Every ministry under Manmohan Singh is shy of spending the money allocated for implementing their schemes. So from Defence to Education to Surface Transport, Shipping, Rural and Urban, are queuing up to return the unspent money. Paradoxically, the UPA is winding up its five year tenure with a whopping 11 per cent deficit, huge cache of unutilised plan fund and more significantly, untouched foreign aid of over Rs 78,000 crore for which the country pays millions of dollars as commitment charges penalty to the World Bank and ADB every year. On the face of it there is a mismatch. But this is how the economic whiz kids of the UPA have mismanaged the Indian economy.
A cursory analysis of the conduct of the Manmohan Singh government will reveal that in the last five years it spent only on sops and survived on bluff. The sops often failed to reach the targeted aam aadmi, it filled the coffers of the middlemen. The schemes were implemented only on paper. The economy could have been booming without the last minute booster packages had the government been sincere, at least partly implementing its plan priorities. In this light the three booster doses announced on December7, 2008, January 2, and February 24, 2009 are nothing but statistical jugglery using the old funds and repackaging old schemes to hoodwink the voter. The three packages only in tax giveaways cost Rs. 70,000 crore. After spending mindlessly on unproductive party populism, now the government is saying that it will spend more to stem the tide of recession even if it means fiscal extravagance.
What the country really needs is not sops but investment to boost manufacturing, build infrastructure and create jobs. This the government cannot do in the next two weeks when it will be constrained by the model code of conduct for the election for the 15th Lok Sabha. Among all the failures of the UPA government on the economic front, the neglect of infrastructure sector is the most disappointing. It was not only in roads and highways alone but in hydro and thermal power sector and urban utilities the UPA abdicated its responsibility.
For instance, India is sitting on unutilised foreign assistance of whopping Rs 78,000 crore and paying commitment charges to the tune of Rs 125 crore annually to the World Bank and Asian Development Bank(ADB) for undrawn assistance. The charges which are paid on the amount of principal rescheduled for drawal on later dates points to ?continued inadequate planning resulting in avoidable expenditure? the CAG report presented in Parliament said. Since the external assistance is precious and commitment charges are being paid, initiatives should have been taken by the government for timely utilisation, the report added. These funds were meant for road construction, health services and drinking water mission. In another report the CAG charged the government with overstating spending on aam aadmi. The numerous schemes under Bharat Nirman like NREGS, Sarva Siksha Abhiyan, Mid-Day Meal, Rural Drinking Water, Rural Health Mission, Child Development Scheme and Urban Renewal Mission which the UPA advertises as big achievements, in reality are a big hoax. The CAG, pinching a hole in the government claim, says there was no record of how the money given to NGOs was used. The government, in fact, according to the CAG, admitted that it was not aware of actual spending by these organisations. The inference is that the money actually was siphoned off by party workers. In most cases the spending on targeted schemes was less than 25 per cent. The travesty of the catastrophic outcome is that money from social and infrastructure development fund was diverted to cultural programmes like 150th anniversary of 1857 War of Independence. Not only Congress but Communist affiliated NGOs made a kill on public money. Kept outside the government account, the CAG said, the funds were beyond the purview of any checks and balances of the centre.
Meanwhile in 2008-09, we have made a full circle from run away inflation to galloping deficit and a deepening recession. UPA'sFinance Minister all these years, P. Chidambaram has been relentlessly talking about the Fiscal Responsibility and Budget Management Act and in his budget for 2008-09, projected a fiscal deficit of 2.5 per cent which was lower than the FRBM target of three per cent.
It would look as if the union budget has no meaning. The unspent amount of the plan allocation exceeded over Rs 108,000crore in 2007-08 according to the latest CAG report. This shows that the very projection of the government'sfiscal deficit was erroneous. The report rightly pointed out that either under-performance or poor budgeting or both are the reason for this situation. Large unspent provisions were in areas like debt repayment, transfer of funds to states, payments in financial institutions, police, and defence spending. The ministries have attributed the failure to utilise funds to the schemes that were not implemented.
Interim Finance Minister Pranab Mukherjee'svote-on-account interestingly coincided with these stinging reports from the Comptroller and Auditor General of India(CAG) which perhaps unintentionally besmirched the pompous poll speech the Minister was made to read on somebody else'sbehalf. The people who messed up the economy, like the Satyam balance-sheet, as BJP leader Arun Jaitley, pertinently castigated, are nowhere to be seen to take the report card. It seems even Pranab Mukherjee did not believe the words he read, for within a week he undid his own promise of reticence in the interim budget ?for the rule did not permit to act other wise?. Then he claimed that he did not want to set a bad precedent. But in his own words he had to violate the Constitutional propriety which he cited earlier to justify not introducing the so-called stimulus package.
Perhaps he may not have been the architect of the new trick. He unveiled the Rs 30,000 crore third stimulus package on February 24, two days before the Parliament session ended to go to the polls. This was yet another half-baked effort to charm the Industry and urban consumer.
With this latest booster dose the total fiscal deficit, according to experts is likely to cross double digit. Politics, is the only priority for the UPA. The CAG reports one after the other has laid bare the bogus claims of the UPA government. The CAG has made copious references as to how the government is manipulating fiscal deficit figures.
Can India trust its future with this irresponsible government? What is the use of a government which cannot act in the face of an unprecedented economic slow down? A dispensation that cannot even give the country a full-time Finance Minister in this hour of crisis? Congress has always believed that governance is nothing but a magician'sbag of mice.
(The views expressed in this column are personal. The writer can be contacted at [email protected])