Dear
Editor ,
In
today's edition of HT , you have invited people of Mumbai , to send in their
suggestions on how BMC should spend its forthcoming budget of Rs 33,514 Crores
I
believe the manner of budgeting is all wrong - whether in a Municipal
Corporation , a State or at the Centre
The
entire emphasis is on achieving the " SPENDING ALLOCATIONS " - not on
achieving " PHYSICAL TARGETS " of improvements !
It
is this EXPENDITURE mentality which is subverting the process and needs to be
replaced with , what Private Sector Companies have successfully practiced for
ages , to grow profitably , viz :
"
MANAGEMENT BY OBJECTIVES "
In
this context , I reproduce below , an email that I had sent to Shri Arun
Jaitleyji , before he presented the last budget - and again , recently
with
regards,
hemen
parekh
Marol
, Mumbai , India
(
M ) +91 - 98,67,55,08,08
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BUDGETING
BY OBJECTIVES
Dear Shri Jaitley ,
Come Feb 2015 and you will
present your Budget in Lok Sabha
You will allocate thousands
of crores of rupees to different ministries , for spending during 2015-16
You may even increase /
decrease their allocations based on , to what extent ( % ) did they manage to
actually " spend " their current year's allocations
The one and only emphasis is
on " spending " !
As usual , no MP will ask :
" But , what
exactly did the Minister concerned achieve by spending this money ?
What physical / measureable targets did the Minister succeed in
reaching / exceeding , with that money ?
Where / What are the OUTPUTS ?
Why is it that no targets
were set in advance , before the start of the
year ?
How come , Minister was
allowed to shoot first and then draw concentric circles around the hole
afterwards ( at the end of the year ) , to claim BULL'S EYE ?
"
In private sector ,
shareholders / bankers do not hesitate to sack the CMD / MD / CEO , if he fails
to deliver on promised profit
Then , why are Ministers
allowed to retain their posts ( - or even get kicked upstairs ! ), despite
failing to deliver ?
Dear Shri Jaitley :
MPs should know that YOU
cannot answer these questions , simply because , at the time of the Budget
Exercise , no physical OUTPUTS got
fixed for each Minister
What did get fixed , were
only EXPENDITURE TARGETS !
Simply because MPs passed the
Budget without fixing targets such as following for 31 March 2015 :
* Finance
Minister
>
GDP ..... 6 % ............ [ 10 % improvement ]
>
CAD.......( - ) 5 % .....[ 20 % improvement ]
* Commerce
Minister
>
Exports........ $ 350 Billion .... [ 10 % improvement ]
>
FDI..............$ 50 Billion...... [ 20 %
improvement ]
* Railway
Minister
> Lengths of Tracks...... 125,000 Km.....
[ Up by 10 % ]
> No of Passenger Trains / day..... 10,000... [ Up by 10 % ]
* Health
Minister
>
Chronic Hunger and Hunger Related Deaths
8 Million / year .................................... [ Down by 20 %
]
>
Under-nourished people..... 200 million..... [ Down by 10 % ]
* Social
Welfare Minister
> Dowery Deaths / year....... 8,000...... ......[
Down by 10 % ]
> People without Toilets........ 500 Million.... [
Down by 20 % ]
* Agriculture
Minister
> Farmers Suicide/ year..... .. 14,000...............
[ Down by 20 % ]
> Food Grain rotting / year..... 5 Million tons.....
[ Down by 20 % ]
So on and so forth for each
Minister
Some caution / suggestions :
* Ignore
the numbers given above. I could be factually wrong
* Focus on
the concept of " Management by Objectives "
* Overcome
the fear of " failure to meet the targets ".
* Overcome
the fear of " being ridiculed " !
* Don't
chop off the neck that dares to stick out !
* Only
failure is , not fixing the targets !
* Actual vs
Targeted achievements must be measured , on an ongoing
basis , by totally independent THIRD PARTY
agencies
Ministers / Finance Minister and these Agencies , must agree in advance , how
the
Agencies will go about " measuring " the Actual Achievements
The method of measurement must be transparent and well publicized
in advance
Agencies shall have no role in fixing of Annual
Targets
That is best done by the Prime Minister - the CEO , MakeInIndia
* There
must be at least 10 performance parameters
for each Minister
*
Parameters themselves could be selected / prioritized , based on an
ONLINE PUBLIC SURVEY / OPINION POLL ,
from Govt web site
* If
conducting such an ONLINE POLL for the
forthcoming budget is
too late , same could be done on a printed form , by current MPs /
MLAs / Rajya Sabha Members
* Results
of the SURVEY / POLL , must be published
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*
hemen parekh / 06
Dec 2014
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