The Telegraph
Since 1st March, 1999
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- How long the interest in this budget lasts will depend on the rains

The budget is about a week old and most people have said whatever should have been said about it. There is one group of people who have said different things in public and private, a group that has been very unhappy, and yet another that appears to be quite supportive. The first group consists of those who want to curry favour with a new government. The second group consists largely of those who are day-traders and/or holders of NRI accounts, though there are also a few agriculturists who feel a bit let down after some high-pitched hype. The third group consists of people who wanted some fresh thinking in the budget-making exercise and were expecting consistency, rather than confusion, with the national common minimum programme for whatever it is worth. At the outset, let me state that I belong to the third group, in public, as well as in private!

If one looks carefully at the NCMP, the emphasis of the new government is on service delivery, managing farmers’ risk, mitigating the impact of uncertain job prospects of those currently employed, increasing productive job opportunities of those outside the organized sector, creating an investment climate, and so on. For each of these to be successful, there has to be an environment that enables local markets to develop. Such an enabling environment needs a minimum of two things — decentralization of authority and the training of labour. The latter is especially important for an economy in which two-thirds of the population is younger than the children of our leaders. While the budget cannot directly address itself to the issue of decentralization, it can certainly address the issue of training and, indeed, it has done so.

The education cess was coming; everyone knew it. What was worrisome was whether it would go to the general coffers or be truly earmarked for education. The finance minister, in all his post-budget speeches, has promised to hand over to the human resource development ministry the entire amount collected through this cess. He has also repeatedly mentioned that this amount will be used for primary education and for providing cooked mid-day meals. The commitment to mid-day meals confirms my view that even if we appreciate what is good in our country, it will happen only after it has been pointed out to us by outsiders. This is the reason why we support an argument by citing an example of a country where it has worked; when opposing an argument we search for a country where it has not worked or glibly point out that it has never been tried by any other country. In any case, appreciating what is good in what someone among us has done is a good start, even if the appreciation is a few decades late.

The other, less-talked-about proposition in the budget is the commitment to upgrade the 500 Industrial Training Institutes throughout the country. Let us understand why this is crucial. First, primary education does not entitle one to a job. It is, however, necessary if one wants to become an independent human being in charge of one’s own destiny. That is possible only when one gets primary education, secondary education and a bit more. In other words, to get the best out of a primary education, one needs to go further and get trained to earn a living. This is what the ITIs are supposed to have done. Unfortunately, they have not performed their task as one expected. Industries continue to crib about the lack of skilled labour, making the problem of unemployment look more like a problem of unemployability. While the big industries can train their own, the smaller players find it very difficult to do so. Therefore, we have an army of unskilled workers, and an equally large army of small entrepreneurs looking for skilled workers. If we can train our young people to do jobs better, they will be able to take care of themselves. However, why are we — the NGOs, the left, the right, the corporate sector — concentrating only on primary education' How does a primary school child enter an ITI'

Indeed, it is this focus on simple processes, rather than big ticket items like privatization, river linking, and so on, that sets this budget apart from earlier budgets. We have had enough of macro focus the last 50 years or so; the time has come to work a bit closer to the ground. In this context, the start of pilot projects in weather insurance that the minister announced is most welcome.

One problem many have with the budget is that it did not specify how the education cess will be spent. This is not to say that the HRD ministry is incapable of proper use of this money. It would have been reassuring if the finance minister made some noise about how exactly it will be spent, or what sort of discussion he has had with the HRD minister. The reason I state this is because there was a strong rumour at one time that every university will get Rs 5 crore from the Central government, partly funded from this cess.

The budget speech also refers to the employment guarantee scheme but refrains from stating anything about how it will be implemented. In principle, it is a brilliantly simple concept, provided it is seen for what it truly is. It is similar to a food-for-work programme, where the work can be associated with generating village level assets. This will stop the seasonal migration of whole families. When that happens, many children will also not be migrating and hence, be able to attend schools on a regular basis. And, it will be poverty-reducing to boot. Unfortunately, we will not introduce it. We will not introduce it simply because if it is successful, which it should be, there will be no more reason to have the umpteen poverty alleviation programmes named after all the prime ministers who have served us. There is a lot of leakage and vested interests associated with the existing programmes, and therefore, those are here to stay. This will reduce the amount of money available for the employment programme, and hence, will not get started.

My only real problem with the budget was the renewed focus on special economic zones. I hate this concept — one of those we have picked up from other country experiences. If the environment that defines a special economic zone is a desirable way to progress, why should we not have that same environment throughout the country' Will not the location of such a zone become a political matter among coalition partners' Will not the question of who gets to set up their units in these zones become politicized and encourage corrupt practices' Why is it that we always try to“divide” the country into separate quarters when faced with a problem'

In any case, how long the interest in this budget lasts will depend crucially on what happens to the rains. Already, people are more concerned about the delayed monsoon in most of India, and the floods in some parts of the country. We might as well wait for the real budget in February next year.

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