NDA austerity move, a mere tokenism

Governments off and on go on austerity drives to send a message to the people that it is economical with the funds and resources entrusted to it.

 Expenditure cuts are especially resorted to in times of  financial stringency or in other crisis situations. The UPA government had announced some economy measures when the fiscal crisis was deepening in its second term. The NDA government has also announced a package of measures now to cut down public expenditure and to reduce fiscal deficit. Such measures usually have only a token value.  Many of them are not actually implemented and those which are implemented do not last for a long time. Politicians and bureaucrats know how to circumvent the measures because contingency steps are available in government rules and procedures. Since it is the establishment that plans and approves the expenditure, not many inconvenient questions come up.

A ban on first class travel and stay in five star hotels and reduction in foreign tours and travel expenses are some elements of the package. Some of these norms are in already place, though they are not followed in practice. They are reiterated now perhaps because the government wants them to be taken more seriously by the officialdom. While study tours and foreign travels of officials are to be curbed there should be similar restrictions on the jaunts of politicians too. They also involve wastage of public money. The overall aim is to reduce non-Plan spending by 10 per cent in order to achieve the fiscal deficit target of 4.1 per cent of the GDP. The  UPA government, which had faced a more serious financial situation, had done some trimming of the Plan expenditure also.

The fact is that the current drive may not make much of an impact even if it is enforced effectively. The expected savings are put at less than 0.3 per cent of the GDP. Major areas of wasteful and unproductive expenditure are outside its scope. The expenditure incurred on the salary, perks and allowances of a bloated bureaucracy is one such. The temporary ban on creation of new posts and filling up posts which are vacant for more than one year will not go very far in curbing expenditure. Many existing proposals to scrap redundant posts and reduce the size of the bureaucracy have not been acted upon.

The salary expenses are going to be much higher when the recommendations of the seventh pay commission, which has been appointed, are implemented. There is also the need to reduce and rationalise many subsidies which form a big part of government expenditure. Action in these areas will be more useful than cosmetic austerity measures.  

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