Making a budget is a task that can be completed with diligence and patience. Making promises — as well as declining to do so — in a budget speech...
Making a budget is a task that can be completed with diligence and patience. Making promises — as well as declining to do so — in a budget speech can be done with a mixture of tact and firmness. Allocating money for the promises that demand only small amounts is relatively easy because it will not strain the fiscal deficit. It is keeping the promises made in the budget speech that is the most difficult task of a finance minister.
What looked eminently do-able when the budget speech was written suddenly faces insurmountable hurdles. The minister (of the department) who insisted on the allocation discovers that his department is totally unprepared. The finance minister is perplexed if the money is not spent. The prime minister is upset that his ministers have let him down. The budget division’s mandarins chuckle quietly among themselves but wear a grave demeanour at a review meeting. It is only the department of expenditure that is genuinely happy that it has saved money for the government! This is a story that has been told many times before.
Learning on the job
Every finance minister (including this writer) is allowed one budget to make mistakes and learn on the job! Mr Arun Jaitley got his chance in the budget for 2014-15.
Counting the mis-hits is a fun sport. The trick is not to lose one’s cool (especially the finance minister’s) when the mis(takes)-hits are pointed out and counted!
How did Mr Jaitley score in his first budget? Here is a quick count (subject to errors and omissions):
Announce and forget
Let me begin with the ones that can be characterised as “Announce and Forget” schemes. They are one-day wonders that nobody will care to ask about after a few weeks and certainly not after the year is over and it is time for the next budget! Examples:
* A war memorial was announced, Rs 100 crore was allocated, but it is yet to receive Cabinet approval.
* A Technology Development Fund to support R&D in defence systems was announced, Rs 100 crore was provided, nothing was spent, and the allocation lapsed.
* The budget provided Rs 50 crore for a National Police Memorial, RE was Rs 50 crore, which means the sum was spent, on what we do not know, but where is the memorial?
Never say die
There is another set of announcements that can be labelled “Never Say Die”. A scheme is announced, money is provided, not much — in some cases nothing — is done during the year, but the department won’t give up, so money is allocated reluctantly in the next year too, but in some cases for a toned down scheme (see table). Some of them will be “rationalised” or given a quiet burial in due course!
Big ticket items
That brings me to the last set of announcements. These are the big ticket items that are the pride of the budget. Let’s see how they fared in 2014-15:
Mr Jaitley’s speech gave top billing to the Pradhan Mantri Krishi Sinchayee Yojana. He announced Rs 1,000 crore for the programme. According to the 2015-16 budget papers, only Rs 30 crore was spent. The budget for 2015-16 has allocated Rs 1,800 crore.
There is no bigger icon for the BJP than Mr Deen Dayal Upadhyaya. The government announced the Gram Jyoti Yojana for feeder separation in his name, allocated R500 crore and claims to have spent the whole amount. What is surprising is that nothing has been allocated in the current year. What does that mean? Has the feeder separation been completed all over the country?
Smart Cities was another big idea. For that, and for JNNURM, the allocation was Rs 7,016 crore. However, only Rs 924 crore was spent in 2014-15. The budget papers for 2015-16 show that the old head will get only Rs 143 crore this year and two new heads have been created with an allocation of Rs 5,939 crore.
I do not claim that all budgets in the past were models of transparency. Nevertheless I say that the NDA, which came to power on the plank of greater transparency and effective implementation, has a considerable distance to travel to fulfil its promises.