RIGHT FOCUS, BRIGHT LINING
By Prabhakar Timble
Dayanand Balkrishna Bandodkar,
the first Chief Minister of GOA fondly remembered as Bhausaheb
was a dreamer and visionary. Goans cutting across political
and community lines still believe that the vacuum in leadership
created after the exit of Bhausaheb remains unfilled. This
is despite the fact that about nine politicians donned the
shoes of Chief Ministership and the infamous political carnival
of the 90s which also provided an easy opportunity to old
and fresh entrants to join the ranks of ex-Chief Ministers
and Ministers. In the initial years, the hold of mining and
transport lobby could be seen in budgetary exercises. Later,
the public works contractors lobby followed by the five-star
hoteliers and the builders lobby controlled Goan politics.
With political leadership lacking vision, the uncommitted
bureaucrats of the I.A.S. cadre designed the annual ritual.
Manohar Parrikar, the IIT-bred
politician through his conduct of political and economic affairs
during the last six months and the pre-budget announcements
and consultations had raised the expectations. The Chief Minister
who also holds the finance portfolio through his informal
but shrewd and assertive style of functioning had sent clear
signals that the budget would reflect innovations and reforms
with priority for human resource development, employment,
growth and fiscal discipline. I should say that the technocrat’s
maiden budget which incidentally coincides as the maiden budget
of the new millennium lives up to the expectations.
REVENUE
The Finance Minister proposes
to mobilize additional tax resources of Rs. 80 crores and
non-tax revenue of over Rs. 72 crores over the revised estimates
of the current year. This is being done without a burden on
the common man.
A matter of concern in the
budget every year is the non-developmental spending. As per
the budget estimates outlay on salaries, repayment of debt
and interest payments will account for 83% of the total state
revenue. This actually calls further downsizing of the administrative
machinery and check on public borrowings.
The simplification of the
sales tax procedure wherein dealers with a turnover of less
than Rs. 3 lakhs are exempted from registration and filing
of returns is welcome. Similarly, the provision wherein dealers
with a turnover of less than Rs. 10 lakhs are required to
file only an annual return will reduce bureaucratic harassment
and will give quality time to the personnel in mobilization
of revenue rather than mere administrative work.
"HIDDEN REVENUE"
The Finance Minister rightly
said that he could mobilize additional resources in the current
year by plugging loopholes and tightening the tax and non-tax
collection machinery. This can be truly considered as the
‘hidden revenue". Even with the existing rates of sales
tax and excise levies additional mobilization is possible
if the personnel involved work to targets. Similar is the
case in matters of non-tax revenue such as dues in respect
of power, water and fees and fines imposed under various enactments.
Another aspect of ‘hidden
revenue" is the savings that can arise if structural
reforms are made in respect of tendering of public works.
I say this because my limited study in this field has shown
that the present system of tendering adversely affects the
quality of works by 55%. Under the system of tendering of
roads and buildings the jobs are quoted by contractors at
25% below the estimated cost. The estimated cost itself is
based on the outdated GOA Public Works Code i.e. GOA Schedule
of Rates.(G.S.R.). It is an open secret that kickbacks in
such contracts is around 10%. The contractor has to earn a
profit of at least 20% and hence the citizens get substandard
works despite all supervision, tendering, controls and audit.
There is need of a structural
reform in this area to suck the "hidden revenue".
This could be done by setting up of a PUBLIC WORKS BUREAU
under the Public Works Department. This bureau should fix
rates for all types of public works i.e. government buildings
and roads. The system of tendering should be substituted and
the contractors should be asked to file their applications
at the pre-determined rates pre-determined by the bureau.
The job then of the P.W.D. is to ensure quality standards.
In fact, since the government has set up the Infrastructure
Development Corporation, it would be advisable to change the
procedure of tendering if citizens should get value of the
money spent.
PRIORITIES
Declaring the financial year
as the "Year of Infrastructure, Education and Tourism",
the Finance Minister has set clear priorities. The attempt
is to mobilize additional resources for infrastructure development
through non-budgetary sources through the Infrastructure Development
Corporation. With an initial budgetary support of Rs. 26 crores,
the corporation is expected to complete public works of Rs.
500 crores through the BOOT and BOLT mechanism. The Finance
Minister is therefore planning for opening up the infrastructure
development wing to private initiative. This is necessary
for speedy and qualitative implementation of infrastructure
projects.
The budget has identified
focus areas in Education. Emphasis will be on development
of infrastructure in government schools and aided educational
institutions. Provision of computers has been accorded priority
through an allotment of Rs. 7 crores for the purpose. However,
the process could be hastened if the government announces
schemes for private participation for development of computer
infrastructure in schools and colleges. Suitable amendments
to the Grants-in-aid Code are required so that computer software,
repairs and maintenance and educational CDs are made eligible
for grants. Private managements who invest in computer hardware
should be in a position to charge fees to student users and
the guidelines in this direction can be fixed by the government.
The budget, however, is silent on these aspects.
Under the Tourism sector,
the budget proposes to develop hinterland and eco- tourism
and exploitation of waterways and navigable rivers. This is
a step in the right direction for balanced development of
tourism considering the fact that till now tourism meant only
concentration on beach-related aspects. As a part of the tourism
package there is drastic reduction in sales tax and luxury
tax for hotel industry, but only in the off-peak season of
June to August.
Fully acknowledging that government
cannot be the prime employer, the Finance Minister has launched
the Chief Minister’s Rojgar Yojana and the Deendayal Rojgar
Yojana for the benefit of local youth to take up self-employment.
Information technology and
e-governance would be the thrust area of the future and this
budget promises to take substantial leap in this direction.
SELECTIVE
The Finance Minister needs
to be complimented for being selective in budgetary allocation.
In the matter of providing educational infrastructure support,
the talukas of Pernem, Bicholim, Sattari, Quepem, Sanguem
and Canacona are declared as less-developed talukas. Similarly,
in the matter of new subsidies the talukas of Pernem, Sattari,
Quepem and Canacona are categorized as backward and that of
Bicholim and Tiswadi are treated as less developed. This will
ensure dispersal of industrial activity.
The proposed Labour Welfare
Bill was long overdue to provide security to contract labour.
Now that the Finance Minister has made the announcement, it
is hoped the same will be made effective without further loss
of time. Similarly, the announcement to disallow mining activity
in areas which has result in reckless destruction of agricultural
resources. In fact, the government should take the appropriate
measures for recovery of damages and compensation in addition
to what is proposed in the budget. The announcement of a ban
on issue of fresh licences for new trawlers for one year was
also required.
The Finance Minister has recognized
that wrong type of industries have been provided shelter in
many of our industrial estates. These industries have sucked
our power and water resources, taken the benefit of all government
schemes and have not provided even employment to locals. The
Finance Minister has agreed to put up the draft industrial
policy for public debate very soon.
ADMINISTRATIVE REFORMS
There is need for a positive
approach to administrative reforms. Administrative reforms
do not just mean abolition of posts and downsizing of departments.
It is true that liberalization and privatization has made
many functions of the government redundant. Hence, offices
and departments which have become nonfunctional need to be
immediately abolished or pruned.
We should also understand
that government is now supposed to perform certain new functions
in view of the fall out of new economic policy. Environmental
protection, Consumer protection, crime prevention, health
and social security etc. are areas wherein additional outlays
are required.
Administrative reforms also
mean that professionalism and accountability should pervade
bureaucracy and government servants should be moulded into
"public managers". A budget cannot be expected to
do this. However, unless this is done, no plan or budget can
achieve the desired goals.
DECENTRALISATION
This budget has once again
proved that no government is serious about decentralization
of power and strengthening of local self-governing bodies
i.e. Panchayats, Zilla Panchayats and Municipalities. Though,
the budget speaks of additional grants for Panchayats and
Municipalities, the budget is silent on the total transfer
of functions to these bodies as enshrined in the 73rd
and 74th Amendment to the Constitution and the
amended Panchayat Raj or Municipal Act.
The Finance Minister started
his budget speech by stating that "it is the people who
make the state". If the Finance Minister wants to reach
the heart of the people, the government should take devolution
of powers to the people on top priority basis. Devolution
of powers and resources to the local self–governing bodies
should be done as per the recommendations of the State Finance
Commission and not by the government.
THE ROAD LIES INFRONT
The success of any plan depends
on its implementation. As the Finance Minister has said whilst
concluding the budget speech "This budget is only a direction
of the road to follow---the road itself still lies in front
of us". It would be advisable if the Finance Minister
introduces a system of presenting a performance audit of the
announcements made in the budget along with the annual economic
survey presented prior to the budget. I say this because every
fresh budget makes new announcements and with the passage
of time the tracking is not done.
In the budget speech of 2000-01,
Francisco Sardinha announced the Green GOA Fund, the Plastics
Containment Fund, the Beaches Improvement Fund, the Dairy
Development Fund and transfer of powers to Zilla Panchayats.
Nobody knows what has happened to all these announcements
in the course of the current year.
In the last three financial
years i.e. from 1998-2001 GOA has scored a hat-trick through
legalized defections wherein the government which presented
the budget did not live to implement the same. The Chief Minister
will have to ensure that the administration becomes accountable,
professional and result-oriented. At the same time, he has
the burden of keeping the political flock together. Mr. Parrikar,
your budget has set welcome trends. Take care to see that
tehelka.coms do not overshadow them.
(The writer is a well-known
economist, presently functioning as the
State Election Commissioner,
Goa)
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