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Editorial | May 2017

Spends are good, outcomes are better

In India, traditionally, over the years, we tend to measure ourselves more by efforts, rather than on results. While everyone of us is happy practising this policy, no one agency does this better than our governments. Every year, ministries are assessed by how much of the sanctioned money has been spent by them; government projects are evaluated by actual spends v/s targeted spends; Our great five-year plans also used to be largely reviewed basis actual achievements of cash outflows. Do we think this is right? What is missing here?

Accountability for results is sadly missing from all these. If we are a nation that recognises, awards and celebrates spending of tax-payers' money into projects without checking for outcomes achieved, the poor condition of our infrastructure and welfare sectors should not come as a surprise. This is what we deserve, being a nation that evades accountability of achieving results, but takes sinister pride in making just investments and expenditure. I call it sinister because public spending is usually associated with graft, and leakages of many kinds. Let us not forget, that the world takes note of such irresponsibility in public spending. This has been the disappointing situation in our public governance so far, but there were expectations that the new regime would bring about change, for the better. There was a lot of talk about smaller government, better governance, which gave rise to such expectations. However, things may not be improving in a hurry. All that has happened is Five Year Plans have been replaced by Three Year Plans, and the Planning Commission has been renamed NITI Ayog. Is anything materially different, in terms of quality of planning, or results or outcomes, or accountability towards achieving these?

Let us talk with an example here, an example that we all will easily identify with. Swachh Bharat is a flagship project of this government, and it is a project with great importance for the nation. Our government had tied up with the World Bank for funding of Swachh Bharat Gramin Mission (SBM-G) to the extent of $1.5 billion, with yearly tranches of $100-300 million, to be released annually in July 2016, July 2017, and so on. But there was a catch! The disbursements were conditional, subject to submission of evidence of targeted reductions of open defecation - and hold on, there is more complexity - the evidences were to be submitted by independent consultants/surveyors. So, in essence, the disbursals were linked to results. And what has been the outcome? No money has been disbursed till date, because, leave alone submitting evidence of reduction in open defecation, the ministry of water supply and sanitation is yet to appoint an independent verification agency.

This is not a surprising situation at all, given our propensity of spending money with scant regard for measuring results. Truly speaking, Swachh Bharat should never have been seen as being about a toilet construction spree, but as an initiative around change of behaviour, a change of culture. The same is true for many of our other initiatives. Likewise, in the case of UDAY, which is a very good scheme on paper, for reformation of our gasping power distribution entities, we need to be mindful of the promised outcomes of targeted reduction in AT&C losses, reduction in gap between Average Revenue Realized (ARR) and Average Cost of Supply (ACS) to zero by FY2018-19, and break even of discoms in two-three years, instead of simply celebrating savings in interest costs. We must be pragmatic, and hold our public spending fully accountable to public scrutiny around outcomes that impact the public.

Enjoy reading. Send us your feedback at Sumit@ASAPPinfoGLOBAL.com

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