Ramesh chains entrepreneurship – Ravi Shanker Kapoor

Ramesh mohan

The disingenuousness that the enemies of freedom employ to promote their illiberal ideas is astonishing. Worse, masquerading as the champions of the poor, the ‘marginalized,’ the ‘downtrodden,’ etc., they also get away with their sophistry. Rural Development Minister Jairam Ramesh attempted something similar recently; he should not be allowed to escape unscathed.

In an interview to The Economic Times (March 12, 2013), he said, “Unleashing the animal spirits is all very well but it has to be in an ethical framework. Markets is (sic) all about morals, trust, adherence to laws and I think an obsession with animal spirits to a point of ignoring these larger issues that govern the functioning of markets is not good for the country. You must unleash the animal spirits but do it in a manner that the animals don’t become man eaters.”

Quite apart from the impropriety of taking a dig at his figurative boss, Prime Minister Manmohan Singh, Ramesh sought to create a chasm where none exists. For Singh had used the term ‘animal spirits’ figuratively—to express the zeal and zest of entrepreneurship. And this does not fit into the scheme of things of Sonia Gandhi, Ramesh’s real boss.

According to Sonia’s ideology, which is Nehruvian socialism in a new garb, entrepreneurship is a trait mankind is better without. The fact, though, is that this trait gives human beings power to become prosperous, spread prosperity, and overcome obstacles. For this very reason, enterprise is anathema to Sonia and her loyalists like Ramesh. Hence the disdain and suspicion for free enterprise. And hence the jihad against economic liberty and market.

Owing to their pathological hostility towards entrepreneurship, the ruling elite are unable or unwilling to understand many important facts, one of them being that entrepreneurship is not the prerogative of the rich, capitalists, tycoons, etc. It is found in all sections of society in all countries. It is not just the earls, barons, and scions of corporate aristocracy who plan and run new businesses; the local eateries, bakeries, shopkeepers, owners of micro and small industries, etc., also conceive new ideas and execute them. At any rate, all major industrial houses began as small; it is with time that they became big. And it is always the small businesses that bear the brunt of socialist excesses, the Inspector Raj being one of them.

In the name of egalitarianism, Nehruvian socialism has done a lot to stifle, maim, and tame business; Ramesh is among Sonia’s knights who have taken upon themselves to dig out the instruments used in the days before liberalization to torment private enterprise. In his avatar as environment minister, he did his best to jeopardize projects—all, of course, for the sake of clean and green surroundings. Swaminathan Aiyar recently said at a function that green approvals have procured by bribes. If Aiyar is right, Ramesh played the role of a facilitator of rent-seeking, this despite the fact that he is known as personally honest (Somewhat like Manmohan Singh and A.K. Anthony. It seems that now honest people have become a national problem!).

As Rural Development Minister, Ramesh is determined to hurt, if not destroy, the realty sector and, of course, the aam aadmi whose cause the government ostensibly champions. Let’s survey the sector. According to the India Brand Equity Foundation (IBEF), realty “is not only the biggest contributor to gross domestic product (GDP) of the country but is also the fourth largest sector in terms of foreign direct investment (FDI) inflows in the country.” The IBEF is a Trust established by the Department of Commerce, Ministry of Commerce & Industry, Government of India.

“The Indian real estate market size is expected to touch US$180 billion by 2020,” says the IBEF. “In fact, the demand is expected to grow at a compound annual growth rate (CAGR) of 19 per cent between 2010 and 2014, with Tier I metropolitan cities projected to account for about 40 per cent of this.”

One would have expected the government framing policies that would give a fillip to the sector—or, at least, do no harm to it. But in Sonia’s India anything that is vibrant and robust has to be punished. So, her loyal follower Ramesh is determined to bring in the Land Acquisition, Rehabilitation & Resettlement Bill that would badly hit a sprightly sector.

The objective of the legislation is to give a fair deal to the land sellers—a laudable goal indeed, given the fact that small landowners have been forced to sell their land at prices not to their satisfaction. But instead of coming out in favor of landowners, the Congress-led government has conceived of a law that is against acquirers.

This is the governing idea of this regime: any action against the rich, by virtue of being anti-rich, is pro-poor. The tax on the super-rich will help the poor. And a heavily anti-industry law should also be appreciated as something beneficial for the ‘marginalized.’ This is the typical zero-sum, class-war doctrine.

So, the Bill proposes that the compensation should be at least four times the market value for land acquired in rural areas and at least two times the market value for land acquired in urban areas. There are many more costs imposed on the acquirer.

The best way would have been the end of acquisition, except in the absolutely unavoidable circumstances; still better would have been the upgrade of property right as a Fundamental Right. It needs to be mentioned that it was originally envisaged as a Fundamental Right; decades of socialism, however, undermined the right gradually, finally leading to its downgrade in 1978.

The Bill, if enacted in its present form, will devastate the realty sector by making land exorbitantly expensive. It will also result in the demise of affordable housing, for dwellings will go beyond even the middle class, let alone the people with lower incomes.

And this would be because Ramesh wants to enchain entrepreneurship.

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