I would decentralize administration, finances

I would decentralize administration, finances
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First Published: Tue, Feb 26 2008. 08 30 PM IST

Updated: Wed, Feb 27 2008. 10 01 AM IST
What are the three things you wish for from the Budget?
The finance minister has repeatedly said that delivery mechanism to the poor is bad. This is taken as an excuse to cut expenditure on the poor. The Budget should find ways to improve delivery mechanism rather than cut expenditure. This can be done by decentralizing administration and finances.
First, the Central government should substantially cut down tied funding in the form of various schemes to the states and to panchayats.
According to the 12th Finance Commission, almost 10% of the Central Budget is spent on items that are there in the state list. Another 10% money is spent on items in the Concurrent List. Various finance commissions have said that the money should be directly sent to states and panchayats and not as Centrally-sponsored schemes. The money reaching grass roots as Centrally-sponsored schemes does not meet the aspirations of the people. For instance, some villages suffered a severe attack of cholera in Orissa recently. They had money lying in the panchayat. But that money could be used only for old-age pension, for widow pension, for a village cleaning competition, etc. The villagers could not use the money for taking them to the hospital and getting them treated. As a result, several people died. Shouldn’t villagers, through their gram sabhas (village councils), collectively decide what do they want and keep a check on money when it is spent? The money should be sent by the Union government as untied funds and let the people make their own decisions. At village level, powers should be given to gram sabhas rather than the sarpanch and panchayat.
According to the 12th Finance Commission, less than 40% of the total revenues collected by the Central government is shared by them with the states. One would assume that most of the money should actually be spent at the lowest levels. Therefore, the Union government should cut down on several ministries, which are working only on state subjects, and make much more funds available directly to states and panchayats. The government should start a line of credit through nationalized banks, which should be directly accessible only to panchayats, who could borrow this money for development works. This would go a long way in generating employment. It would also ensure financial autonomy of panchayats.
If you could end one thing, what would that be?
The complete centralization of the decision-making process by total exclusion of the people. It has led to frustration among the people and has created a huge hiatus among the haves and the have-nots. People find themselves at the receiving end of decisions made by politicians and bureaucrats.
If you were finance minister, what would be the one thing outside your area of interest you would want in the Budget?
Complete decentralization of administration and finances.
What is the one thing you don’t want changed?
I won’t want Indian democracy to be subverted.
Which budget disappointed you the most? Why?
I don’t read budgets so carefully to comment on this.
One proposal you think is shot down in every budget, but shouldn’t be.
Transaction tax.
What would you consider to be inclusive growth?
The growth should be measured from the point of view of lowest 10% of population and not in terms of GDP growth rate.
Arvind Kejriwal is a Right to Information activist and head of Parivartan India.
By K.P. Narayana Kumar
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First Published: Tue, Feb 26 2008. 08 30 PM IST