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Dude, where's my money?

india Updated: Jul 21, 2009 12:22 IST
Neelesh Misra
Neelesh Misra
Hindustan Times
Highlight Story

It is a 62-year-old mystery, fit for Karamchand or Sherlock Holmes: The case of the vanishing government rupee. Rajiv Gandhi said it a quarter century ago; it’s true even now. Taxpayers’ money disappears by the time it reaches India’s villages.

Sample this: The Central government sent Rs 51,259 crore to the states last year for development projects, but has little idea what happened to the money — or government expenditure is “overstated”, as the Comptroller and Auditor General said of 2007-08 spendings.

That is mostly because the Centre spends 0.5 per cent, or even less, monitoring how it spends the remaining 99.5 per A school running under a grove of trees in Uttar Pradesh. Government assets are not monitored in India’s rural heartland.cent of the national budget. In comparison, international development projects spend anywhere between 6 per cent and 10 per cent to monitor spending — the global norm is 10 to 12 per cent.

So here’s one way to keep a closer watch on what our tax is spent on: Invest money on tightening the monitoring mechanism of government projects in India, using a new network of professionals and satellite-aided data.

The Rural Development Ministry, one of the most crucial, has a Rs 62,707-crore budget this year. Its secretariat has a budget of Rs 21.55 crore. That’s 0.03 per cent, of which an even smaller portion was spent on monitoring.


That’s also because there are many agencies or programmes often tasked with the same job.

Take the building of roads. It is done under the Bharat Nirman project (for rural infrastructure), the prime minister’s rural roads project, the Members’ of Parliament Local Area Development Scheme, a similar one for state legislators and state-level road building programmes.

The result: The buck never stops. And monitoring is tougher because there is no reliable data available.

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Data from states is often questionable or unverifiable. Asset Registers — legally mandated lists of everything that exists under a project or department, from schools to tables to the measurements of culverts and the number of jeeps — have long become extinct in India’s government behemoth.

The President, in her address to Parliament last month, promised independent monitoring mechanisms at the district level, to ensure transparency and public accountability.

We show how.

To begin with, we attempt a ‘one sector, one programme’ approach for all development work. Thus all roads would be built under one national project, with states executing it; all schools under one programme.

And there would be one, common monitoring mechanism.

So we set up a countrywide network of Masters of Business Administration (MBA) graduates working as Programme Officers out of each of the 566 rural districts in the country, and out of the 11,000 smaller units variously called blocks or mandals or talukas in different parts of India.

“Hiring MBAs is certainly a workable idea,” says Vinod Rai, comptroller and auditor general of India.

“There should be more trained people — especially since the government has committed to providing more and more for rural spending in the coming years,” he said.

“Typically, the village headman has studied until the 12th standard. Until five years ago, he was handling budgets of, say, Rs 30 lakh a year. Now he has Rs 30 crore. He doesn’t have the training to maintain books.”

The MBAs, who need to work there for at least three years, should each be paid Rs 30,000 per month.

At a time when the estimated 1,600 management colleges in India are churning out more graduates than there are job openings, these positions should be easy to fill.

Each of the MBAs should have a staff of 12 data entry operators, all paid Rs 10,000 a month and equipped with either small point-and-shoot cameras or cellphones equipped with cameras.

Now, if we estimate office and hardware costs at one-fifth the cost of the project, that’s Rs 2,300 crore to create a robust national-level monitoring network — only 0.2 per cent of the Centre’s national expenditure of Rs 10.21 lakh crore proposed for this year.

This team will be paid for by the central government, but will submit data to both the central and state governments and upload all data online, apart from supplying it to the Comptroller and Auditor General (CAG) when required.

Their job: To collect evidence from the ground, backed by numbers and photographs, of whether a government scheme — or at least the big-ticket development schemes — are working in their areas.

For example, does a school for which salaries are being drawn exist on the ground? How many children are actually attending? How many girls have dropped out because there are no toilets? How many schools are giving mid-day meals?

To help this army of inquisitive humans, we use technology.

We use the services of the National Remote Sensing Agency to come out with an annual virtual Assets Register, using the Geographic Information System and Global Positioning System.

In simpler terms, satellite-aided snapshots spanning the entire nation, showing the minutest details — a rural road and its extent, the depth of the water table in a certain area, encroachments, schools, health centres and bridges.

This satellite data should be combined with field visits as part of the monitoring process.

“It’s a good idea to set up a network of MBA graduates working as Programme Officers. They can become a bridge between technology and local wisdom,” says YVN Krishna Murthy, director of the Regional Remote Sensing Centre, Bangalore. “Satellite can detect new structures, and information about what the structure is can be validated from the ground.”

The problem

No one really knows how government funds meant for development are spent. There is no monitoring, ground level data either doesn’t exist or is unreliable, and many agencies doing the same job means many people passing the buck.

HT’s fix

Pump money and attention into monitoring mechanisms to fight corruption. Here’s how:

Set up a countrywide network of MBA graduates working as Programme Officers out of each of India’s 566 rural districts, and all 11,000 smaller units or blocks.
The MBAs work for a minimum of three years and are paid Rs 30,000 each per month. Each leads a team of 12 data entry operators, all paid Rs 10,000 a month and given point-and-shoot cameras.
This will help monitor all government projects from the ground, and will cost Rs 2,300 crore — only 0.2 per cent of the central government's total annual expenditure.
There must also be a ‘one sector, one programme’ approach. All roads should be built under one national project, with states executing it; all schools under one programme. One implementing agency. One monitoring mechanism.
The government must use the National Remote Sensing Agency to come out with an annual virtual Assets Register of the nation, using satellite imagery. This will then be combined with field visits to ascertain whether what a public asset shown to exist, actually does.

(With inputs from Satyen Mohapatra)