A letter to the Chief Minister

Dear Chief Minister,

This is once again the time of the year when you and your cabinet colleagues will be busy with the preparation of the State’s annual budget. Apart from the various political pressures that you may face in preparing the budget, I am sure all of you will surely be considering the development of the State and the strategic direction in which you would like Karnataka to march ahead. The State has started a trend of presenting a separate budget for agriculture and there are also demands for a separate budget for the youth and for the indigenous tribes. It is also a painful fact that the despite the crores of rupees the State has been spending, we are yet to achieve the expected levels of returns on the investment that is made year after year. I would like to offer for your consideration some of my thoughts based on the development priorities and the actual needs of the people, which you consider while undertaking this very important task.

As you will be aware, the Minimum Needs Programme (MNP) was launched in the fifth five-year plan and it was supposed to ensure a basic minimum standard of life for all sections of people in rural India and the urban poor. The idea was to establish a framework to attain an acceptable level of consumption in respect of selected items within a stipulated time frame. We have also seen that whenever there was a crunch, the Government was quick to enforce cuts in the allocation for social sectors. Initially elementary education, rural health, rural water supply, rural electrification, rural roads, rural housing, environmental improvement of slums in cities and nutrition were considered to be minimum needs. Adult education was added to the list of MNP components in the sixth plan, while rural domestic energy, rural sanitation and public distribution system were added during the seventh plan. Despite the good intentions of the planners, it has been a big struggle for millions of people to meet the basic needs even as we reach the end of the eleventh five-year plan. The goal of the planners seems to elude us year after year and plan after plan.

I would like to draw your attention to the Government spending on the Social Sector. As per the Kothari Commission’s recommendations (1966), the allocation to the education sector has been pegged at 6% of Gross State Domestic Product (GSDP). However, the Government of Karnataka has incurred expenditure of only 3.8% (2010-11) on this very important sector. Similarly, as against a target of 2% for the health sector, the Government of Karnataka has incurred expenditure of only 0.9% of GSDP. Although the State’s plan size and expenditure has grown over time, this is not reflected in the growth of expenditure on key social sectors. This situation has also been influenced by a series of fiscal policy adjustments undertaken by the State to meet its fiscal goals. These adjustments have resulted in changes in some social sectors seeing a decline in allocations. I am sure that you and your cabinet colleagues will agree that this skewed expenditure pattern can have a serious implication on the human capital of the State. It also adversely impacts the quality of life of the State’s citizens.

One of the often repeated commitments of your Government is to alleviate Poverty and reduce social, regional, and gender disparities. Although the State has achieved some progress in poverty alleviation, the State is yet to make strong inroads to achieve social, gender and regional justice. While appreciating your Government’s commitment in developing the SCs and STs, I would like to draw your attention to the stipulation of the National Planning commission that mandates 22.75% of the plan resources be allocated for Special Component Plan and the Tribal Sub Plan. The State has allocated funds in the range of only 13.78% to 17.35%. There is also no consistent gender sensitivity in the allocation of the resources department wise. District-wise bifurcation of the budget and decentralized monitoring systems are also not seen. Visible disparities across the divisions of the State exist in sectors such as education, health etc. The actual figures do not match our claims of being a pioneer in decentralized governance and development. The district sector plan outlay as a proportion of total plan outlay has seen a decline from 20% in 2000-01 to 14.4% in 2010-11, indicating a declining preference for decentralized governance. The State’s monitoring mechanisms exist for the District sector plans while such mechanisms do not exist for State sector plans which constitute most of the plan outlay. This calls for the formulation of plans at the district level.

We live in a world today where everything needs to be measured and accounted for. Measuring Performance and ensuring Accountability is one of the key indicators of good governance. The Government of Karnataka has formulated and implemented a plethora of programs and schemes to support social and human development in the State. However, many of these programs and schemes have been formulated without adequate and significant performance or outcome indicators, thereby inhibiting effective monitoring and evaluation. Many of these schemes merely focus on creation of public assets (with low multiplier effects) without addressing the key concerns of the deprived populace. This top-down approach has limited the effectiveness of the programs and led to a situation where disparities exist and thrive across vast areas of the State. It would be useful to standardize the policies, programs, projects and schemes of the State so as to indicate a focus on outcome achievement and efficient use of resources.

The main performance measure has been the amount of money spent, and the success of the schemes, programs and projects are generally evaluated in terms of the inputs consumed. While such an approach satisfies the considerations of economy of inputs and compliance with process regulation, it fails to indicate what are the results achieved by the activities of government in general and deployment of public funds in particular. In fact, the focus on input for accountability and control has led to a situation in which civil servants are rarely held accountable for the outcomes. Obviously, the objective must be to shift the focus away from traditional concerns such as expenditure and completing the activity towards a framework that would manage for results by developing robust indicators to assess performance in terms of outcomes and impacts. This is specifically important when the context of the development of the Scheduled Castes & Tribes and other marginal groups are taken into consideration. One needs to ensure that this group of people is brought into the economic mainstream and this process has to be led and sustained by the Government. Performance management as it exists in Government includes conventional tools like the budgetary exercise, annual reports published by the Ministries / Departments, performance budgets and the recently introduced outcome budget. Ministries and Departments have varying practices of periodically reviewing their organizational performance. It is not binding on them to make their budgets just and equitable.

Considering all these issues, I would like to request you to kindly consider the need to have a legislative instrument (bill) that ensures a minimum threshold of development (as given by key indicators) through performance management systems that promote transparent, decentralized governance, social and gender justice and reduction in regional disparities. The instrument can initially focus on sectors such as health, education, drinking water, housing, nutrition, and food security. This legislation would also reflect the social priorities of the Government in power and ensure social and economic integration of the dalits, tribals and other marginalized classes in a politically acceptable way.

This legislation can hope to ensure that the benefits and impact of the various government development schemes and programs actually reach out to the people it is designed for. It can bring in transparency, set in measurable standards based on actual ground situation, make planning contextually relevant and realistic, remove regional and gender disparities, and hold the implementing executive accountable for program deliverables. It can also prevent the unnecessary wastage of resources that could occur due to flawed planning and mis-targeting, minimize political expediency in development decision-making and bring in empiricism and objectivity into social sector programs. This can result in realizing the desire and dream of the Government of ensuring equitable and just development for all its citizenry.

No State in our country has contemplated a legislation of this kind. We are hopeful that a socially conscious person like you can show the vision and strength of character and take our State to glorious new heights by bringing in this radically different way of planning and budgeting.

Thanking you,

Dr R.Balasubramaniam