DNA, July 15, 2014

By Pradeep S Mehta

Every budget is a reboot of last year’s planning. The 2014-15 budget presented by chief minister Vasundhara Raje, however, is more than a reboot where she decidedly takes control over state’s finances, takes alternate route like PPP model to fund infra development and tinkers with tax structure in a way that taxes luxury goods and services to refresh the flagging economy of state

Chief Minister Vasundhara Raje’s budget tries to answer questions surrounding the economy of state through her budget speech, including that of job creation. However, questions remain over how the government will achieve the target of creating 15 lakh jobs over the next five years or how the Public Private Partnerships (PPP) would be executed to the advantage of the end user. Indeed, job creation is a core agenda of any government in today’s dismal scenario, but not the only one. Addressing availability of basic needs and at the right price is always a challenge. However, inflation, growth and corruption as issues played a distinct role when people voted for change and elected new governments in the state and at the Centre. Managing expectations will, therefore, remain critical throughout Vasundhara Raje’s current regime.

Jobs can only be created when there is a job-oriented growth and a clear strategy to achieve a goal of doubling of our State GSDP from the current level of Rs. 4.8 lakh crores to Rs. 10 lakh crores by 2020. If this path is forged then creating 15 lakh jobs will fall in line. The how-to-go-about-it has not been spelt out scientifically in the budget speech.

The achievement of higher growth needs higher labour intensive manufacturing and services. For that to happen, many things have to be done in parallel and not just linear mode in both the hardware and software of governance. While the government has already announced reforms in labour laws, the draconian land acquisition law is yet to be addressed at the level of the state, even if the centre moves slower.

Land and other related issues will be a problem in road building agenda. However opening up the road transport sector to private participation is a welcome feature, but road safety, which costs three per cent of our GDP, is tragically missing.

The proposed road regulator should be a composite body which should oversee all the three areas: Roads, transport and safety. A PPP approach to build roads is also welcome but the contracts will need to be drafted in a pragmatic manner, otherwise we will suffer the fate of the stalled national highway projects. But tolling these smaller roads will be a problem with disruptive local dynamics. Real cost pricing for water too is welcome, but how can the State ensure water supply when factors are not in their control and Rajasthan is a problem state.

Turning some of the city discoms into PPP ventures too is welcome, but once again care will be needed to ensure that consumers do not end up in the frying pan, and that the state does not lose its rightful revenue share. Our experience with most PPP projects in infra is that they are grabbed by resourceful people through crony capitalism and costs are inflated through gold plating as we see in our major PPP airports or even the oil exploration contracts.

Many of the reforms proposed will be opposed by vested interests. Administrative reforms have not been spoken about at all, and ‘good governance’ features in one para in the context of road transport. Without administrative reforms the government machinery will move in a business as usual manner i.e. while the spirit maybe strong the flesh will be weak.

Our bureaucracy is so opaque and unresponsive, and for that to change in feudal Rajasthan will need a clarion call from the Chief Minister. If that is done, many of the reforms can be carried out by Team Rajasthan, comprising of all stakeholders including the civil society, which she speaks about so beautifully in her speech.

The writer is Secretary General, CUTS International
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