Why Kingfisher Airlines should not be bailed out

November 15, 2011
by

Recently, Rahul Bajaj1 expressed his frustration about the possibilities of Indian government bailing out the Kingfisher Airlines.

He clearly said,

“I am a proud private sector man and I don’t see any logic of bailing out any private sector company either for sake of employees or customers, “If it’s a free market economy, those who die must die.”

Obviously, he is suggesting the right way of action. No private sector company should be bailed out or offered any help by the government. In fact, government should not bail out anything, anyone.

Is there a way to oppose and restrict the government from offering any stimulus, help to Vijay Mallya so that he may save the sinking boar of Kingfisher Airlines?

Why bailing out is wrong?

Bailing out is simply wrong because of the fact that a business in a free market fails only if it is not viable. Since Kingfisher Airlines is suffering, it certainly means that the manner in which this business is being managed is not appropriate and the money invested in Kingfisher Airlines is actually bad investment. If government will add more money in Kingfisher Airlines, it will increase the amount of bad investment. Bad investment always creates further loss. The United States is already suffering the burden of similar bad investment or malinvestment which often causes business cycles, boom and bust and economic meltdown. Then the economic slump leads to further economic stimulus by government which raises the situation of inflation and hyperinflation. Currently, India is suffering inflation; it is the result of the economic stimulus offered by the government in 2008.

However, Keynesian economists like Paul Krugman and our own Prime Minister Manmohan Singh oppose such ideas. They believe that in times of economic meltdown, spending more is beneficial. That is, why there are chances of government offering bailout for Vijay Mallaya’s Kingfisher Airlines.

Argument for Bailing Out Kingfisher Airlines

Arjun Parthasarthy at Firstpost2 suggests that Kingfisher Airlines should be bailed out. Obviously he seems to be unaware of the economic consequences of government interference in the market.

His argument for bailing out Kingfisher AI are too naïve. He suggests that Vijaya Mallya should be provided stimulus because in 2008, government bailed out many defaulting companies and sectors (including financial sector). He also gives example of Satyam Computers which was offered help by government. The writer makes good points when he claims that the Reserve Bank will never let any bank in India to fail and will provide a bailout without asking for anybody’s approval.

At the end, the writer concedes that bailout and economic stimulus are immoral3 in a free economy society but then he asks a genuine question, Are current economies really free, or are they ready to let markets let their own course? And his answer is ‘of course not.’

Bailout is not only Immoral, it is economically irrational

Bail out are certainly immoral, but bail out should be avoided because they cause further malinvestment and creates havoc in the market making economy tumble. We have seen how the huge economic stimulus of the United States of America failed to create any positive vibe in the market. Unemployment rate of the US was around 10% in 2008 and it is nearly 9.1% in current month4 . So bailout failed to make any difference. However, the American economy became weaker. American citizens became poorer and they are under a huge national debt. Same is the result of Indian bailout offered by government in 2008. Economic growth in 2008 was around 6% and in 2011, it is expected to be around 6% so no change. However, Indian citizens are poorer and they are suffering huge inflation.

Why Kingfisher AI should not be offered any Bail out?

Bail out by the government is immoral. Since the government is in practice of doing wrong things all the time, we cannot say that it should also do the same wrong again. Economic stimulus and bail outs actually harm the Individual citizen and make him poor.

It is the right time for Indian government to support the call of free market and to change the pattern of Indian economy from Corporatism to Free market capitalism. Corporatism is certainly evil and the cause of all economic problems. However, free market not only means that government should not bail out any private company, free market also means that the government should not take any corporate tax, business tax and income tax5 from any company, any Individual.

If government is not ready to reduce and remove all compulsory taxes, the defaulting companies also have a right to ask for economic stimulus.

Is it Possible for Indian Citizens to restrict government from Bailing out the Kingfisher airlines?

No, there is no way by which Indian citizens can restrict the government from doing such immoral act. In fact, there is no way by which citizens will ever come to know if the government has already offered some kind of backup for Vijaya Mallya.

Today Vijaya Mallya commented that his company will bounce back and he also criticized the government for not bringing down the tax on high cost ATF6 . Obviously, I agree and sympathize with Vijay Mallya and support his call and criticism of government for not bringing the taxes down. In fact, I support the idea that government should not tax any company any Individual. Taxes are nothing but robbery.

But yes, government should also not provide any bailout package. But we will never come to know if he already has made it up with politicians. We can never know how much stimulus was offered by RBI to market during the last three year because while we can read news, we cannot demand a neutral insight in the working of RBI; we cannot demand a transparent audit of RBI. We are forced to believe that our governmental institutions are the epitome of honesty and we should question their validity. However the truth is the idea of centralized bank and a monopoly of government/RBI over currency itself is a fraud7 , a form of corruption. Politicians are no less than gods in current world. Once Gods are elected in a democracy they cannot be questioned. I think democracy is almost autocracy but the ruler is elected by the mass.

Ron Paul in the United States is demanding for a proper auditing of FED, I wonder if we Indians can raise the similar calls for auditing RBI to establish honesty.

FDI in Aviation Sector: Indian Government has allowed 49% FDI in Aviation Sector. Obviously, this is a huge releif for Vijay Mallya and it seems to be genuine too. But, is it really genuine especially when the Government is still controlling 100% of Air India and has all powers to interfere with aviation Industry by providing subsidies and bailouts for Air India Ltd at the expense of Indian Tax-Payers? How can a private company compete against the government honestly when the government decides all the playing rules? It is yet again a fraud and a form of Keynesian socialism or Crony Capitalism that often turn out to be Oligarchy and creates yawning gap between the rich and poor.

Related Posts

  1. Bajaj Against Govt Bailing Out Kingfisher Airlines, Hindustan Times [↩]
  2. Why Kingfisher Airlines is right in Asking for a Bailout, Firstpost [↩]
  3. Why Kingfisher Airlines is right in Asking for a Bailout, Firstpost [↩]
  4. Why Unemployment Rate is So High in the United States, RLC [↩]
  5. Why Not to Pay Taxes, RLC [↩]
  6. Vijay Mallya Seeks Interest Concessions from Banks, Firstpost [↩]
  7. Story of Money and Price Rise, Rational Libertarian Corner [↩]
: Current Affairs, Economics, Government, Privatization
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Comments

  • http://indianliberals.org IndianLiberals

    Unpretentious diva,

    The way you started this post, it gave me a feeling that you have a very poor understanding of the Kingfisher issue.

    Firstly, Vijay Mallya didn’t ask for a bailout. (http://www.thehindu.com/news/national/article2630872.ece). So all the chatter in media about a bailout is redundant in my opinion.

    Secondly, you said, “Since Kingfisher Airlines is suffering, it certainly means that the manner in which this business is being managed is not appropriate and the money invested in Kingfisher Airlines is actually bad investment.” – this shows your poor grasp of the subject. Kingfisher’s losses are not down to mis-management but due to excessive government regulation in the aviation sector. As a matter of fact, almost all carriers are losing money, including the likes of Jet Airways and SpiceJet.

    There are three critical issues that are bringing the aviation sector down. 1) Excessive jet fuel tax 2) Ban on investments by foreign carriers and 3) red tape.

    I agree with you that governments should not bail out private companies but I am afraid your reasoning in this post is weak. I suggest that Kingfisher doesn’t need a government bailout so long as the government gets out of its way (and out of the way of other private carriers).

    • http://rationallibertariancorner.com/ Unpretentious Diva

      Indian Liberals,

      I agree with you that governments should not bail out private companies but I am afraid your reasoning in this post is weak. I suggest that Kingfisher doesn’t need a government bailout so long as the government gets out of its way

      I feel you missed the argument. I have mentioned that Subsidies and Taxes both need to be removed. In fact, in my very post I mentioned :

      If government is not ready to reduce and remove all compulsory taxes, the defaulting companies also have a right to ask for economic stimulus.

      May be you haven’t read that part, may be you are just trying to support Kingfisher and its expectation of bailout. I never said that Vijay Mallya is asking for stimulus, but it is well known that many politicians are lobbying for his bailout and my post is against that. Furthermore, even Jet Airways wasn’t asking for bailout, it was removing workers in last season. What happened? Government intervened and managed Jet Airways to agree to not to cut jobs. Obviously, they might have got some stimulus to pay salaries isn’t it? So you will never know when and how which corporate got stimulus. In India, there is no truly private company, all works under license raj and compulsory taxation and may attain subsidies/stimulus any time, there’s no check, no audit.

      Coming to the second point,

      No Matter What are the reasons, Kingfisher airlines is badly managed and it is a business which need to go away, it is mallinvestment (let me explain this). Kingfisher Airlines not only means Vijay Mallya’s working team to manage it, it also includes the governmental intervention in corporate world with their corporate taxes, excis duties, high fuel prices and all and I have mentioned it in the post.

      There should not be a bail out because the direct consequence of any bail out is further increasing inflation, government doesn’t produce wealth, it prints money and offers as bailout/stimulus and for this new printed money, it forces us poor common citizens to suffer the loss of the value of our saved money. Inflation is the extra tax we are forced to pay. This is why no matter what wrong are the policies, bailout is not the solution, remove those policies, remove subsidies remove taxation, let the free market exist, BUT DONOT BAILOUT.

      At last, I never blamed Kingfisher or Vijay Mallya, I did stated that government should remove all taxes, all subsidies (not only for rich Vijay Mallya but for the poorest of Indians too). In fact, I said remove the government and that is the only solution. But in free market, Vijay Mallya or his Indian liberals freinds won’t be able to expect any free economic stimulus.

    • http://rationallibertariancorner.com/ Unpretentious Diva

      Indian Liberal,

      One more point I must make, even removing taxes on fuel, ATF isn’t actually moral unless government doesn’t agree for reducing its own expenses.

      Because, when the government will relieve Kingfishers and other private/semiprivate airlines(including AIR), it will loose a significant amount of money in its budget and to fulfill that deficit, government will make RBI to buy a few more government securities at a few thousand crores of Rupees and that will push inflation further high.

      My argument is, Unless government is not ready to reduce its own expenses, it has no moral right to provide any relief for Kingfisher and other airlines because if it do so, it is just shifting the burden of being robbed from Vijay Mallya and others on the poor Ghanshyam, the security guard of my locality who will be forced to face further rise in ffood prices. So reducing taxes on Kingfisher means robbery of Ghanshaym IF GOVERNMENT DOESN”T REDDUCE ITS SHAPE>

      Are you assured that government will reduce its own expenditure? India is going down the huge NATIONAL DEBT. Do not forget the fate looming at the heads of Greece, Italy and America,

  • http://indianliberals.org IndianLiberals

    Unpretentious diva

    First of all, I guess apologies are in order. Yes I did read your point about taxes and subsidies and I was meant to add in my comment that ‘the way you end the post gives me some hope that you begin to understand the problem’. I omitted that for some reason and that’s my fault.

    I think we completely agree on the following:

    1) There should be little or no government regulations in the private sector; and
    2) Government should not indulge in bailing out companies.

    My criticism was not on your conclusions but on the way you arrived at those conclusions. Reading your blog post, I gathered that you have arrived at your conclusions through a fanatical belief, almost bordering blind faith, in libertarianism than through a rigorous analysis of the problem. Most of your post, and the subsequent comments, are mere regurgitation of the libertarian theory than any rational analysis of the identified problem.

    That is why you ended up with an irrational argument. Take for instance your insistence that Kingfisher is a mismanaged business. Now unless you work on the board of Kingfisher, I wonder what facts you had to reach that conclusion. Another example is your premise that Kingfisher is going to be bailed out. Again, unless you have some insider information that the world is not privy to, I wonder why you so strongly believe that Kingfisher would be forced to take a bail out despite its rejection of such an idea.

    You see, it’s good to have convictions but it’s very dangerous to be blinded by them. And as much as I am on your side of the ideology, I certainly don’t appreciate an evangelical argument in its favour. That is something we must guard against.

    • http://rationallibertariancorner.com/ Unpretentious Diva

      IndianLiberal,

      I feel you again found it hard to invest enough time to read my article that is why you are raising such issues which have already been answered in the original post itself. As for example, you said,

      Another example is your premise that Kingfisher is going to be bailed out. Again, unless you have some insider information that the world is not privy to, I wonder why you so strongly believe that Kingfisher would be forced to take a bail out despite its rejection of such an idea.

      I guess you again missed to read the post. I have clearly mentioned that Vijay Mallya himself ASKED FOR RELIEF IN FORM OF REDUCED TAXES ON ATF. Please check it out, I have posted a reference from TOI to that news article.

      Now in my original post and in my last response to this similar question (comment), I mentioned that while i support reduction in taxation and subsidies too for aviation industry, I cannot support the idea that while government will reduce taxes on ATF but will not reduce its own expenditure. Because if government do so, than all the loss caused by reduction in taxes on ATF (fuel) will be paid by the RBI in form of new currency offered to government to pay the government securities by RBI. This newly induced money in Indian economy will push the inflation rate to further height. Inflation is hidden tax on citizens.

      So reducing taxees on ATF without any reduction in government spending is equivalent to robbing my poor security guard and my homemade and the vegetable vendors of my area for paying a stimulus (in form of tax reduction) to fatty Vijay Mallya. This makes no sense, in fact robbing X to help Y is fraud and immoral. before announcing any tax cut on ATF, government need to announce Reduction in its own spending.

      • http://indianliberals.org IndianLiberals

        Reducing/eliminating taxes does not constitute a bailout. I hope you understand that.

        Now you oppose tax reduction in this case because you seem to assume that it would lead to more government borrowing. Again, that’s baseless.

        The government has enough stake in public companies that if they choose to reduce it, they will generate enough cash, and simultaneously save enough money that is lost in those loss-making public companies, that it will not need to tax the public. (http://www.indianliberals.org/2011/01/a-case-against-income-tax/)

        So again, a baseless and fundamentally flawed assumption, if I may say so. But what baffles me most is your argument that reducing taxes on ‘fatty’ corporates robs your local watchman! Are you sure you are a ‘rational libertarian’ after all?

        • http://rationallibertariancorner.com/ Unpretentious Diva

          And hey, I never said fatty corporate robs my local watchman, what I said was government robs local watchman to help the fatty corporate, I asked you for links to proove that RBI won’t buy government bondings and securities if government reduces taxes on ATF, if you have any link offer me.

          But I have many links to prove that when in 2009, government reduced taxes (service) and excise duties on various industries, it sold no stake in any PSU but RBI bought government bondings and securities.

          fatty’ corporates robs your local watchman!

          • http://indianliberals.org IndianLiberals

            Unpretentious diva Let me simplify this debate for you:

            1. Government borrowing money and increasing debt – WRONG
            2. Government increasing taxes and regulations on businesses – WRONG

            Clearly, you are right in criticising the government for borrowing money and passing on the debt burden to its citizens. That’s unacceptable. However, you seem to argue that because the government has committed one wrong, they should carry on with another wrong by not reducing taxes and regulations on private businesses. That’s absurd.

            I am not arguing here that the government should borrow money and increase debt. Quite the contrary. But because the government isn’t doing that today doesn’t mean that I should oppose tax reductions. The alternative to borrowing and piling up debts is to reduce government’s stake in PSUs. Again, I am not saying that the government IS privatising today. I am saying it SHOULD.

            • http://rationallibertariancorner.com/ Unpretentious Diva

              Indian_Liberals,

              Welcome back and thank you, kindly try to understand my point which I tried to raise in this post. I have clearly mentioned that I oppose compulsory taxation. in fact I wrote another post for the issue of taxes here at “Why Not To Pay Taxes”

              I also agree that it is absurd to oppose reduction in taxes, but I am not opposing it am I?

              The alternative to borrowing and piling up debts is to reduce government’s stake in PSUs. Again, I am not saying that the government IS privatising today. I am saying it SHOULD.

              Yes, it should, and I have mentioned this in my post. But it is not doing so and I do not have any hope that it will do so. Even the US government doesn’t work in honest way so how can you expect Indian gov. to do it right?

              Providing tax rebates for some corporates and printing money to compensate is the trend of Indian government and all other governments. Even US government did the same after providing stimulus for Automobiles companies and banks of US. We all know what is the result in US and we all are suffering results of Indian government’s wrong doing here in form of inflation.

              We enjoy 3.5 % interest rate for our savings in banks, and we suffer 10.75% Food Inflation and 9.83 commodity inflation in Market. So we are being robbed. This is what I am opposing, this is the topic of this post and just to explain this, I wrote another post here Reason Behind Indian Inflation.

              You and I have a difference, you are a minarchist who believe that corporates can work only under governmental hand, and I am an Anarchocapitalist who knows that government and corporates together are evil. Only corporates/Companies in free market can remain honest.

              That is why I propose a call for No Taxes and No Subsidies and Obviously no Bailouts. I never opposed you call for reduction in taxes, but I cannot support reduction in taxes for a few friends of government while exploitation of all other citizens through increases taxes of inflation because it won’t be a libertarian society, it will be Oligarchy. And India at present is acting like a Oligarchy and I am against it.

              • http://indianliberals.org IndianLiberals

                “You and I have a difference, you are a minarchist who believe that corporates can work only under governmental hand…”

                Another baseless assumption! I strongly believe in free economy with a clear separation between markets and the state, just as the separation between religion and state exists in a secular country.

                I have been a long advocate of government completely getting out of business and trade and letting the free markets function.

                However, I am not an anarcho-capitalist. I do believe that the government has a role to play, mostly when it comes to law & order and foreign affairs and therein we may differ.

              • http://rationallibertariancorner.com/ Unpretentious Diva

                Another baseless assumption!

                Trust me it is not baseless assumption.

                Since you are miniarchist, you can hope that one day government will honestly start reducing its grip from market in an honest way and you will attain miniarchy with government having no say in economy.

                I am anarchocapitalist because I know it is IMPOSSIBLE and all your hopes will end in something like 2G scam, CWG scam, KG Basin LPG/Petroleum scam, Air India Scam etc, or like that of the fate of the USA. This is why I am suspecting a wrongdoing of government when our central ministers say that they are planning to help Kingfisher.

                You can expect a true miniarchy only if you start opposing any interference of government completely (not gradually).

                Since your first comment, you are trying to abuse/criticize me for this post, but this post has nothing which is baseless. I have provided enough argument, enough proofs for all my allegations about corporate/government amalgamated evil. And I do not hope for any honesty from government. You do and hence you try to provide a way through which government may act honest. but I know it will not.

              • http://indianliberals.org IndianLiberals

                “Since you are miniarchist, you can hope that one day government will honestly start reducing its grip from market in an honest way…”

                No I have no such hope. That’s why we need a concerted and sustainable liberal/libertarian political movement to bring about change. The separation between markets and state should be enshrined in the constitution, just as secularism is.

                As for anarcho-capitalism, I have argued with you on facebook about the impracticalities of it and you haven’t managed to convince me otherwise. But let’s keep that for another debate, another day.

                “Since your first comment, you are trying to abuse/criticize me for this post…”

                My dear friend, abuse is too strong a word to use here, don’t you think? I invite you to show me a single word that I have written that could be seen as ‘abusive’. Criticise, yes. And a strong criticism at that. And I have given my reasons for it. But do let me know if you don’t appreciate criticism and I will keep quiet.

              • http://rationallibertariancorner.com/ Unpretentious Diva

                IndianLiberals,

                When you say that my post is leftist rant without actually understanding my point and when you say that you will never comment (visit?) on my website, I feel abused. I may be wrong, as we know abuse has no definition, any words that hurt and make you feel embarrassed/demeaning is an abuse, ‘leftist’ for me is an abuse.

                I never said nor mentioned in my post that the government should Increase taxes. But Yes I DID mention that GOVERNMENT SHOULD REMOVE all taxes and subsidies.

                What I said is the curerrent trend of government is providing tax rebates for their friend corporates and increasing currency in market through RBI…

                Here, I also provided a link which suggest that Government is again buying back its stakes in rich PSUs so that it may again in future provide stimulus and in shadow of stimulus, may again print new money.http://businesstoday.intoday.in/story/govt-mulls-buying-back-shares-in-cash0-rich-psus/1/19854.html

                Why didn’t you understand my fear that not only my local watchman but I will also have to pay more money to buy regular vegetables if government kept providing stimulus/bailouts in similar fashion?

                I mean to say, in stead of calling me leftist, why didn’t you offer a better solution that is Gold Currency or Competitive Currency or termination of RBI and its control on INR?

                If you had said that, I might have started the debate in a progressive manner. I might have written a new post about need and importance of gold standard or competitive currency market in India and why RBI should be abolished.

                You even failed to reason out why Rahul Bajaj opposed any stimulus for Kingfisher/Vijay Mallya?

                because he knows what happens in India.

                Please let me tell this again, In India, there are VERY few libertarians and very very few people who can understand libertarians. In stead of blaming/opposing each other, try to aid each other with better ideas so that our conversations on internet, on your website on my website on facebook or twitter etc may attract more people and may provide them better understanding.

                I mean our contructive conversations will spread more light in common Indian masses.

              • http://indianliberals.org IndianLiberals

                Leftist is hardly an abuse. It is a legitimate ideological position (even if we don’t agree with it). Anyway, I didn’t mean to use it as an abusive word so you needn’t feel bad.

                As for the rest of your comment, I think we have already discussed this on facebook and I am sure you will agree that there is no reason to duplicate that debate here.

    • http://rationallibertariancorner.com/ Unpretentious Diva

      Indian Liberal,

      Reading your blog post, I gathered that you have arrived at your conclusions through a fanatical belief, almost bordering blind faith, in libertarianism than through a rigorous analysis of the problem. Most of your post, and the subsequent comments, are mere regurgitation of the libertarian theory than any rational analysis of the identified problem.

      Well, I know you are trying to offend me, it really doesn’t bother me.

      Vijay Mallya himself saidd, “everything is high cost for an airline in India.” Obviously it is mismanagement of aviation industry, if you will open up your eyes, you will see this mismanagement in every Indian industry (not only aviation industry.) Such mismanaged is bound to fail, but government is there to rob poor citizens to protect these mismanaged industries through stimulus, tax reliefs etc (both are same). My point is simple, if government is NOT READY TO REDUCE ITS OWN EXPENDITURE, IT HAS NO MORAL GROUND TO REDUCE ATF TAXES TO HELP KINFISHER AND OTHER AVIATION CORPORATES because if government isn’t reducing its own expenditure, it is robbing common citizens through inflation or increased taxation and burdening them with more National Debt. This is immoral and I oppose it.

      The reality is, I have offered complete analysis of Indian aviation industry. Kingfishers is just a part of this corporate system which is entirely mismanaged and is bound to fail every now and then, and government is there to protect it every now and then at the expense of poor citizens. It is nothing new, we have seen similar things happening with Jet Airways when in 2009, jet Airways announced a direct cut of 800 jobs and MNS at Mumbai Airport created scene against it and the UPA government then sent a deligate to take care of the issues of aviation industry and soon Jet Airways took the decision of removing jobs back.

      As I have already mentioned, tax reliefs offered to Kingfishers, or Jet or AIR India are nothing but stimulus for them at the expense of poor citizens because government didn’t reduce its expenses even after the Jet Airways struggle nor it will do any fiscal cut this time after helping Kingfishers as Vijay Mallya has DEMANDED to reduce taxes on ATF.

      In my opinions, it is corporate + governmental fraud against the common Indian citizen. Its is robbery of the savings of common men suffering huge inflation. Soon after providing any such stimulus (or you may call reduction in taxes), government will demand RBI to buy a few more of governmental securities at a price of few thousand crores and Indian inflation rate will reach to 15%, it already is well above 10%.

      I don’t think this is good management of aviation industry which is still in control of the government. (Obviosuly government controls Kingfisher if government has a right to tax on fuel and air routes and airports and the whole business.) You must understand that taxation is a form of regulation according to which the industry is required to be managed. It is obviously mismanagement. Proper management would be, no interference of government either through Taxes or Subsidies, but in that case, if Kingfisher commits a blunder, it will fail.

      About me regurgitating libertarian theory, I do not write anything that I don’t believe in. I have proper authority to rationally defend everything I have written and this is the only requirement for a rational analysis. Dare to challenge me on any issue regarding this post and I will answer you.

      1) Kingfisher/Vijay Mallya actually demanded a stimulus when he asked government to reduce taxes on ATF. Here is the link to this. http://www.firstpost.com/business/wrappetrol-prices-to-be-cut-by-rs-2-no-large-scale-layoff-for-mallya-131645.html Tax relief is actually a form of stimulus.

      2) While I support the ideal No Taxes No Subdies, I do not support any stimulus for Kingfisher including this reduction in ATF tax, why? because government won’t be rducing its expenditure and the loss of governmental fiscal collection will be filled by RBI and that will increase inflation and ultimately, will increase NATIONAL DEBT and I and other poor citizens will have to bear it.

      • http://indianliberals.org IndianLiberals

        Your responses are getting from absurd to laughable. When I first landed on your website, I thought I had reached a rare libertarian commentator. But I am not so sure now.

        “As I have already mentioned, tax reliefs offered to Kingfishers, or Jet or AIR India are nothing but stimulus for them at the expense of poor citizens” – This is not the first time I have come across this leftist rant but to read it from a blogger calling herself libertarian… that’s a definite first.

        To sum up, I don’t think you are either ‘rational’ or ‘libertarian’ and I am quite disappointed. No further comments from me now.

        • http://rationallibertariancorner.com/ Unpretentious Diva

          Whatever,

          are you sure government won’t be borrowing the money from RBI which it will not attain from Kingfisher because of reduction in taxes? How sure are you about it?

          Why did government borrowed money from RBI after providing tax relief and reduction in excise duties during the Stimulus Package 3 in 2009?

          You cannot answer this.

          The government has enough stake in public companies that if they choose to reduce it, they will generate enough cash, and simultaneously save enough money that is lost in those loss-making public companies, that it will not need to tax the public.

          I agree but why will government do that, and is government doing any such thing now?

          Why didn’t government do the same after providing stimulus in 2009? Why RBI bought Government securities and offered 12000 crores first and 48,000 crores later to the government?

          Why our national debt has been increased during the last three years?

          And by the way the whole stimulus package 3 of 2009 was in terms of reduciton in taxes and excise duties.

          I am clear again, if government is really going to seel its stake in public companies than only it has a moral right to reduce taxes, otherwise a no not. Reducing taxes on behalf of inflation or taxes on other citizens is not libertarianism, it is robbery of one for the sake of other.

          There’s nothing leftist in it.

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