It happens only in India

45000 out of an estimated 85000 registered as MCD (Municipal Commission Delhi) employees are fake/not traceable. The estimated numbers of the “missing” is still a riddle but the numbers could be double than present estimates. How or why could such a brazen act of corruption is best left to state investigations. But a correction and weeding out could lead to a saving of Rs.500 to 1000 crore annual saving on a Rs.207 crore monthly wage bill.

Elsewhere, the dalit poster girl, behen Mayawati has embarked on a Rs.2681 crore project to have herself, her mentor, Kanshiram, Baba Saheb Ambedkar sculpted in stone and beautify Lucknow city. The plan involves 45 red stone statues, 60 elephant statues and 413 acres of prime land in Lucknow. The annual cost of maintenance is expected to be Rs.270 crore. All this, when the largest population of people below the poverty line – 59 million belong to UP. This money could have wiped out poverty of thousands of people, provided education and amenties to more.

Food security bill, which is under discussion currently, and is expected to provide upto 25 kgs of grains per month to BPL households at a subsidized rate of Rs.3/kg has come up for some execution challenges. The planning commission’s stidy of 2005 shows that roughly 58% of grains issued from the RDS do not reach BPL families due to problems ranging from targeting errors to corruption all along the chain. Worse, there is a no standard in defining and identifying a BPL Family. Planning Commission puts the number of BPL families at 65.9 million, BPL cards issued by states is 107 million and a second and more recent estimate by the planning commission puts this number at 66 million.

So much for accountability and misuse of public funds in the country.

India: A worrisome fiscal situation

A very important part of populist measures of the incumbent government is to provide equal earning and job opportunities to all. Towards this, the National Rural Employment guarantee scheme (NREGS) is a tool for equitable employment and pay disbursals. However a bad monsoon can turn this tool into a fiscal nightmare. A bad monsoon will ensure that the number of people seeking jobs under NREGS will swell. Being an entitlement based programme, the government has to give employment to anyone who demands it. Recently it announced that a further Rs.9000 crore would be spent under NREGS, taking the total expected spending under it in fiscal 2009 to Rs.39000 crore. That was when the effect of Monsoons were not taken into consideration. With this new exigency in horizon, the NREGS spends may be spiraling out of control. A substantial portion of the fiscal deficit was due to budgeting of expenditures for farm loan waivers and expenditure under NREGS.

Already the economic slowdown and the threat of fiscal deficit hitting the double digits is likely to limit the UPA government from unleashing it full deck of “Aam Aadmi” agenda. Increasing the budgetary spending is only possible when the economy recovers on the path to 8 – 9% growth rate.

In February, the government had set a fiscal deficit target of 5.5% of GDP for 2009-10 but increased its borrowing target to Rs.3.62 trillion from Rs.3.05 trillion last year.
In the first month of the fiscal year, the government already achieved 16% of its fiscal deficit target. The reduction in excise tax by 6% as a part of stimulus package and the Food Security act (which provides food-grains @ Rs.3 per KG to below poverty line beneficiaries) is expected to hit the state coffers.With an expected shortfall of Rs.26000 crore in tax collections and an increased expenditure of Rs.24000 crores (Not counting in the impact of late Monsoons), the Fiscal deficit may be grim, very grim.

Tongue in Cheek: Plutonomy

Plutonomy: Coined by Ajay Kapur, Citigroup’s global strategist in 2006, the term denotes an economy that derives its strength from the assured consumption of the super rich.

Tongue in Cheek: Energy estimates in the world

Research by Harvard University suggests, that the world’s conventional oil and gas alone contains 1000 terawatts worth of energy; coal has 5000, the amount of solar energy falling on earth every year is 30000; and our total current use worldwide is only 15 terawatts-years per year. The trick, of course, is in converting this potential into actual available energy.

Tongue in Cheek:Global loss in wealth due to Financial Meltdown

The world wealth report (June 2009) released by Merrill Lynch and Capgemini estimates a damage of $8 trillion (Rs. 388 trillion) due to the financial meltdown of the world economy in 2008.