ you have adequate parking space because spaces do not have unique identities that are in a common database. It may be necessary to pay someone — a petty official or a person with space — to ‘show’ that you have parking space. Actually, few will take the trouble to do this. It’s more likely that the licencepreneur who owns the photocopying shop next to the RTO will arrange for the parking space available certificate for a small fee. Neither the RTO, nor the traffic police, nor the Union development ministry have the resources to check whether the certified parking space exists in reality or merely in-between folds of red tape.

Needless to say this won’t make a dent in the number of vehicles being purchased. Sikkim and Mizoram are small states with populations and geographies that might even make such a policy workable. In most other places in India, especially in places where traffic congestion is a massive problem, we will just have one more layer of regulation, one more piece of paper to be procured, some more money for petty officials an licencepreneurs.

That said, Mr Naidu is nearly on the mark. The way to reduces incentives for people to purchase and use cars is to charge for parking. Every car parked on public roads not only creates road cholesterol, but also is an implicit, undeserved subsidy to a car owner. The more cars you park on public roads, the greater the subsidy you get from the government. This creates positive incentives for vehicle ownership and use. If we stop rewarding vehicle users for parking on public roads and charge them the market price of the real estate they temporarily occupy, then we will see vehicle use coming down. That, by the way, is what they do not only in Japan, but in almost in every country and city that has sensible urban traffic. It’s not unusual for parking fees to be exhorbitant in central business districts of the world’s cities. In fact, when governments charge market prices for parking in public spaces, more parking space is created as private owners realise there’s good money to be made by creating private parking lots. [Parking availability certificates have reduced car ownership in Japan because parking spaces are available at market prices. See Paul Barter’s blog post.]

The Union and state governments must come to an arrangement on pricing vehicle parking. As Donald Shoup’s research shows, the best way to make the policy work, and get public acceptance, is to ensure that the parking fees collected go to the localities from where it is collected. People are less likely to oppose paid parking if they are convinced that the proceeds from their locality will largely be used to improve that very locality. Funds can be used to finance public transport: from bus services to bus stops, to metro and commuter rail. My colleagues at Takshashila estimate, conservatively, that implementing paid parking on fewer than 10% of Bangalore’s roads can add more than 20% additional revenue to the municipal corporation’s annual budget.

A national policy to make road users pay for parking (or dumping construction material, or hawking) would be a GST-scale reform that Mr Naidu has the opportunity to be the author of. He shouldn’t settle for that red herring called the parking space proof certificate.

Related Post: Eight ways to improve traffic flows in our cities quickly and without spending a lot of money.

Tailpiece: Donald Shoup’s insight:

Drivers want to park free, and that will never change. What can change, however, is that people can want to charge for curb parking. The simplest way to convince people to charge for curb parking in their neighborhood is to dedicate the resulting revenue to paying for added public services in the neighborhood, such as repairing sidewalks, planting street trees, and putting utility wires underground. That is, the city can offer each neighborhood a package that includes both performance-priced curb parking and the added public services financed by the meters. Performance pricing will improve the parking and the revenue will improve the neighborhood. The people who live and work and own property in the neighborhood will see the meter money at work, and the package will be much more popular than meters alone. [Cato Unbound]

Time for a stiff drink

Satyagraha, Neoliberalism, CIA…we’re running out of ideas

It is perhaps a good time for newspaper editors to stop publishing any more polemical opinion pieces on the great currency transfusion (‘demonetisation’). When someone argues that people standing in lines to deposit and withdraw their own money after being compelled to do so by the government, are actually engaged in “the first economic satyagraha [using] their wisdom to articulate opposition to neoliberalism”, it is time to get off the computer and go get a really stiff drink.

It is abominable and grossly insensitive to suggest that people trying to cope with the currency shock are somehow engaged in a satyagraha. A satyagraha is above all a voluntary exercise. There is absolutely nothing voluntary about people standing outside banks and ATMs.

The subtitle of the article proclaims that “the demonetisation drive aims to cleanse the ills of neoliberalism”. That needs a sharp intake of breath and another stiff drink. Or two. The reason why there is a shadow economy is because of the absence of liberalism, neo- or paleo-. Corruption exists because of regulation, because economic freedom and liberty are stifled. If the demonetisation drive can claim to cleanse anything, it is the ills of statism, bureaucratism and the still-extant licence-permit raj. Demonetisation is a bad way to cleanse that, but that’s a different argument.

Last week The Quint had a report blaming a US aid agency and the CIA for demonetisation. Now that neoliberalism has been ritually savaged, the debate is truly over. Head to the bar, folks! They take cards.

How long will the Great Currency Swap be popular?

As long as schadenfreude exceeds inconvenience

Many of us at Takshashila have been struck by the seemingly paradoxical situation of the Prime Minister enjoying popular support for the Great Currency Swap (‘demonetisation’) even when everyone has been inconvenienced to various extents. In a recent post, I argued that this confirmed my cynical hypothesis of what kind of public policies enjoy public support, because “most citizens feel the cost they are incurring is a lot less than the cost others—those with unaccounted money—will incur. For the moment at least, intangible schadenfreude is outweighing tangible personal losses.”

In a discussion today, we attempted to project the two feelings — of schadenfreude and inconvenience — to see how public support might change over time. This is described in the following chart:

Update: This is an updated version of the chart.

 

The excess of schadenfreude over inconvenience constitutes the level of support for the the policy. The excess of inconvenience over schadenfreude constitutes resentment against the policy. As of 15th December 2016, people still feel that the inconvenience is a price worth paying to ensure that those with unaccounted incomes suffer relatively more.

Note that this is a schematic, and the shape of the curves in this chart is not a forecast: events can move them in time or change their shapes.

For instance, if inconvenience continues to grow as people and businesses run out of adequate cash, and if they come to believe that the holders of unaccounted money are getting away relatively unscathed, then we might head towards point B, where resentment builds up. Then, as the situation eases — with adequate cash being pumped back into circulation, and with people adapting to a less-cash lifestyle — the resentment will begin to taper down towards point C.

The chart assumes that schadenfreude will diminish over time, in which case at point C, support and resentment will cancel each other out. However, if schadenfreude does not diminish, the policy will continue to enjoy popular support.

The Modi government can prevent or mitigate the rise of resentment by reducing inconvenience and by feeding schadenfreude. The former, by supplying enough currency quickly, before point A is reached. The latter way is to persuade the public that wrongdoers are getting their just deserts. However, as people hear news of seizures of hoards of new currency, or of others circumventing the moves using clever methods, the schadenfreude is likely to fall sharply.

The greatest danger to the Modi government, and to Prime Minister Modi himself, is if inconvenience does not fall, or fall quickly enough, and it continues to rise beyond point B.

Why PM Modi should push economic liberalisation now

The best use of his store of political capital is to undertake big ticket economic reforms.

When a small Takshashila team walked around Bangalore’s wholesale markets, Dobbspet town and a few tiny village in the latter’s vicinity as part of our #FootNote initiative, we noticed many people reporting that they were not only inconvenienced but suffered monetary losses, yet supported Narendra Modi’s currency reform (‘demonetisation’) initiative. This is counter-intuitive, except perhaps in the context of religious faith.

To better understand this phenomenon, I conducted a twitter poll earlier this week that sought to investigate to what extent have people conflated their opinion of Prime Minister Modi and his currency reform initiative.

The results, after just over 1800 responses, were as follows:

Obviously, there is no claim that this poll is representative of the entire population of India. It is more likely representative of the forty thousand or so people who follow my twitter handle. Even so, the responses are interesting, and support what we noticed on the #FootNote tour.

Modi-Demonetisation-Poll

What does this mean? As Karthik Shashidhar, our resident quant, remarked, in 87% of the respondents there is an overlap between their opinion of Mr Modi and his policy. In other words, people’s attitude towards him overshadows their opinion of his policy. My colleague Nidhi Gupta, who recently reviewed Christopher Achen and Larry Bartels’ Democracy for Realists (Princeton University Press), that exposes the flaws of democratic systems, noted that in this case too, the notion that people vote on issues does not seem to hold up.

We’ll repeat the poll again in January to see how much the responses change.

In any event, the upshot is that the demonetisation episode shows that Mr Modi enjoys tremendous political capital that he can use to implement the type of structural reforms that would be extremely difficult for other leaders to pull off.

He should not lose the opportunity.

Postscript: Mr Modi’s team conducted their own poll using his smartphone app. Both the framing of the questions and the type of sample suggest that the poll is essentially a device to rally his supporters rather than obtain an objective estimate of public opinion. It would be wrong to assume it reflects what Indians think, just as it would be wrong to use my twitter poll for the same purpose.

Cash crisis, reform and pain

Structural reform does not have to be painful.

It is clear by now that the Modi government’s currency reform, involving replacement of old high-denomination notes with new ones, is inconveniencing people across the country to various extents. The expectation that the inconvenience will last only a few days has given way to fears that it will take longer: weeks, a couple of months, or more. Many economists estimate that the cash shock will cause an economic slowdown and hurt economic growth in the short term. [Mint has a very good economic analysis of the currency reform]

So question obviously is: was the move worth the pain? Are the benefits of a one-time cleanup of unaccounted cash worth the disruption of almost everyone’s daily life and the short-term—albeit irreversible to some innocent businesses and individuals—damage to the economy? It’s too early to tell.*

In the meantime some defenders of the move argue that inconvenience and pain is an essential part of structural reform. This is both inaccurate and disingenuous. This month’s currency exchange is not a structural reform. And structural reforms do not have to come with so much pain for so many people.

Those old enough to recall 1992 will hardly recall any pain or inconvenience. Similarly, it is hard to envisage the people of the country undergoing pain if say, schools no longer required licenses, businesses could be set up and closed down without hassle, tax laws became simpler, or even labour reform allowed easier hiring and firing of people.

Those linking structural reform to pain are doing a disservice to the cause of liberalisation. There is no reason why structural reforms must be painful. If anything, by removing red tape, preventing official harassment and lowering friction, structural reforms will make life a lot less painful—both in the short term and in the long term. Baby, bathwater and so on.

* Postscript: Many have asked me whether this currency reform will be successful. The honest answer is that it is too early to tell.

In fact it is hard to even analyse its impact had everything gone smoothly. The Indian economy is very complex, and we know less about the ‘unorganised’, ‘informal’ economy. Like blood that runs through the body’s veins, money supply affects every sector and over a billion people. It would be flippant and arrogant to claim to be able predict how it will pan out. Further, given that the transition is not going smoothly, what was complex has become even more so.

Complexity, the lack of required level of knowledge and inability to predict outcomes is one reason for governments to be tentative and parsimonious in their actions. This forms the basis of the argument for “small government”, or “minimum government”. The Modi government has wagered against this wisdom.

Only time will tell. Take expert predictions with a pinch of salt.

President Trump. What now for India?

Play the ball as it comes to the bat

Peter Thiel, a Silicon Valley billionaire who backed Donald Trump’s candidacy, perhaps best explained the latter’s political appeal. Journalists and analysts, he said, took Mr Trump literally but not seriously, and wanted to know details of how he would implement some of the outrageous ideas he proposed. Ordinary people, on the other hand, took him seriously but not literally, and were persuaded that he intented to take policies in directions that they agreed with; the exact details didn’t matter. In the uncertainties that prevail in Washington and elsewhere on what policies President Trump would pursue, Mr Thiel’s explanation is a very useful signpost.

It would only be conceit for anyone at this stage to predict Trump’s foreign policy positions. Candidate Trump and his core supporters were anti-immigration, anti-Muslim and anti-trade. Mr Trump threatened to pull out of NATO, repudiate free trade agreements, engage Russia’s Vladimir Putin, withdraw the security umbrella from over treaty allies, renegotiate the Iran nuclear deal, deal with ISIS, back Israel and grab the oil in Iraq. And yes, build that wall on the border with Mexico. At this point, it is best to take all these, as Mr Thiel suggests, seriously but not literally.

To the extent that President Trump attempts to throw international regimes, norms and institutions up in the air, New Delhi will encounter opportunities that it must be prepared to seize. This means the level of diplomatic imagination and boldness in the external affairs, commerce and defence ministries must be boosted. India is far better placed today than ever before to take advantage of possible shifts in global order.

Of course there are risks. A world that retreats from free trade will hurt India’s growth and development trajectory. A global recession will shave off significant percentage points from India’s economic growth rate. Throttling of free movement of people — in the US as in Europe — will necessitate painful business and human readjustments, although the result might be more business for India’s outsourcing/offshoring industry. Most of these risks can be managed by proceeding with structural economic reforms, or Reforms 2.0 (yes, I sound like a broken record, but the point is valid and important to make).

The path to success in the world of President Trump is nimbleness, deftness and speed. New Delhi’s diplomats and policymakers will need to see the opportunities early and act faster than others, without being constrained by historical baggage. No pre-determined strokes: see the ball early and play it accordingly.

Related Link: My colleague Pranay Kotasthane has an opinion piece on this in the New Indian Express today.

New currency notes for old

A one-off reduction of unaccounted money must be followed by long-pending structural economic reforms.

Some of the most insightful arguments on the demonetising of high-value currency notes have come from Takshashila associates.

Ajit Ranade has long been a proponent of getting rid of the high-denomination bank notes, pointing out that this will make a big dent in holdings of unaccounted money.

Karthik Shashidhar, on the other hand, has calculated that the exercise will be very costly. In other conversations with some colleagues last night, we noted that the real costs will be even higher, given the higher transaction costs, friction and so on.

[Update] Anupam Manur has a thorough analysis of the demonetisation.

Deepak Shenoy, one of India’s shrewdest analysts of capital markets, has more recent analysis that argues that the Modi government’s move will have short-term negatives but long-term positives. You should read the articles I’ve linked to above.

The Modi government’s move (even if it rightfully ought to be the RBI governor’s move) to demonetize Rs 500 and Rs 1000 notes and replace them after some time with new Rs 500 and Rs 2000 notes will act as a move to massively reduce the existing stock of unaccounted money and counterfeit currency. [Update: There will be new Rs 1000 notes too!] This will generally hurt the people who are sitting on large amounts of cash holdings (mostly for evading tax) and also, temporarily, those who are holding on to some cash, but have no bank accounts. This is significant.

A senior colleague argued that this was an extremely courageous move by Prime Minister Modi, not least because it hurts business communities that have long supported him and the BJP. However, given that this is one of the few moves that makes honest citizens feel good, it is likely to strengthen Mr Modi’s personal popularity. Effects on electoral outcomes have probably been calculated by those whose business it is to do so, and are probably as good as the best (or the worst) guess. There are just too many factors at play when it comes to how people will vote.

Now, if the government (or the RBI) had merely demonetized the big notes, the effect would have been to put permanent brakes on tax evasion and a faster move towards ubiquitous electronic banking. However, since the big notes will be back, the effect will be one-time. In fact, as another colleague pointed out last night, the same mattress will hold twice as much cash if filled with Rs 2000 notes. Also, many cash holders will convert their current holdings into gold, foreign currency or some other assets until they can change it back to cash again. There are limits to how much money they can hide this way, but many middlemen will make healthy commissions by providing such “services”.

Bank accounts will see a lot more transactions as latent account holders begin to transact through banks. This effect too will not be complete, as some might just decide to wait until the new notes arrive, and then lapse back to old habits. Behaviour is very hard to change easily. Until mindsets towards banks, taxes and scruples change, people will continue in the old pattern. It’s a good time to refresh the case for structural reforms: deregulation, getting rid of the license raj (no, it didn’t go away in 1992), tax reform and liberalisation. This will require even more courage on the part of this government (or any government, for that matter).

Will the move hurt confidence in the Indian Rupee? A sober Anupam Manur, Takshashila’s macroeconomics analyst, noted that denominations don’t impact the value of the currency. He doesn’t think the rupee will be hurt. On the other hand, another colleague likened this to Mr Modi’s Tughlaq moment — more politically, perhaps than economically.

The war against corruption and unaccounted money can only be won when economic incentives change, and in turn, change behaviour patterns (and ‘culture’). Disclosure schemes and demonetization of high-denomination currency notes have a salutary, but temporary effect. There is, however, no alternative to Reforms 2.0.

In defence of lobbying

The lobbying industry must be allowed to function transparently within the ambit of the law.

This is an unedited draft of today’s column in Business Standard.

A famous Indian politician was searching for an issue that could energise his party cadre and move the masses. An group of businessmen produced a report on “making India self-contained in her supply” of a particular commodity. It had arguments on the rationale on consumption of the commodity, why it was necessary and why the poor needed it more than the rich. One of the politician’s close associates forwarded the report to the party leadership across the country while his personal secretary echoed the report’s arguments in an op-ed article the subsequent week.

The politician embraced the cause and triggered off a historic agitation, the basis of which, partly at least, was the output of corporate lobbying. The politician was Mohandas Karamchand Gandhi, the industry group was FICCI and the commodity common salt. The historic event in question, of course, is the Salt Satyagraha (see this post for details). It would be hazardous to suggest that a FICCI monograph singularly triggered off Gandhi’s famous march to Dandi. It would, however, be equally hazardous to discount the importance of lobbying on national politics then, as indeed in contemporary times.

The current debate over corporate lobbying conflates two separate issues: one, the legitimate persuasion of politicians on the merits of a certain policy measures and two, the illegal activity of bribing them in pursuit of this goal. The latter is wrong. The former is necessary. We might be in the throes of moral panic, but we should not mix up the two.

Lobbying is inevitable in a modern representative democracy: the more rules you make, the more complex the economy, the more the need for ‘specialists’ to intermediate between citizen, corporation and the state. That’s why we have lawyers, who help individuals and firms navigate the legal system. That’s why we have chartered accountants, who interpret the arcana of tax laws. These intermediaries play an important economic role by specialising in such matters and saving you and I the trouble of mastering law and the tax code when all we want is to go about our business.

Lobbying serves a similar function. It is far more efficient for businesses to hire public affairs specialists and lobbyists rather than involve the management in the byzantine world of Indian politics. If we consider lawyers and chartered accountants as legitimate professionals, why not lobbyists?

One argument against mainstreaming lobbying is that lobbyists risk making democracy a plaything of the rich. Those with deeper pockets will get to unduly influence government policies. This is reasonable in and of itself. However, isn’t it true that richer people can afford better lawyers and bend justice in their favour? Isn’t it true that richer people have smarter accountants who can find ingenious ways to pay less tax? More importantly, isn’t it the case that richer people already influence government policies, but in opaque, shady, dubious or wholly illegal ways? Those who doubt this can contact Mr Kejriwal for details.

Hey wait! What about the Niira Radia controversy? Doesn’t that connect shady corporate lobbying to high corruption? Yes, it does. However, that controversy arose in a country where lobbying is not only unregulated by perceived by many as a dubious activity. Had lobbying been a recognised as a legitimate profession, bound by its own norms and governed by a set of rules—like law and accountancy—we might have been spared some of the scandal.

This is, in fact, a good time to have a public debate over lobbying. Before 1991, most corporates would line up outside government offices as supplicants pleading for licenses, quotas and permits. After 1991 and until the exposure of big corruption scandals of 2010, canny businessmen sought to create legislative loopholes that would allow them to squeeze through, but keep their competitors out. This approach is becoming untenable.

Economic growth, globalisation, the Right to Information (RTI), urbanisation and the penetration of social media have changed the nature of how India’s corporations and governments engage each other. Businesses that try to create and exploit loopholes have a greater chance of being exposed, with the attendant loss to reputation and valuation. Like their counterparts in mature democracies, Indian businesses will have to engage in public affairs in cleaner, more professional, and transparent ways.

This can only happen if we allow the lobbying industry to function within the law. It is far better to regulate it rather than drive it underground. Indian democracy will be better served by placing the lobbying industry in a regulatory environment that requires companies to declare their lobbying activities and expenses, lobbying firms to disclose their activities and lobbyists to adhere to professional codes of practice. This is what the United States does. It’s not a silver bullet, but certainly an improvement over hypocritically persisting with a sanctimonious moral blindfold and pretending to be surprised that odious things happen in our country.

Copyright © 2012. Business Standard. All rights reserved.

Return and reforms

Will Manmohan Singh’s return to the finance ministry result in some reforms?

Pranab Mukherjee, an over-rated, over-respected and over-portfolioed cabinet minister presided over the finance ministry at a time when the results of UPA government’s gross mismanagement of the Indian economy began to show. His remedies worsened the malaise—not only has the economy slowed down, domestic and foreign investors have been given reason to believe that India’s economic managers are not only unserious, but also nearly banana. Retrospective taxation—Mr Mukherjee’s gift to economic policymaking—is an abomination and exemplifies how awfully perverted the UPA government’s thinking has been.

So, with Mr Mukherjee out of the cabinet (and undeservingly heading for Rashtrapati Bhavan) and Manmohan Singh taking over the finance portfolio, what are the prospects for reforms? None at all, argues the astute Swaminathan Anklesaria-Aiyar. Quite a lot, contends Sanjaya Baru. The truth may be in the middle, but despite Mr Baru’s valiant cheerleading, the odds are stacked up in favour of Mr Aiyar’s prognosis.

Samanth Subramanian sought my views for his report in The National. Here is my full response to his questions:

Q. Do you think the PM has the political capital he needs to make bold changes? Do you think, for that matter, that the government will risk making possibly unpopulist changes with the elections less than two years away?

Whether or not there will be any reforms depends on how much Manmohan Singh is willing to face down the Congress party establishment in order to secure his own place in history. It’s not so much about political capital but as he said in his 1991 speech “Sarfaroshi ki tamanna ab hamare dil mein hai/Dekhna hai zor kitna baazu-e-qatil mein hai.” Does he have Sarfaroshi ki tamanna?

Q. How much can any possible economic reforms redeem Manmohan Singh’s otherwise awful leadership of this UPA government?

What Manmohan Singh can do at this stage is revive the narrative of reforms, by setting out a long-term road map and by implementing the ones he can. The signal this will send will help set the economy back on track and hopefully redeem his own record.

Q. If you had to make a short, three-item wish list of reforms you hope he could enact, what would that list be?

Liberalise education, liberalise labour laws and start fixing land acquisition. Toying with fuel subsidies, reversing GAAR etc is mere signaling…the fundamental strengths of the economy can be reinforced only by liberalising education, labour and land acquisition. Playing around with financial markets and FIIs is mere tinkering. He must do what is necessary to revive direct investment, both domestic and foreign.

Everyone loves a good outrage

The reform agenda must be defended from Montek Singh Ahluwalia’s attackers

As far as op-eds go, this one marks a new low from P Sainath. It is not uncommon for him to frame grave issues in a divisive manner by conflating them with unrelated matters—like, for instance, agrarian crises and beauty pageants. This technique seeks to arbitrage outrage, as if decent people cannot be anguished at a tragedy without having to contrast it with an unrelated celebration. But when Mr Sainath links the poverty line, expenses incurred by the Planning Commission chief while traveling on official business overseas, the lavishness with which some tycoons spend their private funds and dubious dealings of crony capitalism, it can’t merely be his usual, unfortunate and misguided conflation.

Make no mistake: Mr Sainath’s hatchet job on Montek Singh Ahluwalia is part of an internal campaign against reform-minded individuals within the UPA government. This week’s manufactured controversy over renovation expenses of toilets in the Planning Commission’s headquarters is another manifestation of the same campaign.

Let us examine Mr Sainath’s cleverly framed allegations. His case is that at Mr Ahluwalia’s travel expenses are exorbitant, at an average of $4000 per day abroad. You would think he would give you some comparable data to prove Mr Ahluwalia has been unusually proliferate in spending public funds. Say, for instance, the average daily expenditure when cabinet-ranked Indian officials travel abroad on official business. Or for instance, the average daily expenditure incurred by Mr Ahluwalia’s counterparts from other countries. These would be like-for-like comparisons. Mr Sainath, however, does not do that. He compares these to a income of a person on India’s poverty line. All this proves is that $4000 is much higher than Rs 28. It does not even come close to proving that public funds were misspent, nor does it show that Mr Ahluwalia was unusually liberal with his expense budget. The onus of doing this research is on Mr Sainath, the person making the argument.

How Mukesh Ambani spends his personal wealth is irrelevant to the argument—he is free to spend his money as he pleases, even if it does not suit our tastes—, so is a discussion on cronyism and corruption in IPL. You don’t need to read the Planning Commission’s response to conclude that Mr Sainath’s allegations are sensationalistic nonsense.

But why choose Mr Ahluwalia at all? Mr Sainath’s arguments against profligacy would have been worthy of respect if he had compared the travel expenses of the top officials of government—from President Patil to the lowest ranking minister of state. How much, for instance, does Sonia Gandhi, as chairperson of the National Advisory Council, spend on her foreign trips? Whatever her political role, she’s an official of equivalent rank. How much do the members of the National Advisory Council spend on their foreign and domestic trips? Unless we have some numbers to compare with, we can’t say anything about Mr Ahluwalia’s trips.

What we do know is that Mr Ahluwalia is among the few people known to be advocating economic reforms in the UPA government. Singling him out with a view to making him the lightning rod for public outrage has all the signs of a political hatchet job. The objective is to discredit the reformist agenda by associating it with imaginary wrongdoing. After running the Indian economy to the ground, the socialists that haunt the UPA government’s policymaking are now trying to bury the narrative of reform, liberalisation and markets through subterfuge and intellectual dishonesty.

It’s no different with the renovation expenses of public toilets in Yojana Bhavan, the Planning Commission’s headquarters. One of the earliest reports on this, in the Times of India, again compared toilet renovation expenses with the the poverty line. Few in the mainstream or social media bothered to ascertain the scope of the renovations and compare it with similar renovations conducted in New Delhi’s public and private buildings. The purpose of the revelations was to insinuate wrongdoing on the part of Mr Ahluwalia, rather than to establish whether there was any wrongdoing at all.

Mr Ahluwalia is guilty: of not throwing his credibility on the line to compel the UPA government to launch the second-generation reforms, and to prevent it from engaging in monumental fiscal irresponsibility that has put India’s future at risk. Like his mentor Prime Minister Dr Manmohan Singh, he becomes complicit in the UPA’s misgovernance. He will have to answer these charges both to the nation and to history. This does not mean he’s lavishing public funds on unnecessary foreign excursions, building gold-plated toilets or taking a cut from the renovation contractor.

It is fair for the Opposition parties to politically exploit the situation to their advantage. However, it is in the national interest not to allow a campaign of unfair personal calumny to discredit the reform agenda—or indeed, to prevent Mr Ahluwalia from a chance to redeem his reformist record—to succeed. The Acorn completely agrees with Mint’s editorial defence of Montek Singh Ahluwalia. Mr Ahluwalia has “done far more for the poor than the busybodies and peddlers of poverty porn who are now attacking him.”