Friday, February 6, 2015

Acting responsibly as a government- Do not sell family jewels

Governments give away land to private enterprise in the name of encouraging industry or investment. After a few years, the industry or the business shuts down,, jobs are lost and the promoter ends up with a fortune in real estate.
Governments should NOT be selling away any asset to private or public sector. What assets are with the government is also the assets that belong to all the generations yet to come. It is not fair that a family jewel be sold off to satiate immediate hunger. When later generations come, there is nothing left in the larder.
Let the government only give away land by LEASE. Say for 10 or 20 years at an annual rent. To encourage an industry, the rentals could be small in the initial years. However, any business which cannot afford market rents does not make commercial sense, especially in the private sector. No private sector business should thrive with a public subsidy. As it is business and industry are encouraged with a host of tax incentives, soft loans etc.
Rents can be linked to an index of inflation. This will ensure that all future generations also get a fair revenue out of what is the citizens’ property. It is not ethical or right on the part of a government to sell off an asset, no matter what the price.
There are cases like Infosys or TCS, where so many governments have given away land at throwaway prices. Today, these companies are making money hand over fist and the taxpayer (who gave up the land to a group of businessmen) do not get any joy or benefit from it.
Land is the asset which is most abused by politicians by giving it away to businessmen who make super profits out of it. Look at the textile mills of Mumbai. So many jobs lost and so many bank loans written off. And NTCs supported with tax payer money. Is it fair for the promoter or someone else to sell this land and take away the money? These lands belong to the citizens of today and tomorrow. They can be used to generate income. They cannot be sold.
Similarly, when it comes to spectrum for the telecom companies, let it be given on an equitable basis, but on a revenue share. It could be five or ten percent of revenues. That way, the revenues of the government will keep growing. And industry need not find up front money.
Let no asset of the government be sold. It is not ours to sell. It belongs to the generations yet to come. And benefits of these assets should keep flowing in perpetuity.

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