This is not the first time that a government has gone on an austerity drive. The first call for austerity dates back to the time India went to war with Pakistan in 1965 and suffered a devastating drought the following year.
Prime Minister Lal Bahadur Shastri called upon people to “miss a meal” and urged them to cut guest lists at wedding parties so that the country could tide over a food shortage. Indira Gandhi’s ‘Garibi Hatao’ (banish poverty) campaign was perhaps one of the most successful acts of symbolism that nudged politicians to avoid conspicuous consumption.
When P.V. Narasimha Rao was prime minister in the early 1990s, he appointed an austerity panel under Orissa Chief Minister Biju Patnaik. Patnaik recommended a slew of measures
— from downsizing government to freezing salaries of officials — in what could be described as the first comprehensive attempt to cut wasteful expenditure.
Each time fuel prices shot through the roof, we have heard of government orders asking officials and ministers to go short on travel — although there is no empirical evidence if those orders ever worked.
That said, never before has a call for austerity from the ruling coalition generated as much drama and hype as we are seeing today. Rahul Gandhi’s travel in the Shatabdi Express from Ludhiana to Delhi was a nightmare for security officials and may have actually cost the government much more than the Rs 10,000 saved by the economy class rail journey.
A visible flaw in the campaign is that ministers and officials are being encouraged to fly economy class, while a previous government order requires them to travel by only Air India that is often more expensive than other airlines.
But nothing undermines the campaign more than the Cabinet’s decision last week to increase the dearness allowance (DA) by 5 per cent. The
hike would cost the exchequer Rs 2,300 crore in a full year — nearly 10 times the money the government would save annually through a 10 per cent cut in travel expenses of ministers and bureaucrats.
In a broader context, the scenario is not very different. The government has done little to keep its non-plan spending under check — namely salaries and subsidies that have ballooned in recent years and taken the fiscal deficit to an alarming level. The money saved through the ‘austerity drive’ may at most add to some hundreds of crores — a flash in the pan given a fiscal deficit of about Rs 4 lakh crore.
So what is all this ‘austerity’ brouhaha now about? The only major elections that are round the corner are in Haryana and Maharashtra, where voters care little about what their politicians wear, eat or do with their money.
One theory has it that the ‘austerity campaign’ has snowballed from an action that was intended to nix the embarrassment caused by news reports on how some ministers opted to stay in five-star hotels because the government had not been able to allot them houses in Lutyens’ Delhi. This is too naïve a view to take seriously.
That leaves us with one other conclusion: that there is no method to this madness.