Parasitic economy woes

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The Comptroller and Auditor General, CAG, report for Manipur this year was damning to say the least. Among many others, it charged several departments of the Manipur government of not furnishing utilization certificates for the funds earmarked for them during the financial year 2016-2017. The total figure exceeds a whooping Rs. 5000 crores, which is close to half of Manipur’s total annual budget, plan and non-plan combined. Without going into details, the accountant general, D. Jaisankar did explain in a press meet on the occasion of the releasing function of the report, that the unaccounted for funds have been utilised, but it is not known how or where they have been used. In other words, the unaccounted funds are no longer in the government’s bank account and have been put to use somewhere other than where they were meant to be. This is serious, though it would be wrong to straightaway presume there are criminal offenses involved.  The funds could have been used not for what they were earmarked for, but their alternate use though not appropriate, may not be illegal. Our guess is, this is not all about fund leakages or corruption, but of a non-sustainable balance between revenue entitlements of the state and its essential expenditures. To put it briefly, the state is spending more than what it earns and to make up for the extra expenditures on its home front, it is eating into its plan budget, much of it now coming in the form of central schemes under the new political dispensation at the Centre. Indeed, after the abolishing of the Planning Commission, the overall philosophy behind the funding pattern for development seems to be to relegate the states to a role of plan implementers rather than plan makers. But this is another question to be discussed another time.

For the moment, the one question that beggars an answer is, where have such an astronomical sum of Rs. 5000 crores plus gone from the government’s coffer? The answer, to our mind, is quite obvious. Part of it would have leaked and disappeared into the black hole of the unholy ministers-bureaucrats-contractors nexus. How otherwise in such a poor state with an expanding population of impoverished urban and rural jobless, would we also see a rising number of expensive SUVs and marble palaces? Such economic scenarios are typical of a banana republic, which Manipur must admit it has indeed become one in a very entrenched way. But even this leakage would not account for all of the Rs. 5000 crore plus expenditure for which the government is unable to provide utilisation certificates. In any case, for the actual leakages, the nexus would have made sure there are utilisation certificates by hook or crook. The larger part of this money missing on paper would have gone to meeting the state’s non-plan expenditure heads, monthly salary bills being the biggest of these overheads. And since the government job sector essentially is of the service sector meant to service other sectors of the economy and the people, they spend but do not directly earn. In other words, if their services do not result in propping up or nurturing the growth of other revenue generating sectors, then it is only natural for the entire economy to turn parasitic, knowing only how to spend but not earn. Unfortunately this is precisely where Manipur is in– an unproductive economy with a weak primary and secondary sector, but an oversized and overpaid tertiary sector supposedly serving the earlier two, and in many ways having acquired a life of its own independent of the sectors it is meant to serve. Any tough intervention to lift Manipur out of this trap will have to involve resetting this relationship, but this will be easier said than done considering the deeply entrenched, middleclass vested interest in perpetuating this system.

There are also of course institutions which exist on paper but not on the ground. For instance it is not difficult to imagine how difficult it must be to come up with authentic utilisation certificates for routine scheduled activities of the many government schools and colleges which have only teachers and staff, but virtually no students. Though most prominent here, this farce has become the condition everywhere in the government in varying degrees. The danger is, this dark comedy does not have a short shelf life after which it will disappear. This is so because it has succeeded in self-perpetuating itself. The general insecurity introduced is such that generation after generation will simply seek to be part of this grotesque establishment rather than seek its complete reform. In our opinion the salvation will have to come from enterprises outside of the government system. Only when they are able to offer a parallel fountainhead for sustaining the state’s economy, thus paving the way for a metaphoric withering away of the state, would Manipur gain back some agency to take itself out of this trap of parasitic existence.

IFP Editorial

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