‘Everything shows that the Prime Minister knew and did nothing about the (telecom scam)’

Source: Indian express

SUNIL JAIN: Kapil Sibal claims A Raja followed what the NDA government had done on spectrum allocation. As telecom minister during the NDA government, can you explain what you did?

Arun Shourie: People today cannot visualise what the the telecom sector was like at that time. Tele-density today is 60 per cent, at that time it was 4.1 per cent. There were large parts of the country where despite bids being invited, not a single operator had bid. There were parts of the country where bids had been won and licenses had been granted and their services had not yet been activated. For example, Northeast, where nobody had taken the licence. The whole sector was collapsing. It was rescued from that by shifting from fixed fee to revenue sharing. A third factor was that there were 20 types of licences and fees and this led to much litigation. The whole sector was caught up in litigation--we have had a small glimpse of that in the exchange of letters between Mr Rajeev Chandrasekhar (Rajya Sabha MP)and Mr Ratan Tata. There were a host of issues related to licences and subsequent litigation and Ataliji (Prime Minister Vajpayee) told me that this sector needed cleaning up. I felt the main problem was the splintering of licences. This was one of the two or three sectors which was still left in the licence quota raj phase. I felt we must unify licences and the government should be technology neutral, it should be service-provider neutral, it should be service neutral. The idea emerged for a unified licence, in which a service provider can provide any service to any user anywhere in the country using any technology. This matter was referred to TRAI. TRAI wrote a very good report at that time (October 2003), the substance of which was that you should be technology agnostic, don’t go in for a universal licence in one go because it will lead to complications. They suggested we do it in two phases.

Sunil Jain: We understand that there was a controversy around Reliance and WLL, which was illegal at that time. TRAI came out with a recommendation, saying let’s go for UASL (Unified Access Service License), which meant that whoever had a fixed licence can offer WLL services. The second recommendation was that having done this, any future person who wanted to offer mobile services, will have to do a multi-stage bidding for that.

Arun Shourie: The concept was you will have automatic authorisation for anybody who wants to come in. With a low entry fee, divorce the spectrum from the licence. Whereas the earlier practice was that spectrum was given as a part of the government obligation for having allowed you to provide a service.

SUNIL JAIN: So TRAI allowed people the option of moving to UASL and in future, if anybody wants to offer a new service, please do multi-stage bidding for that.

Arun Shourie: Only after the unified licensing regime is introduced, please don't forget that phrase. But the unified licensing regime has not been introduced till today.

Sunil Jain: Let us assume for the sake of argument that BJP did everything wrong and was favouring people. Of the licences issued, you issued only some of them, the rest were all issued by the Congress minister. In 2005, the Congress came out with some new guidelines for what the prices should be for UASL. Would this be your answer to Sibal that if you assume we were wrong, in 2005 December when you issued new guidelines, why did you stick to the Rs 1,651 crore price?

Arun Shourie: That is a good argument which I shall remember. But you have to look at the growth in tele-density--that is what determines whether the 2001 price is justifiable or not. Between 2001 and 2003 there had hardly been any improvement in tele-density, but if you use the same price in 2009, then obviously that is wrong when tele-density has increased to 48 per cent. The point about Raja is that he followed no principle, no policy.

First-come-first-served was never the only criteria. When Raja said first-come-first- served, there were 539 existing applications. In a first-come-first-serve situation, those should be processed first. But he didn't process them. He contacted the real estate companies and said bring in your applications with a cut-off date of October 1. Four months later, he made September 25 the cut off date. A large number of applications were removed but not the ones he wanted to favour. Then he changed the basis of the first-come-first-serve process. He changed it from the date and time of receipt of application to the date and time on which letters of intent conditions are fulfilled and paid. That means you must bring Rs 1,651 crore, as CAG says, in 41 minutes. After that, he was still not able to give Swan Telecom the amount of spectrum which he had contracted for and so he changed the priority list in circles which are very lucrative today, like Punjab and Maharashtra and this was the first-come-first-served process. So to say that I am following Arun Shourie’s footsteps is wrong. I have said this many times--Raja, stop following my footsteps, follow my advice. My advice is turn an approver. Even your leader Mr. Karunanidhi has said one man could not have made so much money all by himself, so tell us who are the other persons.

Rishi Raj: The Prime Minister’s silence has been an issue. The Cabinet decision of 2003 said that finance ministry should always be involved in pricing of spectrum. So when Raja did not listen to the finance ministry as well as the law ministry for auction, the two ministries could have independently approached the Cabinet on the matter, which they did not do. How do you view this?

Arun Shourie: That shows the character of the government today. Chidambaram wrote a letter and there are several letters on record written by Subbarao--who's now the RBI Governor, but was then the Finance Secretary--saying don’t do this. By contrast, I discussed every single matter with Jaswant Singh, Finance Minister then and head of the Group of Ministers which considered the TRAI recommendations. More than that, the finance ministry is institutionally represented by the member finance in the Telecom Commission. In Raja’s time, the member finance got so disgusted with Raja’s illegalities that she sought premature retirement. It is my personal knowledge that Prime Minister had called Nripendra Misra, who succeeded Pradeep Baijal as the chairman of TRAI, to brief him. He said that Raja had claimed he was following TRAI recommendations, was that the case or not?

Nripendra Misra said no, he was not. Then Pranab Mukherjee called him and Nripendra Misra told him the same thing. Nripendra Misra came to me after a few months and said this is what they have called me for, what should I do.

I said please put it on record, files last a long time. So Prime Ministerknows from Nripendra Misra, from the press, he knows of the violations reported by every operator. He himself writes a letter saying that complaints that are coming in, please consider a transparent procedure for auctioning the spectrum. As I have mentioned, Sibal is the advocate of Raja and not of the government. Each time he defends Raja, he implicates the Prime Minister.

There were two persons who were handling affairs for Raja, one was Chandolia (Raja's private secretary) and there was another person. Raja was cruel to this other person, he fell out, he sought transfer from the department, started giving out information, none of the journalists wouldtake it. He was receiving threats, lures of money but he was the hero of the entire situation, he kept giving out information. In August-September 2009, I met the PM outside the Rajya Sabha. I told him that ‘under the umbrella of your good name loot is going on’. I showed him a list of the front companies and what Raja was doing. I told him about this person and that he was ready to give the entire evidence on record. I asked if I could meet Principal Secretary TKA Nair. Then I could give him all these papers and CBI or someone could investigate. I waited for one month but there was no call. I then contacted Ashwini Kumar, Director, CBI. I gave him all the papers and said, there is this man and here is his telephone number, he will give you all the evidence. CBI contacted him and had a series of meetings with him. Nothing happened so I asked the CBI what happened and they said, `Sir your man knows everything, we have followed up, everything is ready but we have to wait for a nod of the Prime Minister'. Nothing happened and nothing was going to happen. Then this meteor of CAG fell and Raja was indefensible. All the companies of Raja that have been raided are in the list that was given to the CBI at that time. It turned out to be absolutely correct. The rapidity with which they are able to move right now is precisely because they knew everything already. The Prime Minister has to be encouraged to be a good man, a good man means who enforces goodness in the circles which are under you. In this case, everything shows that Prime Minister knew and did nothing.

Shekhar Gupta: Does the CBI have sufficient evidence to convict people?

Arun Shourie: Yes. I had been told that in one set of transactions, they have been able to track the money trail. I would not be surprised if some of those persons--not just Raja and his advocate Kapil Sibal--are also deflecting attention to a JPC, and other matters. They don’t want the prosecution to proceed.

Shefalee Vasudev: Everything seems to be falling apart--civil society and the state. If you had to start a clean-up process, would you start with judicial reforms?

Arun Shourie: When such situations arise, think of Gandhiji’s phrase: anything, anyone, anywhere, anytime. We should not think of just judicial reforms, police reforms or qualifications for legislators. Many people are now feeling that the situation is ripe for another people’s movement. Political parties feel they don’t have the credibility at the moment, they have to find some non-political faces to start the process. You can guess the names they are gravitating towards--APJ Abul Kalam is one and three former chief justices of India. People feel the situation is ripening for a people's movement--the government is being buffeted, it will continue to flounder.

Ravish Tiwari: The Opposition today is looking for a protagonist. The BJP is going through a power game within its own ranks. There is no protagonist like VP Singh in 1989. What is the remedy?

Arun Shourie: I don’t want to comment on the BJP. But sometimes, erratic things throw up protagonists. I am not saying this is going to happen. It is a very different public today and a very different country where money-making is accepted and looked up to. People have got accustomed to these things. So I am not saying this is the solution. But from random situations, protagonists do rise. For instance, who thought that Mohamed ElBaradei would become the focal point of a people’s movement in Egypt? However, mass movements, even if ignited, can remove but cannot construct. Construction requires a much longer effort.

Soma Das: A few days ago, you said that Pranab Mukherjee is one of the best PMs we are yet to have.

Arun Shourie: He is certainly one person who has goodwill across the political spectrum. He is certainly mature, I don’t know about other things. Many persons are seeing a window of opportunity for themselves between Mr. Manmohan Singh demitting office and Rahul Gandhi not being ready, so ‘kisika bhi number aa sakta hai.’

Shekhar Gupta: Has the CBI been in touch with you?

Arun Shourie: I had rung up Mr. A P Singh, the CBI Director, about two months ago, saying that now that you are questioning former officials like Pradip Baijal and Vinod Vaish, I am sure you would want to question me, so I will come any day. The date has been fixed for February 21.

Shekhar Gupta: Is it your instinctive sense that whatever the CBI is doing is right?

Arun Shourie: They are absolutely on the right track. The reason is twofold: the monitoring by the Supreme Court and second, it is not difficult to be on track when public pressure is so intense. Supreme Court must continue to monitor it like a hawk and public pressure must continue. We must never forget that this is just the first stage, even the investigation is not over. After that the trials will start, appeals will be made, etc. So this requires perseverance.

Amitabh Sinha: Jairam Ramesh has been taking your name in the Lavasa controversy. You live in Lavasa, can you tell us what you think of the case?

Arun Shourie: For reasons that do not have to do so much with the merits of this case, Jairam has taken an extreme position. I had sent him an email in this regard saying, please don’t think of ‘either-or’ but ‘and-also’. Secondly, if the state of India gives clearance to POSCO or Vedanta, and they spend time and money and then, seven years later, you say stop the work, it brings the Indian state into question. In the case of Lavasa, I can tell you, the developers are thinking in terms of a model, they are aiming for international recognition. So they are having bio-mimicry workshops, plantation workshops and hydro-seeding and they take great pride in that. Sitting in Delhi we can’t realise what happens but there were 8,000 workers there, mostly from Bihar with their families and little children and suddenly no work. Many of the local people had opened vegetable shops, milk stalls--all closed. The real issue is that there should be some norms. I am told Jairam will give the clearance on February 14 for the first stage of Lavasa, so I hope that happens.

Ravish Tiwari: In the name of social expenditure, we are spending Rs 30,000 crore on NGREGS while the allocation for rural roads is only Rs 10,000 crore in the budget. Similarly, you are coming out with food security rather than creating infrastructure for storage. So how are these things going to play out for the future of the country?

Arun Shourie: Only educated people who are not going to stand for elections can oppose this. Schemes like NREGS are like throwing money out of the window. Unless delivery measures are improved, all these populist measures are going to boomerang. I opposed this at that time to the great discomfiture of the masters in BJP. Populist measures are a main cause of the current inflation. People like Yashwant Sinha, who work in their constituencies, will tell you this is nothing but centralised corruption.

Ravish Tiwari: Has India lost its story?

Arun Shourie: In America, you are getting just one per cent interest, here it is 8.5-9 per cent. That is why FII money is still coming in. I meet investors all the time, and they are all now expressing concern. They say that the long-term Indian growth story remains but we are all living for the short-term and what about that?

Transcribed by Smita Aggarwal & Sweta Dutta

For the longer version, visit www.indianexpress.com

The new remedies

Arun Shourie: Friday, March 28, 2008

Arun Shourie puts the Budget to the aam aadmi test and argues why the UPA fails miserably

What the CAG’s Performance Audit has revealed about the ‘flagships’ – the National Rural Employment Guarantee Scheme and the Rajiv Gandhi Drinking Water Mission – is the pattern. NC Saxena draws attention to an account of another ‘flagship’ programme held up by Chidambram in this new Budget, the ICDS – the Integrated Child Development Services. After citing what the PM, FM, etc. have been saying about ensuring outcomes and not being lulled by outlays, Saxena asks, and ‘How is outcome delivered in the states?’, and answers, ‘By falsifying records!’ He cites the tour observations of a person in a position to know, and unlikely to state things that would embarrass the Government:

‘We discovered that all data of children at the centre for the past five months, weight, vaccinations, health records etc, were filled in with pencils. On probing further, I found it was done so that in case of an official inspection, the figures could be erased and “correct” data inserted to make the centre’s performance look good!’

The writer? The Congress MP, Sachin Pilot. Recalling such accounts, Saxena observes, ‘The practice is so widely prevalent in all the states, presumably with the connivance of senior officers, that the data reaching GOI [according to a recent study by the National Institute of Public Cooperation and Child Development] shows only 8% as the overall percentage of malnourished children in case of 0-3 years (with only one percent children severely malnourished), as against 46% reported by NFHS-3. What is equally astonishing is the fact that records show a steep decline in the percentage of malnourished children from 29% to 8%, which is totally at variance with the findings of the various NFHS surveys. By sending bogus reports the field officials are thus able to escape from any sense of accountability for reducing malnutrition.’

This then is the pattern. And what does Chidambram propose to do about the matter? He sets it out in his new Budget:

‘I think we do not pay enough attention to outcomes as we do to outlays; or to physical targets as we do to financial targets; or to quality as we do to quantity. Government therefore proposes to put in place a Central Plan Schemes Monitoring System (CPSMS) that will be implemented as a Plan scheme of the Planning Commission. A comprehensive Decision Support System and Management Information System will also be established. The intended outcome is to generate and monitor scheme-wise and State-wise releases for about 1,000 Central Plan and centrally sponsored schemes in 2008-09.’

Pray, what is the reason to believe that this new central scheme of the Planning Commission will work better than the 1000 central schemes of the Planning Commission that it is to monitor? Then follow the currently fashionable words, ‘Government also intends to strengthen evaluation. Some ministries have started concurrent evaluation. This needs to be supplemented by independent evaluations conducted by research institutions. The Planning Commission will authorise such evaluations of the major schemes and complete the task by the time of the mid-term review of the Eleventh Plan.’

Pray, why will the new evaluations authorised by the Planning Commission be more independent than the innumerable ones that it has authorised in the past? Why will they be more independent than the countless evaluations that have been done independently of the Commission in the past?

The piece de resistance

In each of its five Budgets, this Government has had one triumphant item – agricultural credit. In each Budget, Chidambram has proclaimed higher and higher targets, and in each he has announced that the target has been exceeded. In the new Budget, he says that, as against Rs. 100,000 crore that were disbursed when this Government assumed office, Rs. 280,000 crore shall be disbursed as rural credit in 2008/09.

Surely, that very fact should have alerted the Government that either the credit is not reaching those who need it most, or that their problems are not going to get solved by credit alone. As suicides have mounted, as the agrarian crisis has barged more and more into its face, the Government has done what it always does – it has appointed committee after committee: the Swaminathan Commission; the Radhakrishna ‘Expert Group on Agricultural Indebtedness’; the A. Vaidyanathan ‘Task Force on Cooperative Banking’; the RBI’s ‘Working Group on Distressed Farmers’ headed by Sardara Singh Johl; the RBI’s ‘Technical Group to Review Legislations on Money Lending’ headed by SC Gupta.

Second, it has rained package after package:

•2% remission in interest rate – 1,700 crore were provided for this in the 2006/07 Budget;

•The Backward Regions Grant Fund: in the 2006/07 Budget, Chidambram announced that he would disburse Rs. 5,000 crore; this year he pledges to disburse Rs. 5,800 crore;

•In July, 2006, Government announced the PM’s special package for distressed farmers of 31 districts in four states. In the 2007/08 Budget, Chidambram announced that Rs. 16,979 crore would be spent under this special package. The usual panoply of institutions have been set up to implement and monitor the package: state-level committees consisting of representatives of central and state government, district level committees and Panchayati Raj institutions, and ‘appropriate institutional structure and special purpose cooperatives/community based organizations at the local level for delivery of the package and optimum utilization of resources in a time-bound manner.’

And yet distress continues unabated. Yet suicides go on increasing. Who is swallowing up these packages? What is happening to the packages?

The Report of the Radhakrishna Committee – The Expert Group on Agricultural Indebtedness – gives a part of the answer. It sets out the result of its inquiries into the fate of the PM’s special package in its Report:

•Commenting on the disbursement of fresh loans, the Committee observes, ‘The gap in the off take of fresh credit in three states (Andhra Pradesh, Karnataka and Maharashtra) indicates that the credit needs of the farmers were not assessed accurately. The credit flow targets do not appear to have been based on a proper assessment of the credit absorption capacity at the farm/household level. In order to ensure that the basic objectives of providing farm credit are not distorted, disbursements should have been made only after proper project appraisal. This also calls for greater coordination among banks and block level officials at the ground level in identifying the genuine credit needs of the people.’

•In regard to ‘Irrigation’, it finds, ‘Utilization rates varied across states and between irrigation schemes. In the case of major irrigation schemes, delay occurred because for some of them like Accelerated Irrigation Benefit Programme (AIBP) sanction has to be obtained from the Planning Commission and for many others from the Ministry of Environment and Forest and Tribal Affairs. This is a time-consuming process.’

Pause a moment. That sentence itself gives us a glimpse of the well-practiced trick: the Accelerated Irrigation Benefit Programme is an existing programme. All that has been done is that it has now been shoved into the new envelope, ‘The PM’s special package for distressed farmers in 31 districts’! But to continue with the findings of the Radhakrishna Committee:

•‘The progress is poor under minor irrigation in the case of Andhra Pradesh and Karnataka due to the existence of grey blocks…’

•‘Watershed Development, Rainwater Harvesting and Check Dams: Progress has been extremely poor in all the states. Even Maharashtra, which had in place a shelf of sanctioned projects, could utilize only 12 per cent of its financial allocation of Rs.54 crore in the year.’

And then a comic instance:

•‘Kerala falls under high rainfall area and no watershed projects are being implemented in the state under any of the Government/NABARD programmes. As such, the concept of watershed development is relatively new to the state; all the partner institutions involved in the implementation of the project are required to be sensitized vigorously.’

And then, a glimpse of the same old trick – of giving an existing programme a new name, but this time with another comic consequence:

•‘In the case of Andhra Pradesh, the state government was already availing of loan from the Watershed Development Fund at the time the package was announced. The switchover from loan mode to grant mode took some time due to the procedures involved in the conversion.’

And then the thoughtlessness: ‘The process of watershed development requires five to six years,’ the Committee notes, but the authorities that be have decreed a cut-off of three years!

•‘Rainwater harvesting and construction of check dams are a non-starter in most districts.’

And it turns out that in some cases at least there is good reason for this!

•‘Some states which are implementing rain water schemes and enjoying cent per cent subsidy are reluctant to switch over to the scheme from the Ministry of Agriculture under the Prime Minister’s package. With regard to check dams, NABARD is yet to receive proposals from any of the states….’

And so on, to one dismal conclusion after another: ‘There is no coordination between different agencies implementing the schemes. Further, no information is available on the impact of the scheme on the people. In addition to financial targets in the Prime Minister’s package, physical targets need to be set and monitored…’

Lesson? Another massive special package! Exactly, but exactly the sort of package that the Radhakrishna Committee, the RBI’s Working Group, Vaidyanathan himself, each and every one of them had said should not be given: a ‘historic’ loan waiver amounting to Rs. 60,000 crore.

The loan waiver

First, as expert after expert has pointed out no one knows from where this figure of Rs. 60,000 crore has dropped. Second, the waiver is of loans that are overdue to commercial banks, rural banks and cooperatives. Each of the expert bodies has emphasized that the farmers in real need are the ones who do not have access to institutional credit – they borrow from moneylenders and the like. Two columns – one for Andhra which has witnessed a spate of suicides, and one for India as a whole -- from the detailed tables furnished by the Radhakrishna Committee tell the tale:

Accordingly, to get relief to the ones who really need it, the Radhakrishna Committee suggested, not a loan waiver but a ‘one-time measure of providing long-term loans by banks to enable them to repay their debts to moneylenders,’ and thereby free them from the latters’ clutches. The RBI’s Working Group as well as experts like Vaidyanathan added another reason: arguing against giving any general loan waiver, they pointed out that it would reward those who had not paid, that it would implicitly penalize those who had, that it would reinforce the culture of not living up to one’s contractual obligations.

But compassion is compassion! Hence, 60,000 crore it shall be.

NC Saxena and Vaidyanathan – both advisors to the Government – prick the claims. Saxena points out that the farmers who get credit from institutions are actually those who are well-enough connected to have access to these banks and cooperatives. A number of these, Saxena points out, double up as moneylenders! They borrow from the banks at 6.5 per cent, and lend to the small farmer in distress at rates ranging from 50 to 100 per cent. So, who is the waiver actually going to help? Vaidyanathan adds a further fatal detail. Writing in The Hindu, he points out that ‘The magnitude of outstanding debt of rural households, going by National Sample Survey data, is less than outstanding debt reported by the institutions in the cooperatives and substantially so in regional rural banks. Since both are intended to lend mostly in rural areas, this difference suggests that they also carry a sizeable portfolio of non-household, non-rural loans… There is good reason to believe that a generalized waiver of all overdues will benefit non-rural borrowers to a considerable extent; that the large majority of rural households, including those in the below 2 hectares category will not benefit; and that the magnitude of the benefit will be considerably less than Rs. 60,000 crore. Benefits in rural areas will accrue to a rather small fraction of households and the magnitude of beneficiaries is likely to be considerably less than the cited figure.’

But who is listening? It is celebration time, time to seize the moment: posters, rallies to hail the Almighty for her beneficence… And hope that she is looking…

(To be concluded)

For all stories visit www.indianexpress.com/arunshourie

On their own yardstick

Arun Shourie: Thursday, March 27, 2008

Arun Shourie puts the Budget to the aam aadmi test and argues why the UPA fails miserably

One problem is that while the Government committed itself in that new scripture – The National Common Minimum Programme – to doubling the proportion of GDP that is devoted to social sectors like health and education, in fact, as NC Saxena, member of the UPA’s National Advisory Board, points out, the proportion continues to hover around half the pledged targets.

But that is the lesser problem. The even more debilitating one has been much in the admonitions of the Prime Minister and the Finance Minister. In his Budget speech for 2005/06, Chidambram drew pointed attention to this: ‘At the same time,’ he told the Treasury Benches that were cheering his announcements of higher outlays, ‘I must caution that outlays do not necessarily mean outcomes. The people of the country are concerned with outcomes. The Prime Minister has repeatedly emphasized the need to improve the quality of implementation and enhance the efficiency and accountability of the delivery mechanism.’

So what did he propose to do? ‘During the course of the year, together with the Planning Commission, we shall put in place a mechanism to measure the development outcomes of all major programmes,’ he told Parliament. ‘We shall also ensure that programmes and schemes are not allowed to continue indefinitely from one Plan period to the next without an independent and in-depth evaluation.’ Given that activists were said to have the ear of the Highup, Chidambram added, ‘Civil society should also engage Government in a healthy debate on the efficiency of the delivery mechanism.’

Two years went by, little happened. Chidambram returned to the theme in his Budget of 2007/08. ‘There is no dearth of schemes,’ he told Parliament, ‘there is no dearth of funds. What needs to be done is to deliver the intended outcomes.’

The Prime Minister has been proclaiming the desideratum just as frequently and even more emphatically. ‘We have generated adequate resources in the last three years for use in social sector without sacrificing fiscal prudence,’ he told the ‘Roundtable on India’ organised by The Economist in March 2007. ‘However, we cannot spend our way to prosperity and having tangible outcomes is, therefore, as important as increasing outlays. This is the single biggest concern of our government today and we have to address this issue if we need greater returns on our social investments.’ And a few months later, in November, 2007, he told the full meeting of the Planning Commission, the Gross Budgetary Support provided for in the 11th Plan is almost double what it was in the 10th Plan. More than that ‘the architecture for inclusive growth’ has been laid out, the ‘basic elements’ of that architecture ‘are now fully in place.’ ‘This is a matter of satisfaction and indeed of pride,’ he said. ‘For the next few years, the emphasis must be on ensuring that these programmes deliver what they promise. We must work purposefully to realise the socio-economic transformation the Plan seeks to achieve.’

And what is happening on the ground? After all, these worthies are not consultants to Government. They are the ones directing it. The answer can be gleaned by picking up any one of what Chidambram calls ‘the flagship schemes’ of this Government.

If this is the flagship…

‘The object is to guarantee 100 days of employment in a year to one able-bodied person in every poor household,’ Chidambram told the cheering MPs during his Budget speech for 2004/05 as he explained the Government’s commitment to the poor. So, what was he going to do? Pending legislation, the Food for Work Programme is being extended to 150 districts.

And where is the money to come from? Chidambram’s solution was one that has become the hallmark of this Government: ‘Allocations under different schemes will be pulled together to support the Food for Work Programme,’ he declared. There are substantial funds totaling over Rs. 6,000 crore under SGRY, SGSY, SJSRY, REGP and PMRY.’ A typical stratagem: if there is one big programme, split it into five and announce five path-breaking, closer-to-the people initiatives; if there are five programmes, club them, and announce one historic initiative! In either event, rename them – giving them one of the two permissible names.

In the 2005/06 Budget, while announcing that he was increasing the allocation for this programme to Rs. 11,000 crore, Chidambram correctly noted that there were two components to the allocation – a cash component and a food component.

By the 2006/07, the commitment had got altered, a word got slipped in: while the original commitment was to ‘guarantee 100 days of employment in a year to one able-bodied person in every poor household,’ the commitment now became to guarantee 100 days of employment in a year to one able-bodied person in every rural household. As for allocation, Chidambram said, ‘In the current year, under a clutch of schemes including the Food For Work programme, a sum of Rs. 11,700 crore is expected to be spent on rural employment.’ A few sentences later, the figure was given as 11,300 crore. And there was to be in addition, Rs. 3,000 crore under the Sampoorna Gramin Rozgar Yojna (SGRY).

In the Budget for 2007/08, the scheme was expanded from 200 districts to 330, and the allocation was increased to Rs. 12,000 crore, plus another Rs. 2,800 crore for (SGRY) for rural employment in districts not covered by NREGS.

In this new Budget, Chidambram proclaims, the National Rural Employment Guarantee Scheme ‘has proved a historic measure of empowerment of Scheduled Castes and Scheduled Tribes, and, especially, women’; that the allocation for it will be raised to Rs. 16,000 crore, and that it will be rolled out to all 596 rural districts of India.

In a note that he has sent to all the Highups, NC Saxena punctures the balloon. First, he points out, since this Government took office, the allocation for rural employment has actually fallen! While Chidambram has been parading financial outlays, he has forgotten to mention what has been happening to that other component of outlays on this programme, the food component: this, Saxena shows, was sixty eight lakh tonnes in 2005/06; it fell to twenty four lakh tonnes in 2006/07; and this year, it was just a little more than seven lakh tonnes till Novemebr, 2007, and may not reach even fifteen lakh tonnes by end-March 2008. Converting these figures into cash, Saxena points out, the outlay by the central Government on wage employment schemes has come down from Rs. 18,406 crore in 2005/06 to Rs. 15,000 crore.

The second point he makes is almost cruel! Recall the other part of the announcement: the programme will be extended to all 596 rural districts of India. But one-fourth of the districts are short of labour, Saxena points out! ‘Reckless expansion will only promote migration and fudging of documents,’ he writes.

That must have been obvious, even to Chidambram. So, what happened? Rahul Gandhi, with his insights into India, is said to have ‘suggested’ that the programme be extended to all districts. The revelation having descended, Chidambram at once did the needful, as they say in Government! ‘They are perfect practitioners of dialectics,’ that distinguished civil servant, the late Ashok Mitra told me about the type, ‘Strong to the weak; weak to the strong’!

And then there is the fatal point, one to which …. has already drawn attention in The Indian Express: larger outlays or smaller, on the ground the programme is riddled with leakages, fraud and the rest. In the draft report on the Performance Audit of the NRGES that has been sent to Government in December 2007, the CAG states, among other things, that under the programme

•Only 3.2 per cent of the registered households have been given 100 days or more of employment;

•The average employment that has been provided to each household is just 18 days;

•While projects are to be taken up in low-wage areas, such areas have not even been identified in 53 of the test districts;

•Works have been taken up without the kind of planning and scrutiny that the guidelines require – on occasion just on the ‘recommendation’ of VIPs;

•While no more than 40 percent is to be spent on materials, in case after case much higher proportions – on occasion up to 80 per cent – are being spent on materials;

•Materials are being purchased without the mandatory tenders being called;

•Contrary to guidelines, work has been assigned to, and payments are being made to contractors and the like;

•Registers of materials received, and utilized of work assigned and executed are not being maintained;

•Workers are being paid wages that are far, far less than the minimum prescribed;

•Muster rolls as well as registers of materials and payments are being fudged wholesale – the report is full of shameful examples;

•When wages are not paid in time, workers are to be paid a compensation; this is not being paid – ‘because it has not been claimed,’ say those in-charge…

And so on. NC Saxena draws attention to these findings also about this ‘flagship’, saying only, ‘As regards its implementation, I think the CAG has said whatever needs to be said.’

Another flagship

Another ‘flagship’ that Chidambram mentions in his Budget is the provision of drinking water. This too has all the hallmarks of this Government.

‘I turn now to one of my big dreams,’ Chidambram declared in his Budget for 2004/05. He described how ‘Water is the lifeline of civilization,’ and lamented that the water bodies of yore had fallen into disrepair, and said that, ‘I therefore propose to launch a massive scheme to repair, renovate and restore all the water bodies that are directly linked to agriculture.’

So, what shall be done? ‘In the current year, we shall begin with pilot projects in at least five districts, and we shall select at least one district in each of the five regions of the country. The estimated cost is Rs.100 crore.’ The big dream has become a little dreamlet. Even so, from where shall the funds for even this dreamlet come? ‘Funds for the five pilot projects will be drawn from existing programmes such as SGRY, PMGJSY, DPAP, DDP and IWDP. Once the pilot projects are completed and validated, Government will launch the National Water Resources Development Project and complete it over a period of 7 to 10 years.’ And then there is the LIC, and those much derided institutions, the World bank, and others. Funds will not be a constraint.

The much bigger dream, of course, has been the Rajiv Gandhi National Drinking Water Mission. In this year’s Budget, Chidambram lists it again as one of the ‘flagship programmes’ of the UPA. He increases the allocation for it from 6,500 crore to 7,300 crore. And he carves out Rs. 200 crore out of this for providing drinking water for schools.

Excellent. Who can deny the importance of water? Who cannot agree that it is a shame that even 60 years after Independence we are not able to provide drinking water to all our people?

The first thing we have to remember is that this is almost an ancient programme. It used to be known as the Accelerated Rural Water Supply Programme – ARWSP.

Second, its implementation remains woeful, living up to Rajiv Gandhi’s statement that only 15% of outlays reach the poor in whose name they are defrayed. As Ganesh Pandey and Ravish Tiwari have reported in The Indian Express, the CAG has conducted a Performance Audit of this flagship also, and sent his findings to the Government in December, 2007:

•While guidelines require that states prepare Annual Plans for works that are to be taken up, of 26 states, 8 had not prepared the required Plans at all. Of the remaining 18, 9, while saying they had prepared them, did not submit them to the central Government; 10 had put together something at the state-level but these had no district or lower level details; Plans drawn up by 10 turned out to be ‘sketchy’; 9 had no shelf of schemes and likely size of allocations.

•While the guidelines require that 35 per cent of the outlay be on schemes that benefit SC/STs, the CAG’s Audit finds that in state after state, no separate targets or schemes have been formulated for the Scheduled Caste population; that the allocation, instead of being 35 per cent of the total, is much, much lower.

•An enormous portion of the funds have been diverted – for paying salaries, for defraying office expenses, for paying outstanding bills, for other schemes.

•Works said to have been completed do not exist; works have been ‘completed’ in non-existent villages; in other cases they have been taken up in villages that are already ‘fully covered’; works have been abandoned – in typical cases, pipes have been laid only part of the distance, pools have been dug where there is no water.

•Guidelines provide that the quality of water must be assessed: it is not assessed at all – water treatment plants have just not been installed as required.

•One half the Rural Protected Water Supply projects and a fifth of the tubewells shown as ‘completed’, found to be ‘non-functional’ or abandoned.

•In state after state, the expenditure figures turn out to be manifestly inflated; they turn out to be not just without authorization but ‘fictitious’.

•The Guidelines have provided a remedy very close to Chidambram’s heart – they require that Village Monitoring Committees and Special Monitoring and Inspection Units be set up; the CAG finds that in 14 states the committees are not holding regular meetings; 21 states have not nominated the required officials from the Health Department; 15 states have not established Special Monitoring and Investigation Units; in the remaining 11 states, these MIUs do not carry out field-level monitoring of quality of water, adequacy of service, etc.

•Guidelines require that the central and state governments monitor and evaluate the works from time to time: in 22 states, no evaluation studies have been carried out at all; in 17 states, officials from state headquarters have not visited districts, blocks and villages for inspections.

A ‘flagship’?

Or the tattered rag covering a sunken vessel?

(To be continued)

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