'An Interment Budget'

Sir, I am very happy that at long last, we have this speech, called the speechof Pranab Mukherjee, minister of finance. Sir, you will allow me to expressa regret that if this title had come earlier, Pranab Mukherjee, minister offinance in this government, then many of the things which I shall now speakabout, would not have happened. The problem is that then elsewhere things wouldhave happened which all of us would have regretted. Sir, we have to take thingsas they are, and I will make three points for Shri Pranab Mukherjee, for thegovernment and for the House also.

The first point is that the Budget documents disclose throughout that thepromises which were made, repeatedly, by this government, in successive Budgets,have not been kept at all.

The second point is that in fact, as I should show, fallacious claims, basedon absolutely fabricated figures, which have been named even by the CAG, havebeen put forward in this Budget as was done in Budgets throughout the tenure ofthis government.

The third point is that the fiscal mismanagement of the last four years hasbeen of such an order that I, having followed Budgets, as Dr. Mukherjee knows,since the mid-seventies, cannot think of any period of four years havingmismanagement of fiscal affairs of this order. It has brought us back to theexact position, Dr. Mukherjee, which prevailed in 1986-1991 and, as I shouldshow you, which greatly contributed to the breakdown of our accounts in 1991and, then, again, to what happened from 1996 onwards and, then, again led to afinancial crisis which had to be retrieved by Shri Yashwant Sinha, Shri JaswantSingh and others in 1999.

The fourth point that I shall make, Sir, is that this mismanagement of fiscalaffairs of the government is a symptom of general economic mismanagement whichhas, today, brought us to a position where there are now very limited options toretrieve the country from the economic crisis. ...

No measure to stimulate the economy

Throughout this period and especially in the last six months, aftercompletely denying month after month that the country was heading for aslowdown, the government is using the international economic slowdown as analibi to cover up the consequences of its own mismanagement. And I will start,Sir, therefore, with the Speech itself. You kindly look at page 5 of the Speech,in para 20, I think. What does the minister say? Mr. Mukherjee, says,"Extraordinary circumstances merit extraordinary measures. Now is the timefor such measures." And, as everybody has acknowledged, no measure wasannounced to stimulate the economy. 

A story was put out that because this is an Interim Budget, the government isadhering to a convention. There is not a constitutional convention, Sir, whichhas been adhered to by this government. There is not an office; there is not anagency. CBI is a good example, Governor's Office is a good example, which is notbeing converted into an instrument. The real reason is not that. After all, thisis what Dr. Mukherjee said on the 16th of February. And yesterday, he announceda third stimulus package.

Everybody saw that the Budget was a non-Budget when the country is, exactly,as he said, in extraordinary economic circumstances and that convention did notprevent the government from announcing an additional expenditure of Rs.1,40,000crores. Actually, the reason for this non-Budget is that the consequences ofeconomic mismanagement of four years are now so severe that extremely harshmeasures are necessary and this government does not have the gumption to takethose measures. And, as I mentioned to you, Sir, the very next sentences thatfollow after that show how the government is using the international economiccrisis to cover up the consequences of economic mismanagement. 

FRBM Targets

You just see the next sentence. "Our government decided to relax theFRBM targets -- I will come to the targets and why they are so important -- inorder to provide much needed demand boost to counter the situation created bythe global financial meltdown." But actually speaking these FRBM targetswere given a go-by last year. In Mr.Chidambaram's speech last year -- you willrecall that first he took great credit -- he said, "It is widelyacknowledged that the fiscal position of the country has improvedtremendously", and he gave fabricated figures. Then he said, "Furtherprogress will be made in 2008-09. Hon. Members will note that not only will Iachieve the target of fiscal deficit under the FRBM Act and I also left myselfsome headroom." It was last year. But then he said, "In the case ofthe revenue deficit, I will meet the target of annual reduction of half a percent." You will recall how much clapping was there at that time in theHouse. Why? It is not because of the international economic meltdown. He furthersaid, "However, because of the conscious shift in expenditure in favour ofhealth, education and social sector, we will need one more year to eliminate therevenue deficit. In my view, this is an entirely acceptable deferment." Butthis was done last year. We are now being told as if this target has been givenup only now. It is being given up to provide the stimulus which is necessitatedby the international economic meltdown. Sir, this is a typical example of whatis happening. 

Allocations v/s Outcomes

I shall show you how and I am very sorry that Dr. Mukherjee has not been thefinance minister longer enough because it could never have happened under hiswatch. It is not that the figures have been completely perverted. Completelyfallacious figures have been given in the Budget documents successively. I willcome to that later. Sir, I will first take up the question of the test which hasbeen prescribed by the finance minister himself and by the Prime minister many,many times over. They said it again and again. In the Budgets of 2005, 2006,2007 and 2008, the Prime minister several times said, "Allocations are notimportant. Allocations are not enough. People are interested in outcomes."The Prime minister said, "The single biggest task and the emphasis of ourgovernment shall be to deliver the outcomes that we have announced." Infact, as you will see just now, the outcomes, item after item, have beencompletely suppressed and claims are being made only on the basis ofallocations.

Mumbai: My friends from Maharashtra will be particularly keen to knowthis. The Prime minister announced, with great fanfare, that the governmentwould give a Special Package of Rs.1,000 crores to make Mumbai a financialcentre. You see the documents. My friend, Shri Kirit Somayya, tried hard to findout how much had been given. It took him six months of effort to get the figure.He had to apply under the Right to Information Act. The government was notdisclosing. Eventually, it came out that of the Rs.1,000 crores, Dr. Mukherjee,which was promised by July 1st, only an amount of Rs.16,16,00,000 had beengiven. Again we applied under the Right to Information Act. Since then not onepaisa has been given and Mumbai remains as far or as near becoming aninternational financial centre.

Mithi River: Secondly, you will remember, Sir, and Dr. Mukherjee willalso remember, that there were many visits by the Central ministers and theChairperson of the UPA. They were because of the flood which engulfed Mumbai on26th July, 2005. What did they announce? Both of them, the Prime minister andthe Chairperson of the UPA, announced a Special Package of Rs.1,260 crores for,what they said, the rejuvenation of the Mithi River.

Dharavi: Sir, as of yesterday, not even one paise has been given underthis promise at all. I am going only by the Budget documents. Similarly, therewas a great plan that was announced that Dharavi would be reconstructedcompletely. Its poverty, its filth, the crime in it, is being celebrated ininternational films and we are applauding those films. Not one shed has beenmade, as of yesterday, when I found out, for the reconstruction of Dharavi.

Mumbai Metro: Maharashtra was led to believe that the Centre, as it isdoing in Delhi, will finance the Mumbai Metro. In fact, they told theMaharashtra government, after repeated pleas from Mumbai, that the Centre willnot do anything of the kind and you manage on you own with private partners. Theresult is, the first phase has already slowed down. For the second phase, bidswere invited. Do you know what happened? The last date had to be extended threetimes and yet not one bidder came forward, at all. So much for the great claimson urban infrastructure!

National Highways Programme: Secondly, you have mentioned in yourBudget Speech, in the ancillary documents, the National Highways Programme.Shrimati Mohsina Kidwai is here. In response to her question in December, it wasstated that the project completion rate had dwindled, in 2004-05, which hadalready slowed down to 81 per cent, and by 2007-08, it slowed down to 56 percent, it has now slowed down to less than 50 per cent. The award rate -- thereis a mystery behind this which the Parliament should investigate -- has fallenfrom 70 per cent in 2005-06, to 17 per cent in 2007-08. What was the remedy ofthe government? They set up another Committee which was chaired by the Primeminister himself to ensure that infrastructure projects are implemented swiftly.

The finance minister has again mentioned those projects. What happened? ThePlanning Commission says that the NHAI is now taking, instead of the five monthsit was taking for awarding a contract, 20 months even to abort a contract. Butthe miracle is, as will be evident from Shri Mukherjee's Budget documents, thatthe NHAI is spending almost all of what it has been allocated, but the projectsare not getting completed. This is the position. What is the reason? Is it theeconomic meltdown? I will tell you what the reason is. I will give you twoinstances of this and show you the consequences for India of all this. Thereason is this. Shri Mukherjee will recall that when this government came intobeing, they announced a decision that the Chairman of the NHAI shall have aminimum tenure of two years. Do you know that the current Chairman is the fifthChairman in the last two years? Similarly, to ensure transparency, the NDAgovernment had decided that the programme would be decided by the government,but the contracts would be awarded by the NHAI. Therefore, to ensure bothexpeditious decisions as well as accountability, the Board was elevated toSecretary level officers. What did this government do? They said, "No, no,contracts shall not be given by NHAI, contracts shall be given by somethingcalled, the government". For good reasons, I am sure, Sir! 

What is the net consequence of this? Shri Mukherjee has spoken aboutinfrastructure projects, emphasis on all this, Highways, etc. Do you know whatthe consequence is? Just a few months ago, bids were called for 60 projects ofthe NHAI. Shri Mukherjee knows this. I am sure the House would beinterested to know that for 43 of these projects, not one bid came forward. Thatis the credibility to which the highest programme has been reduced. And, of theother 17, in six cases, there was only one bidder, and the consequence is thatnow without the Cabinet approval, no sanction can be given for those sixprojects. For the others, the other alarming factor is that the bidders haveasked for higher grants, almost up to 35 per cent higher than what wasoriginally envisaged.

Rajiv Gandhi Drinking Water Mission: Sir, I will now come to thingswhich are really very distressing because I cannot understand why suchprogrammes are named after such good people, and what happens, in fact. Take theRajiv Gandhi Drinking Water Mission. I request Shri Mukherjee to kindly read theCAG Performance Audit Report (No.12) of 2008, which was laid here. It says,"Since April, 2000, to April, 2007, one-and-a-half lakhs fully coveredhabitations, which were supplied drinking water, have now slipped back. The CAGsays that the slippage is at 'an alarming level'. Then, he says, "The datathat is being given to us is unreliable." Projects have been put up atplaces which are unsustainable. Laboratories for testing water quality, whichare mandatory under the Mission, have not been set up. Or, where they have beenset up, qualified officers have not been deputed; or, where the officers havebeen deputed, tests are not taking place. And, he says at one place, and Iquote: "The water supply may pose a threat to public health". Theycall it the Rajiv Gandhi Drinking Water Mission! [I do not understand whatthey reduce even their Gods to! -- translated from Hindi] 

NREGA:The third thing is, you have mentioned about the flagshipscheme, that is, the National Rural Employment Guarantee Scheme. Now, again,there is the Performance Audit Report (No.32) of 2008 of the CAG on this. Hesays, "Of the 3.81 crore rural households registered under this scheme,only 22 lakhs, that is, only six per cent, got the mandatory, legally allowable100 days of employment. This is the flagship scheme! Not only that, he showsenormous deviations in the scheme. 

I don't want to take the time of the House in that. I will just give you onlyone point, Mr. minister, to show you the condition of accountability in thisgovernment, about which you have spoken, the Prime minister has spoken, and ShriChidambaram has spoken again and again. Do you know that the CAG has pointed tothese deficiencies? Now, the minister, the other day, when questions were put,was claiming great credit for this. The minister now says, "No; no,implementation is a State subject." So, the CAG is forced to point it out.[Where there is a scheme, the credit is yours, but if there is a deviation,deficiency or default, it is the responsibility of the states! -- translatedfrom Hindi] The CAG says, "The National Rural Employment Guarantee Act is aCentral legislation, and the ministry, as the nodal agency for NREGA, bearsultimate overall responsibility for coordinating and monitoring theimplementation and administration of the Act, and ensuring that funds providedby the GOI are economically, efficiently and effectively utilised by theimplementing agency." It is your responsibility, but it is not done. Yousay, "It is of the States". Not only that, the CAG said, "Theseare your guidelines." You provided these guidelines because you thoughtthese were necessary for implementing the schemes. These have been routinelyviolated. So, then, the ministry suddenly remembered and wrote to the CAG; allthis is in the Report. He expressed his surprise. The ministry wrote, "No,no; our guidelines were merely suggestive."

Therefore, the ministry took this great phrase and now said to the CAG thatour guidelines, for which they were taking so much credit, were merelysuggestive. So, the CAG came down heavily on the ministry saying that it wasyour responsibility. If you felt that your guidelines were merely suggestive andwere being violated for good reasons, you had to come up with alternateguidelines and rules under which the whole Scheme should be implemented. But, itis complete abdication, and as I said, it is complete typical that if there iscredit to be claimed, it is the Centre; if it is not credit, then, it is theStates' responsibility. 

Telecom: Sir, just now we saw my good friend, Shri Raja, he used to bevery innocent when he was working with us. Just now you saw him in action. Now,I will tell you, contrary to what the Budget documents tell us, what ishappening in the Telecom. Sir, this is a very important matter, and, I willstart with this. I request Members to see how Parliament is being [*wordexpunged by the chair -- let's take it as 'misled' -- Ed]. You see, myfriends Brinda [Karat and other from the Left -- Ed] and others arealways very agitated about rural-urban divide because of telecom. On this,questions are asked by Members of the CPI, CPM and everybody. I remember, I usedto be asked these questions.

[Ms. Mabel Rebello of NCP interjected:  "We are alsoconcerned" -- Ed]

Very good. Madam, it is very important that you are concerned about it. Now,just see what is happening under your government. 

The USO Fund was set up in April, 2002. As you know, Sir, it is anonlapsable Fund. All operators are to give five per cent of the adjusted grossrevenue towards this Fund. Now, the accumulations in this Fund, till last year,by now it is much more, was Rs.20,400 crores. And what is the expenditure? Theexpenditure is Rs.6,300 crores. Not only that. That means, almost Rs.14,000crores had accumulated. But, all these people, good people were askingquestions, what about USO, what about USO? So, Sir, it turns out that theaccounts of the government were so arranged that instead of the balance beingshown, as Rs.14,000 crores not having been spent, actually speaking, the balancewas shown as zero. Sir, from pages 18 and 19 of the CAG's Report, you will beshocked to learn that the balance which was Rs.14,000 crores was shown as nil.This is the balance given to Parliament! It is there in pages 18 to 19. Not onlythat. Mr. Mukherjee, the CAG says, you are concerned about accountability; thePrime minister never tires speaking about accountability, 'that I drew theattention of the government to this wrong figure, and the government has donenothing at all'. I mean, I can't understand. But, this is just one of tenexamples I will give you of complete [fudging?] of figures in Budgetdocuments, in this regard. 

They said that it has just been used to show that the FRBM targets are met.But, the more important is, you have seen absolutely scandalous proceedings thattook place in the auctioning of 2G licences. I know from personal knowledge howthe scuffle took place in Sanchar Bhavan. I know, Sir, we had cleaned up; I hadcleaned up the sector in which, Sir, such things could never happen, but forcollateral purposes. Sir, the bids were announced, bids were received and thecut-off date is changed retrospectively! Qualification criteria are changed.Sir, you personally ask the officer to come and explain to you what hadhappened.

Then, the same things happened on 3G. Guidelines were issued.