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| 'You have to turn the whole system upside down...' | | Bimal Jalan on the Budget |
| Bimal Jalan / New Delhi Jul 26, 2009, 00:03 IST |
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I want to raise some overarching issues. One is the fiscal deficit. The second is the capital expenditure not being as high as it should be. And the third question is with regard to delivery of services and how much it costs.
The three questions are inter-related. Take the fiscal deficit. There is no difference of view, including that in the finance minister’s speech or in the finance ministry’s document, that this level of fiscal deficit is unsustainable. It is unsustainable. If it were not, he would not have talked about reducing it from 6.8 to 5 and later to 4.2 per cent. So, that is one problem.
The second question relates to capital expenditure, which is not increasing. That is a perennial issue with us. You can allocate money for capital expenditure, but we cannot spend it. This happened in the previous year; it keeps on happening. Whatever you provide for it, it will not be spent in time.
The third is the public delivery system. According to the latest Planning Commission study, for the delivery of one rupee to the ‘below poverty line person’ under the targeted Public Distribution System, we have to spend as much as Rs 3.35.
So, you can see how these three matters are related. If we could save even two rupees in terms of waste in transferring funds in our poverty alleviation programmes, in our employment-generating programmes, if you could deliver credit or infrastructure investment, then the fiscal deficit will not be as high as it recurrently happens.
How do you tackle this? This can’t be done unless you make some fundamental reforms in the way in which we run our ministries.
India is, probably, the only great democracy where you have as many as 70 ministers or ministries. On every issue of expenditure, whether it is capital, whether it is public delivery, whether it is fiscal deficit control, you find that there are 10 ministries involved and you will find that there are three tiers. There is the Centre; there is the state; there is the district; and then there is the gram panchayat. The Centre blames the state and the state blames the Centre. All this costs money; all this creates fiscal deficit; all this delays the implementation of your highways and so on and so forth — and all this delays the public delivery system.
We should take a lesson from the way in which our great democracy provides free and fair elections for 670 million people on time. But it can’t construct a power plant on time, which a private sector can construct. It can’t construct a highway on time which a private sector can construct. Why is it so?
Under our Right to Information Act — we are very proud of it — you can ask a question and you are time-bound to give answer to us. But you can’t provide food on time. Why? The fundamental reason is that we don’t have delivery structures which are at arms-length from the ministries. The policies should be decided by the government or by the ministry. But the delivery, like the elections conducted by the Election Commission, like the appointment of civil services done by the UPSC (and not by the home ministry or the Department of Personnel), should be with an autonomous agency.
If we want to take care of our credit problem, if we want to take care of capital expenditure, if we want to take care of our fiscal deficit, if we want to take care of our public delivery system, the central issue is that we should try and keep it at an arms-length from the ministries. You have to turn the whole system upside down whereby your Five-Year Plan should become a one-year Plan. I will come to this a little later. But you should have one year target, one year plan, within a Five-Year Plan, and it should be implemented annually and somebody should be responsible for that—and that should perhaps be the minister.
Excerpts from the July 15 speech of Bimal Jalan, member of the Rajya Sabha, on the Budget
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