By announcing that the price of water will not go up. See the Utility Regulatory Authority was set up on the basis of a rather sloppy justification to fix the price of stuff like water and electricity. Now if the PM decides that there won't be any increases it immediately makes that institution redundant. Why spend so much money on a new institution when the work can be done elsewhere like at the Ministry of Finance? It also cuts the energy minister who heads the tiniest of political parties to size and is another splendid reason for him to tender his resignation.
But the head of government did more. He also reduced the price of petroleum products which overrode the recent work of the Petroleum Pricing Committee. This makes the case for the prices of these basic building blocks of GDP to be determined at all times by Cabinet. Electricity prices too should have come down to give a fillip to the economy but they did not because of two reasons. One is that government has been kidding itself for too long that tax mix doesn't matter. Taxing inputs to death to build a very risky facade of a low-tax jurisdiction instead of bringing back top income and corporate taxes to more sustainable levels of 30% has generated a catastrophic growth path. Indeed there was an equivalent of five years of national output missing – those between 2005 and 2009 – at the end of last year because of the trickle-down economics which started in 2006 on the watch of Navin Ramgoolam, an avowed socialist.
But the head of government did more. He also reduced the price of petroleum products which overrode the recent work of the Petroleum Pricing Committee. This makes the case for the prices of these basic building blocks of GDP to be determined at all times by Cabinet. Electricity prices too should have come down to give a fillip to the economy but they did not because of two reasons. One is that government has been kidding itself for too long that tax mix doesn't matter. Taxing inputs to death to build a very risky facade of a low-tax jurisdiction instead of bringing back top income and corporate taxes to more sustainable levels of 30% has generated a catastrophic growth path. Indeed there was an equivalent of five years of national output missing – those between 2005 and 2009 – at the end of last year because of the trickle-down economics which started in 2006 on the watch of Navin Ramgoolam, an avowed socialist.
