HYDERABAD: Lok Satta Party founder Dr Jaya Prakash Narayana suggested strengthening and empowering the Finance Commission of India, by making it a permanent independent body with the power and research capabilities to curb the expenditure of the States. Narayana was delivering a speech as the chief guest at a round-table conference on “Impact of Freebies on the Economy of States,” which was organised by the Institute of Inclusive Governance Hyderabad (IIGH) at The Plaza in Begumpet on Saturday. Professors and social science research scholars from various universities in the State attended the conference.
Narayana said India could replicate something like what was being done through the Congressional Budget Office (CBO) established in the US in 1970s, the Stability Council in Germany, or the Office of Budget Responsibility established in the UK in 2010; so that debt to GDP ratio, fiscal deficit, revenue deficit and other fiscal parameters could be monitored and flagged.
Perverse incentive
Referring to the supply of ‘free power’ as a perverse incentive being given as a ‘freebie’ to the farmers, he said that there was no incentive to save power through this, and that irrational investments like digging borewells were made, pushing the farmers into further debt and leading to suicides.
“If there is no meter to check the power utilisation, how would we know where the power is going waste, and how to check it? `1 lakh crore of people’s money is being lost in our country due to this kind of wastage every year,” he pointed out.
“In 1983, the market price of rice was `3.50 and it was given on subsidy of `2 per kg to 40 per cent of the population. Forty years later, today the market price is `30 for rice and it is being given to 80 per cent of population for `1 per kg. Even if the delivery is right, have we succeeded in eliminating poverty,” he wondered.