Openness leads to more efficiency, greater growth, and boredom. Once the Ministry of Finance took the unprecedented step of openly discussing tax reform on the web, via the Kelkar report on taxes, the suspense about the budget has disappeared. But there is still a lot of mess to be cleared up, and it remains to be seen whether the government is genuinely concerned about fairness and growth.

This mess is the possible continuation of the biggest financial scam the world has known, much bigger than all the Enrons put together. And it is the Indian left that supports it, and the elite left and the corporate right that are the major beneficiaries. This deadly combination ensures its continuation. It is done in the name of the poor, and like all such (deliberately?) misguided attempts, it benefits precisely the people it is not supposed to benefit. It is worth Rs. 100,000 crore annually, or close to half of the combined deficits of the centre and the states. Or half of the entire financial savings of the household sector! So next time you protest about the deficit, think about RPPR, or Robbing the Poor to Pay the Rich.

RPPR is not the official name of the scheme; it can't be with the left and the unright politicians clamoring for its continuance. The scheme is magnificently titled "Small Savings". These are deposits of the poor in "small" amounts at government banks. They are guaranteed by the government - they are as good as government paper, the kind that all the foreigners are buying in order to avail of the juicy 6 percent interest rate. But India's "poor" cannot survive on only 6 percent; no, they need 9 percent, or a 7 percent real interest rate.

India's "poor" always needed interest subsidies to supplement their meager incomes. First, the transfers were through guaranteed returns in equity schemes, also known as the UTI. This was also worth the same 50 to 100 thousand crores. But that scheme ended in shame. So where were the "poor" (also known as the rich corporate sector in India) going to get juicy, fat, excess, riskless returns of around 9 percent? Why, in small savings schemes administered by the government of India, and large returns guaranteed by the same.

Why is the government of India continue subsidizing the rich? Because it thinks this is the only way to raise money to finance the spending extravaganzas of the states. So let me see. The states need money for spending that does not reach the poor. It goes for fertilizer subsidies for corporations who produce fertilizer well above international prices. Or to subsidize hotels, computers, airlines for the poor. States also need to spend on their teachers who have a record for absenteeism. States need spending to finance the theft losses on the electricity supply they supply to the industrial sector. Who in his right mind would finance this theft? Why, the people of course, as long as they were told that this was going to help the poor.

There is a way out of this scam. The Reserve Bank of India issued a report last year recommending that the yields on small savings deposits be tied to yields on government securities. Which means that yields on small nee scam savings deposits should decline from 9 percent t 6 percent. Think of the boom to you (and the economy) if your borrowing rate was to decline by 3 percentage points! But does the Finance Ministry get it? When you look for reform in the forthcoming budget, see what the mandarins are doing about SS, Scam Savings.