Two to Tango: IPL and GST, a match report!

Dear Reader,

Hi! Here’s a piece on what happens when Parliamentarians are gripped by the IPL fever 🙂

This piece appeared in my column “Tweakonomics” in the Hindu Business Line today. You can read it at http://www.thehindubusinessline.com/opinion/columns/two-to-tango/article9631178.ece, or read it here directly. Cheers!

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Team FM was celebrating. They’d pulled off the GST feat in record time i.e. before the IPL began. Many of the NDA MPs had threatened not to be present if the Bills were not introduced before April 5. That had got FM Jaitley really worried. He had been pushing his team hard, and yet, some of those clauses looked tricky. “A strategic time-out, that’s what we need,” he told his beleaguered team, working out the clauses yet again to make them Chidambaram-safe. “Such express pace! If only there was an assured follow-on in 2019. Then we’d have done this in style!”

But the PM was pitching it hard and had asked him to put his best foot forward. He had to deliver not only the doosra and the teesra, but also the choutha! The Central GST Bill, Integrated GST Bill, Compensation (to States) GST Bill and the UT GST Bill, all at the same time. And all this with the Delhi Daredevil mufflers breathing down his neck.

To add to his troubles, there was Chennai Super King P Chidambaram in the Rajya Sabha muttering about how he’d goofed up in writing the clauses of the GST, especially with the wording of the anti-profiteering clause. With the anti-profiteering clause, the FM had just wanted to make sure that if companies were not passing on reduction in the GST rate to the consumers, there would be a third umpire to examine the case. “The presence of the third umpire is ok,” said the Super King snootily. “Who is the selector, is what worries me. Unorthodox and draconian, is my verdict. Howzzat!”

The BSP had another set of issues. In the first year of implementation, an offence, if compoundable, should not be non-bailable, they kept on hankering. Normally, the stumps hold the bails, grinned the FM to himself. But here the bails have them stumped. Heehee!

But his team had delivered. On March 29, all four supplementary GST Bills were passed in the Lok Sabha by voice vote. It was actually just a noisy out-break of relief that the damn thing was done before April 5. It meant that the entire “Wah bhai Wah” IPL season could now be enjoyed happily in front of the TV without worrying about how to ask intelligent questions and participate in the debate tomorrow just as Lasith Malinga came out with that Yorker. “Neat thrownnnnnnn,” roared the Gujrat Lion, pleased with the new phrase, new bill and new year. It sounded very English, and yet, had the pleasant Mitt-rrron impact on the Parliament.

The FM was super pleased. Here was the ultimate legal boundary- all four Bills passed at the same go! In the meanwhile though, the scene had shifted to Rajya Sabha, where there was a lot disappointment because Sachin Tendulkar didn’t turn up.

“He never turns up in the other sessions. That is ok. But it should be made binding on him to turn up in March. After all, we want to discuss important issues here. What are the prospects of the Mumbai Indians winning this season, we really want to know,” said a Rajya Sabha MP.

“It’s ok, we still have Dhoni,” said Super King cleverly.

“What? Now when did he become MP? Tch, tch, I really must start reading newspapers again!”

“Idiot! I’m talking about Sakshi Dhoni making that comment on Aadhaar. Oh, we’ll raise privacy issues now. Silly point to the rescue! You want the GST, eh? We’ll catch you, alright! How? Simple! Gully, Slip and the Third man!

A case for Evenomics

Dear Reader,

Hi! Happy women’s day! Here’s a piece I wrote under my column Tweakonomics in the Hindu Business Line as a women’s day special! You can see it at http://www.thehindubusinessline.com/opinion/columns/a-case-for-evenomics/article8324270.ece; else read it here directly…Enjoy!

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On women, economics and sexism

Look at the centre-piece of economic theory. The entire science hinges on the assumption that economic agents are rational. Households, firms, governments and bureaucrats all act in a rational fashion so as to maximise utilities, profits, revenues, rents or social outcomes. Really now. Can anyone smell sexism here?

Mister Ricardo

This is not to imply that rationality is a male domain and that women are irrational. But the very definition of rationality in that other things being equal, rational people think at the margin and always respond to monetary incentives, is so construed as to be necessarily a male domain.

Think of Ricardian equivalence. This theorem says a tax break given to a household today does not really prompt it to consume more immediately; that is, households look at their consumption inter-temporally i.e. across time. So households believe that any reduction in taxes today will be compensated by governments increasing taxes later and, hence, a tax cut may not really promote consumption, in a manner that was assumed by Keynes.

Did Ricardo never indulge in that fun thing called as impulsive shopping? Had he just thought of consulting Mrs Ricardo about her inter-temporal choices, he would undoubtedly, have been given a totally different angle to look at things, saving him a lot of criticism in the future.

Another centre piece of neo-classical economics that has been blasted by feminists is Gary Becker’s paper on “A treatise of a family.” Becker, using rational neo-classical norms goes on to prove that the utility of the family would stand maximised when each partner performed the task in which he or she “specialised”. Through socialisation, he claims, women have developed a comparative advantage in home production, and hence, a happy couple is one in which the woman stays at home. This inherently means that an egalitarian couple could not really maximise their well-being, a conclusion that derives from a premise based on male rationality.

Male models

A last example. Rating agencies failed to predict the sub-prime crisis. Obviously, react feminists acidly, given that the current set of models used by them look at things in a finite orderly, male fashion. So, the probability that things can go wrong becomes a function of fundamentals, bank regulations, housing prices, derivatives prices, etc. There is no place in this model to assume quirky agents, the behaviour of which may lead to super-quirky outcomes. Of course, all of the comments offered above come to a grinding halt when one thinks of Joe Stiglitz, who got famous for predicting the sub-prime bang on.

There is, however, a stream of thought emerging that such episodes could be prevented in the future by just making sure that we don’t simply man our policy posts, but rather wo-man them. Get that gender equality done, not just for woman empowerment, but for the empowerment that the intuition gets to the framework.

Because, maybe economic events cannot be classified just using formulae. Maybe the notions of rationality are gender-specific. Because, maybe markets are from Mars, but value is from Venus

Econ Mom watches Rail Budget with Lil One

Lil One has been quite unwell. He had a bad tonsillitis episode combined with a nasty viral fever and was grounded at home last week. From Wednesday onwards, he was actually quite on the recovery path; a quick barometer to gauge recovery is the “back-answering” index. He was shooting nasty answers at me quite happily and when on Wednesday, dinner saw him crack some of the most abominable toilet jokes, I knew that he was absolutely fine.

“Why don’t you go to school tomorrow? I am busy and you seem to be quite fit. And your jokes will find a much more errr…receptive audience,” I remarked nastily after having suffered about 21 of those, most of them cracked just when I was about to gulp my food.

“What? School? Nnnnaaah, this is so much fun!” Lil One said innocently and quite happily and then catching my nasty gaze, recoiled with a correction. “I mean…I mean…I mean I am quite unwell, Mom. Even Doc says the same thing. Are you going to send your sick child to school?”This one came with wide eyes and the sweetest possible tone.

“You are quite right about the “sick” bit, there. Ok. If you don’t want to go to school, that’s fine. But let’s study something. You have missed a lot of lessons.”

And so we sat down to read the lesson on the Parliament. The main function of the Parliament, said the lesson, was to debate and discuss and legislate. Pass laws for the betterment of the country. The Parliament is made up of the Lok Sabha and the Rajya Sabha and the President. Once the bills are passed by both houses, the President signs the bill into an act.

“Heehee, if I were the President, I wouldn’t sign so easily,” said Lil One, his eyes glinting mischief and wickedness. “What happens then, Mom?”

“Hmmm. I’ll tell you what, Lil One, it is to take care of wicked minds like yours that our Constitution is drafted so beautifully. The moment such wicked thoughts come to your mind, immediately an article comes in to offer correction. So, the Constitution provides that the President can refuse to sign a bill that has been passed by both houses only once. The second time around, he has to sign. Now do you see what a great job Dr. Babasaheb Ambedkar has done?”

I could see awe in Lil One’s eyes. He tends to respect people who can pre-empt mischief.

“The lesson says you can’t introduce money bills in Rajya Sabha. Why is that so, Mom?”

“Well, the LS members are elected by direct voting, but RS members are not. So matters pertaining to money have to be proposed by people’s direct representatives. Got that, pesky?”

“Oh! Is that what you keep talking about? The Budget? Does that mean the Budget only can be introduced in the Lok Sabha?”

“Bingo!” I beamed at him with pride. I like it when he talks economics. “The Budget is a proposal that the Finance Minister has for the country. So, he will present the Budget in the Parliament. The other MPs will listen and debate and discuss. He will then submit the Finance Bill for discussion and approval to the Parliament. All this is done under the supervision of the speaker. The FM is Mr. Arun Jaitley (Lil One nodded knowledgeably) and the Speaker is Mrs. Sumitra Mahajan.”

“Oh! I didn’t know that the Speaker was a woman!”

“Whether in Parliament or at home, only women are speakers, son.” That was Hubby. I gave him a poisonous look while Lil One giggled.

“Is that why you are busy tomorrow, Mom? Is the Budget going to be declared tomorrow?”

“No, sweetie. Tomorrow is the Rail Budget. It will be presented by the Rail Minister Mr. Suresh Prabhu.”

“What happens in the Rail Budget?”

“Well, Railways are a BIG project for the Government. So he’ll tell us tomorrow how many new trains will be introduced. Whether new tracks will be created to join remote areas. Whether trains will be made more hygienic. Whether superfast trains can be introduced for certain tracks. Whether he is planning to increase the fares for passengers and/or freight. Do you know that more business for Railways comes from freight than from passengers like us?”

“Wow! No, I didn’t know that. So will he raise tickets for the freight trains?”

“I guess not,” I said smiling at the peculiar “freight ticket” usage. “Business from the freight component has already been falling. His steepest competition for freight is trucks. And since diesel prices have been steady, I do not somehow see him risking increasing the freight rates.”

“Why is this Rail budget such a big thing?”

“Well, if he plans lots of new trains and tracks, then the Government will go shopping for steel. And the steel makers will employ more people. And they’ll shop for coal. And the coal businesses will increase employment. When the people working in the coal and steel industries get paid, they go shopping for clothes and books and food. So more people get employed in those industries and so on. So, if the Rail Budget promises lots of new investments and new tracks etc., then it is good news for employment and welfare of the people.” Whew! Explaining the Keynesian multiplier to kids is a tough job. Lil One didn’t look super convinced, but didn’t say much.

Next day was the Rail Budget. Since Lil One was at home, I told him to watch the Rail Budget with me. “But I won’t understand it!” He started to whine. “See the Lok Sabha in action once. You will get a better grip on that lesson!”

And so Econ Mom sat down with Lil One to watch the Budget. He was watching everything quite carefully, and in between listening to the announcements, I was pointing out where the Speaker sits. And showing him how the MPs sit on their benches in a semi-circular arrangement to debate and discuss.

As some shouting erupted over some announcement, I primly told him, “The chief function of the Parliament is to debate and discuss and pass laws.”

I was rather proud of myself for having converged my rail budget gyan with his civics lesson and was congratulating myself on having done a simply phenomenal job when Lil One piped up.

“But Mom, they are only shouting!”

I was flustered. “Ahm, well, that does happen at times, when they feel very errrr…passionately about an issue.”

“And look at that man. He is sleeping. Hee hee hee! And those two women back there don’t even know what is happening. That’s exactly how Swapnil looks in the class when Teacher is teaching us linear equations. Heeheee!”

Gawd! What a reality check! I guess I should have never got so enthusiastic about getting civics lessons to come alive. “Now if anyone asks me what I want to be, I know what I’ll say! I want to be an MP! It’s really easy and it’s so much fun!” Sigh!

 

 

 

Econ Mom becomes the FM!

“Sssshh! Can you reduce the volume, guys? I am reading something important!” I yelled to Lil One and Hubby, who were watching some crazy TV show with great gusto.

“Mom, come join us…what are you reading anyway which is so important?” Lil One sounded hurt that Mommy wasn’t joining in the fun.

“Oh, she is reading news pertaining to the Budget,” said Hubby, in a maddening, condescending fashion. “As if she’s going to be the next FM.”

The words stuck to my mind. As if I am going to be FM. That would be a disaster of an order unknown. Econ Mom could almost see the entire circus unfolding.

A couple of days ago, the Halwa party was held at North Block. Well, that’s kinda traditional. The halwa party marks the printing of the budget documents. About a 100 officials who are involved in the printing of the budget documents stay at North Block from the halwa party upto the budget day so as to maintain complete secrecy regarding the same.

If Econ Mom were to be the FM, the first unmitigated disaster would be awaiting me at the halwa party in the format of Hubby’s Aunt, the Cook, who believes that she is the Only One who can..Cook.

“Oh no no no, is this the way to make halwa,” she would grumble, causing all the bureaucrats and budget experts, already weak from the crazy work schedule, to cower visibly before her towering persona. “And this is not halwa, to begin with. This is Sheera. Your cooks don’t even know how to make halwa.”

I would be busy trying to pretend I do not know the woman and do some intellectual talk on the fiscal consolidation path.

“Beti, next year, whether you are FM or not, and looking at your track record, I am really not sure you will be, but I am going to teach this joker to cook halwa. Tch, tch, tch…when the boss doesn’t know how to cook, how can I expect this poor man to be cooking properly!” This last bit would be probably addressed to Arvind Subramaniam, the Chief Economic Advisor, who would start to explain that he was NOT the cook. “No, no, no. Don’t give me excuses, young man. You are a very poor cook!”

Eve of the budget. The entire team would be discussing the last minute issues. “And Madam, be forceful when you make that announcement about cancelling the LPG subsidy for the richer households!”

And in the midst of the Chak De! huddle, Hubby would call, just to take stock and generally shake me up with the most stupid details. “Sweetheart, our washing machine stopped working today.”

“Ohk, look, I really can’t talk about this…we are in the midst of the LPG subsidy strategy..”

“Good you reminded me!” This, if I know him, will come in a super booming voice. “Say, sweetheart, we’ve run out of both cylinders. I know you asked me to book a refill, but I don’t have the number….errr, do you?”

“What? Gawd, how can you? Forgot to book a refill? I am really going to levy a special tax on Company Secretaries tomorrow.” That last bit would be hissed in that poisonous tone I generally reserve for him.

“Hey, cool down, honey…just joking…what are you so tense about? It’s just a budget!”That’s SO typically Hubby.

“Just a budget? JUST a budget? I have to announce it in the midst of antagonistic opposition members and later there’s a talk scheduled with Arnab Goswami…I am scared…”

“What are you saying? Scared of Arnab? Arre, don’t you worry, just imagine its me you are talking to and you’ll tear him down to pieces in that rude, impossible, toxic, inimitable fashion of yours, sweetheart. I give him 2 minutes at the most. He is going to meet his match today!”

Sigh! Was that a compliment?

Day of the budget. I reach the Parliament with the suitcase in hand…nnnnah, make that a purse, a real classy one. Hmm, I am dressed up and am walking up the steps when the cell phone rings.

“Moooooommmmy, I forgot to tell you…we had to take Geography maps to school today, else I’ll get a remark!” That was typically Lil One, who ALWAYS remembers what’s to be taken to school whilst at the doorstep or in the school bus. Grrr!

Gawd, this is so stressful! “Listen, I am going to be on TV. You can tell your friends too. And a remark or two is ok!”

“What? They finally gave you that lead role in Kabhi Bahu Kabhi Daayan? Dad was telling me! How embarrassing! I am not telling my friends. They’ll laugh at me. So now I’m getting a remark and plus everyone’s going to laugh at me….Aaaaaaaaaaarrghh!”

It’s final. Econ Mom really doesn’t want to be FM.