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B. S. Raghavan

THE Finance Minister, Mr Yashwant Sinha, will be the first to admit that by effecting savings within the Government itself, he will be able to lessen the pressure on resources to a great extent. There are many avenues that immediately suggest themselves.

The first is subsidies and levy of user charges. Even if he does not want to touch them just yet, there are a host of fringe benefits of various kinds — railway and airline passes, concessional rents for official quarters, heavily scaled down prices for goods and services — enjoyed by government employees whose affluence bears no relation to the pathetic plight of the Common Man. One estimate puts the accrual to the Government by the abolition of these benefits which have long lost their rationale to amount to as much as Rs 7,000 crore.

Grasping the nettle

The Finance Minister can no longer avoid grasping the nettle of downsizing the Government from top to bottom, instead of carrying on the charade of being both for and against it. In fact, this is one aspect of governance on which he should prevail on his colleagues, leaders of political parties and associations of employees to do some soul-searching. Whatever methods of persuasion he adopts — and this is an issue justifying his resignation if he does not have his way — he should get going within the shortest possible time.

The Geethakrishnan Committee's recommendations as well as the examples of the National Performance Review undertaken by the Clinton Administration in the US are already before him. He can take heart from the fact that in the course of reinventing the Government, the former US President, Mr Bill Clinton, and the Vice-President, Mr Al Gore, did not hesitate to axe more than 300,000 posts throughout the federal hierarchy.

Those retained in their jobs in the US were then subjected to stringent performance standards and their failure to measure up to them resulted in their being sacked forthwith. If a genuine and open democracy such as the US, with its bill of rights, trade union rights and human rights, can be so hard, there is no reason why India should be so timorous to cut the flab. The surplus staff can be either given generous severance benefits or retrained and redeployed in vacancies that must exist in the sprawling leviathan that the Government has become.

New National Agri. Commission

No Common Man-centric Budget can ever ignore agriculture and allied activities, as they are at once a source of livelihood for more than 70 per cent of the population, a guarantor of nation's food-cum-nutrition security, a stimulant of demand for a variety of goods and services, and for that reason, a powerhouse driving the economy as a whole. Its growth has fallen from 9 per cent in 1996-97 to 3.4 per cent during April-September 2001, pulling down along with it the prospect of GDP growth as well. This has cast serious doubts about achieving the hoped-for growth of 7 per cent in agriculture in 2001-02. Considering that every percentage point growth in that sector puts an extra Rs 10,000 crore into rural pockets, the enormous damage resulting from a slide can easily be imagined.

`Unfinished agenda'

Mr Sinha has admitted that "the most important unfinished agenda is in the agricultural sector". His innovative Kisan credit card scheme seems to have taken off with the issue of nearly two crore cards and advance of Rs 40,000 crore to the farmers. He has not been wanting in efforts aimed at revamping cooperatives and rural banks to accelerate the flow of credit, giving a fillip to food processing and establishing a national post-harvest storage grid.

If with all this, the record in agriculture is uneven, it can be ascribed, in the main, to two factors: First, the tardiness in fitting the ongoing schemes into a comprehensive design encompassing among other measures: A common market for agriculture; freedom to the farmer to sell whatever and wherever he wants within or outside the country; a minimum support price policy which will promote diversification and a proper mix of food and cash crops; introducing modern practices and facilities in agricultural marketing; decentralised procurement; and providing incentives for the use of advanced technology.

Second, and a harder nut to crack, is that the Centre does not have the final say in matters pertaining to this sector, and can accomplish little without the States coming forward to extend their support in a spirit of partnership. For instance, the idea of decentralised procurement is stoutly resisted by both surplus and deficit States for their own separate sets of reasons. Mr Sinha, no doubt, will use the Budget to carry forward many of his earlier initiatives and secure the cooperation for some new ones; but it will essentially be a fragile exercise, apt to come unstuck, unless its various components are blended into a mutually beneficial package acceptable to both the Centre and the States.

This task is complex and will require close application of mind to a cornucopia of specifics in the light of the latest advances in science and technology and farm management, and in keeping with the WTO's protocols on intellectual property rights and investment measures.

It is time the Government set up a National Agricultural Commission to take into account the sea change that has occurred since the last one submitted its report, and come up with recommendations covering the entire gamut of policies and programmes covering agriculture and related issues.

Self-help groups

Curiously, the Finance Minister, in formulating his earlier Budgets, has failed to note the multiplier-effect of a development that has a tremendous bearing on the financial muscle of the people living in villages. And that is the micro-credit movement that is spreading like forest fire in the whole of South-East Asia and has given to ordinary folks outside the ken of the government and corporates alike a sense of power and purposefulness, and confidence to stand on their own legs. A preponderant proportion of the estimated annualised credit requirements of the 60 million households below the poverty line amounting to Rs 45,000 crore is capable of being met by micro-finance, if only self-help groups receive the active encouragement they deserve.

They have impressively demonstrated their quick grasp of entrepreneurial skills and productive as well as profitable management of resources, even making forays into insurance with highly innovative products. They are poised not only to take an immense load off the Government's obligations, but also to forge symbiotic linkages with the best and the biggest of private sector enterprises.

The first among them, Hindustan Lever, has successfully adopted the Grameen Bank concept to boost the demand for its products in areas where they had no presence before. Other corporates are jumping on the bandwagon as they find that joining hands with self-help groups gives them access to hitherto unexplored territory and expand their distribution networks. Besides, support to rural self-help groups directly leads to alleviation of poverty and reduction of disparities in purchasing power. "For people in rural India", as one of the reports puts it, "this translates into critically needed sustainable jobs contributing to better living standards and prosperity." The Finance Minister will find in self-help groups very powerful allies gifted with creativity and imagination, and he will do well to press them into service to achieve his goals.

Afghan reconstruction

Finally, one passing word on the ever-broadening vistas for investment and returns opening up in Afghanistan. In the next two-three years alone, an amount exceeding $3 billion (Rs 15,000 crore) is proposed to be ploughed into the reconstruction of that devastated nation. It will call for some quick-footed agility on the part of India to have a good share of this pie which can then induce a reverse flow of resources for all that the Finance Minister has in view. However, there are certain conceptual and psychological barriers to be crossed while framing a Budget with Common Man as the centre-piece. The first and foremost is to get rid of any hang-ups about deficits. Conventional wisdom is, no doubt, fixated on balancing the Budget, if a surplus is not immediately attainable. The Finance Minister has, in recent weeks, been veering away from any morbid obsession with utterly illogical prescriptions of magical percentages governing fiscal deficit. A deficit is as a deficit does, and a country like India with low inflation, on a trajectory of growth, and endowed with abundant natural, human, material and technical resources can afford to take some liberties with the deficit so long as it creates assets.

Mission possible: Prosperity

The second mental block is proclaiming the true nature of India's mission. It is not just eradication of poverty. The Finance Minister can electrify the people by coming out loud and clear that India's mission is to usher in a glorious era of prosperity here and now, without being mealy-mouthed and wishy-washy about it. India deserves nothing less.

(Concluded)

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