Saturday, November 3, 2012

How to reduce expenses in Central Govt.(austerity)?



                                                    Bikash Choudhury
Prime Minister in his last & recent meeting of councils of ministers emphasized on Austerity; in other words, to cut wasteful expenditure and defer not so essential expenses. Old habit dies hard and therefore, most likely the ministers and their babus would go back to their old ways. The least that PM could do is to make an institutional arrangement in which the second highest item of expenditure in Govt. after salary bill can be pruned and at the same time an experiment can be initiated on entrepreneurship inside Govt. itself.  

Idea: The expenditure on Automobiles purchase, maintenance, fuel and expenses accrued on salary for the personnel engaged on such activities always makes a huge dent on public expenditure; apart from huge leakage due to mismanagement and cost incurred on personal than official activity of public servants. This can be pruned substantially without affecting the efficiency.

1. GoI could take a decision to provide Govt. provided automobile to only very top functionaries in Govt. where protocol is involved. And, to rest of the Govt. officials the automobiles would be provided on need to use basis for official work by a services provider.

2. The services provider could be created by PPP mode and 50 % equity would remain with Govt. (in lieu of the vehicle transferred to the SP) 25% of equity with employees  co-operative whose services would be transferred to the Services Provider and balance 25% of equity for the Private Company who will manage the SP with appropriate investment.
                   
3. Arrangement would be such that all officials who are authorized to use Govt. vehicles could do so through the SP on Official work for which SP would be paid on a standard rate applicable for the Govt.(lower than market rate). However, SP would be free to deploy surplus vehicles on commercial terms in the market after attaining to the Govt. business.

Benefits:

1. Govt. could prune its salary expenses on this activity.

2. Govt. could cut its capital expenditure in purchase of automobiles and maintenance.

3. Govt. could plug huge leakage.

4. Govt. could eventually create and support an entrepreneurial mindset inside Govt.

5. Govt. could also encourage private travel & tourism.
Twitter: @ideasofhope Blog: www.ideasofhopebikash.blogspot.com  E-mail:streben.market@gmail.com
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