BUDGET 1999-2000
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Can the government be downsized?

Better than last year's, still a gamble

Can growth rates pick up?

This is definitely easier said than done. Downsizing the government is an extremely difficult task in the best of times and even developed countries have found it difficult to reduce the size of their bureaucrats -- in spite of public claims about the virtues of a small government.

The problem in India is two-fold. The Union government as well as state governments have established a host of manufacturing enterprises and taken over the managements of many more concerns which were turned sick by their erstwhile owners.

These companies make a range of products like bread, bicycles, tyres and wrist-watches which no government-run enterprise in other countries manufacture. How should such companies be either revived or closed down? The question is not easy to answer as each unit has its own peculiarities.

The second aspect of the problem goes beyond the public sector to the government itself. At one level, the government has no business to be in various business activities. At another level, the government does a pretty pathetic job in providing services in areas where market forces do not operate efficiently, specifically health and education.

Many observers would like to see the influence of Nobel laureate Amartya Sen in Yashwant Sinha's Budget. This would include the proposals relating to watershed management, developing rural infrastructure, credit cards for farmers, capital subsidy for building cold storage facilities and godowns, schemes to empower women and transfer of decision-making powers to Panchayats and local bodies.

Perhaps the comparison is a bit far-fetched. Sen or no Sen, no finance minister in India can today afford to create an impression that he is against the interests of the poor and the underprivileged. No politician worth his salt can remain in power without paying lip service to Dalits and tribals. Sinha is no exception. He has astutely taken a leaf out of Madhya Pradesh Chief Minister Digvijay Singh's book to set up new schools in rural areas.

Be that as it may, the finance minister will surely acknowledge that his decision to abolish four secretary-level posts in the Union government is at best a symbolic gesture. Sinha's predecessor, Chidambaram, had attempted to set up an Expenditure Commission in 1997. He had even approached the BJP's Jaswant Singh (who is now external affairs minister) to head such a commission but the latter refused to oblige.

Sinha now hopes to appoint a similar commission. What is more significant is that he hopes the government will display the necessary political will to accept the recommendations of such a body and actually reduce the size of the bureaucracy. The ride ahead is certain to be rough, for the road is bumpy and there is no dearth of speed-breakers.

Paranjoy Guha Thakurta / New Delhi

(The author anchors the India Talks programme on the CNBC Asia Television channel.)

Courtesy: Sunday magazine

Budget 1999-2000

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