September 9, 2009EconomyPublic Policy

In defence of Messrs Krishna and Tharoor

Why is the UPA government insisting that the taxpayer subsidise the new ministers?

This is an archived blog post from The Acorn.

SM Krishna and Shashi Tharoor have declared that they are paying for their own accomodation at five-star hotels in New Delhi. But they are members of a party and a government that just doesn’t get the idea of private property. Small wonder that they are at the receiving end of the finance minister’s request” asking them to move out of their privately-financed luxury hotels to taxpayer-financed state accommodation. (Even if they still pay the rent from their own pockets, state accomodation is inevitably subsidised by the taxpayer)

Mr Mukherjee’s hypocrisy lies in using taxpayer funds to convey an impression of austerity’ because some parts of India are suffering from a drought. Even this faux austerity is unwarranted and useless even from a symbolic perspective—just like the insistence on wearing khadi. Surely, someone should point out the irony of scale and scope: the UPA government caused immense damage to public finances through gargantuan spending programmes since it first came to power in 2004 and now calls for MPs to give up 20% of their salaries as an austerity measure.

On the question of housing Messrs Krishna and Tharoor the question that ought to be asked of Mr Mukherjee and his economist boss is whether the government of India is paying fair market prices for the bungalows and bhavans it occupies in New Delhi? It doesn’t matter that the government actually owns the real-estate—there is an opportunity cost. Can’t all the parliamentarians and high government officials be moved into high-rise complexes somewhere in New Delhi, and their Lutyens’ bungalows be rented out? There are a number of government offices—engineers, commissioners, registrars and post offices—that could be moved out of the most expensive areas into less expensive ones.

Forget austerity, mere maximisation of the use of government assets suggests that Mr Mukherjee should turn the whole lot of sarkari grandees out of their palatial homes. He could start by moving out of his own bungalow, into a private hotel, and settle the bills with his own funds.

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