AN OBJECTIVE GOVERNMENT ?

05 DEC  2014 :

I sent to Shri Jaitleyji , my following blog :

BUDGETING     BY   OBJECTIVES

https://myblogepage.blogspot.com/2014/12/budgeting-by-objectives.html

In that email , I urged that in his  Feb 2015  Budget , he shift the emphasis from  :

 “  Spending ( Expenditure )  “  to  “ Objectives ( Outcomes ) “

In my email , I gave some illustrations of “ Quantifiable / Measurable Objectives “ as follows :


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*  FINANCE  MINISTER

*   GDP ..... 6 % ............ [ 10 % improvement ]

             *   CAD.......( -  ) 5 % .....[ 20 % improvement ]

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*  COMMERCE  MINISTER

            *   Exports........ $ 350 Billion  ....  [ 10 % improvement  ]

            *   FDI..............$    50 Billion...... [  20 % improvement  ]

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 *   RAILWAY   MINISTER

            *   Lengths of Tracks...... 125,000 Km.....         [  Up by 10 %  ]

            *   No of Passenger Trains / day..... 10,000... [ Up by 10 % ]


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*   HEALTH   MINISTER

            *   Chronic Hunger and Hunger Related Deaths

                  8 Million / year .................................... [  Down by 20 %  ]

            *   Under-nourished people..... 200 million..... [ Down by 10 % ]


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*   SOCIAL   WELFARE   MINISTER

            *    Dowery Deaths / year....... 8,000...... ...... [  Down by 10 %  ]

            *    People without Toilets........ 500 Million....  [  Down by  20 % ]

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 *   AGRICULTURE   MINISTER

            *    Farmers Suicide/ year..... .. 14,000...............  [ Down by 20 %  ]

            *    Food Grain rotting / year..... 5 Million tons.....  [ Down by 20 %   ]

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14  MONTHS  LATER

 In Global Business Summit (29  Jan  2016 ) , Shri Jaitleyji said : 

“We will introduce Structural Reforms in the forthcoming Union Budget "

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24  MONTHS  LATER  :

Business Line ( 07 Dec 2016 ) carried following report :

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" Outcome Budget norms tightened; Deadlines will be set to meet Objectives "

" In order to improve the quality of public expenditure, the Finance Ministry has tightened norms under which each ministry and department will have to prepare an Outcome Budget in consultation with NITI Aayog to achieve certain OBJECTIVES within a TIME FRAME .

As per the Ministry’s directions, every ministry will have to prepare an Outcome Budget statement linking outlays against each scheme as well as project with the DELIVERABLES and medium term OUTCOMES .

A Finance Ministry official, involved in Budget making, said every “allocation for scheme/project will be against a firm set of DELIVERABLES which will need to be adhered to”.

The ‘Outcome Budget’ is to be prepared after finalisation of the estimates for budgetary allocation, the official added.

“The OUTPUTS/ DELIVERABLESV should be mandatorily given in MEASURABLE / QUANTITATIVE terms based on parameters and deliverables DECIDED IN ADVANCE in consultation with Department of Expenditure and NITI Aayog,” the official said.

Through “outcome-based budgeting”, the Ministry is trying to shift from traditional performance-based budgeting by planning expenditure, fixing appropriate TARGETS and QUANTIFYING DELIVERABLES of each scheme.

The outcome-based one will outline what can be achieved with what is being spent and will involve the process of defining the desired long-term outcome of schemes of various ministries. "


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38  MONTHS  LATER

Now , in just presented Budget 2018 , I find that Shri Jaitleyji has set following OUTCOMES :


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• Ayushman Bharat Health Insurance Scheme

#   Cover 10 crore families (50 crore persons) for Rs 5 Lakh


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• Ujjwala Yojana

#   Free LPG cylinders to 8 crore poor women (up from 5 crore)


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• Saubhagya Yojna

#   Free Electrical connection (not free electricity) to 4 crore families


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• Farmers MSP

#   50 % more than cost of production 


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• Gramin Agricultural Markets

#   Develop and upgrade existing 22,000 rural haats



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• Organic farming

#   Set up large clusters, preferably of 1000 hectares each

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• Agri Exports 

#   To increase from US $ 30 Billion to US $ 100 Billion


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• Kisan Urja Suraksha Utthan Maha Abhiyan [ KUSUM]

#   To convert 30 million farm pumps ( 10 million running on diesel and 20 million running on grid-supplied electricity ) to Solar Pumps , to generate 10,000 MW of Solar Power ( surplus of which farmers can “ Sell “ back to DISCOMS )


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• Swachh Bharat Mission

#  Government is planning to construct around 2 crore toilets. 


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• Prime Minister Awas Scheme

#  Rural > 51 lakhs houses in year 2017-18 and 51 lakh houses during 2018-19

#  Urban > To construct 37 lakh houses.

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• Prime Minister Krishi Sinchai Yojna- Har Khet ko Pani 

#  96 deprived irrigation districts where less than 30% of the land holdings gets assured irrigation presently


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• Employment

#  Create employment of 321 crore person days


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• Rural Roads

#   3.17 lakh kilometres 


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• Right to Education Act

#  More than 13 lakh untrained teachers to get trained.


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• Ekalavya Model Residential School

#  In every block with more than 50% ST population and at least 20,000 tribal persons



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• Schools of Planning and Architecture

#  18 new SPAs would be established in the IITs and NITs


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• Prime Minister’s Research Fellows (PMRF)’’ Scheme

#  1,000 best B.Tech students each year from premier institutions and provide them facilities to do Ph.D in IITs and IISc, with a handsome fellowship 


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• Quality Medical Education

#   Setting up 24 new Government Medical Colleges and Hospitals 


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• Prime Minister Jan Dhan Yojana

#  Bringing all sixty crore basic accounts within its fold


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Finally, we see a “ Change of Attitude “ on part of the Ministers / Bureaucrats

An attitude of holding themselves “ personally accountable “ , not only to the Prime Minister but to the entire nation !

Accountable for actual achievements against “ quantifiable / measurable “ targets set at the beginning of the year

This “ ATTITUDINAL  CHANGE “ is a reform which is much bigger than De-Monetization or GST  ! Its beneficial effects will continue to be felt for decades to come !

I hope this is just the beginning and by April 2018 , Shri Jaitleyji will put in place a mechanism that answers the following issues that I had raised in my email to him , 38 MONTHS ago :


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“ Actual vs Targeted “ achievements must be measured , on an on-going basis , by totally independent THIRD PARTY agencies

Ministers / Finance Minister and these Agencies , must agree in advance , how the Agencies will go about " measuring " the Actual Achievements

The method of measurement must be transparent and well publicized in advance

Agencies shall have no role in fixing of Annual Targets 

*   There must be at least 10 performance parameters for each Minister

*    Parameters themselves could be selected / prioritized, based on an,

ONLINE PUBLIC SURVEY / OPINION POLL , from Govt web site

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MEASUREMENT OF ACTUAL  ACHIEVEMENTS : 

In  March 2015 , government launched a web site ,

https://pragati.nic.in/pragati/loginPage#nb  

with a banner that reads :

“ Pro Active Governance and Timely Implementation “ 

It records “ Minutes of Monthly Meetings “ held by PM with the officers of the concerned Ministries for reviewing the progress of implementation of various projects

Unfortunately, one cannot make any sense out of these “Minutes“in respect of ,

*   percentage completion (against target) 

*   probability of achieving target

For ease of understanding by even ordinary citizens, I suggest that each concerned Ministry (responsible / accountable), put up on its web site, a graph such as following illustration.

This graph should be updated with a dotted line (representing actual cumulative achievement) below the solid line (representing cumulative targets) for each month of 2018-19:

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06  Feb  2018 

www.hemenparekh.in / blogs 

Wealth : Ownership & Distribution

Last few weeks saw media reports from Oxfam / New World Wealth , re: ownership of world’s wealth among its population

From reports published in Times of India / Business Line / DNA , I tried to piece together , following figures for India

INDIA POPULATION ( 2016 ) :

·         100  %   ………………………………………. 1324  million

·              1  %  …………………………………………..  13  million ( rounded off )

·            99  %  …………………………………………. 1311  million

INDIA TOTAL  WEALTH :

·         2016  …………………………………………..   $   6,600  Billion

·         2017  …………………………………………..   $   8,230  Billion ( $  8,230,000  million  )

2016  SCENARIO  :

Finding :  India’s  1 %  of persons held its 58 % of wealth ( in 2016 )

Implying :

·         13 million Indians ( 1 % ) ,  held $ 3,828  Billion = $ 3,828,000 million ( 58 % )  of wealth

·         So , each of these Indian held  $ 294,000  of wealth !

·         Balance 99 % of Indian held 42 % of the wealth

·         So, 1311 million Indian held $ 2,772 Billion = $ 2,772,000 million  of the wealth

·         So, each of those poor Indians held $ 2082  worth of wealth  !

WHAT  IF  ALL THE  WEALTH  WAS  EQUALLY  DISTRIBUTED AMONG  ALL ?

·         $ 6,600,000 Million to be distributed equally among 1324 million Indians

·         That would give each Indian , $ 4,985  worth of wealth

·         So each of these poor Indian would get transferred into his account, some $ 2900 ( Rs 1,88,500 ) from those rich Indians ( ie : Rs 15,708 per month for next 12 months )

WEALTH  CORNERED  DURING  2016-17

Finding :

·         Wealth generated during 2016-17

     $ 1.63 Trillion ( $ 8.23 Trillion  -  $  6.6 Trillion ) = $ 1,630 Billion = $ 1,630,000

     Million

·         73 % of generated wealth ( = $ 1.19 Trillion = $ 1,190 Billion = $ 1,190,000 Million ) cornered by 1 % of population ( ie : by 13 million Indians )

·         So , each of those 13 million rich Indians,  “ cornered “, $  91,538 of the Wealth generated

·         Balance 27 % of the wealth ( = 27 % of $ 1.63 Trillion = $ 0.44 Trillion = $ 440 Billion = $ 440,000 million ) , went to 1311 million Indians

·         So , each of those poor Indian managed to “ corner “ , $ 335 worth of wealth

QUESTIONS :

·         Can there be a somewhat better ( less unequal ) distribution of wealth cornered by the rich 1 % of the Indians by taxing them more ( than at present ) ?

·         How much more can we think of taxing the rich , with the sole purpose of obtaining a better distribution of wealth ?

·         If we agree that no amount of additional taxing of the rich , can bring about rationalization of wealth distribution , then what “ other  purpose “ can taxing of the super-rich , serve ?

·         Could that purpose be “ raising of resources “ for Infrastructure building ?

·         If so , how much resources can be raised ( for this Infrastructure Building purpose ) , by how much extra tax on the rich ?

·         If this ( additional tax on the rich ) ,  is unlikely to serve this other purpose , what else can we do to raise resources ( for Infrastructure Spending ) ?

I hope some Economic Experts will come up with an explanation of which “ purpose “ has 2018 tax proposals have managed to address

03  Feb  2018

www.hemenparekh.in / blogs