FM gets free hand on budget draft

New Delhi, February 11: | Updated: Feb 12 2002, 05:30am hrs
Finance minister Yashwant Sinha doesn’t have the Prime Minister or the PM’s aides looking over his shoulder in this budget. Instead, Mr Sinha is being provided support from the PM’s aides, when he needs them, and essentially left to write his own draft. Therefore, it would be Mr Sinha’s budget draft, which would go to the Cabinet this time for approval at the political level. The practice until last year was that a top PM aide like NK Singh would whet the finance ministry’s plans at the pre-cabinet stage and would even provide Mr Vajpayee a bullet-by-bullet counterpoint to the key proposals. Often, the counterpoint would prevail.

Rather than influence this year’s budget, Prime Ministerial aides, alongside Cabinet Secretary TR Prasad seem involved in creating ‘a long list’ of reforms for fiscal 2002-03 for the Cabinet Committee on Economic Reforms (CCER), possibly as a pre-budget adrenalin on economic sentiment.

It is learnt that the first such draft is ready, and will reach the facilitation group of secretaries attached to the CCER this week. This group of secretaries will mull over which of these proposed agenda items should be taken on board. They would also assign tentative feasibilities and priorities. A group of ministers will then re-visit their recommendations from a political point of view. Once that’s done, the CCER will try and ink binding commitments with concerned ministries, and if all goes to plan even evaluate them at the end of the fiscal. “Indeed, predictability of reforms is a priority. Also, our interest is now more in creating and then institutionalising a compact with each ministry, but not at the level of nails and screws,” an aide said.

The conceptual division of this priority agenda on reforms will be a) areas that are experiencing cobwebs and pervasive distortions, leading to unutilised potential, b) areas where reforms have been on the government’s radar screen, but there hasn’t been definitive enactment, c) areas where the impact in the long-term has created distortions, and a reversal of course is required now.

Simultaneously, the Cabinet Secretary will try to finalise recommendations from a task force under petroleum secretary VK Kaul on a re-jig plan that identifies cumbersome regulatory processes that are throttling both government and private projects. Inputs to Mr Kaul have been outsourced. First, consulting firm McKinsey is being paid by the government to review the so called ‘upstream processes’, like preparation, review, and approval of public sector projects. McKinsey’s deadline is Friday.

Second, collaborative case studies in the so called ‘downstream processes’ have been made on hassles like securing land, water, power, fuel, and eco-clearances for projects, at the level of centre, the states, and municipal levels too. Covered here are important sectors like power, roads, and telecom. The case studies —a sort of ‘Let me tell you what I went through’— are being collected by CII, Ficci, Assocham, NTPC, and the IDFC, the synthesis coming from consultant AT Kearney.

Is this a big deal Well, it’s supposed to. The input on ‘upstream’ and ‘downstream’ sides is expected to re-design regulatory processes across all sectors, and all major projects in the country.