Utilize Central Funds better

When I was the health minister of Odisha, the grant from the Central Government for building the rural health infrastructure was negligible. In comparison, from 2007-08 to 2011-12 Odisha received 1821.69 Crore under the National Rural Health Mission (NRHM), which is a much needed investment in the health sector. If we look at 15 Flagship programs of Government of India like MNREGA, JNURM, Mid Day Meal Scheme, PMGSY, Annapurna, ICDS etc, all of which are key social sector expenditures, the non-utilization of funds by the state comes to more than 7400 Crore and such not-utilization in a state with tell-tale poverty, hunger, disease is to say the least highly unfortunate. The inability to utilize Central funds has been an old problem and we need to understand the reasons and find solutions. Denying non-utilization and demanding more funds from the centre will not cure this malady. We need to improve administrative capacity to spend money in a proper and timely way and then only our claims for more funds will be taken seriously. We cannot surrender funds and ask for more money at the same time without being laughed at.

Odisha historically has had a weak administrative and delivery mechanism. In 1936, the British amalgamated Odia speaking tracts to create the separate state of Odisha. Till 1936, Odisha division consisted of three districts only: Cuttack, Puri and Balasore. In 1936 a large area, earlier called agency area or hill tracts were added to Odisha along with the princely states. In most of these areas there was no presence of the Colonial Government. This historical problem persists even today, particularly in districts known with the acronym KBK (Kalahandi- Bolangir- Koraput) and even in many other parts of the state.

Under the central schemes Government of India provides grants mostly for one-time capital expenditure. Let us say, they provide money for construction of roads under PMGSY. But, Central Government does not pay for recurring expenditure like the salary of the Engineers without whom the road cannot be built or expenditure cannot be incurred. We not merely need engineers, but we need competent and honest engineers, doctors and development administrators for proper and timely implementation of developmental schemes. For example, in most of the KBK districts the vacancies of doctors is between 50 to 75 %. So, how do health services get delivered without doctors and paramedical staff? Even as far as engineers are concerned, most of the work is being executed through contractual diploma engineers. So, the problem is not merely of utilization, but also quality of works and preventing leakages without which the central funds would not yield optimum results. In the 15 Flagship programs mentioned earlier the Central Government has poured in Rupees 41176.82 Crore, between 2007-8 to 2011-12, a huge amount of money indeed. Under-utilization is an issue. But, equally, there is a problem of very weak delivery. Mr. Naveen Patnaik has spent 12 years in office. But, he hardly displays any understanding of the administrative weaknesses and has done virtually nothing to remedy them. His main focus is on propaganda to take credit for whatever benefits people get from the development programmes and to blame the Central Government for the rest of it. While being unable to utilize central funds, he also uses some money from the state budget as a token to reinforce his image building exercise. Go to these districts and you will find delivery of health services without doctors, schools without teachers, diploma engineers executing crores of rupees of work without supervision. In the naxal-affected districts Government servants do not want to work or visit interiors, more so after the kidnapping of the Collector Malkangiri and MLA, Laxmipur. There are large areas without a functioning Government and all that you can find are Central and State Police forces fighting Naxalites. Bhubaneswar is unconcerned, though fully aware of the situation.

For a long time the Central Government has been asking the state to strengthen the Panchayti Raj Institutions, to hold Palli Sabha and Gramya Sabha, to hold social audit etc. The State has finally complied the instructions only after the Supreme Court ordered a C.B.I. investigation into irregularities under MNREGA. Why were these meetings not being held all these years? Better late than never though and I welcome the state Government’s decision to finally follow the instructions of the Central Government. Unsurprisingly, the State Government is taking credit for this forced and delayed compliance.

The real problem, as far as I can understand having worked as a political activist for four decades at the grass-root and having held ministerial positions in the state Government, is poor quality ministerial supervision over developmental programs. Mr. Naveen Pattnaik has removed many experienced political leaders from the Government and has cut others to size. The ministers play second fiddle to the bureaucracy and prefer inactivity to preserve the red lights on their cars. They understand the practical and governance problems, but maintain silence. The Chief Minister takes very little interest in getting into details of governance and has no worthwhile understanding of grass-root problems. The administration is left to unelected bureaucrats.

The State Government signed an MOU with the World Bank in 2009 for a $ 250 million loan for the Odisha State Roads Project covering Bhawanipatna-Kahriar, Berhampur-Taptapani and Bhadrak-Chandbali roads. In 2011 World Bank suspended the loan, which has recently been lifted. World Bank suspended the loan not because of any step-motherly treatment or because the World Bank President Jim Yong Kim is against the BJD. If such an action had been taken by the Central Government BJD would have gone to town protesting against non-existing central neglect. The loan was suspended because the World Bank was not convinced that the tender process in which the same construction company, namely ARSS was awarded the contract, was competitive and transparent.  Also ARSS had sublet the contracts, there was poor progress of work and the entire process of land acquisition, rehabilitation and resettlement had not met agreed social-safeguard requirements.

The problem of under-utilization of central funds and failure of developmental programs will continue unless ministers are active, the PRIs exercise real control and the administration at the cutting-edge level improved. The Chief Minister has kept the Works department that executes the World Bank-aided Road project under him and the performance of the department was miserable leading to loan-suspension by the World Bank. As a critical first step, the State Government has to acknowledge the existence of a problem with the delivery mechanism in the State. Odisha needs a vision, which is totally lacking. Image cannot be a substitute to vision, nor can it substitute administrative skills, more so when the image is manufactured by chicanery.