The freebie fracas is playing out. The hi-decibel contest of allusions, assumptions and allegations continues to occupy prime time – and mind you, no party can claim to be innocent of the practice. Dialogue has been ousted by radioactive rhetoric ricocheting across the political theatre.
The occasion calls for a broader and deeper discourse. It is easy to mistake public attention around the issue as episodic and limited to freebies. For sure, as this column has observed there is a need to define what a freebie is, debate its costs and the need for constitutional guardrails. More pertinently, public angst also represents anger about public expenditure and its oversight, how taxpayer monies are used by various governments.
It is now a decade since states overtook the centre in expenditure. Between 2016 and 2021 the total expenditure of governments, centre and states, went up from Rs 37.06 lakh crore to Rs 64.70 lakh crore. Expenditure at the hands of state governments went up from Rs 23.60 lakh crore to Rs 42.11 lakh crore. How well was this used?
The fundamental assumption in a federal system is that people elect MLAs to represent their cause in states. Do the elected have the time and inclination to deliberate and debate on how taxpayer monies are used?
The harsh reality is that there is little space for the elected to represent those who elected them, to contest the claims of the regime in power, and debate the allocation of public funds and implementation of programmes.
A recent study by PRS Legislative shows that between 2016 and 2021, the legislative assemblies of states met for an average of 25 days in a year. Drill down the data, and the lack of diligence is stark. In 2021 the states together spent Rs 42.11 lakh crore - – that is Rs 11,537 crore a day or Rs 480 crore per hour. The legislative assemblies were in session for an average of just 21 days – down from 30 days in 2016.
Worse, 17 of the 29 states met for less than 20 days and five were in session for less than 10 days Five states – BJP and opposition ruled states of Karnataka, Odisha, Manipur, Punjab and Uttar Pradesh – have rules stipulating minimum number of days the state assembly will be in session. None of the states, not even in a single year in the six-year period, met with the minimum standard.
The track record of the state governments in engaging in the sacred process of democracy is shocking. It is a testimony to indifference and insufficient attention. To appreciate, consider the state of Punjab. The state’s debt to state output (GSDP) ratio was 53.3 per cent in 2021. Its fiscal deficit was 4.6 per cent, and a fifth of the state’s revenues was spent on interest costs.
Arguably the state of the finances calls for attention. Punjab has rules stipulating that the assembly will meet for a minimum of 40 days every year. The state assembly met for only 11 days in 2021, and its average between 2016 and 2021 was 14 days.
Uttar Pradesh, the most populated state in India with over 220 million people, is another case in point. Its debt to GSDP ratio in 2021 was 34.9 per cent, and its fiscal deficit stood at 4.3 per cent – its expenditure on just the social sector was estimated at Rs 1.93 lakh crore for 2021. Was the money spent well? The answer lies in unasked questions on the use of taxpayer monies. The rules state that the Uttar Pradesh assembly should meet for a minimum of 90 days in a year. In 2021, the assembly was in session for 17 days, and between 2016 and 2021 the average duration for sessions was 21 days.
The harsh reality is that there is little debate on the allocation of public funds and the implementation of programmes. This is reflected in the persistence of insufficiency, incapacity and losses across sectors. There are over 10 lakh vacant teacher posts, of which 2.48 lakh are in Bihar. There is a shortfall of over 17,500 specialists in rural health centres – of which over 2000 is in Uttar Pradesh and 1200 in Odisha. Over 5 lakh police posts are vacant – UP, West Bengal, Bihar, and Madhya Pradesh leading the list.
There is also apathy about accountability. State Discoms reported an average of around Rs 74,000 crore in losses between 2017 and 2020 – that is Rs 200 crore every day. In many states, nearly half the state public sector enterprises do not file annual financial statements. For instance, in Telangana, of the 66 functioning PSEs, only 30 furnished their accounts for audit. In Jharkhand, only 16 of 31 filed their accounts for the CAG audit. Are government companies immune to the provisions of the Companies Act? Do state governments owe no answers to taxpayers?
India is at an inflection point. The momentum for India’s next growth push depends largely on how well the states deliver. Nearly every square kilometre of India is governed by the states. India’s states are as large and populous as independent nations. The evolution in scale and complexity calls for a review and overhaul of how the world’s largest democracy conducts governance. India’s aspirations rest on how well the political class resets oversight, transparency and accountability.
Author of The Gated Republic, Aadhaar: A Biometric History of India’s 12 Digit Revolution, and Accidental India