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| This deadweight flab |
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AMAZINGLY, the website
of the Expenditure Reforms Commission (ERC) still
exists. In case you have forgotten what ERC was
about, hark back to the 1999-2000 Budget. Alarmed
by the rising non-development expenditure, Yashwant
Sinha had sought suggestions on downsizing government
expenditure. This meant food subsidies, fertiliser
subsidies and reducing the number of government
staff. As ERC chairman, K.P. Geethakrishnan took
his charge seriously and produced 10 voluminous
reports. Little did he know then that Expenditure
Reforms Omission would have been a more appropriate
name.
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| Since
the PM can't do much about jumbo
Cabinets, do not expect downsizing
of government departments |
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The 2000-01 Economic Survey went to town with ERC
recommendations. On optimising government staff,
we had a 10% cut in staff strength, a ban on creation
of new posts, identification of surplus staff, retraining
and VRS retrenchment. The two subsequent Economic
Surveys forgot about ERC. There isn’t much
to remember anyway. Look at what the action taken
reports (ATRs) contained in the Budgets have to
say. The 2000-01 Budget said recommendations would
be implemented by July 2001. In the 2001-02 and
2002-03 ATRs, recommendations were being ‘processed’,
while the 2003-04 ATR makes no mention of the ERC.
Volume 1 of the Expenditure Budget will tell you
that the number of Central government staff has
actually been rising. The only time it dropped was
when telecom staff was transferred to BSNL.
If this is the background, why bother about the
Surinder Nath Committee, whose recommendations have
now been submitted? Evidently, this was set up at
the prime minister’s behest. It talks about
turning the world of seniority, automatic promotion
and security of service upside down. Those medically
unfit, those who face three vigilance enquiries
and those who aren’t promoted to the joint
secretary (JS) rank and above in three attempts
will be chucked out. (For the last, there will actually
be a second review after five years.) Selection
as JS will not be automatic. Officers will specialise
in 11 domains and ministers have to choose a name
from an empanelled list. Thank you, Gen. Surinder
Nath. But barring the odd detail or two, wasn’t
all this contained in the recommendations of the
Fifth Central Pay Commission?
Thank you, too, Mr Prime Minister. We realise that
you have to show some action because you handle
the department of personnel and training. But have
you given up on government staff downsizing per
se? After all, ERC talked about all layers of government
staff. Nath is only concerned with IAS and allied
services. Each such officer carries deadwood of
administrative staff, Grades III and IV. At the
last count, a JS has 10 such staff members, an additional
secretary has 12 and a secretary 15. There are peons
whose sole function is to turn red lights on and
off. There are IAS officers who are managing directors
of three public sector companies so that they can
get three cars — one for self, one for spouse
and one for kids. But in all fairness, if the PM
can’t do much about jumbo-sized Cabinets and
deadwood ministers, it is illogical to expect actual
government downsizing. As with Geethakrishnan, Nath’s
recommendations will gather dust.
So the aim must be tactical rather than strategic.
Central elections are in the offing. The vaunted
external affairs initiatives are in a mess. The
PM has not left a mark there. With the economy perking
up (good news on GDP growth and inflation), isn’t
it time to dispel the impression that the Prime
Minister has no expertise or interest in economic
matters? So let’s have 115 policy issues for
priority action and 47 projects for close monitoring.
The PM will be interested in 23 policy issues and
seven projects. Let the world know economic reforms
aren’t dead and that the PM is an economic
purush. Surinder Nath is part of the same piece.
These tactics don’t carry conviction. Wasn’t
the PM interested in the PM’s Council on Trade
and Industry? That council prepared 12 reports.
What happened to their implementation? How about
the PM introducing an ATR for these?
Forget broader reforms and concentrate on just expenditure
and revenue. Here’s a list of tasks left undone:
privatisation through strategic sales, interest
rates on small savings, the fertiliser subsidies,
the food subsidies, the defence expenditure and,
of course, salaries and pensions of government employees.
The sole salvation for the fiscal (or revenue) deficit
comes from the revenue side, and yet, the Kelkar
Task Force’s recommendations are not being
implemented. A buoyant economy means enhanced tax
revenue even if Kelkar goes unheard. That apart,
a higher GDP pushes up the denominator and the fiscal
deficit is usually expressed as a share of GDP.
That’s the general message for the PM. |
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