A new order is sorely needed
The Rangarajan Committee’s recommendations for efficient management of public expenditure was definitely needed and very appropriate. Doing away with the difference between Plan and non-Plan outlays is more a technical and accounting change that the committee has recommended but, if it can have a salutary effect on making the billions of rupees spent on creating assets work more efficiently, it is very welcome.
Today, as Dr C. Rangarajan, chairman of the Prime Minister’s Economic Advisory Council, explained, the Planning Commission may plan for a certain number of schools and hospitals, but the money needed to maintain these come under non-Plan expenditure so you can end up with schools without teachers and hospitals without doctors. This is just what is happening, even in big cities like Mumbai. Non-Plan expenditure has outlived its purpose. The committee has suggested a more business-like handling of planning where you have capital expenditure (that will create assets) and revenue expenditure (money to maintain and run these assets), and these will be handled in tandem with the finance ministry. Or, as Dr Rangarajan said, there will be a shift “from input-based budgeting to budgeting linked to outputs and outcomes”. In the new order envisaged, the Planning Commission will be more a guiding force that will formulate a plan taking into account the government’s priorities. The new order suggested by the Rangarajan Committee will, hopefully, be more responsive and in sync with the needs of development. It recommends taking a holistic view, not looking at issues in bits and pieces.
This is particularly welcome against the background of qualitative changes taking place in the country for some years. The focus has been on infrastructure and the need for ports, roads, power, irrigation systems, etc. Neglect of these areas is almost bringing the vital sectors of the economy to a halt and, whilst there is much talk about the need to step up investments in these areas, the ground reality is very different. It is shocking that despite having a Planning Commission there was a mismatch between what was needed and what actually was created. Of course, a major part of the problem is corruption. If from every one rupee only 10 paise goes to a project, one can imagine why our infrastructure is in such dire straits despite the many, many crores allocated to various sectors by the Planning Commission. But this problem, too, is tackled by the committee in its recommendation that citizens should be empowered to seek information on the flow of resources and their utilisation so that the needs of transparency and accountability can be met. It has also recommended the strengthening of the Central Plan Monitoring System.
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