What we need and what we get

Nor is the Board8217;s experience the only one we have before us. The largest number of sick PSUs is under the charge of the Ministry of Heavy Industries. Every minister who is given charge of this Ministry, when asked at his maiden press conference what his priorities are going to be, intones, 8216;8216;Reviving the PSUs under this Ministry8217;8217;. Each of them has plans prepared. And nothing comes of them. What is the reason to conclude that some new Board will accomplish what successive secretaries and ministers of Heavy Industries and managers of the units have not been able to do?

In any case, we have the sterling example of, to use their phrase for themselves, 8216;8216;the force that had made this Budget possible8217;8217;. Namely, the CPIM and the Government it leads, that of West Bengal. They took over 20 sick firms declaring that they would nurse them back to health in no time. And they set up a Department for Industrial Reconstruction in 1972 to do so. In addition, the Government set up a Standing Advisory Committee to revive the sick units8212;that was in 1983. And then in 1998, the Government set up a third body to help the other two accomplish the revival8212;the Strategic Business Expert Group. In a recent report, the CAG summarises the result of the efforts of the state government during these decades. He reports, 8216;8216;From the financial results of taken-over units, it would be seen that only two units, viz Silpabarta Printing Press and Saraswaty Press Limited, earned a profit aggregating Rs 1.34 crore during 1997-98, whereas the accumulated loss of 18 units on the basis of latest available accounts was Rs 703.78 crore as against the paid-up capital of Rs 65.60 crore of these units.8217;8217; A telling figure that8212;accumulated loss more than 10 times the paid-up capital of units for reconstructing, which not one but three bodies laboured over for years in that most committed of states.

Moreover, what is the help that the PSUs have not been given in the last decade? Over Rs 40,000 crore have been showered upon them by way of 8216;8216;relief packages8217;8217;, and not just once8212;Heavy Engineering Corporation at Ranchi has completed swallowing the sixth revival package. Before putting your faith in Chidambaram8217;s new Board, find the enterprise whose work culture has improved as a result of those Rs 40,000 crore.

The year8217;s most important financial document

8216;8216;Hon8217;ble Members are aware that I abolished the gift tax in 19978230;,8217;8217; declares Chidambaram in his Budget Speech. In fact, that tax was abolished by Yashwant Sinha. When Sinha drew attention to this appropriation, Chidambaram maintained that it was just a mistake. The way he responded one would have thought it was some lower form of life8217;s typing mistake! It was a mistake, he said. I had corrected it. The correction was not carried out. But 11 days had passed between the day Chidambaram had presented his Budget and the day the discussion was taking place in the Rajya Sabha. How come, no one from the Ministry, nor Chidambaram in any one of his appearances over television or his press interviews, had mentioned the misappropriation, and sought to correct it?

Readers have read a lot about PURA in the last few years. Proposed by P Indiresan, it has been popularised by A P J Abdul Kalam and Vajpayee. The acronym stands for 8216;Provision of Urban Amenities in Rural Areas8217;. In Chidambaram8217;s speech this becomes 8216;Provision of Rural Amenities in Urban Areas8217;! The open air and land of the villages to us in the cities? Free power? Or no power? In the document, Budget At A Glance, Chidambaram puts the allocation for the Accelerated Rural Water Supply Programme at Rs 2,900 crore. In his speech, Chidambaram puts it at Rs 2,610 crore. In the Blue Book detailing expenditures, Chidambaram puts the allocation for Rural Sanitation at Rs 360 crore. In Budget At A Glance, he puts it at Rs 400 crore.

The allocation for the Department of Telecommunications was Rs 14,955 crore in the Budget Estimates for 2003/04. This year it has been cut to Rs 11,660 crore. What had the poor department done in the last two months, I wondered, to suddenly deserve such drastic mauling? I am told that what has happened is the following8212;and it illustrates the state of affairs. The amount allocated in 2003/04 included two entries8212;one for the Universal Service Obligation Fund: the resource through which much of the expansion of telecom services in rural areas is to take place; and another for reimbursement of licence fee and spectrum charges to BSNL, the instrument through which almost all the expansion into rural areas is taking place. I had gone to Jaswant Singh for these amounts, and he had graciously extended them. They had been included in the proposals for this year. Later, when discussions took place, the Planning Commission said that these are non-Plan items, and should therefore figure elsewhere in the Budget. Fine. They were taken out of the Plan block, but were forgotten when the amounts were being entered in the non-Plan block! Letters are flying to and fro now8230;

Such claims and discrepancies have become commonplace8212;even in so important a document as the country8217;s Budget. A one-rupee cut motion in the figures given in this document leads to the fall of a government. But what is one to do when, from one document to the next in the set that constitutes the Budget, Rs 300 crore vanish in this entry, Rs 40 crore in another? The other point is illustrated by the fate of Chidambaram8217;s announcements about FDI, by the way he has had to 8216;8216;revisit numbers8217;8217; on the Transaction Tax. This too has become a standard feature of our budgets. It has almost become a game in the last few years. The Finance Minister presents a Budget, and a game starts, 8216;8216;Saale ko kis cheez par roll-back karvaayaa jaye?8217;8217; pack forms, and the Finance Minister is made to take back what he had announced8212;and his announcements are made on behalf of, and with the full approval of the Cabinet. Successive groups demonstrate their power, and to such an extent that future budgeteers dare not touch their interests.

We were chatting the day before Chidambaram8217;s Budget Speech. Someone remarked that Chidambaram would be extending the services tax to bring more services into the tax net. Yashwant Sinha said: 8216;8216;Let8217;s see him try and touch trucking and truck owners. He wouldn8217;t dare.8217;8217; And so, when Chidambaram was reading the services tax proposal in his speech, I was amused to hear him make a point of saying, 8216;8216;I may clarify that there is no intention to levy service tax on truck owners or truck operators8217;8217;! There is no 8216;8216;canon of taxation8217;8217; that says you should, as Chidambaram has done, tax 8216;8216;airport services, services provided by transport booking agents, transport of goods by air8230;8217;8217; but assiduously leave out trucking! The explanation lies in the strike that owners and operators of trucks can engineer.

A posse forms the moment a Budget is presented, and it beats back the proposal. Yashwant Sinha was forced in this way. Jaswant Singh was as good as gheraoed by the powerloom and fertiliser subsidy lobbies. Chidambaram has had to 8216;8216;revisit numbers8217;8217;. This being the case, how is any reform to be seen through? When even 1,200 brokers can beat back a government, what can possibly come of the study8212;yet another study8212;that Chidambaram has announced to prepare 8216;8216;a roadmap8217;8217; on those Rs 44,000 crore of subsidies?

But my main complaint about such exercises is a different one. Over the years budgets have become dhobi lists8212;4 shirts, 6 handkerchiefs, 4 sets of kurta-pyjamas8230;There is of course some prose about 8216;8216;priorities8217;8217;8212;Chidambaram has his 8216;8216;seven clear economic objectives8217;8217;. As will be evident from the foregoing, the allocations and proposals have little to do with the high-sounding prose of such enumerations. The allocations and proposals betray no design. They are just a miscellany. Glance through the list of changes that have been made for individual sectors or industries8212;jis ki aawaaz darbaar tak pahunch gai, use kuch mil gaya. What we need instead is 8216;8216;imagineering8217;8217;8212;imagine a future and engineer it back to reality today.

Here are the 10 industries in which this Government envisages India to be a world leader 10 years from now. Such and thus are what these industries require to get to that position. Here is what this Government is doing to help them establish that leadership8230;The Budget that will be worth reflecting upon will be that one. But till then, as Chidambaram8217;s Budget reminds us, we must follow two rules:

8226; We must read what a Finance Minister says before composing eulogies.

8226; We must read what he says twice when the Finance Minister is a lawyer!

Concluded

PART I

PART II