India's Irresponsible State Govts

[Guest guest]

The story of our irresponsible governments

By M.V. Kamath

Source: Free Press Journal

 

 

State after state is going bankrupt and the tragedy is that the

average citizen seems blissfully unaware of it; or else he hopes

that someone somehow will come to the rescue and bail out the

recalcitrant administration out of its dire predicament. Maharashtra

is in trouble. So are over half a dozen states. In the northeast

Assam is breathing very hard. In the centre Andhra Pradesh has been

desperately seeking World Bank loans. In the South, Kerala has been

passing through a very difficult period. Some 500,000 government

employees went on indefinite strike since 6 February. The treasury

is empty.

When A.K. Anthony, God's good man if ever there is one, took over

the reins of power from the outgoing Marxist-led Left Democratic

Front he could hardly have known what was awaiting him. Not only was

the Treasury empty, the LDF has left behind uncleared loans to the

extent of Rs. 3532.33 crores borrowed from several institutions like

cooperative banks (1,500 crores), HUDCO (Rs. 1,000 crores), Life

Insurance Corporation (Rs 800 crores), NABARD (Rs 700 crores) and

Gramin Banks (Rs 500 crores). Additionally the LDF had gobbled up

Rs. 500 crores of infrastructure bond it floated. Now Antony is

really and truly in the soup.

 

In 1996 the salaries of government employee was of the order of Rs.

2,230 crores. By 2001 that had risen to twice the amount, to Rs

4,416 crores. Revenue collection (including the Centre's aid of Rs.

2500 crore) in the current year is around Rs. 10,000 crore while the

expenditure is billed at Rs 13,000 crores. The revenue deficit in

1996 was a mere Rs 482 crores while the figure for 2001 is to the

tune of Rs 3,634 crores. And the public debt has risen to Rs 29,000

crores and is going up and up.

 

The borrowings have been so high - and unpaid - that recently Indian

Airlines would not issue a flight ticket to Chief Minister Antony on

Treasury Account because past bills had not been paid! Can there be

a more shameful situation? Instead of doing something about it all,

politicians are blaming each other. The UDF leaders charge the LDF

of looting the state. But Antony's own rivals in the Congress - has

anybody heard of Karunakaran? - and the Opposition, charge the UDF

with financial bungling. Antony is caught in a cleft and is looking

for answers. The truth is that the Leftists have misgoverned Kerala

to an unbelievable extent.

 

Money was spent lavishly as if there is no tomorrow. Party workers

had to be kept fed, so they were provided jobs in an already over-

staffed administration. Schools were opened where there was no need

for them. It was worse than Vote Bank politics. It was plain and

simply irresponsible government. That any sane public institution

went to the LDF government's rescue without checking up on its

credibility, speaks volumes for the way these institutions are

functioning. Is there no accountability anywhere in this country?

Antony has taken some faltering steps, rousing opposition ire. Thus

his government has withdrawn certain facilities like leave

encashment and housing loans for its employees.

 

The retirement age will be held at 55 and not at 58 as has been the

demand. About 2,000 uneconomic schools are to be closed. To show

that he means business Antony has decided to slash Ministers'

salaries by as much as 20 per cent. Actually he should also reduce

the number of Ministries. Their trips to Delhi and abroad have been

severely curbed. Ministers will not be given ISD phones and

henceforth they will be allowed only one STD phone instead of two.

Again, Ministers must be encouraged to talk less and work more.

Ministers in the forties and fifties worked just as - if not more -

efficiently than Ministers do today. So much for Kerala.

 

Take Andhra Pradesh. It is considered a progressive, developed,

state. And what is its record? The state government is caught in a

major debt trap. The budget for 2002-2003 plans to set aside 85 per

cent of revenue to pay of debts.

 

The government will be spending Rs. 7,521 crores in debt servicing

alone during 2002-2003 as against the Plan outlay of Rs. 8,838

crores. Money in the till is disappearing. As a stop-gap arrangement

the Andhra Pradesh government is seeking Rs. 1,200 crore loan from

the World Bank and another Rs. 470 crore from the Department for

International Development of the United Kingdom. To satisfy the

World Bank it will cut revenue deficit to less than 2.3 per cent of

GDSP in 2001-2002 and 1.7 per cent in 2002-2003. It will keep public

guarantees, except in power, at zero level and reduce state staff by

1.9 per cent in each fiscal year. Other steps have also been

recommended. The situation in Assam is worse still. The state is in

a total fiscal mess.

 

It is said that the Assam government spends more on the medical

bills of its 5 lakh-odd employees than it does for the health care

of the entire state. How come? All this mess can be traced to two

major factors: Establishing Vote Banks and pretending to establish

a 'socialistic' pattern of society. What has been true of every

state, but more so in states ruled by Leftist governments as in West

Bengal and Kerala. In Kerala out of 111 Public Sector Units, only

seven make some profit. The rest - one hundred and four - are in the

red. Is anyone accountable for this situation? Ever since

independence people have come to entertain three myths. One that the

government owes everyone a decent living.

 

Two, that governments have enormous financial resources just waiting

to be tapped, and three, the government exists to take care of its

employees. The time has come to disabuse the minds of people,

especially government employees, about the aim and purpose of

government. The primary purpose of a government is to maintain law

and order. That is - and should be - at the top of its agenda. It

should facilitate the setting up of industries that generate job

opportunities. A government is not there to create jobs; it is there

to help others to create jobs. A government is not there to be

blackmailed by employees' unions for more and bigger pay packets.

 

And a government is not a zamindari, with hardly any income but

which insists on keeping a vast retinue of servants who have no work

but continue to be on the payroll. For over 500,000 Kerala

government employees to go on an indefinite strike is sickening, to

say the least. Several hundreds of them must be sacked or, as a

measure of goodwill, asked to take voluntary retirement. Thereby we

may not only get a streamlined government but, even more

importantly, an efficient government that knows how to do its job.

And, hopefully, there will be less corruption.

 

It is not that there are no employment opportunities outside the

government. There are - and in plenty. According to 'Business World'

(11 February) there are 1,00,000 jobs available every year in

customer interaction services, BPO, transaction processing,

multimedia and animation, 12,000 jobs a year for patient care

coordinators, insurance coordinators, ward specialists and

paramedics, some 1,00,000 jobs a year for surveyors, claims

processors and other agents, one million jobs a year for

merchandisers, front-end executives, supervisors and store managers

and 35,000 jobs this year for RF engineers, network specialists and

marketing and sales personnel.

 

These jobs obviously require a little expertise and a lot of

commitment and dedication. They are not meant for time servers and

political appointees. According to this Journal, British Airways

subsidiary World Network Services (WNS) had a modest start in 1995

with a team of 12 (twelve) but today it has swelled to 1,600 and it

is hoping to nudge the 12,000 figures by 2005.

 

And consider, too, what happens when Public Sector units are

privatised. In one year PSU shares have shot up sensationally. On

Dec. 31, 2001 the price of a BEML share was Rs. 17.25. On Feb. 15,

2002 it shot upto 53.50. Consider the rise in price of shares of

other companies at the end of 2001 and on Feb. 15, 2002. Bharat

Electronics Rs. 82.80 (Rs. 139.45) BHEL Rs. 140.60 (Rs. 196), Bharat

Petroleum Rs. 189 (Rs. 306), Container Corporation of India Rs. 147

(Rs. 271), Engineers India Rs. 80 (Rs. 168.70), IBP Rs. 408 (Rs.

883) and so on. Private companies or private majority share-holders

will enforce discipline in the working force and demand efficiency.

The world knows it. So should workers.

 

For years our irresponsible politicians have played havoc in job

placements. PSUs have been forced to take on workers on the

recommendation of politicians whether the PSUs could afford to

overstaff their administration or not. A PSU was taken as

a 'kamadhenu'- the cow of boons. PSUs have been not only milked dry,

they have been practically reduced to skin and bones. It is time for

politicians to be called to order and our citizens to know their

duties and responsibilities.

 

Especially if our industry has to compete with China which is

flooding the Asian market as a whole with cheap goods. Workers have

to learn to give their best and help produce excellent products at

reasonable costs. And governments, in particular, have to give the

lead in this matter, whoever is in power. But the first duty of any

government in any state is to get to be solvent. A debt-ridden

government reflects poorly on not just a political party but on all

the citizenry. It is a point worth remembering in the days and

months ahead.