Blog

05 DEC 2014 :

I sent to Shri Jaitleyji , my following blog :

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

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

Tuesday 6 February 2018

AN OBJECTIVE GOVERNMENT ?

Friday 2 February 2018

Wealth : Ownership & Distribution