The future of the inheritor, and more importantly, of India, depends on fighting corruption. Here is how Pranabda can use the Budget to tame the monster

February 28, 1958: “While we should always be prepared to reconsider the methods we adopt, should this become necessary, we have to strive with all our strength for our planned development by conserving all our resources, increasing production and trying to ensure progressively a more equitable distribution and to thus raise the standards of the great mass of our people,”

- Jawaharlal Nehru as Union Finance Minister

February 28, 1970: “It is generally accepted that social, economic and political stability is not possible without the growth of productive forces and the augmentation of national wealth. Also, that such growth and increase in wealth cannot be sustained without due regard to the welfare of the weaker sections of the community,”

- Indira Gandhi as Union Finance Minister

February 28, 1987: “Twenty nine years ago, presenting the country's Budget, Jawaharlal Nehru told this house [that...] we have to strive with all our strength for our planned development by conserving all our resources, increasing production and trying to ensure progressively a more equitable distribution and to thus raise the standards of the great mass of our people…Our principal objectives are the elimination of poverty and the building of a strong, modern, self reliant independent economy,”

- Rajiv Gandhi as Union Finance Minister

Some of you would be aware of how and why these three former prime ministers also had to don the hat of a Union Finance Minister. For those who haven't found time to check out this bit of deliciously ironical history, here is a brief recap. In 1958, the son-in-law of Nehru and Indira Gandhi's husband raised uncomfortable questions about the role of the then Finance Minister T.T Krishnamachari in what became the “Mundhra scam”. TTK, as he was popularly known, was forced to resign in February 1958 and Nehru had to temporarily take over as the Finance Minister. In 1969, the Congress party split and the then Union Finance Minister Morarji Desai quit the government. Desai was strongly opposed to the “socialist” vision being gradually adopted by the then Prime Minister Indira Gandhi. She preferred to take over the Finance portfolio after the exit of Desai. Her titanic tussle with Desai and its consequences resulted in the ‘license permit' and ‘inspector raj' era, issues that continue to haunt India till date. In 1987, V.P Singh, a loyal and trusted aide of Indira Gandhi and Rajiv Gandhi, was ready to present his third successive budget to the nation. Prime Minister Rajiv Gandhi, for reasons future historians will be better able to explain, shifted Singh and chose to present the budget. Within a few weeks, the Bofors scam started tormenting him.

Many of you who have been waiting for my 12th successive Alternative Budget this time must be wondering why I have taken a historical detour even before talking about the proposals I have in mind this year. Many of you might even be wondering about the headline for this year's Alternative Budget: “A Budget for Rahul Gandhi”. I'll address the second issue first. One fine day in August 2010, out of nowhere, I got a call from the office of Rahul Gandhi informing me that he wanted to meet me. I was taken aback as I had made no such request to meet him. Despite my initial surprise, I decided to go and meet Rahul to see what he had in his mind. In the brief meeting we had, he kept asking me what I wanted from him and since I had gone with no expectations, I spoke to him about the Alternative Budgets that IIPM Think Tank comes out with every year. I didn't expect him to give it much of a thought but I was pleasantly surprised to see him quite interested in it and asking me several questions around it. The meeting ended with him requesting me to send a copy of my next Alternative Budget in time for his perusal. Come February 2011, I did that. However, there was no response from his office and the real budget hardly took note of my suggestions, which were all to do with changing the plight of the farmers in our country (http://www.thesundayindian.com/en/story/do-dooni-chaar-budget/12869/). So this time, keeping in mind that in any case, there is a very high probability of Rahul Gandhi becoming Prime Minister in 2014 (and since history repeats itself endlessly in India, I wouldn't be shocked to see Rahul Gandhi like his great grandfather, his grandmother and his father present a Union Budget in the future), I thought of addressing the budget directly to him; Rahul being young, I believe he has a higher probability of taking a note of it than Pranabda! Moreover, I am certain even Pranabda will be presenting this year's budget with Rahul Gandhi's future Prime Ministerial prospect in mind!

But it is my historical detour quoted at the start that I think holds more relevance for the future of India. The reasons I have quoted Nehru, Indira and Rajiv in their avatars as finance ministers are twofold. The first: there is no doubt that all three were passionate about India and did try their best in their own ways to at least minimize, if not eliminate poverty from India. No objective analyst can doubt their intentions. The second: the primary reason why all three largely failed in their efforts is because of corruption that started as a harmful disease in the Nehru era and now is a malignant cancer that is corroding the insides of India, even as Rahul Gandhi makes a pitch for his personal tryst with destiny. As Dr Pranab Mukherjee makes the final preparations to read his speech as Finance Minister on March 16, 2012, and as Rahul Gandhi gets ready to absorb the import of the verdict delivered by the voters of Uttar Pradesh, both surely must be aware of two things. Corruption and good governance will most definitely play a big role in the 2014 Lok Sabha elections. And that it could well be a kind of a last chance for Dr Mukhrejee and the Gandhi scion to use the two remaining budgets before 2014 to send a loud and clear message to voters that the two (and Congress per se) actually walk the talk when it comes to curing India of corruption. On this hinges the political future of Rahul Gandhi. More importantly, on this hinges the future of India. Quite simply, India can no longer afford tall promises and noble intentions even as we march towards hell for the poor.

In 2009, when the UPA surprise, surprise stormed back to power and the Congress an even bigger surprise won more than 200 Lok Sabha seats for the first time since 1991, I presented my Alternative Budget with a headline that raised quite a few eyebrows. The headline was “Khao aur Khilao Budget”. My premise was simple: it is impossible to change a rotten system overnight in an electoral democracy and yet Dr Mukherjee should be able to implement many proposals that would make a huge difference to poverty, inequality, education, healthcare and governance “even if corruption continued, albeit on a lower scale”. That Alternative Budget surprise, surprise again was a huge ‘hit'; and many economists, analysts and bureaucrats, and even politicians, appreciated some of my ‘realistic' proposals. One such proposal went with the following headline: “A census, a national database and biometric cards for the Poor.” I further wrote, “The FM must allocate another Rs 2000 crore and rope in the Election Commission to provide the poor with biometric photo identity cards. Smart card technology is easily available... I estimate that at least 250 million Indians will get these smart cards and claim welfare scheme funds and resources. Knowing Indians, many undeserving people will sneak into this database while many deserving ones will get left out. But we are not talking about achieving perfection in this budget.” (For more details, log on to http://www.thesundayindian.com/en/story/arindam-chaudhuri-presents-the-khao-aur-khilao-budget/19/7719/)

I doubt if Dr Mukherjee and the former Infosys CEO Nandan Nilekani found time to read my Alternative Budget in 2009 in this magazine and our sister publication Business and Economy. And yet, I was delighted a few months later when UPA-2 actually announced the UIAD project that was all about biometric cards. I feel a little sad when I read newspaper reports about how vested interests are trying to stall, or even kill the UIAD project. And yet, it made me think that there are people in policy making who are genuinely thinking about tackling ‘leakages', which is a polite word for blatant, shameless and parasitic corruption. As with everything else in India, when it comes to corruption, there is a lot of despair; and a lot of hope. The very fact that biometric cards are now a reality for the poor in many districts of India makes me concentrate more on hope than despair.

But to give the devil her due, I have no choice but to highlight some statistics and studies that reveal how corruption must be a cause of despair for all well-meaning citizens of this country. The primary reason for a country being ranked very low on ‘the quality of life indicators' is not poverty or lack of resources but corruption and poor governance. Despite tall promises and about 65 Union budgets some presented by charismatic prime ministers India's ranking continues to be pathetic at just about 125. Not surprising because 400 million Indians are still illiterate, 750 million Indians lack access to basic sanitation and 1,000 million Indians spend their own family money on healthcare because the State has failed to act in that area. Look at the Transparency Index, or the Competitiveness Index or any other damn index and you will realize that India has a pathetic record of taking care of its poor and underprivileged. And it continues to do so despite so many social welfare programmes launched by this UPA government since 2004 when it came to power. The astonishing thing is that Indians still appear to be largely optimistic when we see results of global surveys. And then I realize those survey guys probably never went to slums or villages where farmers were committing suicide.

There is another way to look at how corruption is corroding our innards. Back in the 1980s, Rajiv Gandhi said that about 85% of the money meant for social welfare schemes was eaten away by corruption. If anything, despite RTI and the rise of social activism, media activism and judicial activism, corruption has only gotten worse. One interesting data here. Together, the Centre and all the states have spent close to Rs 20 lakh crore on education since the UPA came to power. This includes plan and non plan expenditures. Assume that Rajiv Gandhi was exaggerating and only 50% of the funds get ‘diverted', you still have a figure of close to Rs 10 lakh crores siphoned away in the name of education. Add health, irrigation, rural electrification, roadways et al and you can well imagine the extent of corruption in India. And almost all of it could have been used to lift the desperately poor above the poverty line. Forget Swiss Banks and black money. I honestly think we in the media should start an audit of expenditures on these schemes meant for the poor and prove how much was actually ‘diverted'. I know activists and the media are already doing it. But no positive outcome seems to come out despite judicial intervention. That brings me close to my proposals this year in my Alternative Budget.

But before I start presenting my proposals, let me share something that we all know. Corruption is flourishing in India because the corrupt are more likely get away with it. I have nothing personal against the former Telecom Minister Sukh Ram who has been convicted again and again on charges of corruption. But the case has dragged on for so long that he is now in his late eighties. I felt troubled about the future of India when I read in a paper that the 96 year old Sheila Kaul a former Congress minister who faces corruption charges was summoned to appear in court despite her lawyer arguing about her age and health. I think Indians are so fed up with corruption and the system that encourages it that they might think that people in their late eighties and nineties are getting just desserts. The simple reason why corruption flourishes in India is that our judicial system is completely broken down and paralysed. We get occasional glimpses of what the judiciary can do like in the cases of Priyadarshani Matto, Jessica Lal, the 2G scam and many others. But they are not even a drop in the ocean.

So what can Pranabda do if he presents a budget for Rahul Gandhi?

Well, he should tackle the key issue of corruption that has rattled the government this year, in particular during the Anna Hazare movement and the Ramdev fiasco! Yes, as of now, both the issues have been managed, but the truth is that it won't be long before more agitations rock the country if it is not tackled properly. Thus, this budget keeps tackling corruption as its top priority! The biggest sufferers of corruption are the poor as the high and mighty use corruption to their benefit.

Here are my suggestions for this year's Alternative Budget.

Key resource allocations:
Transform the judiciary
The Lokpal has been given its silent burial with a completely manipulative and flawed bill. Though the Lokpal bill in its ideal best had the power to make a big impact to deter corruption, I never believed that this was the first priority when it came to tackling corruption. The first priority as I also told Arvind Kejrival during one of our interactions has to be necessarily a massive focus on judicial reforms. Unfortunately, most people don't understand its real relevance and those who do are sitting in power and thus keeping it dysfunctional so that the corrupt can make merry! If Rahul Gandhi is really keen to change this country and make an impact in the field of reducing corruption, he has to awaken the sleeping and completely dysfunctional judiciary of this country!

I was truly shocked when a colleague pointed out that less than 1% is allocated by the Central and State budgets every year for the judiciary. In the Ninth Five Year Plan, the government set aside Rs 385 crore for the judiciary. That works out to 0.078% of total plan expenditure. In the tenth Five year Plan, the allocation was increased to Rs 700 crores; about 0.071% of total plan expenditure. In the Eleventh Five Year Plan which is in progress, the allocation was ‘generously' raised to Rs 1470 crore. As a percentage of total plan expenditure, things haven't improved at all. These figures are so laughably small that I marvel at how the judiciary functions at all!

All this, while new laws, amendments to existing laws, a massive increase in corruption and the rise of activism have led to more and more cases piling up even as old cases continue to languish. As I stated earlier, and have often stated in the past, the only way to reduce corruption in India is to make the judiciary more effective. Till the corrupt remain convinced that they can either escape punishment or delay it indefinitely, corruption will continue to increase. The one and only solution for corruption is a functional judicial system. Corruption and greed are globally prevalent, yet it touches far less lives in the USA than in India simply because the American judicial system is functional and ours is dysfunctional. In America, they have ten times more judges per million people than in India. If we are to try and achieve such standards we need to have about 100,000 more judges. It sounds huge but is surely achievable in a span of five years. And to have 20,000 additional judges per year, we have to budget for an additional amount of approximately Rs.6,000 crores per year, assuming that the expenses around a judge and his office assistants put together is definitely not more than Rs.30,00,000 per year.

So if I were Pranabda, I would use the 2012 Budget to announce that Rs 6,000 crores have been allocated for the judiciary in the coming fiscal, with a commitment to increase it to Rs 10,000 crores in the next fiscal. India desperately needs such a big ticket and transformational move. The budget must unveil a concrete plan whereby the Law Ministry works with Supreme Court and High Court judges to draw up firstly a concrete blueprint to “quadruple” the number of judges and courts before the general elections in 2014; and secondly, to draw up a blueprint that will compel litigants, lawyers and judges to commit to a time frame to settle cases. First, this will send a huge message to voters that the government actually means business. Second, it will actually transform governance in India. If those facing corruption charges know that they could be convicted in less than a year and their property confiscated and auctioned as it has started happening in some isolated cases the incentives for corruption will vastly diminish, if not disappear altogether. This is far more important than making noise about a Lokpal. This is very doable. No progress was made for almost two decades in Bihar when it came to tackling corruption cases. Then Chief Minister Nitish Kumar set up fast track courts and lo and behold, the corrupt actually started getting convicted quickly.

These massive allocations for the judiciary will ensure that ‘fast track' courts do not remain exceptions but become the norm in Indian judiciary.

Focus on education and healthcare
For close to a decade, I have been repeating the simple fact that without education and healthcare, there is just no way that India can ever hope or dream of catching up with China. It is a disgrace that public expenditure on health and education at less than 2% of GDP is less than the share taken away by myriad subsidies and exemptions. The only way out is a massive increase in allocations for schemes like Sarva Shiksha Abhiyaan and National Rural health Mission. But as I have often pointed out, merely allotting more money without improving governance and reducing corruption will not help. For a more detailed perusal of my proposals, do read my 2010 Alternative Budget that went with the headline “A Budget for Three Idiots” (http://www.thesundayindian.com/article.php?category_id=28&article_id=637). The recommendations I have made in that proposal are even more relevant today.     Read More....

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM B-School Detail
IIPM makes business education truly global
IIPM’s Management Consulting Arm - Planman Consulting
Arindam Chaudhuri (IIPM Dean) – ‘Every human being is a diamond’
IIPM ranked No 1 B-School in India
domain-b.com : IIPM ranked ahead of IIMs
IIPM: Management Education India
Prof. Rajita Chaudhuri's Website

IIPM Proves Its Mettle Once Again....
Planman Technologies
IIPM Contact Info
IIPM History
IIPM Think Tank
IIPM Infrastructure
IIPM Info

IIPM: Selection Process
IIPM: Research and Publications
IIPM MBA Institute India
IIPM Best B School India

-----------------------------------------------------------------------------------------------------------------------------
 
 
Shortage of a hundred and fifty million rural employment jobs. Shortage of twenty five million urban employment jobs… Additional Rs 1 lakh crore required to replace urban slums… And Rs 10,000 crore required every year for five years to give justice to every Indian by ramping up the judiciary… Another Rs 20,000 crore required every year to make universal primary education a reality and have equality in education opportunities… And additional Rs 10,000 crore required annually to give some basic access to health facilities… Welcome to India. A country where the hospital beds to population ratio is 1:1422, ranked 161 alongside sub-Saharan African countries, against an ideal ratio of 1:333 prescribed by the United Nations. A country with 2.4 million temples but only 1.4 million temples of education i.e. schools… A country with 30 million cases pending in courts, making life hell for the common man who wants justice, because our courts have only 12 judges per million population compared to 120 judges per million in the developed world.

In the middle of such an environment, what’s the role of an annual budget? Is it to maintain status quo or to give the world a robust signal that we are committed to our people – the 45 crore people who earn below 1.25 dollars a day? If the objective is to maintain the status quo, then Pranabda has delivered a perfect budget, as loudly proclaimed by each and every member of the equally objectiveless and visionless industry organisations like FICCI, CII and ASSOCHAM etc. They were too happy that the entire stimulus package had not been withdrawn. As it is, the spokespersons aren’t independent intellectuals. They are timid business men – however rich they might be – scared to ever speak against the government as their businesses are at stake! In most cases, they aren’t even capable of commenting on the budget, such low is their understanding. But they are the people who give the bytes and that’s what next days headlines look like in papers indirectly and directly owned by them and mostly run by sold out editors or editors intellectually incapable of analyzing a budget or how it needs to be. So the verdict that they have given is thumbs up!

The man on the street, of course, has no voice. And his concerns are of no importance to politicians or media. Media has no vision to effectively and constantly focus on their cause in order to effect a change. They are more interested in rapes, murders and sex, which keep the readers confined to intellectually dumbed-down dustbins of these media houses.

The truth, however, is that if we were to look at this budget from the perspective of people – those 45 crore that I mentioned above and another 35 crore who are just marginally better off – then this budget is a hoax for them. Allocations to the best scheme of the Sonia government, or for that matter any government in ages – the NREGA scheme – wasn’t even increased enough to cover the inflation! What was done was a mere increase from Rs 39,000 crore to about Rs 41,000 crore. At a point of time when the common man is being made to pay an astoundingly scary Rs 50 per kg for sugar and Rs 100 per kg for dal, when the food inflation has touched horrific proportions and when they were looking up to the budget for some relief, forget immediate relief measures, there were no signs of any long run relief either in this budget. No lip service even to stop hoarding. No measures to stop speculation in food. No recommendation of strict punishment to the hoarders and no announcement of using the country’s huge forex reserves to import basic food necessities to increase supply and reduce prices. In other words, totally shocking. The reference to the aam aadmi went missing. It was clearly a budget for the mango people who live in India and not the aam aadmi who lives in Bharat.

The long-run steps to increase agriculture growth through a new green revolution got a token Rs 400crore. Nothing could have been more hilarious. Now, NBFCs (non banking financial institutions) can open banks and Rahul Bajaj must be very happy with his part of lobbying. But the real requirement of financial inclusion, which reaches a rotting low of less than 200 million people compared to the required 900 million people, still remains unsolved. At a time when so much had to be done for the poor who are the direct sufferers of the high inflation, the government gave away Rs 26,000 crore to the middle class and rich through its new tax structure favouring the two per cent top class of people who pay taxes in this country! I have been always for lesser taxes to increase tax base, but in a year like this, such a move was a bit too much to accept, especially when compared to the lack of commitment of resources for the bottom 70 percent people.    
Read More....

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM B-School Detail
IIPM makes business education truly global
IIPM’s Management Consulting Arm - Planman Consulting
Arindam Chaudhuri (IIPM Dean) – ‘Every human being is a diamond’
Arindam Chaudhuri – Everything is not in our hands
Planman Technologies – IT Solutions at your finger tips
Planman Consulting
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine

IIPM ranked No 1 B-School in India
domain-b.com : IIPM ranked ahead of IIMs
IIPM: Management Education India
Prof. Rajita Chaudhuri's Website


------------------------------------------------------------------------------------------------------------------
 
 
“History is a race between education and catastrophe.”
H G Wells

“All who have meditated on the art of governing mankind have been convinced that the fate of empires depends on the education of youth.”
Aristotle

I think this is the first time I have started a write-up with quotes from famous people. I normally do not do that, because I usually feel so strongly and passionately about issues that I simply start writing and words just flow out in a torrent. But I am making an exception this time. And I have strong reasons for doing so.

Let me digress a little before stating them. This will be the 10th consecutive year that I have written and presented an ‘Alternative Budget’. This will be the 5th consecutive year that the ‘Alternative Budget’ appears in Business & Economy (Yes, your favourite magazine – when it comes to sharp, incisive and thought-provoking intellectual analysis – is about to complete 5 years!). For close to 10 years, I have been repeating ad nauseam that India can never hope to be a country that is respected in the 21st century unless there is a drastic and dramatic overhaul of social infrastructure. Apart from occasional good news on that front, budgets over the last decade have been largely disappointing when it comes to dealing with social infrastructure. Of course, lip service and wise quotes from historical personalities have always been offered by successive finance ministers. Of course, ambitious schemes with thousands of crores of budgetary allocations have been launched. Of course, well meaning policies have been designed and implemented. But has there been a really substantive improvement in outcomes? Do poor Indians actually have better access to healthcare now than they had when the 21st century began? Do they actually have better access to education? You know the answers as well as I do.
I have often been frustrated and dismayed by the answers. This prompted me to present an Alternative Budget in 2008 with a headline Ban the Budget. My logic was that too much needless attention was lavished on the Union Budget. My suggestion to the Finance Minister was to use the Union Budget to launch some path-breaking policies for the social infrastructure sector and let nitty gritty issues be handled through the year during the normal course. In 2009, I went a step ahead and presented an Alternative Budget with a headline Khao aur Khilao Budget. My logic was simple. I raised a fundamental question: How come China and South Korea with levels of corruption as deep and endemic as India have delivered fantastic outcomes in social infrastructure while India has failed to do so? I also argued that economics was all about incentives and if a Union Budget offered the right kind of incentives, stakeholders in India, too, could dramatically improve social infrastructure. Just in case you are interested in what the Khao aur Khilao Budget suggested, please visit www.businessandeconomy.org/09072009/storyd.asp?sid=4485&pageno=1.

Having digressed a little, let me come now to the theme and headline of my Alternative Budget this year. It is called A Budget for Three Idiots. You guessed it. It has been inspired by the iconoclastic movie that revealed how hollow our education system is. It also offered us hope and redemption. And it told us poignantly that the biggest challenge for India in the 21st century is to transform its education system. The quotes that appear right at the top of this write-up tell me that thinkers and philosophers throughout history have consistently argued that a society, a nation or a civilization simply cannot survive – far from flourish – without the right kind of education. Aristotle mused about the power of education to sustain an Empire more than 2,000 years ago. And in the 20th century, George Orwell, the author of timeless classics like Animal Farm and 1984 highlighted the importance of education in an equally compelling manner.

Of course, you don’t need to be a philosopher to understand the value and power of education to make or alternatively mar the future of India in the 21st century. And the way things are going at the moment, only the naïve will believe that India is on the cusp of an era where it will reap the much talked about ‘demographic dividend’. Just a few days ago, the international body UNESCO released a report called ‘Education for All Development Index’. It tracks the progress made by various nations on the key Millennium Development Goals of achieving universal education by 2015 from 1999 to 2007. The results in the report are sobering, if not disturbing for those who keep prattling childishly about India’s demographic dividend. The rank given to India is 105, below Bhutan, Zambia, Vietnam and Ghana to name just a few. That is not really surprising since India is consistently ranked pathetically when it comes to human development indicators; and justifiably so. More disturbing are results buried in some tables in the 300-plus page report. A staggering 49 percent of the children drop out of school before they reach elementary level. And before you start talking about some sinister western conspiracy to show India in a poor light, please remember that the report is based on government released statistics.     Read More....

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM B-School Detail
IIPM makes business education truly global
IIPM’s Management Consulting Arm - Planman Consulting
Arindam Chaudhuri (IIPM Dean) – ‘Every human being is a diamond’
Arindam Chaudhuri – Everything is not in our hands
Planman Technologies – IT Solutions at your finger tips
Planman Consulting
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine

IIPM ranked No 1 B-School in India
domain-b.com : IIPM ranked ahead of IIMs
IIPM: Management Education India
Prof. Rajita Chaudhuri's Website


------------------------------------------------------------------------------------------------------------------