The Hindu Business Line : How about this Dream Budget?

With the Budget season upon the country, P. V. Indiresan presents his own dream version that he says will make money for the government and yet offer better service to citizens.

THIS IS the season for dream Budgets. Joining the bandwagon, I present one of my own, which, unlike what most people suggest will make money for the government and yet offer better service to citizens.

Toilets are my first dream. Half of our population (the female variety) manages to comport itself well; the other half brings us disgrace by defecating anywhere, anytime. If the Finance Minister were to consult reputed foreign experts like the Lord Mayor of London (who was once moved to comment on it), the best chance of our overtaking the Chinese in FDI lies in building proper public toilets, and maintaining them well. Unfortunately, however hard we try, there will always be some recalcitrant elements. Fortunately, we have a solution on hand. In many of our cities, cranes are being used to lift wrongly parked vehicles and to deposit them in police stations. That system can be expanded for the case of wrongly parked defecators too.

I guess that one lakh toilets (costing say Rs 10 lakh each) will suffice to serve all our towns and cities with no one having to go more than a couple of hundred metres to become comfortable. That will cost Rs 10,000 crore or an interest payment of Rs 1,000 crore a year — a modest sum indeed considering the volume of output involved. This scheme has the additional advantage of being labour intensive and, as Sulabh has shown, can be profitable too. With two attendants each in the male and female sections, working in three shifts and aided by the number of babus to administer them, this scheme will provide employment to a million persons. For that reason, I commend this scheme to the FM as one way to placate the Left parties.

Incidentally, C. Srinivasan of Exnora, an NGO in Chennai, has developed a technology for making urban waste profitable. In Vellore, he has demonstrated that urban waste is an expensive nuisance only in bulk; once it is separated into its constituents, each one can find a profitable market. Starting with collection of domestic waste in two bins (one for the biodegradable kind and the other for the non-biodegradable variety), he has divided and subdivided urban waste into 69 components, each of which sells at profit. In the bargain, Exnora feeds and nurtures male calves that, otherwise, would have been slaughtered. The process is both profitable and labour intensive. For that reason, and to rehabilitate ex-ministers, I propose setting up a new Ministry of Waste Recycling.

However, there is a catch. Toilets need water, and in water-scarce cities (like Chennai) people are known to invade municipal toilets and carry away the water supplied there for domestic use. Without ample water for domestic use, no scheme of toilets will survive. For that reason, as a supplement to civilised toilets, my second dream is ample water for domestic use.

Urban water policy in India is like that of a scheme concocted by a dictator who ruled over two islands: He put all young men in one island and all nubile young maidens in the other and nationalised the boat business. In a like manner, our State governments have a policy of generating water in one place and locating all people in another far away place and then making water supply the preserve of politically powerful people.

Technologically, even chronically water-short Chennai is a water-rich city. Chennai gets copious rainfall, which, unfortunately, it donates immediately to the Bay of Bengal. Not merely in Chennai, but in most other cities in India, straightforward rainwater harvesting and recycling can contribute ample water for household use — provided the houses are no more crowded than they are in (the admittedly crowded) New York. Sadly, our cities are planned and built to have four-ten times higher population densities than New York. Hence, the problem is not water scarcity but overcrowding. More basically, the problem is crowded cities are very profitable for many rich and powerful people. They are also clever: They have brainwashed the public to think that congested cities are the only solution for India.

For a remedy, I draw a parallel with the Provident Fund Act. It is the law of the country that notified businesses (which strangely enough do not as yet include the software business) must contribute to the Provident Fund account of all employees at specified rates. The law is so strict that the official responsible for PF is liable to be jailed if the contribution is not made. Why not have similar rule for water supply too? Why should the Budget not call on every employer to provide every day a minimum of 500 litres of water at the doorstep of each employee failing which the firm and the designated manager will be liable to suffer horrible penalties? Such a move will fetch more income; more votes too, but unfortunately, no funds to fight elections.

That brings us to the sad situation of our politicians. We, ignorant people, think that politicians are rich and rolling in money. If you catch them in a reflective mood, they will tell you how miserable their financial state is. We, professional people, have regular incomes and pensions too. Our expenses are fixed; we can look forward to old age with self-assurance. Politicians have no such luck; they have no regular incomes; their expenses are uncontrolled. They have no assurance for old age; they lead a stressful life not knowing what the morrow will bring.

It is outright cruel to impose such misery on the people who have taken a vow to serve us whether we like it or not. Hence, my third dream is to make our politicians honestly rich. I propose that all MPs (and MLAs too) be given a tax-free commission of one per cent of all the taxes and cess collected in their constituency.

As those who lose out in elections contribute too to national polity (at least negatively), they too may be given a smaller but sizeable commission (also tax-free) totalling half a per cent of the taxes collected. These commissions may be spent by the candidates entirely as they deem fit, either for promoting their politics or filling family coffers. Once this scheme is instituted, politicians will think twice before concocting wild goose schemes, nor will they call for a bandh at the drop of a hat the way they do now. That too will increase government's income.

In all fairness, candidates should now be expected to deposit, say, 0.1 per cent of taxes and cess collected in their constituency. That makes elections a proper gamble with returns that could be as high as fifty times the deposit.

With this logical but substantial fee for contesting elections, politicians will be forced to behave like racehorse owners; their numbers will be self-restricted, and they will have no option but pamper their constituency the way racehorse owners pamper their horses. Thus, this is a win-win-win game. My next dream is a government servant who serves promptly. In this matter, we have got the situation all wrong. In its ignorance, the government imposes a more or less fixed charge for each service it renders. For many people, that fee is significantly less than what the service is worth for them. Competent government officials appreciate the business opportunity this unwarranted gap offers.

Hence, for prompt service, the clever ones demand an extra payment that is profitable to the applicant, and of course, to them too. Ignorant people wrongly call this business of splitting profits a bribe.

The government should nationalise this win-win game. For each service, it should open a bargain counter where the supplicants will specify what the service is worth for them, and sign a contract offering a fixed commission on that amount.

In all fairness, if the service is not good enough, the applicant will then get a rebate equal to the designated amount. Then, what moves now under the table will be aboveboard.

This scheme presupposes that the government accepts its error when it fails to deliver the required service. Now, that is not accepted in law. We have borrowed from the British the legal principle "the King can do no wrong".

On that principle, the government (hence, government servants too) can do no wrong. It would be a futile exercise to question this hoary principle. The best we can dream of in this situation is to split government service into two, one part that governs and another part that serves. Internal and external security (Home and Defence ministries), foreign affairs, law making and of course, finance come under the category of government. All others may be consigned to the realm of service.

Government finances should change in a matched fashion. At present the cost of both governance and service are met from taxes. Unfortunately, taxes create a disjoint between the payer and give total freedom to the bureaucracy to use (or misuse) the proceeds in any way it likes. That will not do for a service organisation. Such institutions would do better with cess and service charges.

Therefore, the dream is for a Budget that collects taxes to finance its governance functions and imposes cess and user charges to finance its service functions — more income again for the state.

Some dreams come true. Will these?

(The author is a former Director of IIT Madras. Response may be sent to indresan@vsnl.com)

This is 142nd in the Vision 2020 series. The previous article was published on January 24.

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