Rs 118,000 crore: Climate of fear costs India dear

As calculated by the Ministry of Program Implementation, the original cost of the 195 projects — Rs 586,000 crore — has gone up to Rs 704,000 crore.

Published: 21st October 2012 09:07 AM  |   Last Updated: 21st October 2012 09:07 AM   |  A+A-


The Planning Commission may have removed the much-debated phrase “policy paralysis” from its official document, but a ‘sick administration syndrome’ threatens to overshadow a string of economic reforms unleashed by the UPA to improve the country’s fiscal health. Facing heat from civil society  activists and investigating agencies, many Union ministers seem to have lost their political will. The fear created in the bureaucracy because of the spate of arrests of babus who approved decisions at the behest of their political masters all over the country has brought the movement of government files to a standstill in ministries. This has caused a gigantic cost over-run in project implementation of Rs 118,000 crore, according to a report released in October by the Infrastructure and Projects Monitoring Division of the Ministry of Statistics and Programme Implementation.

To give an idea of size, the overrun equals the total budget of the Education and Rural Development ministries put together. Some of the projects were even commissioned during UPA I. Former Cabinet Secretary TSR Subramanian told The Sunday Standard that civil servants are afraid to touch a file and make recommendations to expedite work. “They know anybody who makes a recommendation will be targeted sooner or later. The present system needs a complete reform otherwise bureaucrats will not work. It doesn’t affect them but it affects the people. With the current policy paralysis, both politicians and bureaucrats are happy but the country is suffering,” Subramanian said.

The report says that out of total 195 government projects, 19 have been delayed by one to two years and 27 mega-projects by two to five years. It also suggests that 91 big-ticket projects are hanging fire, and at least 14 projects will be delayed by more than five years. The report is based on data collected till July 1, 2012 of all mega projects costing above Rs 1,000 crore.

Prime Minister Manmohan Singh’s assurance to babus this April that there will be no witch-hunting—meaning they would not be penalised for bonafide errors of judgment—seems to have failed to boost bureaucratic performance. The cost overrun is the excess cost of a project deemed as the expected loss to the national exchequer; which would eventually mean a greater tax burden on the aam admi. As calculated by the Ministry of Program Implementation, the original cost of the 195 projects— Rs 586,000 crore —has gone up to Rs 704,000 crore.

Speaking to The Sunday Standard, former Deputy Comptroller and Auditor General (DCAG) N R Rayalu said, “The authorities concerned in the ministry always justify delays as inevitable due to blockage in getting several clearances. Actually the problem is more of a political nature. They should not commit to so many projects. But they do so because of political compulsions, to show the people that the government is at work. They spread the resources so thin that it becomes impossible to complete projects within the deadline, costing more money and resources,” Rayalu said .

The report says that the government cleared 11 projects even without defining any commissioning schedule.  “The brief reasons for time overruns as reported by various project implementing agencies are the delay in land acquisition, revision in the scope of work, delay in supply of equipment and non-development of modern equipment, award of works, forest and environment clearances,” the report states.

But Rayalu said the real reason behind the delay is concealed by our bureaucratic system. “The reasons pointed out by the ministry are not the causes for delay but are excuses. How can a project be approved without procedural clearance? They are misleading the public,” Rayalu said.


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