Indian Taxpayers do not get accountability from the government on all actions which the government takes to deploy the tax receipts fruitfully for the development of the country.
Yes, yes, I understand that the Finance Minister presents his annual budget this month (every February) to the Parliament, and the budget has to be balanced. And the fact is that the Finance Ministry mandarins and accountants are now working very hard indeed to prepare the budget, and they have to follow accounting rules, of course.
But, does the government explains the rationale of its expenditures in great detail, except hundreds of pages of the usual speech through which the citizens are expected to wade through and obtain an intellectual enlightenment as to how their funds are getting used by the government ministries. Not really. One has to depend on consultants to explain the mumbo jumbo in easy terms.
The point is that there are two major areas which continue to drain government tax receipts (both income taxes and corporate taxes are what I am referring to here – there are other incomes of course) into unprofitable public sector investments and subsidies. If the government of the day continues with this heritage philosophy of funding the unfundable, then it also has the responsibility of specifically explaining its actions to the citizens.
Let us look at investments and equity infusion into unprofitable public sector companies. Take the example of the national airline, Air India (now called just as “Indian”). This airline is plagued by many issues for the past decade or so – it has a poor safety record, it invested heavily into new planes which it never could afford, it is run badly, has had the privilege of being managed by a series of bad managers at the top, it has the privilege of continual governmental interference, it gives away many free tickets to the undeserving, its pilots are undisciplined, it has poor quality of service on board, and on and on………it is an endless list of complaints. Should it be run by the government at all ? Should it get funded for bad performance ? Given that the funds are coming from tax payers.
The government of India just approved a funding of nearly USD 1.5B for rescuing Air India, which could not even pay salaries to its employees, and could not service its debt. It could not pay for jet fuel even. This is terrible performance which is getting an infusion of taxpayer funds.
Does Air India deserve this funding ? Absolutely not. I cannot make a prescription of what the government should do. I can only say what they should not be doing, and that is exactly what they are doing.
Now let us look at subsidies. Subsidies might be a political necessity, and no government in the history of independent India could escape from continuing to provide sometimes unjustifiable subsidies to various segments of the society. I am not against subsidies per se, but I believe it is important to tie the subsidies to a timeline for termination eventually. People have to accept that government subsidizes certain things for the benefit of the poorer sections of the society or to help farmers, but everything should have an eventual expiry date.
One can argue that elected governments have the power to do what they wish to do in their own interest. The only solution is to defeat the party which runs the government in the next elections, this is the only possibility in a democracy. So, the taxpayers have to decipher government’s actions and motives via the budget speech, rather than just look at the pure numbers. If the government cannot sustain its policies, then taxpayers have to take cognizance of the same.
Think about it !
Cheers,
Vijay Srinivasan
11th February 2012
Mumbai
