B S Raghavan

Budget 2013-14: Now, the hard part

B.S.RAGHAVAN | Updated on March 09, 2018

Finance Minister P. Chidambaram. - Shanker Chakravarty

The easiest part of the functions of any Finance Minister is to present the Budget: For, by now, a well-set pattern going back to British days has been established laying down how and within what timelines the facts and figures are to be sent by the various Departments and Ministries, based on which the numbers are crunched, allocations made, figures compiled and the speeches delivered.

The hardest part involves the close and constant oversight to be exercised by the Finance Minister to make sure that the amounts allocated are made available in due time to the Ministries concerned and that they are spent according to the norms and criteria governing the different purposes. It is especially necessary for him to keep under strict watch the functioning of the internal financial advisers (IFAs) of each Ministry/Department.

They are the first line of defence against pressures that may result in wasteful, improper, unauthorised and illegal use of funds. The uncovering by the Comptroller and Auditor-General of so many scams in recent years is a clear indication that the internal finance advisers have been either unequal or indifferent to the responsibilities entrusted to them.

DARKNESS UNDER THE LAMP

I would strongly urge the Finance Minister to hold detailed periodical reviews of the kinds of matters referred to IFAs and the extent to which they have been proactive in spotting irregularities and lapses from probity, propriety and prudence even at the incipient stage.

This will also help him take the measure of their performance on the job and make a running appraisal of the calibre and competence of individual officials, instead of waiting for a whole year to assess their merits.

Very often there is darkness under the lamp itself.

My experience of watching Finance Secretaries in action at the Centre and the States is that, barring a very few honourable exceptions, they simply deal with problems as they arise, instead of anticipating and averting them. For instance, why should there be huge amounts remaining unspent from allocations in the previous year’s Budget?

They make the allocations themselves mythical, in the sense that an illusion is created as if there had been spectacular increases in the provisions made, but scant utilisation in the course of the year makes nonsense of it.

Here are a few striking examples: Of the provisions of Rs 364 crore and Rs 400 crore made in the 2012-13 Budget for the formation of the National Intelligence Grid and the Crime and Criminal Tracking Network Systems, respectively, the amounts spent were only of the order of Rs 11 crore and Rs 193 crore. And the Government has been proclaiming that war on terror and crime was its topmost priority!

Likewise, the Rural Development Ministry and the Gram Sadak Yojana bearing the name of the Pradhan Mantri himself, no less, could spend only Rs.55,000 crore and Rs.10,000 crore of the amounts of Rs 75,000 crore and Rs 24,000 crore allotted for them in 2012-13. The amount of Rs 12,517 crore earmarked in the 2012-13 Budget for public sector bank recapitalisation is also still on paper.

IMPLEMENTATION GAP

This means either of two things: The mandarins of the Finance Ministry are making Budgetary allocations without taking account of the readiness and capacity of the Ministries to utilise them and are merely going by their say-so; or, the release of funds by the Finance Ministry is so belated that Ministries are hard put to it to find ways of spending them at short notice. This forces them to spend them in a rash and reckless manner to beat the deadline of March 31.

Either way, the Budget and its provisions are robbed of their credibility and the provisions fail to achieve the purpose intended. This is one of the main factors behind the ‘implementation gap’ for which India has been notorious ever since Independence.

The Finance Minister, in his Budget speech, has mooted a proposal to set up separate committees to monitor stalled projects and put them on fast track. This will only cause duplication and confusion.

There is already a Ministry of Statistics and Programme Implementation, but, unfortunately, it has never been considered high profile and no politician liked being given charge of it. Whereas it should be reckoned as a very important Ministry whose efficient and purposeful functioning can give a conspicuous push to the economy.

The Finance Secretary should hold joint meetings with the officials of that Ministry to help remove bottlenecks and hasten the pace of implementation of projects.

Published on March 05, 2013

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