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Right steps

1 Nov. 2014 1:28 AM IST

There is much to ponder about whittling down expenditure in the government since it exists to serve the people and not itself. It was therefore a welcome step when the prime minister Narendra Modi on Thursday ordered a slew of measures aimed at cutting down unnecessary expenditure so as to restrict budget deficit to just 4.1 % of GDP in 2014-15.Austerity is not a mild word in financial matters; it practically means taking drastic steps to severely limit expenditure so that deficit can be curtailed. The central government has banned fresh appointments and filling up of posts that have fallen vacant for over a year ; ministers are banned from holding meetings in five-star hotels or travelling in first class in flights and a ban on purchase of any other vehicles even by defence forces, paramilitary and security forces unless it was to meet with operational requirements. The severest cut was the mandatory 10 % on non-discretionary or non-plan outlay. The central government’s austerity drive comes when deficit reached nearly 83% of its full year budget in the first half of the current financial year. The deficit was a cause for concern for the central government because a serious intervention was required to reduce the gnawing deficit which greatly affects the nation’s economy. It would do well for the government of Nagaland to revisit its past decisions to effect austerity measures in order to halt further downslide of the financial position beyond the deep crisis of an unmanageable deficit of around Rs.1234 crore, which is half of the state annual plan budget. Despite announcing such austerity measures, the state government has not implemented it in letter and in spirit. There are cuts made over budgets of various departments since the past several years but these were done not to reduce expenditure but to provide fund for other projects. In addition other unnecessary expenditure such as purchase of new vehicles and all too frequent and fruitless air travels by ministers and bureaucrats have hardly reduced. Of course, the ban on fresh appointments and creation of new posts have been more ignored than obeyed which has been reflected in the sharp increase in the figure of government employees between 2011 and 2012 by over ten thousand. Interestingly, a majority of fresh appointments have been done through back door and in clear violation standing government orders. There is also a need to rationalise entitlement of vehicles for government servants since many senior government officers retain more than one vehicle just because they hold charge of more than one department. In the past, during the 60s to mid-80s, only officers of certain categories were entitled to a vehicle. Even ministers had only one official car. Today almost all officers have government vehicles while ministers retain more than two vehicles. Damages in accidents while not on bonafide government duty or theft of vehicles need to be relooked. In the past, ministers or officers flying to Delhi had to get official clearance with justification but these days most fly at government expense on flimsy grounds. When the state coffer is almost bankrupt, there is more reason to impose stricter austerity measures to arrest further downslide. This is what the central government would expect from a state that has not learnt to live within its means.

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