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Healthcare
vs profits Policing
without fear |
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Beni
& Mulayam
Inadequate
defence budget
Saving
what you can
Himachal’s
bills mount despite fiscal discipline
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Policing without fear
Four
ASIs dead in four months, all on duty, either shot or mauled. That’s a horrible record for any state police. The shame would be even harder to live down for the Punjab Police, a force once known for the fear it evoked. While each one of these incidents could be ascribed to the particular circumstances of the case, the tally is just too hard to ignore. This is a trend — a trend of the criminal holding sway. The brazenness of the anti-social element in every guise — politician, mining mafia, farmer, drug peddler — shows the confidence he has acquired in the helplessness of the police, rendered ineffective by political interference. The situation is a natural consequence of nearly every field position being filled by an officer selected through a system of political approval rather than professional. From the extreme autonomy of the terror days, the state police is down to a stage where an SHO is unable to rein in even local goons. The only one scared of cops is the common man, which is another shame. The beating the self-esteem of a police officer takes when he has to release a suspect felon on receiving a phone call from a small-time politician is only too obvious. This cannot be allowed to go on. The government has to take charge of the situation — in this case it would be the Deputy Chief Minister, Sukhbir Singh Badal, who also holds the Home portfolio. He cannot let the force down. But it must be noted that the answer lies not in cracking the whip randomly. A systemic shakeup is required, which would mean professionalism has to flow from the top. The government should put the force in the hands of an officer it trusts, and thereafter not undermine his authority. What may also need immediate attention are police training, equipment and strength. A policeman has to be proud of his uniform, not clout. Let the force fear no one, and let no law-abiding citizen fear a policeman.
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Beni & Mulayam
No
political leader plays his or her cards without keeping an eye on the future. Thus, Samajwadi Party chief Mulayam Singh Yadav must have made long-term calculations when he extended support of his party's 22 MPs to the UPA from outside after the Trinamool Congress of Ms Mamata Banerjee withdrew itself from the Congress-led ruling coalition some time back. The position of the UPA government weakened further when the DMK left it owing to differences between the two sides over the Sri Lankan issue. Now the SP leadership wants Union Steel Minister Beni Prasad Verma to be removed from the UPA government as a bargaining chip to complete its full term. Mr Verma's tirade against his friend-turned-foe Mulayam Singh shows that he can hit the SP supremo where it causes him the maximum hurt. Mr Verma, who has considerable following among the Kurmis, one of the OBCs, can upset the Congress applecart in UP if he is removed from the Cabinet to appease the SP. That is why the Congress high command will have to think twice before taking any action against the Steel Minister. Mr Verma has accused the SP leadership of betraying the party's Muslim vote bank by having secret deals with the BJP, and that the 2014 elections would result in the SP's "funeral procession" to be taken out from UP. According to Mr Verma's calculations, the SP will win only four seats whereas the Congress can bag 40 seats from UP. He gives 26 seats to the BSP and 10 to the BJP. How he has come to this conclusion is not known, but his previous predictions have proved to be meaningless. Actually, all this indicates that the fight for the 80 Lok Sabha seats from UP has begun. Those who have any doubt about it should revise their views after the latest allegation made by UP Chief Minister Akhilesh Yadav against the Congress leadership that anybody who does not act according to its scheme of things faces "persecution" through the CBI. One should not be surprised if the SP withdraws its outside support to the UPA in case the Congress allows Mr Verma to continue as a minister.
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The purpose of life is a life of purpose. — Robert Byrne
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Inadequate defence budget
The
funds allotted for defence expenditure by Finance Minister P. Chidambaram for the financial year 2013-14 are inadequate to meet the growing threats and challenges facing the country, for modernisation of the armed forces and India’s increasing responsibilities as a regional power. The defence budget is also inadequate to expeditiously make up the “critical hollowness” in defence preparedness pointed out by General V K Singh, the Army Chief. The increase of 5.3 per cent in the budget estimates from Rs 1,93,007 crore in 2012-13 to Rs 2,03,672.10 crore ($ 37.46 billion) for 2013-14 is too small to allow for inflation, which is ruling at about 7.5 per cent annually. Also, the rupee’s recent slide against the dollar to almost Rs 55 to a dollar has further eroded its purchasing power. Hence, in real terms the defence budget has actually declined by about 1.3 per cent. China’s People’s Liberation Army (PLA) has been modernising at a rapid pace for over a decade, backed by a double-digit annual hike in the defence budget. At $ 115.70 billion, China’s official defence budget for the current year is 10.7 per cent more than the previous year and it is over three times India’s planned defence expenditure. As China invariably conceals many items of expenditure on national security, its actual expenditure is likely to be well over $ 150 billion. China is investing heavily in modernising its surface-to-surface missile firepower, fighter aircraft and air-to-ground strike capability. It is acquiring strategic airlift capability, modern aircraft carriers, new submarines, improving command and control and surveillance systems and is enhancing its capacity to launch amphibious operations. It is also upgrading the military infrastructure in Tibet to sustain larger deployments over longer durations. Despite the long list of obsolescent weapons and equipment in service with the Indian armed forces, the present military gap with China is quantitative rather than qualitative. However, as India’s military modernisation has been stagnating for several years, this gap is likely to soon become a qualitative one as well. By about 2020-25, China will complete its military modernisation and will then be in a position to dictate terms on the resolution of the territorial dispute if India continues to neglect defence preparedness. Of the total allocation for defence, the Army will get Rs 99,707.8 crore (49 per cent), the Navy Rs 36,343.5 crore (18 per cent), the Air Force Rs 57,502.9 crore (28 per cent) and the Defence Research and Development Organisation (DRDO) Rs 10,610.2 crore (5 per cent). The total revenue expenditure planned for the year is Rs 1,16,931.41 crore (2.73 per cent increase, 57.41 per cent of the budget). The remaining amount of Rs 86,740.71 crore (9 per cent increase, 42.59 per cent of the budget) has been allotted on the capital account for the acquisition of modern weapon systems. Major purchases this year are likely to include initial payments for 126 multi-mission, medium-range Rafale combat aircraft, 197 light helicopters, 145 Ultra-light Howitzers and C-17 heavy-lift aircraft, among others. India is expected to spend approximately $ 100 billion over the 12th (2012-17) and 13th (2017-22) five-year defence plans for military modernisation. The government has earmarked Rs 52,264 crore for the Central Armed Police Forces (CAPF) in the annual budget of the Ministry of Home Affairs (MHA) for homeland or internal security. A portion of these funds will be utilised for setting up a National Intelligence Grid and the National Counter-Terrorism Centre — measures which are considered essential to streamline counter-terrorism efforts consequent to the Mumbai terror strikes in November 2008. Also, the state governments will be given Rs 1,847 crore for the modernisation of their police forces. This year’s defence budget has been pegged at 1.79 per cent of the projected GDP, which is the lowest since 1961-62 when it was 1.66 per cent. The 13th Finance Commission had recommended that the nation’s defence expenditure should progressively come down to 1.76 per cent of the GDP by 2014-15 and perhaps the Finance Minister has decided to go by that recommendation. China and Pakistan spend between 3 and 4 per cent of their GDP on defence. India’s per capita expenditure on defence is less than $ 10, while the average expenditure of the top 10 spenders in Asia is $ 800 approximately. India’s soldiers-to-citizens ratio, at 1.22 per 1,000 citizens is among the lowest in Asia. The average of the top 10 Asian nations is about 20 soldiers per 1,000 citizens. The reasons for India’s lackadaisical approach to military modernisation include the shortage of funds on the capital account for major defence acquisitions, the inability to spend even the allotted funds due to bureaucratic red tape in decision making and the lack of a robust indigenous defence industry because of excessive reliance on uncompetitive ordnance factories and defence PSUs. The lack of progress in the replacement of the Army’s obsolescent weapons and equipment and its qualitative modernisation to meet future threats and challenges is particularly worrisome as the Army continues to maintain large-scale deployments on border management and internal security duties. It needs to upgrade its rudimentary C4I2SR system and graduate quickly to network centricity to optimise the use of its combat potential. While the mechanised forces in the plains are still partly night blind, the capability to launch offensive operations in the mountains continues to remain inadequate to deter conflict. All of this will need massive budgetary support, which can be provided only if the defence budget goes up to 2.5 to 3 per cent of the GDP. While some tightening of the belt is understandable when the economy has taken a downturn, India’s expenditure on national security is clearly inadequate to squarely face the emerging threats and challenges. The government must insulate planning for national security from the vagaries of fluctuating economic fortunes by backing five-year defence plans with firm budgetary
commitments. The writer is a Delhi-based strategic analyst.
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Saving what you can Oh, this will feed my goats,” remarked the woman who collected garbage from my house as I handed her pea peels in a separate packet along with my garbage. This set me thinking as I used to dump, quite literally, all my waste in one bin rendering it useless for anybody’s else. From then on I began to meticulously segregate the vegetable peels in one pack for the goats and the bread crumbs and left-over rotis for the stray pups in my locality. (It was so satisfying to see the pups come running, wagging their tails and gobble the crumbs we considered waste in a jiffy and lick our feet in gratitude.) As I swung into action, I also began stacking all used paper sheets, the paper packets I got with my groceries and other packing material for the kabariwala for recycling. My husband and even the kabariwala would look at me incredulously at my effort and I didn’t get a penny for all that stuff but it didn’t bother me. I am doing my bit for Mother Earth, I reasoned. And it tremendously reduced my daily garbage output. Encouraged by this, I began conserving water — a key component for life on this planet and no other as far as we know right now. The water I used to wash my vegetables and lentils began providing water for my plants along with the water I used to mop my floor every day. In villages and small towns, I had observed that they would wash their dishes with ash in the open near their vegetable beds. This would irrigate the plants automatically and the ash would act as fertilizer! Inspired by that, I switched to a dishwashing agent, washing powder, shampoo, bathing soap, etc, made from natural ingredients to lessen my contribution of toxins to the daily waste. Also, I avoid using small sachets of shampoos etc and always go in for the larger super saver packs — another way to reduce one’s garbage output. The small sachets can easily choke the drains while the larger plastic packs can be recycled. Another common practice, particularly in India, of exchanging old clothes for utensils is a very efficient way of recycling, apart from a source of livelihood for many. “Amma, can I help you?” my 13-year old son offered as I lifted the bucket of soap water left after washing clothes for swabbing the floor. It made me happy that my son had noticed the extra effort I was putting in and now he, too, helps me walk that extra mile. Over time all these chores come naturally to me now and don’t require any extra effort on my
part.
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Himachal’s bills mount despite fiscal discipline
With
the Fiscal Responsibility and Budget Management (FRBM) Act in place, the state has been forced to exercise a degree of fiscal discipline. The government no longer has the luxury of raising indiscriminate loans, but it is not providing any respite from the perennial financial crisis and only leading to compression of expenditure. The fiscal woes of the state are multiplying with each passing day due to the mounting wage bill, interest burden and other committed liabilities. In its anxiety not to upset the “feel good” factor among the people by taking harsh measures in its very first budget, the Congress government has not made any effort to mobilise resources. Matters have reached a stage where soft approach will not help and steps will have to be taken to generate additional revenue. Steady and unsustainable increase in salaries and pensions apart, the non-plan revenue deficit grant recommended by the 13th Finance Commission will decline by Rs 570 crore in 2013-14 and by Rs 909 crore in 2014-15. It is a huge amount for a small state with a population of 69 lakh as the per capita tax of Rs 100 will only generate revenue of about Rs 70 crore. The liabilities The financial health of the debt-ridden state has been steadily worsening due to the inability of successive regimes to contain the swelling wage bill and mobilise resources. The gravity of the situation can be judged from the fact that the government expenditure on committed liabilities is nearly 157 per cent of its own tax and non-tax revenue in 2013-14. The committed expenditure on salaries, pensions and interest liability has been mounting with each passing year, but the state’s revenue has not been growing at the same pace. The annual outgo on account of salaries shot up from Rs 2,615 crore in 2007-08 to Rs 6,956 crore in 2013-14 and projected to reach Rs 9,520 crore by 2016-17. Similarly, the pension burden has increased from Rs 880 crore to Rs 2,839 crore and touch Rs 3,990 by 2016-17 while the interest liability will swell from Rs 1,778 crore to Rs 2,431 crore and to Rs 3,374 by 2016-17. The state’s own resources grew by just Rs 1,729 crore over the past three years whereas the committed liabilities on account of salary, pension and interest on loans increased by Rs 2,540 crore over the period. The outstanding debt has increased from Rs 21,241 crore on March 2008 and is expected to be Rs 28,513 crore in 2013. It is set to cross the Rs 31,000 crore by the end of next year. The only redeeming feature is that the outstanding debt as percentage of the Gross State Domestic Product (GSDP) is projected to improve from 39.58 per cent in 2012-13 to 33.86 per cent in 2016-17. World Bank strategy As per the fiscal correction path chalked out by the World Bank while granting the Rs 900 crore development policy loan to pull the state out of the debt trap, the ratio of fiscal deficit to the GSDP was to be reduced from 3.4 per cent in 2007-08 to 2.2 per cent in 2011-12 by implementing the approved “policy matrix”. The figure of 2.85 per cent for 2013-14 is higher, though it is within the norm of 3 per cent. Overindulgence in populism and inability to raise resources has been undermining fiscal stability of the state and hurting the pace of development. The tax revenue as percentage of the GSDP is set to decline from 7.03 per cent in 2012-13 to 6.59 per cent in 2013-14. As per the medium term fiscal plan statement, the figure will increase only marginally to 6.66 per cent by 2016-17. The outstanding debt is set to cross the Rs 31,000 crore by the end of next year. The debt burden will increase at a slower pace due to the FRBM Act which limits the quantum of loans a state could raise annually to 3 per cent of the GSDP. Accordingly, the figure for 2013-14 comes around Rs 2,400 crore. Further, the budget has to be surplus after raising the permitted loans otherwise it will be denied the specific central grants. Thus, the outstanding debt as percentage of the GSDP is projected to improve from 39.58 per cent in 2012-13 to 33.86 per cent in 2016-17. Pay panel must There has been no downsizing of the administration despite switchover to e-governance and the number of employees has been increasing. The number is projected to go up from 2,25,113 in 2012-13 to 2,28,409 in 2013-14. The fact that the state is committed to grant pay scales on the Punjab pattern does not help. Given the scant resources and limited scope for revenue generation the state should have set up its own pay commission but no government has the courage to do so as it will have adverse political fallout. The BJP government lost a golden opportunity when it responded negatively to the advice of the state High Court to consider the option of having its own pay commission. Successive governments have been coming out with ad hoc schemes like voluntary teachers and PTA teachers to avoid recruitment of “expensive” regular staff. Even appointments of doctors and other hospitals staff are being made through Rogi Kalyan Samitis for the same reason. Such measures are affecting the quality of services, particularly in the education and health sectors, as evident from the declining learning levels at school and the mess created by indiscriminate opening of private universities at the higher level. The lack of funds was also hurting development as almost 88 per cent of the budget was being utilised to meet the committed expenditure and only 12 per cent was available for development. The roads were in bad shape as there was not enough money for maintenance. The policy to recruit employees on contract basis has lost its purpose due to competitive populism. Initially, there was no provision for regularisation and periodical increase in wages did not put much burden on the state exchequer. However, subsequently the government came out with a policy for regularisation of contract employees after eight years of service, which was reduced to six years on the eve of election. It would have been better for the state to have its own pay structure for new employees. PSUs ailing The financial position and functioning of public sector undertakings (PSUs) has also been deteriorating due to lack of political will to carry out fiscal reforms. The aggregate losses of the 20 PSUs exceeded the equity share of the government for the first time in 2011-12. The cumulative losses shot up during the year from Rs 1,666 crore to Rs 2,188 crore, an increase of Rs 522 crore, exceeding the government investment to Rs 2,022 crore from Rs 1,877 crore. As many as 12 PSUs have been perpetually in the red. The number of employees in these units declined marginally from 43,165 to 42,386 during the year. It is obvious that the stringent norms laid down by the 13th Finance Commission to restrain the government from extending “soft” loans or make “imprudent” investments to bail out inefficient PSUs has not helped. As per norms, a minimum of 5 per cent return on investment was made mandatory and an interest of 7 per cent was to be charged on all loans advanced to sustain loss-incurring units. These norms have not been followed over the past three years. Consequently, the PSUs plunged deeper in the red. The state electricity board, with the highest number of 25,208 employees, has accumulated the maximum loss of Rs 1,406 crore, including Rs 512 crore during 2011-12, as on March 31, 2012. It was set to cross the Rs 2,000 crore mark by the end of the current financial year. The failure of the government to carry out proper restructuring to segregate the functions of distribution, generation and transmission has turned a profit-earning board into a loss-incurring unit within a short period. The state has been blaming the “faulty” recommendations of the 13th Finance Commission for its woes and maintaining that it under-assessed its committed liabilities as a result of which the state received a much less revenue deficit grant. The uncovered gap in committed liabilities of the state on account of pensions, salaries and interest worked out to Rs 3,522 crore during 2012-13 and would increase to Rs 4,043 crore during 2013-14. It is seeking a special economic package of Rs 7,565 crore to tide over the difficult financial situation, but the prospects of the Centre obliging the state are bleak. The only ray of hope is that the stay may get the arrears of its claim in the BBMB projects. The amount worked out in accordance with the Supreme Court verdict by the committee set up for the purpose is Rs 4,250 crore, but the Centre had reduced it by Rs 850 crore after taking certain aspects into consideration. The matter is yet to be finalised. In case there is a delay, the state will have a very hard time for the next two years.
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