Plenty of cream for India's fat government

Raja M 

Inflation and prices are at an all time high and the government is appropriately alarmed. The Prime Minister has called for some discipline and cutting the costs while traveling abroad. But clearly this is not enough as much more wasteful expenditure takes places routinely in the form of security to VIPs and electricity bills of various official establishments. The first step should begin from there. 

Prime Minister Manmohan Singh, faced with inflation at a 45-month high and a pummeling of the ruling United Progressive Alliance government by opposition parties, has urged his ministerial colleagues to slash costs by cutting out conferences in five-star hotels, foreign trips, advertisements (usually boasting governmental "achievements") and overtime allowances.

The prime ministerial order for belt tightening came after the government raised petrol and diesel prices by 10% on June 4, adding to inflation already soaring over 8%. The fuel-price increase was so politically sensitive that the prime minister had to justify the rise to the nation on live TV.

Terming the follow-up ministerial cost-cutting drive as a "moral duty", Manmohan pointed to the "the huge burden imposed on our financial resources due to the continuous rising trend in global oil prices and our dependence on import of crude".

He urged colleagues" "I am, therefore, writing to ask you to severely curtail expenditure on air travel, particularly foreign travel, except in cases where it is deemed to be absolutely necessary."

Frequent "official" trips abroad are a big drain on public money. Ministers, bureaucrats and elected representatives fly business or first class on such journeys (usually "study" tours) and run up average daily expenses of over US$1,000, staying in luxury hotels and having their shopping bills picked up by the local Indian embassy.

Following the prime ministerial cost-cutting shout, cabinet ministers cancelled foreign trips for reasons that pointed to the kind of wastage. Finance minister Palaniappan Chidambaram was to head to the US for a Stanford University seminar. Tourism minister Ambika Soni scrapped a visit to San Francisco and Los Angeles to attend a dance festival and a function of the American Association of Physicians of Indian Origin.

Manmohan's austerity call, dismissed by cynics as too little too late, is expected to save the federal government $110 million in non-budgeted expenditure, a fraction of the wasteful spending it runs up every year.

''Petrol hike or no hike, there should not be any wasteful expenditure," said Tapan Sen, a member of parliament belonging to the Communist Party of India (Marxist), a governmental ally. "This just sends out the impression that if oil was not so high, then all this would be allowed.'

India's central government costs spin on a continuous upward spiral. Total expenditure of ministries and related departments climbed to $175 billion in fiscal 2008-09 from $166 billion a year earlier and $136 billion in 2006-07, according to the Ministry of Finance. Net central government tax revenue rose 23% to $375 billion in 2007-08 compared with a year earlier.

Total expenditure for the first half of 2007-08 rose to $74.45 billion, compared to $59 billion during the corresponding period in 2006-07, "signaling a relatively higher pace of expenditure, as in preceding years," a finance ministry report observed.

Taxpayers feed bloated federal and state governmental cabinets, with ministerial berths generally handed out as sops to enlist coalition partners. Manmohan runs a fat ship, with 104 ministries and related departments, including 50 cabinet ministries with curious super-specialties such as Ministry of Statistics and Programme Implementation and Ministry of Food Processing Industries. In contrast, the United States has a 15-member cabinet to run a superpower.

In 2005-06, India's federal council of ministers ran up a non-planned expenditure bill of $45 million, including security and administrative expenses, tour expenses ($11 million), Prime Minister's Office ($3.8 million) and security from the Special Protection Group of commandos ($24.3 million). The ministerial tab for 2008-09 is $50 million. Non-plan expenditure, according to the governmental definition, is a generic term to cover governmental expenditure not included in "plan" or the annual budget.

The non-plan expenditure of the President, Parliament, Union Public Service Commission and the secretariat of the Vice-President surged 149% to $46 million in the nine months to September 2007 from the corresponding period in 2006.

Taxpayers seemed unimpressed with the prime minister's austerity act following the fuel price increase. "I have often seen bureaucrats traveling in Sonatas, Camrys, Skodas. Isn't this a gross waste of tax-payers' money?" Pravav Sharma demanded in a letter to the daily Indian Express on June 5.

Luxury cars are favorites in government circles. On January 9, the Department of Expenditure in the Finance Ministry circulated an office memorandum including a Ford model in an expanded list of approved air-conditioned cars that can be purchased as staff vehicles. "It is reiterated that the approved models of AC category of staff cars can be used only by the Ministers and officers of the level of the Secretary to the Government of India and above," the memo said.

Abuse of official cars and other property is rampant, and does not escape notice. "You go to any prestigious private school in Delhi and you will find tens of government cars waiting to pick up kids of bureaucrats and politicians," said Kuldip Sharma, another indignant newspaper letter writer. "You go to any market you will see tens of cars with wives of these people shopping in official cars. Just stop this misuse of official cars and see the huge amount of oil that is saved."

"Thirty-three percent of total cars on road are government property and they are running on petrol paid by income-tax payers," bristled Sharmila Jain, another member of Club Public Outrage. "Government servants enjoy cost-free rides in cars at people's expense."

Increasing the misuse of cars and wasted fuel are the security details assigned to politicians who use their entourage as status symbols. The highest Z+ category entails a security cover of 36 personnel, the Z category 22 personnel, the Y category has 11 body guards and the X category two. The cost of security is conservatively estimated at more than $23.4 million each year.

The misuse of security status symbols continues among state governments, with one of the worst offenders being former Tamil Nadu chief minister and present opposition leader Jayalalitha Jayaram, who has been seen travelling in convoys of over a hundred cars (with public traffic being held up en route as her royal highness passes by).

Jayalalitha, a former movie star, is, albeit unmarried, India's version of Imelda Marcos and has much in common with the former Philippines first lady, including a regal lifestyle at public expense, serious corruption charges and a fetish for shoes. A police raid on Jayalalitha's residence after her party lost an election produced 750 pairs of shoes, along with 500 wine goblets,10,500 saris, 700 gold bangles and other gold objects weighing 28 kilograms, 800 kg of silver, 91 watches, 19 cars and a mini-cinema.

India's tolerance level with corruption is so unfortunately high that Jayalalitha was elected back to power, lost it again in 2006, but could find herself back as chief minister, helping her no doubt to add to her shoe and jewellery collection.

Prime minister Manmohan Singh has yet to make any reference to thousands of politicians living in grand government-owned property, often beyond their elected tenure. It has been suggested that members of parliament (numbering 780) be dumped together in hostels.

It has also been suggested ministers could be housed in the sprawling Rashtrapati Bhavan, India's presidential palace, and save hundreds of millions of dollars in residential and security costs. The 340-room Rashtrapati Bhavan, once the British viceroy's residence and now the home of the democracy's president, is symbolic of India's showy and wasteful governmental luxury. In a country where a majority of the population earn less than $1each day, and where the capital suffers from power cuts, the Rashtrapati Bhavan electricity bills for the past five years have totaled $3.7 million, according to information accessed by Mumbai resident Chetan Kothari on March 26 through the Right to Information (RTI) Act.

The fact of the matter is that more stringent steps, in tune with reality, need to be taken than what has been suggested by the Prime Minister. It is time to get out of tokenism and act meaningfully and substantially so that there is no disconnect between the poor multitudes and the elected few.