Sep 28,1998
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MAHARASHTRA Trimming the Fat A cash-strapped government devises ways to cut costs. By Smruti Koppikar
Beginning this month, the state Government embarked on a paisa-pinching mission. Realisation seems to have dawned on the state Finance Department mandarins that small savings, assiduously made, could well pile up to a tidy sum. "There will be an estimated savings of Rs 300 crore," says Finance Minister Mahadev Shivankar. "If all goes as planned, it might be upwards of Rs 500 crore for 1998-99." In the finance and planning ministries, the savings effort is called "Operation Rationalisation". It is vital, feel officers, to home in on the administration. In 1996-97 as much as 41 per cent of the expenditure was on non-development areas. Of this, interest payment and debt servicing added up to 18.3 per cent, while administrative services accounted for 11 per cent. In 1998-99, the administrative expenses will constitute 25 per cent of the total expenditure. "There's not much we can do about interest payment. We're looking at the administration," says an official. The first step in the operation involved sending a spate of letters to the state's 32 district collectors, asking them for detailed information on administrative expenditure. Emphasis was on two heads: cars and phone calls. The questions show a zeal for minutiae: how many cars does the collectorate have? How many phone calls are made in a month? Collectors were also asked to suggest ways to curb spending. Instructions regarding the use of cars are explicit: keep fewer cars, minimise their use and reduce personal trips. "The idea is to cut back on superfluous expenditure and waste," says Finance Secretary Ravi Buddhiraja. Accordingly, more instructions were sent out this week. The most-discussed one was about the use of electricity. However, these verbal instructions will get official status when Chief Minister Manohar Joshi signs the circular. Shivankar and his team have also addressed the major head of "wasteful and/or superfluous" expenditure: travel allowance (TA). "We'll prefer that no TA is given for the next few months. If that's not possible, TA will be allowed only under the most pressing circumstances," says a team member. Employee unions are already gearing up against the TA clampdown. But there are two measures regarding which Shivankar will brook no dissent: abolition of posts lying vacant for over six months and a freeze on recruiting personnel for new schemes such as the Tapti and Godavari irrigation projects and Mumbai's Slum Rehousing Project. Not surprisingly, there are voices of dissent. Congress leader Chhagan Bhujbal feels the cut in spending is a "drop in the ocean". For a Government that has to shell out Rs 8,000 crore as arrears under the Fifth Pay Commission recommendations, Rs 300-500 crore culled from cost-cutting measures seem ridiculously small. However, the measures reflect a realisation that a rupee saved is a rupee earned. |
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Switch off the lights there." It seems
an unlikely instruction from a senior bureaucrat to a staff member. But Mantralaya, seat
of the resource-hit Maharashtra Government, is gradually waking up to the reality of
devising ingenious ways to save money. 
