Business Today

Ideas for real austerity

The government and the Congress party’s recent “austerity” drive has created much debate. BT looks at a few practical steps that the government can adopt to actually save money.

K.R. Balasubramanyam        Print Edition: October 18, 2009

First, the UPA regime had to launch India’s biggest-ever stimulus package backed by government spending to boost the economy. Then came the realisation that higher government spending is great, but not if the money goes into five-star accommodation, air travel and foreign trips. Quick! Roll out the austerity measures.

But austerity measures should mean more unused funds in government coffers, not just a circular. Having failed in many previous expenditure reforms, the Congress party and the government are now trying to show that this time it’s for real. BT looked around, spoke to experts and has some practical ideas:

Use video conferencing, cut travel
Bureaucrats from the states often travel to Delhi to attend official meetings, and those from Delhi fan out to states to check out underlings or centrally-sponsored schemes. (Okay, so what if I dropped into my niece’s wedding in Kolkata during the commissioners’ conference? The dates coincided!).

So, if it’s just a meeting and not a field trip to check out the new crop, use video conferencing. Check out that rarely-used room on the second floor: may be the video conferencing gear installed three years ago still works! This will cut travel bills, save many man-days, and help increase India’s broadband penetration.

Low-cost flying doesn’t mean only Air India
The Finance Ministry has said that government officials travelling by air on work must fly Air India, even if the national carrier does not connect their destination (in which case they are required to fly to an Air India touchdown point closest to their destination, then, for the last leg, use an airline that has a tie-up with Air India). You guessed it. It’s costlier than Jetting there. Flying low-cost airlines will save money and time.

Lease vehicles, don’t own them
Every IAS officer wants it. Every IPS officer lusts for it. An air-conditioned white Amby, or a macho 4x4. Fine. But why should the government end up owning hundreds of cars and paying salaries and pensions to similar number of drivers? And pay for the petrol the driver will pilfer anyway to recover the bribe he paid to get the job? Take cars on lease to begin with for the lowest rung of eligible bureaucrats. Carmakers will sell more cars at market rates, and a clerk somewhere will have to be bribed to pass the bills. The government can also encourage its bureaucrats to use their own cars and get an attractive allowance for it.

Abolish Legislative Councils
Quite a few Indian states like UP and Bihar have a bi-cameral legislature. These states can follow the majority of Indian states by abolishing the Legislative Council or Upper House just like Tamil Nadu did in 1986. Legislative Councils, in any case, can’t make laws, and can at best contribute to the debate. The Council is onethird of the size of the Legislative Assembly of that state and its members are entitled to same pay and perks as MLAs. The abolition of Upper Houses would not just lead to quicker decisions but will also save a mountain of taxpayer’s money.

Biometric attendance
For livelier debates and greater value for money, why not install biometric attendance systems in Parlia—oh, well, spike that. Why upset a holy cow in the festival season?

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