Monday, April 3, 2000, Chandigarh, India
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Matter
of low interest
REINING
IN PUBLIC EXPENDITURE |
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This oily business in Petroleum
Ministry by G. K. Pandey NOT too many reporters covering the petroleum sector would remember N.B. Prasad, a man who, to my mind, deserved a Bharat Ratna for his yeoman service to the country. While finding Indias biggest oil reserves till date at Bombay High, he suffered a heart attack. Ordinary men would have stopped to rest, since most of the task was completed anyway.
The
tragedy of Chitti Singhpora
SC:
keep off judicial appointments
NRIs
to honour widow of Staines
April 3, 1925
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REINING IN
PUBLIC EXPENDITURE DESPITE honest efforts and best of intentions, Finance Minister Yashwant Sinha has lost considerable credibility because of his failure in initiating any meaningful steps to reduce unproductive and wasteful public expenditure, despite promises of harsh measures in the run-up to the Budget presentation. By his failure to do so he has only confirmed the nagging suspicion that all political parties while in government seem to believe that the nation and its people exist only to sweat, toil and sacrifice mainly to keep the vast, largely unproductive, government machinery happy and contented. While the prices of all essential commodities are mounting and the common man is increasingly finding it difficult to make both ends meet, there is no sign of pruning government flab and public expenditure despite loud pronouncements of reforms, liberalisation and the resultant obsolescence of many state departments and agencies. It looks as if in the governments scheme of things the 3 per cent population comprising the government and public sector employees is infinitely more important than the vast majority of the toiling masses on whose vote politicians come to power. To be fair to Mr Sinha, this seems to be the pattern and philosophy of all political parties and governments irrespective of the public postures they make. At least he can claim credit for some step he has initiated in setting up a public expenditure commission with some specific terms of reference. Be that as it may, it is a known fact that fiscal profligacy and financial indiscipline indulged in by the central and state governments have caused severe strain on the nations economy. The Planning Commission has failed to rein in the states expenses and the annual budgets are not of much use, since there is practically no mechanism for the evaluation of expenditure in terms of norms or expectations built in as part of the budgetary exercise. As is common knowledge, the Government of India and almost all state governments are in deep financial and fiscal distress. The root cause for this state of affairs is the extreme inefficiency in fiscal and tax management as well as very low levels of employee productivity. Added to this is the budgetary profligacy and extravagant expenditure indulged in unproductive areas and the high interest burden on borrowings to meet these expenses. It has been recently reported that all states in India, barring some honourable exceptions, are facing bankruptcy and are surviving on borrowings, payment defaults and overdrafts. In fact, the Planning Commission has officially communicated to the Prime Minister that most state governments will fail to raise the necessary resources to fund their annual plans and that they might indulge in fund diversion on a big scale to meet their day-to-day requirements. Governments have virtually lost control over expenditure, both its magnitude and quality in the sense of prioritisation because budgeting is all mortgaged to the political/electoral process. In the event it is doubtful if the fledgling Expenditure Reforms Commission, set up by the Union Finance Minister to bring order and discipline in public expenditure, will have much of an impact where long-standing and high-powered institutions the Public Accounts Committee, the Planning Commission, the Comptroller and Auditor-General of India and the Reserve Bank of India have failed to achieve these objectives. What is, therefore, called for is not one more commission but a professional diagnosis and an action plan that can be made part and parcel of the budgetary process of central and state governments and the annual plan monitoring exercise of the Planning Commission. The action plan that comes out of the professional diagnosis should be brief and lean, and have no huge volumes of reports presented with all fanfares, only to gather dust. Now that the Expenditure Commission headed by a competent person with vast experience in financial management has become a fait accompli, it calls for all support in the hope that such a professional approach would be adopted in accomplishing its mission. An exercise of this nature should take into account the following realities and imperatives: * That the conventional methods of economy in expenditure and cost control by government departments are no more than cosmetic exercises. In fact, such farcical steps only impinges on whatever little development that is taking place since the axe actually falls on them only. There is need to bring about major paradigm changes in the very ethos and concept of public expenditure (PE) vis-a-vis public welfare (PW). * As a critical step towards disciplining PE, there is a need to establish a direct and quantifiable relationship among PE, PW, tax, subsidies, public services performance (PSP) and employment generation (EG), and clearly lay down performance standards, the absence of which is encouraging government functionaries to run amuck with the tax-payers money. For this purpose an evaluation matrix needs to be developed in the following areas: a. Public service performance indexes in departments and agencies where productivity is difficult to be quantified. b. Public service productivity indexes where productivity could be quantified. c. Tax to subsidy ratio. d. Public expenditure to public welfare ratio. e. Public expenditure to employment generation ratio. The fund and figure approach, wherein the efficiency levels of most departments are judged by the funds allocated and amounts spent, particularly in the month of March rather than any performance or productivity standards, is not merely archaic but anti-people. If the Indian economy is to get out of the mendicant syndrome and become productive, there is immediate need to lay down performance and productivity norms as envisaged above and mandate it into the budgetary and plan approval process. The independent monitoring agencies appointed for the purpose should do the performance/productivity review every three months and the departments/organisations that fail to comply with the norms twice in succession should be sharply pruned and shut down if necessary. The Planning Commission, with its massive manpower and infrastructure, with nothing much to do these days, should take up this unpleasant but crucial task of monitoring and enforcing financial discipline. The commission should be retooled, re-tuned and retrained in order to be equipped for the purpose. If there is need for legal authority for the Planning Commission to perform this task effectively, Parliament should enact appropriate law without any further loss of time. In order to give due status, seriousness and importance to this crucial matter of expenditure control, Parliament may consider setting up of a high-power expenditure review board under the chairmanship of the Vice-President of India who should guide the activities of both the Planning Commission and the Expenditure Commission in bringing about meaningful results. This review board may perform the task of overseeing the evaluation matrix proposed earlier and monitor the follow-up action. A body of this nature will be far more effective than the Finance Ministry, and will command respect and attention from other ministries and departments. Such a step will be in line with the practice obtaining in the USA where the countrys Vice-President is the troubleshooter and monitor of public expenditure and has succeeded in achieving substantial savings. The focus for
expenditure management in the states could be on the main
revenue spending. Departments of PWD and Home, revenue
earning Departments of Excise and Commercial Taxes and
two major utilities the SEB and the SRTU. The
urgency for financial and fiscal discipline has become
manifold, with the contingent liabilities of states
increasing due to guarantees being given to
infrastructure projects, while their financial position
is deteriorating. Gross fiscal deficit of the states is
galloping, and their financing through borrowings has
created an enormous debt-servicing burden. With every
possibility of states defaulting on guarantees, the very
credibility and honour of the nation and its people are
at stake. |
This oily
business in Petroleum Ministry NOT too many reporters covering the petroleum sector would remember N.B. Prasad, a man who, to my mind, deserved a Bharat Ratna for his yeoman service to the country. While finding Indias biggest oil reserves till date at Bombay High, he suffered a heart attack. Ordinary men would have stopped to rest, since most of the task was completed anyway. Not Prasad. Since finding the oil was useless without putting in place an intricate pipeline network to bring it to the shore, Prasad set up his work station on a ship at Bombay High, so that he could study each X-ray film, to ensure that each kilometre of under-sea pipeline was absolutely flawless. After finishing his task, Prasad resigned his job. All that was left was just a task which anyone could do, he said while opting to go into oblivion. Clearly, such men are not to be seen anywhere in the oil sector. Apart from the number of vigilance cases against so many top officials of ONGC, what is even sadder is that almost no one feels responsible for his duty anymore. And, worse, with petty politicking being the main job in the Petroleum Ministry, no one there, including Secretary S. Narayan, even bothers to take anyone to task anymore. So, some months ago, Mr Narayan won a lot of acclaim as a tough Secretary when he asked Ministry officials as well as the ONGC brass to explain why production kept falling, from 31.6 million tonnes in 1995-96 to 26.5 million tonnes today (it is expected to fall by another million next year), why its cumulative shortfall over the target was a whopping 10 million tonnes in last Plan and shows all signs of happening again, and why even after three years of the Narayanan (not to be confused with Secretary Narayan) report on how to repair the Bombay High fields, the progress was very poor. Mr Narayan asked Mr A.R. Sihag, a director in the Ministry, to assign responsibility. Four months later, no responsibility has been assigned, actually no report was prepared either. Mr Sihag says he was never formally asked to prepare it! Apparently he felt that Mr Narayan was not serious, and since he has not asked him about the report again, it appears he was right in thinking the way he does. So what does the Ministry actually do, at a time when the situation is so serious that close to a third of our total export earnings are used up in just paying for oil imports? Simple, it just ensures that it gets as many benefits from the oil companies as possible. So if you actually take a random check at the houses of top bureaucrats, you will find all number of laptop computers, cars, cellphones and even credit cards which are paid for by ONGC, JOC, HPCL and other oil PSUs. Not that the companies are protesting too much either. It is a little quid pro quo. The largest shareholder in these PSUs, the Government of India, asks no uncomfortable questions about performance, and the company managements reward the Ministry to ensure that this situation continues. And to ensure that no oil executive gets out of hand, the Ministry has the ultimate brahmastra, the vigilance report. Almost every top official of ONGC, to cite just one example, has some vigilance case or the other pending against him. Several appear fictitious, but they are allowed to linger, to ensure that Ministry officials always have the upper hand no one with a vigilance enquiry can be confirmed or promoted. In one case brought to my attention, the complainant had simply said that the official was helping certain firms to benefit in various tenders, but not even sketchy details were provided, like the name of the parties, the tenders in question, what the benefit was, etc. But since the Minister at that time, Mr V. Ramamurthy, or the oil bureaucracy wanted to fix the PSU official, he recommended that the case be investigated, and it continues to be that way for over a year now. Needless to say, this very senior official continues to function on a temporary basis, and is scared of even a bureaucrats shadow. He is clearly not able to put everything into his job, nor can he seek premature retirement to take up more lucrative private sector offers since he still has a blot on his record. At one point, as one newspaper reported, all ONGCs top staffers, including its chief B.C. Bora, were functioning on a temporary basis, or, as the instructions go, till further orders! What of ONGC itself? Does its chief Bora take strong action to ensure that it meets its targets? The surface view is that he does not. I know of no one who has lost his job, or even been transferred for poor performance. You can and you cannot blame Mr Bora for this. For, it is equally clear that he has very little real power to do anything. Apart from the obvious trade unionism in ONGC, political patronage ensures complete protection for those that Mr Bora may think inefficient. ONGCs director in charge of operations, Mr A.S. Soni, for instance, is clearly someone who should have been held responsible for the sad and complete failure in ONGCs production levels. But how strong Mr Sonis connections are can be gauged from the fact that when it came to his confirmation in 1998, Ministry officials moved haven and earth to ensure this happened quickly. Ideally, for instance, they should have waited for the comments of former Petroleum Secretary Probir Sengupta, since he was the person who had seen Mr Sonis functioning. But since it was presumed in the Ministry that Mr Sengupta didnt think Mr Soni was efficient, the Ministry actually processed his papers at top speed, taking advantage of Mr Senguptas week-long visit outside Delhi on official work. To make Mr Soni sound very efficient, Ministry officials also pulled a fast one on the Public Enterprise Selection Board (PESB) which selects all top officials for PSUs. They gave the PESB figures of oil production only for 1995-96, a year in which the output rose, but not for the later years of Mr Sonis tenure when it fell. Similar speed is now being exercised, ironically enough, to ensure that Mr Sonis successor is a person of the Ministrys choice. A file has been moved to transfer ONGC Videsh Limiteds (OVL) Atul Chandra to Mr Sonis job. Just like that. Never mind that it is thoroughly improper that the selection for such posts is done by the PESB and after the job is thrown open to all candidates to apply for. Mr Chandras track record is pedestrian at best and OVLs big finds such as those in Vietnam took place long before he took over. And whose favourite Mr Chandra is can be judged from the fact that ONGC has not even moved a single paper asking for this to be done. So much for its navratna status that is supposed to prevent the Oil Ministry from interfering in its day-to-day business. Incidentally, that this should be happening should not really surprise anyone. The politicisation of oil PSUs is so complete, such an old story, that when Secretary G.V. Ramakrishna put adverse comments on the CR of one of the ONGC chiefs, the latter got the Minister to intercede on his behalf, and years later the adverse remarks were expunged. The ONGC chief was later awarded a Padma Vibhushan. Others like Mr C.R. Dasgupta of IOC, who did yeoman service in the field of marketing and refining but lacked similar clout with the political bosses, failed to get any such recognition. That all this should have continued, and even prospered under a Minister like Mr Ramamurthy, is hardly surprising. What is sad is that even someone known for his patriotism and dedication to duty like Mr Ram Naik should allow himself to be taken for a ride. An absolute necessity is to put everything in order in the entire petroleum sector, or else the country will have to pay a huge price. A World Bank country report on India has clearly warned that in the absence of some new oil finds and substantial improvement in the rate of recovery from the proven oilfields, India by 2010-11 will have to spend two-thirds of its export earnings for importing oil. Can India afford to be
complacent? Please wake up, Mr Naik, it is perhaps late. |
The
tragedy of Chitti Singhpora THE inevitable has happened, as night follows day. It is no surprise that the event has come to pass, but that it has taken so long in coming. Chitti Singhpora has happened. Surely it is nothing, if not naive, to have imagined that any particular community, sect or group, would remain safe even while the Pandits were hounded out. Commonsense suggests that the Sikhs would be the natural target once the Pandits had been dealt with. It is a sad commentary on the powers that be to have misjudged so grossly the intent of the perpetrators of violence in Kashmir whatever be their name or banner: terrorists, extremists, jehadis or any other. People who have not flinched an eyelid when gunning down men, women and children, dishonouring women and burning or looting the properties of their co-religious brethren, cannot, by any stretch of the imagination, be expected to respect any particular group or community, any assurance to the contrary notwithstanding. It is but a natural progression to have moved on from Pandits to Sikhs. The next target will be the Shia community; the question is not if but when. Chitti Singhpora reads out two glaring lessons should any one be interested in learning. Firstly, our intelligence system remains extremely poor. Lessons from Kargil and the Subrahmaniam Committee report have still not been learnt. We remain unable to read the mind of the enemy and to anticipate his manoeuvrings. The strategy for intelligence gathering, whatever that may be, is casual and not professional. Even a casual student of history, in particular the history of the partition of India, would have known that the Sikhs would, in particular, be targeted sooner or later. The support for such Sikh elements as launched the movement for Khalistan has been completely misunderstood. Khalistan is only a convenient tool in the grand design to dismember this country. It has been the gameplan of these terrorists to spread the belief that Sikhs in Kashmir would not be harmed, thereby ensuring that they remain vulnerable. Abject incompetence is the only phrase that describes this gaping hole in the strategy adopted by the policy-makers as well as the security agencies. The second lesson
relates to the community-specific response to this
abhorrent and reprehensible event. That Sikhs should feel
outraged and rise in support of the local Sikh community
is but natural, but what about the Pandits, Hindus,
Christians and Muslims of the country? Not long ago
Pandits were similarly targeted in Wandhama but the
response was again largely community-specific. The Sikhs
of Chitti Singhpora, the Pandits of Wandhama, the Hindus
of Surankote and many other victims of similar tragedies
were all Indians. The Indian nation would be stronger and
more secure today if public response to the outrage, and
succour for the victims, were nation-specific rather than
community-specific. The secular Indian nation must not be
allowed to degenerate into a narrow sectarian fixation.
Plurality that bonds the national fabric demands that
individuals and groups rise above their personal beliefs
to stand for any Indian be he Sikh, Hindu, Muslim
or any other. Humanity cannot be split into sects.
Gandhiji laid his life trying to bring home to all of us
this simple principle of nationhood. Sadly the prevailing
hiatus in quality (national) leadership is holding back
this great nation. Whatever passes for political
leadership today is more interested in nitpicking for
vicarious gains than in practising a commitment to the
much larger national cause. |
SC: keep
off judicial appointments STRIKING a major blow for the independence of the judiciary, a five-member Constitution Bench of the Supreme Court has, in a decision the first of its kind since 1950, disempowered both the legislature and the executive from imposing their own reservation policy on High Courts in judicial appointments below the High Court level. Handed down by a Bench split right down the middle, the decision is notable as much for the sharpness of the dissenting opinion as for the boldness of the judgement of the majority. And while, as a student of the Constitution, I broadly concur with the majority and disagree with the dissent for considerations that are essentially practical, I find it impossible to say that the judgement of the majority is, theoretically or logically, inevitable. Establishing Articles 233 and 234 of the Constitution as the sole repository of the power of recruitment to the district and subordinate judiciary, the verdict (released late last month) rules out any statutory or governmental intervention under Article 309 in relation to judicial appointments below the High Court level. The State legislature cannot, says the majority speaking through Justice S.B. Majmudar, lay down a statutory scheme of reservation (under Article 309) as a road-roller, straight-jacket formula uniformly governing all state services including the judiciary, by upsetting the apple-cart and bypassing the constitutional mandate of Articles 233 and 234. An intimately familiar feature in the landscape of service litigation, Article 309 empowers Parliament or the State legislatures to regulate, by law, the recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or of any State. And enables as well the President or the Governor to step in and make, in the alternative, rules for the purpose of such regulation until such law is made. Article 233, briefly put, provides for appointment of district judges by the Governor of a State upon recommendation by the High Court. And Article 234 for appointment of other subordinate judicial officers, also by the head of the state, as per rules made by the Governor in consultation with the High Court and the State Public Service Commission. To these two constitutional provisions is added a third: Article 235. Vesting in the High Court complete control over all district judges and subordinate judicial officers, to be exercised in accordance with their conditions of service as prescribed under any law made in that behalf by the legislature. It is the High Court, not the executive, which possesses control over the State judiciary, a Constitution Bench of the Supreme Court, hearing B.S. Yadavs case from Haryana, ruled in 1981. But what is important to bear in mind is that the Constitution, which has taken the greatest care to preserve the independence of the judiciary, did not regard the power of the State legislature to pass laws (under Article 309) regulating the recruitment and conditions of service of judicial officers as an infringement of their independence. The courts verdict last fortnight takes what can fairly be described as a diametrically opposite view. At least so far as judicial appointments per se, as distinguished from post-appointment conditions of service, are concerned. The complete code projected by Articles 233 and 234, it declares, speaking of appointments of district and subordinate judges, would itself be an exclusion of the legislative power and equally the Governors power under Article 309 qua that field. As these twin Articles, says Justice Majmudar, making the same point at another place, cover the entire field regarding recruitment and appointment of district judges and judges of the subordinate judiciary at base level, pro tanto the otherwise paramount legislative power of the State legislature to operate on this field clearly gets excluded by the constitutional scheme itself. The High Court can, he says (Justices G.B. Pattanaik and U.C. Banerjee striking concurring notes), be consulted by the Governor for framing appropriate rules regarding reservation for recruitment under Articles 233 and 234. But so long as it is not done, the legislature cannot, by an indirect method, completely bypassing the High Court and exercising its legislative power, circumvent and cut across the very scheme of recruitment and appointment to the district judiciary... Such an exercise (he adds), apart from being totally forbidden by the constitutional scheme, will also fall foul of the concept.... of separation of powers between the legislature, the executive and the judiciary as well as the fundamental concept of an independent judiciary. Both these concepts are now elevated to the level of basic structure of the Constitution and are the very heart of the constitutional scheme. Behind the verdict, arising from Bihar and carving out a zone of immunity from statutory action not fully intended by the Constitution, or not exactly so, lies a deep, unstated fear of reservation politics. More on the verdict,
Justices R.P. Sethi and V.N. Khare dissenting, next week. |
NRIs to
honour widow of Staines FOREMOST, the NRIs of New York have succeeded, where we failed. They have invited Gladys Staines, widow of the Australian missionary Graham Staines, to New York and a special reception will be held in her honour on April 11 at New Yorks Martin Van Buren High School auditorium. And together with her, two well known Christians from India Archbishop Alan de Lastic and John Dayal have been also invited and they would be honoured for the role played by them in trying to combat communalism. In fact, Dayal would be addressing various forums and gatherings and he says that his thrust will be on the fact that we have always maintained that India is a secular country but there are groups which have tried to dent the plurality of Indian culture...I would also be addressing the NRIs to make them use their influence and advise this (Indian) government that the very image of the nation gets tarnished the minute any person or group is traumatised and attacked in this country on grounds of his/her religion. Unfortunately this is what is happening here. An atmosphere has been so created that the Christians, Muslims and Sikhs have to keep chanting that they are loyal and patriotic...all this is unfortunate. Moving ahead, I must mention that several prominent Christians and Muslims of this city have been visiting Gurdwara Sisganj and Gurdwara Banglasahib. To quote John Dayal, who along with the Imam Abdullah Bukhari and Naib Imam Ahmad Bukhari and Rev Karam Masih visited these two gurdwaras, after the recent massacre of 35 Sikhs in the valley we met our Sikh brethern and conveyed to them our deep pain, anguish and also expressed concern at talks of mass migration of the minority groups from the valley. In fact it was certain people, who are now in this government, who had earlier created that atmosphere and now we are absolutely aghast to hear the government stating that Sikhs in the valley had not been provided security because it was felt that they could protect themselves. This sort of talk amounts to total abdication of responsibility and therefore our demand is that wherever there is a religious minority group, security has to be provided to it, by the government. And this should apply to the Hindus and Sikhs in the valley, Christians in Gujarat and Orissa and Muslims living in Gujarat and Maharashtra .... Imagine what will happen to this country if minority groups are forced to flee from their ancestral homes.... Continuing along the same strain let me also add that Campaign for Peoples Solidarity along with several other bodies/organisations are holding a day-long convention Fascist attack on democratic rights and institutions on April 2 at the Constitution Club. I am filing this column a day before so cannot fit in any of the conventions proceedings. Other happenings...... I repeat, there is so much happening all around. And the surprising aspect is that this socalled so much that is happening, happens to be happening to the same set of people. In fact, before I write about anything else let me fit in that last evening when I met Nafisa Ali, at one of the circuit parties, I simply had to ask her the magic formula. She laughed heartily and quipped Am I really doing so much? Actually at the end of the day I have no time to do anything! I have been wanting to write a book but, then, where do I get the time to sit down and pen those lines.... So another person is coming up with a book and this time it wouldnt be one of those autobiographical outpourings, nor any of those fictions but determined she is to write a word or two or maybe more ( if time and hectic socialising permits, that is ) on how parents ought to handle their children. Youll be shocked to know that many parents rarely interact or communicate with their children ...there are no healthy discussions in most homes and obviously all this is very damaging ...many of my childrens friends talk to me and discuss what their parents ought be discussing with them. And to write all this she plans to take a break from the hectic socialising scene and spend some time in the little kutiya I have built near Dharamsala.... Then, the very active Hungarian Cultural Centre here has invited the Franz Liszt Chamber Orchestra (Budapest) and I am told they would be playing the works of Mozart. Marcello, Rossini, Tchaikovsky and Bartok. Usually these orchestras visit only our metros but this I am a little surprised to find Mussoorie in their itinerary. Surprises dont really end there, for in Mussoorie it is for a special audience theyd be performing for the IAS probationers at the Lal Bahadur Shastri National Academy of Administration. And the Max Mueller Bhavan, in cooperation with Federation of Film Societies of India, is screening three films on April 11, and all three films focus on disability. I really wish they take these films to our smaller towns. And on April 4, the United Nations Information Centre will launch in New Delhi, UN Secretary Generals millennium report We the Peoples: The United Nations in the 21st century. So far, especially in
recent years, the United Nations has played an
ineffective role and has been dictated by the USA. So can
really look forward for miracles to take place in the
21st century. |
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