Monday, February 27, 2012

AP Finance minister's budget speech...

The following post was written for Centre Right India, by Kesava and me. Pasting it here for reference.

"Continuing with the sustained efforts of the state to achieve ‘poverty-free Andhra Pradesh by 2015’..."

Thus begins the "Rural Development" section in the budget speech delivered about 10 days back, by the finance minister of Andhra Pradesh, Mr. Anam Ramnarayana Reddy. So this government wants to achieve poverty free AP by 2015. Let's revisit an old picture at this point of time. 

The government in the above ad said that there are about 7.5 crore poor people in the state (the budget speech puts this figure at 7.25 crores). This was in December, 2011 - which is not far too distant in the past! And within 3 months, we hear that this government wants to make Andhra Pradesh "poverty-free" by 2015! How will you bring out 7.25 - 7.5 crore people out of poverty in just 3 years? 

One way would be through Employment.

So our visionary government came up with a "new" scheme - Rajiv Yuva Kiranalu. They claim that 15 lakh jobs will be provided in 3 years. Pompous as it may sound, let us assume that this target is achieved. 15 lakh jobs - assuming these jobs will bring families of 5 members out of poverty - we have only 75 lakh people! That's like 10%! 

Before proceeding further, let's quickly take a look at this "new" scheme. 

In last year's budget speech - under "skill training for youth" they said - 

The Andhra Pradesh Employment Mission, popularly known as “Rajiv Udyogasri Society” has been established with the objective of imparting training to the youth so that they are better equipped to take up employment in the industries, services and business sectors

Now, here's a challenge - can you find the word "Udyogasri" in this year's budget speech? The reason you will not find that word is that this program was rehashed and given an another name - Rajiv Yuva Kiranalu. Don't trust me? Here's what the official website says: 

Rajiv Yuva Kiranalu is conceived by the Govt. of Andhra Pradesh to build job specific skills among the unemployed and place them in appropriate private jobs.

See the co-relation?

Ok, from this year's budget speech - 

To implement the new scheme of Rajiv Yuva Kiranalu, we have set up the Rajiv Education and Employment Mission of AP (REEMAP)

Please note that the employment mission already existed. And now, to implement one scheme named after Rajiv, they set up another mission in the name after Rajiv! 

The Chief Minister resorted to unbelievable levels of advertising for this program. Prime time slots on TV, ads in paper - all promising that the Prime Minister himself will come and give 1 lakh appointment letters in December (2011). We are in Feb now. The PM is yet to come (infact news is that, he rejected this offer too, claiming that to be a bogus scheme!). It has been announced that 1 lakh jobs have been provided - no list though of where and how! 

And before you accuse me of propagating the opposition's lies - this scheme has been criticized time and again by the ruling party MLAs, the ruling party's ministers, the state president of the congress party and none other than the Prime minister too! A snapshot of a news item in a telugu newspaper (from last week) is below. 

Training has been organized by the govt. for the benefit of MLAs to understand this program. Apart from the officers stressing on the "system failures" to achieve targets, they gave out some interesting statistics - in one job mela 1300 people were selected. Merely 56 people actually joined. 4% only - just imagine the kind of "jobs" being offered. The local MLA is reported to have said that people prefer to take up works under MNREGS instead of taking up small time jobs in these melas! 


A lot has been said, debated, discussed, derided and what not, on this scheme. Since there is only so much roads and drainages that you can construct in a village, the government is now desperate to somehow continue this scheme. And for that, it is now sanctioning construction of buildings! 

Sthree Sakti Bhavans have been sanctioned to the 1,068 Mandal Samakhyas @ Rs.25 lakhs per building by converging with MGNREGS Programme.

More importantly, through convergence with MGNREGS, construction of Gram Panchayat buildings and road works are taken up at a cost of Rs.437.29 crore.

And more importantly, the government announced a new scheme:

Under this scheme, additional funds will be provided to upgrade the work taken up earlier under MGNREGS into a durable permanent work

which begs the question - what purpose is MNREGS serving if works are not "durable" and "permanent" ? 


Despite all this, let's to assume the government will miraculously bring 75 lakh people out of poverty, through employment.  Majority of the remaining 90% will be from agriculture. So let's take a quick look at agriculture then. What is the government doing to bring them out of poverty? Nothing. Don't trust me? Read the budget speech here. Nothing! Andhra Pradesh faced a drought last year. 876 mandals (out of 1200 odd) were officially declared drought-hit. That's ~70%. What does the government do - send in a request for assistance from the ever active central government! And as if this is an achievement, the CM again mentions this in a speech in the assembly.

Additionally, the government announced that it has increased the man-days from 100 to 200 under MNREGS in drought hit mandals. We discussed MNREGS above, so nothing much to add to it. What if there is a drought next year? Same solution? What will you build then? Flag-posts on those buildings?

Let's hope, next year is going to be better, rains wise. Which would mean that we would have a similar environment as in say 2011-2012; which would mean that the farmers would still remain in poverty, right? You want to know why? Because while the input cost to the farmer is increasing, the minimum support price is the same. You think this is arm chair punditry? The farmers themselves are so distressed with these policies that they went on a crop holiday last year, in certain areas! A crop holiday! And guess what - the government does not even acknowledge this in their annual financial statement! 


If there is crop holiday for farmers, then there is power holiday for industries! And of course for domestic consumers, there are power cuts ranging from 2 hours to 12 hours. Please note – all these are official announcements and not some cooked up accusations. What progress would one really make without proper supply of electricity? And does the budget speech reflect any of these realities? Sadly, no!

Police, Law and order

March 11, 2011. The date is today marked as a black day by every Andhraite who admires the rich cultural heritage of the state. The million march which turned violent finally resulted in raging of statues of the cultural icons from Coastal and Rayalaseema areas. One did wonder about the state of security in AP. While this is the state of affairs in a thoroughly urban environment, in rural/agency areas it is even worse. In 2010, we saw some unpardonable crimes committed by Maoists. Dantewada incident is still fresh in public memory. 2011 was no different. One of the most gruesome attack was when Chattisgarh cops were abducted by Maoists in early 2011. The abduction of Malkangiri Collector R V Krishna and the letters sent stating Maoist demands indicate that border areas need much better policing. Even security personnel were under attacks [1, 2]. Maoists also continued to attack business units and government property [1, 2, 3]. This 2009 Reuters report stated that ill equipped police makes the security personnel easy targets. Police remain ill equipped even today.

It is no exaggeration in stating that in the last 2-3 years, the most over-stressed department has been the police department, given the number of agitations (some of them violent) that they had to face and resolve. Post these events, logical response of the government would have been to bring in some much needed police reforms. It was not to be, thereby sending a message to the anti-establishment brigade that "this government will not do anything on lawlessness".

Despite the fact that police hunt down dreaded Maoist leader Azad a.k.a Cherukuri Rajkumar; despite the fact that the urban police had a really tough time through most of the year police force have been the most stressed out department- there was little motivation for the police in Budget proposals last year. The situation continues this year too.

When Anam Ramnarayana Reddy presented Budget proposals, one would have naturally expected some motivation to the police force given the threats in urban and rural areas. The budget allocations disappoint heavily in this regard. Budget speech by the minister simply presents us the number of vacant positions and how they are going to be filled up. Police force faces a multi-dimensional problem, which this government is clearly not interested in solving.  In Amuktamalyada, Sri Krishna Devaraya points out the importance of police - "....Pay the foot-soldier punctually to earn his love and win over the horsemen with gifts. Give a good horse and a good elephant to a loyal warrior. Take care of the stables yourself....". 500 years later, we are clueless on how to make the police do better job and be efficient. 

While there is little endeavor from AP government to put police reforms on the top priority, there is no end to "social welfare". Government of AP continues to its extravagant spending in the name of social welfare while sidelining the primary duty of a government - security.

Is there anything good in this budget then?

The only new proposal (and a good one that too) in this budget speech is to construct indoor and outdoor stadium in every assembly constituency. If implemented well, this would be a major boost for sportsmen. 


If there is one glowing example to show "why governance model where government is a welfare machine, fails", then it is Andhra Pradesh. On the one hand, there are CBI investigations indicting some top businessmen, bureaucrats, politicians in some serious offenses committed by the previous government under the garb of "social justice". Despite the continuing investigations, GoAP proposes a budget allocation of stupendous 14,000+ crores toward social welfare - approximately 10% of total budget allocations (apart from amounts dedicated to freebies), while budget proposals to Police department, despite the prevailing security situation, is a mere 4,832 crores i.e., approximately 3 percent. In this 10% allocation toward "welfare", BC welfare is worth 3104 crores which is a 43% hike from last year and minority welfare is worth 489 crores which is a whopping 62% hike from last year. This probably explains what this government is eyeing. Opposition's concerns on this aspect have been sidelined as usual. 

Now, what about the tax payer? This budget doesnt want to provide relief to the tax payer by easing pressure on him to face high fuel costs, high real estate costs and heavy inflation. This budget doesnt also give the tax payer any relief from traffic, pollution, shortage of electricity and water supplies. Yes, as this blog post rightly said "tax payer remains the most abused citizen".

One important component of all the schemes being announced by the CM is the massive spending on ads for these schemes. This is bound to run into tens of crores of rupees (maybe even hundreds) - where is this money coming from? Maybe, in some cases the money spent on ads is more than the money spent on the actual scheme! 

We are discussing the budget speech of the Finance minister and not the budget per-se. Budgetary process involves the hard work of a lot of people – evident from this presentation here. Budget speech is however expected to be visionary and bring in promise of a new future. Alas! 


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