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! 

MNREGS

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" ? 

Agriculture

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! 

Electricity

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. 

Conclusion

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! 

So many points, so little time!: Oct.4-10

1. What is common between Ramalinga Raju and Pak government? Both were riding tigers, not knowing when to get down! hehehe... ok ok excuse me for the PJ. So, Afghan envoy tells US that ISI was behind the blast in our embassy in Kabul. Please note, we did not say this, the Afghans themselves said this. I don't understand this, Pakistan has enough terrorism problems in its own land, why is ISI even bothering to do such things outside? I mean, where do they get the time and inclination to carry out such attacks? On top of that, ISI wants to talk to us directly - yeah right, we will talk about Biryanis and Kababs and everyone goes home. Taliban was fed by Pakistan only, and now it is biting it back. LeT, JuD are also being fed by Pak, but haven't bitten back yet. Let's wait and see when that will happen!

2. These days, actually from the last five years, the Naxalites have decided to throw challenges towards the government. Shivraj Patil was at the helm for most part of the five years and so it is futile to expect anything from him. What, however is disappointing is even today we are still being told that Naxals are the "biggest internal threat", we will do everything in our power to curb it etc. On top of that, we are being told that more money also will be pumped into developmental works. Come on, these people's agenda ceased to be development a long time back. They have just become cold blooded murderers. Take for example the beheading of a constable in Jharkhand - what kind of ideology supports such a gruesome act? How long will we continue to think that the Naxal problem still remains a social problem, instead of a law and order problem? Just because Rahul Gandhi decides that the problem is still a social one, should the government stop from taking the practical course of action here? It still beats me why the AP model of just eliminating them is not followed. We have seen that is was largely successfull, so what just is stopping us from expanding it to other states? You want to know the answer - it is politics! Read this story here, to understand it better. Even Lalu Prasad has opinion about this issue now!

3. PT Usha was not provided proper accomodation in Bhopal for a national atheletics meet. There was apparently a "miscommunication" which led to this farce. Yeah right, I am sure no such "miscommunication" would have happened if any official of the sports authority in the government were to visit other places. Only when sportspersons are involved, do such things happen. And then we want to bid for 2020 Olympics! Haa! First, let us learn to respect our legends, then think about inviting others.

4. The Nobel Peace Prize Committee just relaxed some conditions needed to win the prize. With these relaxations, there will be hundreds of more nominations from next year onwards. It is now official that the prize will be given not just for achievements, but also for "attempting" to achieve. So, next year, Gilani and Manmohan Singh are strong contenders for the award. By the way, read this to find out how the top contender for the post was overlooked.

5. Salman Kursheed tells us that CEO's have to get rid of vulgar salaries. Sure, the day your political clan gives up its hobby of earning vulgar corrupt money, the CEO's will follow suit. Until then, it is break time, Mr. Minister!

6. Blogger completes 10 years :)

So many points, so litte time!

• LOL!! Seriously, you will also laugh out loud after knowing this! Pakistan's Intelligence agency, the ISI, wants us to talk to them directly!! LOL! "…Lt. Gen. Pasha came clean in stating that the ISI and the Pakistan Army were involved in framing Pakistan's India policy, along with the Foreign Office. He made the oblique suggestion that India deal directly with these three institutions if it had a similar three-way mechanism." Again, LOL! Someone should tell this Pasha dude that it is precisely because we don't have such a "similar three way mechanism" that our country is much more stable that he can ever imagine his to be! No wonder that country is in chaos, eternally. Well, with three power centres (reports are also suggesting that there is a rift between Gilani and Zardari. If true that makes it four power centres!) operating parallelly, what else can you expect but chaos?! You can read the full report here.
  
• Dr. Kalam was frisked and this incident came into light nearly two months after it happened. And then our frenzy media went into a tizzy, and then had debates whether our VIP's are overly pampered! For starters, the protocol only restricts 18 kind of VIP's, with former Presidents also being in the list. Secondly, it is also a major security breach that a person was bodily allowed to touch a former President. As much as the US airline is worried that a former President of the world's largest democracy is a security threat, our security agencies also have to be worried that the same employee can also be a potential threat to our former President. Thirdly, Dr. Kalam did not make this an issue, but we are and I think this time we are doing it rightly so. Sagarika Ghose of the CNN-IBN, eulogises in her blog how Tony Blair stood in the line and how she was impressed with it. Well, Sagarika, I wonder when you will write a blog about the simplicity of Dr. Kalam in many more matters than praising a former Prime Minister who was as responsible as George Bush for the killings in Iraq. I guess that's pardonable, for he stood in the queue at an airport! My point is this - these VIP's represent the state/country for a long time, both internally and externally. These VIP's ensure that the country moves forward ( at what pace is a different debate, but they do it right?). So extending them these small courtesy's in no way jeopardizes the "security threat" of an airline. Continental is guilty, period.
  
• She came, she saw, and she went. I think this is how we can summarize Hillary Clinton's visit to India! Her visit was so "hectic" that she could get to meet our External Affairs Minister (who is also officially her host) for just one hour in her 5 day trip. And just in case you are wondering what the result of that one hour meeting is, read the next point! Before that, I wanted to make one more point. She apparently visited the Taj hotel in Mumbai, and paid tribute in the book there. I think we need to stop this over-hyped obsession with Taj whilst equal or more number of people died at other location during those deadly attacks. This is just plain insulting to the memories of those who died. Maybe, the government should construct a memorial for all those killed in multiple attacks on Mumbai over the years, and that's where people should go to pay homage. Not just the Taj.
  
• After the 1 hour meeting between Hillary Clinton and S.M. Krishna, here's what happened. We will buy military equipment from the US, and then US has the right to inspect all our facilities that use this equipment! In layman terms, the US wants to make sure we don't mis-use these weapons (attack a country that they like), and therefore get the right to inspect our facilities. Please note, they get to inspect our facilities. As if this capitulation was not enough, here's more. The US will choose 2 sites where we can install nuclear plants with the technology they give. Yes, you read it right, US will choose the location for establishing 2 facilities. Read here, if you want to know more details.
  
• And finally, the Foreign Secretary has admitted that the Joint Statement was a case of bad drafting. Excellent, for he agreed to what most people in the country have been shouting from the roof top! Full marks for stating the obvious. I wonder what the government's reaction will now be? Ohh wait, I know what it will be – all of us "read his statement out of context". Here's what Menon said – "One can argue how good or bad the drafting was...you can say it is bad drafting, but the meaning is clear. These things happen, what can we do?"

Lessons learnt from Chattisgarh tragedy..

Praveen Swami from The Hindu, wrote this article today on how unprepared the police forces are, in Naxal affected areas. It gives a lot of information, and also exposes the sad state of preparedeness in some states.

You know, I feel very sad that we lose precious lives because we didn't invest well into machinery and training for police. They lose their lives for no fault of theirs, and we very quickly forget their sacrifice. We never want to learn from just one tragedy, we need multiple tragedies to learn. After hundreds of lives lost, and scores of incidents, we are then told - ohh yeah, we didn't have enough equipment to deal with them!!

And see what the reverred former Home Minister, Mr. Shivraj Patil had to say when he was at the helm - "“Force alone cannot be a solution,” the former Union Home Minister, Shivraj Patil, said in the wake of the killing of 24 police personnel in the Elampatti-Regadgatta forests of Dantewada district of Bastar division in Chhattisgarh on July 9, 2007."

Neither did he find a solution, nor did he go along with equipping the forces better. This man was a disaster. A disaster that should not have been allowed to happen.

Disinvestment; and number crunching on budget

There were two very excellent articles in The Hindu today.

The first one (click here) is related to the disinvestment policy that the UPA government is proposing to follow. Siddarth Varadarajan begins with why some of the decisions of the NDA government failed and then continues to suggest how to get back to the basic principles. I felt this article is a very good one to gather a nice understanding of the process.

A brief excerpt:

"Before going down this route, however, it is essential that the case for privatisation be discussed anew from first principles. And that this discussion be conducted rationally, without the free market dogma and leftist sentimentality that has tended to cloud the real picture. Broadly speaking, one needs to ask four questions. First, is public ownership of industry inherently inferior to private? Second, is private ownership the only way to deal with managerial inefficiency? Third, is there a difference in the positive and negative outcomes produced by privatisation through the strategic sale route and through the sale of shares to the public? Fourth, is plugging the fiscal deficit a sound rationale for disinvestment?"

The second one (click here) is related to the number crunching from the Budget 2009. S. Gurumurthy exposes some of the claims made by the FM in his speech, and provides us with concrete numbers to prove why the increase in deficit has less to do with "fiscal stimulus" and more to do with subsidies etc. He ends the article on a very interesting note - "But that calls for a different leadership which no party in the country seems to possess."