There is little in the Budget to fulfil the stated goal of re-energizing government so how will it happen?
Presentation of the annual Budget has been the most consistent act of governance during the 62 years of our independence. The first Budget of independent India was presented by the first Finance Minister, RK Shanmugam Chetty, on November 26, 1947. The 62nd Budget was presented by Finance Minister Pranab Mukherjee on July 6. The nation has undergone a sea change during these decades. But governance seems to have lost its steam. Hence the Finance Minister’s call in his Budget presentation for “Re-energizing government and improving delivery mechanisms to provide high quality public services, security and the rule of law to all citizens with transparency and accountability.”
This “re-energizing” is to “lead the economy back to the high GDP growth rate of 9 per cent per annum” and to “deepen and broaden” the agenda for “inclusive development” – the two challenges the Finance Minister has set for the government in the short- and medium-term perspectives.
India’s “suffocating bureaucracy” is the least efficient among 12 rising economies, according to the Hong Kong-based Political & Economic Risk Consultancy’s business survey, and working with the country’s civil servants a “slow and painful” process. In the event, re-energizing of government becomes a must. But do the “challenges” posed by the Finance Minister in his Budget offer enough spark to “re-energize” government?
First, the GDP. In a country like India with a massive population consisting of several layers of income and vastly disparate economic opportunities, is GDP the true measure of growth? In fact, excessive obsession with GDP growth bordering on paranoia has skewed the economy and has led to vast disparities in income and living standards. It is time genuine economists pooled their thinking and evolved growth indicators for different income groups – poor, low, lower-middle, middle, high, upper and rich. Only then will there be equity and fairness in the allocation of physical and financial resources as well as apportionment of environmental assets which as of now are extremely distorted.
Second, “inclusive development”. It looks as if all our economic policies and priorities are proceeding on the wrong premise that “inclusive growth” is partaking of the State’s largesse and not sharing the country’s prosperity. There cannot be a better description of inclusive growth than the famous proverb: “Give a man a fish; you have fed him for today. Teach a man to fish; and you have fed him for a lifetime.”
But the various schemes and massive expenditures outlined in the Budget are more of handouts with huge financial outlay aimed at giving a man a fish only and not teaching him to fish. Given the huge fiscal and revenue deficits these outlays are unrealistic, may not materialize and could substantially shrink before the year is out.
If inclusive development in the rural and agricultural sector is to have any meaning, small and marginal farmers should move away from the subsistence syndrome to a surplus situation wherein they earn adequate income to pay for balanced nutrition, dignified shelter, decent clothing and quality education for their children. For this agriculture needs to be redefined, its activities diversified and development integrated.
With average farm holdings of around two acres, primary activities alone cannot bring about a surplus situation for the small farmer. Agriculture as a form of industry should be diversified and modernized and formed as entrepreneurial activities by integrating primary (farming), secondary (agro-industries) and tertiary (services) functions for substantial value-addition.
Inclusive development in the urban setting should be based on the principle of urban citizenship, affirming that no man, woman or child can be denied access to the necessities of urban life, including adequate shelter, security of tenure, safe water, sanitation, clean environment, health, education and nutrition, employment and public safety and mobility. Do the Budget or government policies even remotely attempt this?
The Finance Minister concedes that the unorganized or informal sector of our economy accounts for 92 per cent of employment and absorbs the bulk of the annual increase in our labour force. Two years ago, the National Commission for Enterprises in the Unorganized Sector reported that 77 per cent of these are les miserables living on less than Rs 20 a day! Yet, in the Budget there is just a mention of some action to chalk out social security schemes for various occupations falling in this category and nothing regarding “inclusive” financial or resource allocation to make this critical sector a vibrant part of the economy.
What is more, youth and sports, constituting “vibrant India”, does not find any place in the so-called inclusive development. Only the Commonwealth Games has been given additional funds that will benefit some officials and contractors.
Only if these issues are addressed in the manner they deserve can there be inclusive GDP growth and development. It is imperative for the Budgetary agenda to be recast and repackaged before positioning them as a challenge to governance, seeking re-energization of government.
The challenge of re-energizing government is basically addressed to the elite civil services who are the leaders of the bureaucracy. If this challenge is to be met, certain basic realities need to be understood and factored in. Central and State governments and the district administration manned by members of these services were designed for a workforce that is fast losing its relevance. The civil service system in India has virtually stood still for the past six decades, but the culture of work has changed dramatically, in no small part due to the demands of accelerated economic development, inclusive growth, entrepreneurial upsurge and global competition.
Governments and districts in India are not configured to offer the work bright young Indians want. Beset by functional inefficiencies, political and financial scandals, debilitating corruption and rampant rent-seeking, governments have failed to articulate a clear vision of how to recruit and motivate a work force with performance and efficiency as guiding mantras. Government departments and agencies are struggling with the mediocre personnel they have, and there is no thought of a new public service in which experience and expertise moves freely among the government, private and nonprofit sectors, and fresh ideas flow in like a mountain spring. Instead, what we see is unhealthy in-breeding and promotion of parochial agenda amidst civil servants!
Re-energizing governments would require a distinct work-culture and efficiency platform. State hierarchies, thickened by needless layers of departments and agencies, cannot provide this. The Sixth Pay Commission, unleashing massive pay-packets without corresponding performance standards and integrity, has failed. The giving-a-man-a-fish Budget hardly offers any challenge.
Unless these daunting issues related to “re-energizing government” are met frontally, the Finance Minister will be left hunting for an Asterix potion to work magic!
What’s sapping energy?
If Finance Minister Pranab Mukherjee says something in his Budget presentation, there is meaning behind it. So when he called for re-energizing government for implementing his Budget agenda of 9 per cent GDP growth and inclusive development, the meaning was obvious – that the bureaucracy has lost its “energy”!
What has sapped energy? Obviously, inbreeding within the bureaucratic clan! Inbreeding is defined as breeding between close relatives or a clan, which if practised repeatedly, can increase the homozygosity of a population resulting in reduced health and fitness, lower levels of performance and eventual de-energization.
Worse is the clan-within-clan inbreeding practised by a “linguistic-parochial” group that has captured almost every conceivable top-job in Delhi’s corridors of power – National Security Adviser, Secretary to the President, Principal Secretary to the Prime Minister, Cabinet Secretary, Home Secretary, Foreign Secretary, and a host of Secretaries to the Government of India in several Ministries. Finance and Commerce were also in their hands till recently. Key UN positions are no exception.PMO patriarchs of this “clan-within-clan” are brazen. They anointed a clan-mate as the new Foreign Secretary as if it was their birth-right. Going further, they proclaimed another one Delhi’s next Police Commissioner!
Poor Pranabda will have to seek energy elsewhere!
It is time economists evolved growth indicators for different income groups – poor, low, lower-middle, middle, high, upper and rich. Only then will there be equity and fairness in the allocation of physical and financial resources
The challenge of re-energizing government is basically addressed to the elite civil services who are the leaders of the bureaucracy. If this challenge is to be met, certain basic realities need to be understood and factored in
IAS (retd) with a distinguished career of 40 years - worked in Army, Govt, Private, Politics & NGOs.
