Austerity vs ambitions

Austerity is a bogey in our lopsided governance. We have gone out of proportion when it comes to income and expenditure, and all tall claims of reforms and rightsizing have fallen short of realistic implementation. The admission from the government that the cost of civil administration has increased by 13% to Rs161.2 billion in July-Sept should not raise any eyebrows. Perhaps, that was a given taking into account our inconsistency in policy, and the ad-hocism that we are obsessed with.

The data released by the finance ministry says that the pensions bill has increased by a staggering 125% over the last five years, and the subsidy tag has risen by six times to post an outlay of Rs120 billion. The first quarter of the current fiscal year ironically saw a double-digit increase in spending. This is despite a cut that the government had taken in the form of shunting out more than 200,000 people from state-centric payroll, and a freeze on new purchases, foreign travels and other auxiliaries.

The dilemma in managing the purse deserves some serious thinking, and instant out-of-the-box solutions. The cosmetic measures that governments usually adopt to win public clap, and the lip-service associated with abstemiousness must come to a halt. While the PSDP funding usually is the first victim when governments want to squeeze the budget, it looks the other way when it comes to their personal political-incentivised expenses. Pro-government advertisements, fanfare billboards, undesired foreign trips of bureaucracy and parliamentarians and, last but not least, misuse of funds remain a constant, though. This is where austerity must set in, if the economy has to be sustained within revenue generation limits.

Another enigma eating into our national exchequer is corruption. If lenders, including the IMF, are to be believed, we are in a quagmire and literally no efforts are being made to stem the rot. The cited recovery of Rs5.3 trillion by the premier anti-graft agency and subsequent absence of prosecution of the guilty is a case in point. Stringent checks and balances, and reforms, on the path of governance are indispensable to stay afloat.