Wednesday, May 28, 2008

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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