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Creating our own surplus


D. N. Bezboruah

Over the years, I have watched with dismay and a sense of dishonour Assam’s total dependence on the Centre’s grants—not only for development projects, but even for sheer economic survival. Over the years, Assam has slid down from its pre-eminent position of being one of the leading States of the Union to being a “begging-bowl” State. I know that there is no dearth of people who actually rejoice at Assam’s ability to depend perpetually and ubashedly on the Centre’s grants to the State for all its fincial needs without having to contribute anything to the State’s exchequer. There is a bizarre sense of victory about being able to make the Centre pay for all our needs. This is an irratiol approach to our mode of providing for our fincial needs.

How does the Centre provide the funds for the requirements of the States of the Union? After all, it cannot use its mint to go on printing currency notes to fince States that are uble to take care of their fincial requirements. The Centre depends heavily on some of the more affluent and productive States like Maharashtra, Tamil du, Kartaka, Andhra Pradesh, Punjab and Harya to provide the means to make its fincial allocations. So we have two kinds of States—those that eble the Centre to make its fincial allocations, and those that are no more than the beneficiaries of the efforts of such prosperous States. The latter category comprises the “begging bowl” States. I am aware that there are many people who are not in the least ashamed about belonging to the “begging bowl” group of States. Many of them are, in fact, convinced that States that can always sponge on the Centre are the smart ones. This is what happens when people of the industrially undeveloped States of India are mere spectators of development elsewhere in the country but are not prepared to put in the planning and execution that are needed to bring about any kind of worthwhile development here. Unfortutely, this is the kind of mindset we have had among our leaders in Assam for several decades. The outcome is only too glaring. We have fairly generous development grants coming in year after year with much of it having to be returned because our leaders and bureaucrats fail to utilize such grants within the specified time-frame. Over the years, this debilitating failure has become an accepted part of the administrative and work culture of the State. This fincial year too is likely to conclude in just over a month with hundreds of crores of rupees having to be returned by the State government to the Centre for failing to utilize the money within the timeframe and conditions set. Let us take a typical example of what has happened to sizeable funds advanced by BARD to some of the departments of the Assam government for the fiscal year 2016-17 for infrastructure development. With only a month left for the utilization of the grant of Rs 1,240 crore provided by BARD from its Rural Infrastructure Development Fund (RIDF), the departments concerned of the Assam government have been able to spend only Rs 370 crore till January 2017. This is very much in tune with what happens to most grants of the Central government as well as other fincial institutions trying to bring about some kind of industrial development in the State. Most of us in Assam are aware of how much time is spent by the heads of government departments of the State scheming and planning the means to siphon off much of the development funds that come from the Centre or from fincial institutions like the Intertiol Monetary Fund (IMF), the World Bank and the Asian Development Bank (ADB). In almost every case where it is difficult to siphon out the money and divert such funds to private accounts, one sees that the funds are not utilized and the money has to be returned. In a State that is uble to create a surplus of its own, the ibility to utilize grants and fincial assistance from exterl sources efficiently is most unfortute. There is a lamentable failure in the appropriate circles to appreciate that the State would be in a position to create a surplus of its own only when it is able to build up the requisite infrastructure for generating such surplus through proper utilization of funds made available to the State by the Centre or exterl fincial institutions. Over the years, the disinclition for any kind of productive work within government departments has gradually turned into an ibility to kickstart any work-related project even when funds have been readily advanced for such projects. We can all see the effects of such a mindset and such an attitude to work: no development and an abnormally high unemployment rate.

While we may not be efficient enough to create a sizeable fiscal surplus through governmental activities, it would not do to jump to the conclusion that there is no money in circulation within the State. That there are huge sums of cash in circulation within Assam was established by the figures of deposits of Rs 1,000 and Rs 500 currency notes made during the recent demonetization initiative. Thousands of crores of rupees were deposited even in Assam. This is a clear indication of the kind of money that has been siphoned off from government funds over the years. But these are sums in the hands of private individuals. In fact, most of it may not even have come out had there not been a demonetization of high-value currency notes. That apart, the speed at which some people were able to get new currency notes of Rs 2,000 and Rs 500 worth crores of rupees was indeed mind-boggling. But when we talk about creating a surplus, we have in mind the government’s fincial activity and not the fincial activity of individual citizens. What matters to the people and what reflects the extent and kind of fincial activity in the State relates to the government’s revenues and expenses. We go by what the government is able to do with funds available to it and not by what private individuals are able to do with their persol assets when it comes to major public issues. Even so, what is generally acknowledged is that there are substantial sums of cash in circulation within the State as well as expenditure of substantial amounts of money by private individuals on luxury goods and consumer durables that go to establish an individual’s status in society. No wonder, we have even in an underdeveloped State like ours, dealerships of expensive cars like Mercedes Benz, BMW, Audi and so on and the gradual emergence of five-star hotels and a five-star lifestyle in a city like Guwahati. The clear message that is going around is that regardless of the surplus that the government can create or help in creating there is a great deal of surplus created by private companies and individuals. Ironically enough, this surplus is created largely through the diversion of large sums of government funds from the exchequer to private coffers. The situation can be more simply stated by saying that there are two kinds of big money that are in circulation. One is the money siphoned out of Central funds and the other is bribe money. Both varieties help to sustain the most lavish and luxurious lifestyles for people who never earned the money but just looted it or facilitated the process of looting it. This is the kind of visible surplus that has been created in a State that resists development for everyone because some undeserving souls have been provided the means of diverging government funds from the exchequer to private coffers. It is obvious that as long as this kind of surplus exists, there will be no benefit either to the State or to the common people of the State. And that is the most important reason for people to fight the perverse kind of surplus that is being created in the State. It has become the responsibility of the people to ensure that the loot of public money is brought to an end and a healthy surplus of public money is created. Until the loot of public money in Assam is brought to an end and until people in government work to create a healthy surplus through the government’s fincial activity, there will be little use in talking about development.

About the author

Ankur Kalita