Timesof24
Ever since Finance Minister Nirmala Sitharaman introduced her fifth and final full funds of the Modi authorities’s second time period on February 1, 2023, each side of the funds has been analysed thread-bare by stakeholders, specialists, and members of the commentariat. This creator, himself, beginning with the evaluation of the financial survey, analysed the funds story by his framework of a five-part collection.
Make no mistake- together with the finance minister’s funds speech and calls for for grants, the end result funds (OB) types the trinity of crucial funds doc and nonetheless, just a few have determined to deep dive into it. And the explanations are as follows-
- The result funds, in its present avatar, is of latest origin and has not but obtained the correct consideration of the commentariat.
- It’s a complicated, complicated and prolonged doc that’s troublesome to decode. The FY24 final result funds is 280 pages lengthy, whereas FY23 one was 297 pages lengthy.
- Not like calls for of grants which gives actuals of earlier, revised estimate of present yr and the funds estimate for subsequent yr, the end result funds is a standalone doc that simply enumerates the budgeted output and final result targets for chosen schemes underneath ministries and departments. It throws no gentle on what was the goal of the earlier yr, nor does it throw gentle on previous years’ achievements in opposition to the goal.
It’s pure then that the end result funds doesn’t get the eye of the analysts it deserves. And this in itself was motive sufficient for this member of the commentariat to deep dive into the end result funds of FY24 and to reach at significant perception to additionally look at the end result funds of FY23 critically. And right here goes my evaluation. As two years’ final result funds paperwork are so voluminous, this evaluation covers solely final result funds of two Ministries with an try to understand whether or not the budgetary outlay for FY24 is correctly aligned with monitorable outputs and outcomes or whether or not the end result funds has become a standalone doc falling quick on its fundamental premise, shedding its rigour and seriousness.
The important thing side that I search to handle is whether or not output, final result and key milestones to be achieved within the monetary yr are synced seamlessly and defined synchronously as a result of, in its absence, the funds outlays stay what they’re— easy annual expenditure targets defeating the very goal of getting an final result funds.
THE OUTCOME BUDGET
For the uninitiated, I start with a primer on- what’s the final result funds.
Until just lately, earlier than FY2017-18, as a part of the Union funds, solely the monetary outlays of schemes of varied ministries have been a part of the funds doc whereas the anticipated outputs and outcomes of schemes have been ready and introduced individually by every ministry (initiated by P. Chidambaram as Finance Minister in FY2008.)
Starting FY2018 funds, a big-ticket structural reform to the annual funds train was launched in type of an Output-Consequence Monitoring Framework (OOMF) or Consequence Price range doc. The result funds begins with the acid take a look at query, “Do increased outlays of a ministry, division, sector, programme or scheme, essentially imply or end in higher outcomes?” Whereas presenting the primary final result funds in FY18, the FM started with the daring pronouncement- “Residents are curious about outcomes, not outlays.”
As such, the FY17-18 funds made a radical departure from the previous with the presentation to the Parliament in all three- outlays, outputs and outcomes- in measurable phrases as a part of the funds.
Explaining Outlay, Output and Consequence
The Outlay is the quantity supplied for a given scheme or venture within the funds; whereas the Output refers back to the direct and measurable product of program actions, usually expressed in bodily phrases or items. And the Outcomes are the collective outcomes or qualitative enhancements led to within the supply of those companies, usually expressed when it comes to enhancements over ex-ante or earlier indicators and benchmarks.
Presenting the outputs and outcomes together with the monetary outlays as part of the funds paperwork is meant to obviously make accessible for evaluation the outlined aims and objectives for every scheme.
WHY OUTCOME BUDGET
The aim of the introduction of the end result funds was to radically improve the transparency, predictability and ease of understanding of the federal government’s improvement agenda. And within the authorities’s personal phrases –extra exactly, it goals to nurture an open, accountable, pro-active, and purposeful type of governance, by transitioning from mere outlays to result-oriented outputs and outcomes for ministries and different stakeholders to maintain a monitor of the scheme aims and work in the direction of the event objectives set and be sure that the event objectives set by them are achieved.
In view of the abovementioned, an final result funds is a device supplied to stakeholders to critically perceive, analyse, and remark upon them to obviously assess the federal government’s insurance policies and its actual improvement agenda.
OUTCOME BUDGET FY23-24
As enunciated within the preface of the FY23-24 OOMF or final result funds doc, it presents (a) the monetary outlay for FY24 together with (b) clearly outlined outputs and outcomes (c) measurable output and final result indicators and (d) particular output and final result targets for FY24.
The FY24 final result funds doc presents the Output-Consequence Framework for all main Central Sector (CS) Schemes and Centrally Sponsored Schemes (CSS) with an outlay of equal to and greater than Rs 500 in FY23-24, thereby overlaying 148 CS/CSS schemes.
For paucity of house, I analyse schemes of simply two ministries- Ministry of Rural Growth and Ministry of Railways.
MINISTRY OF RURAL DEVELOPMENT
Consequence funds for FY24 for the Ministry of Rural Growth considers 5 schemes underneath the division of rural improvement (in opposition to Eight in FY23 funds) and 1 scheme underneath the Division of Land Sources in each FY23 and FY24. I analyse a number of schemes pertaining to the division of rural development-
First, MGNREGA – In FY23-24, the outlay for MGNREGA is Rs 60,000 crore as in opposition to Rs 73,000 crore in FY23, a considerable discount from final yr. And this discount is even if Covid-19 has despatched thousands and thousands of rural households reeling into poverty. Nevertheless, the previous monitor file of the outlay of the MGNREGA scheme provides hope that this being a demand-driven program, the outlay will get elevated mid-year if the necessity arises.
MGNREGA’s output focus is singular– (a) Offering employment, improved institutional capability and creation of sturdy property and (b) introducing new work programmes.
Towards the above talked about output, the comparable output indicators for (a) are (i) variety of person-days generated in crores) (ii) whole variety of property generated throughout the year- in numbers and (iii) proportion of individuals supplied with employment in opposition to demand.
However right here lies the massive bug. The result funds, say output indicators ‘goal not amenable.’ And it has an evidence for the same- “MGNREGA is a demand-driven programme the place works are executed in Gram Panchayat stage and there’s no such goal for execution, therefore outcomes/goal can’t be predicted. Nevertheless, achievement made on numerous indicators shall be reported throughout the course of the yr on quarterly foundation.”
It’s a unhappy commentary on the state of affairs the place the precise information of such a key empowerment scheme can’t be collected, collated, and commented upon and utilised. And the end result funds of this yr ought to have collected and collated the achievement of at the least three quarters of FY23.
Transferring from outlay and output to final result, the laudable final result of the scheme is “offering financial safety and creating rural property.” For the FY24 final result, there are three indicators (i) micro irrigation works undertaken in hectares (ii) afforestation work in numbers and (iii ) creation/renovation of water our bodies in numbers. Consequence once more is a block field as no targets in any respect are supplied.
One other vital side of MGNREGA scheme for FY24 is that it has lowered the variety of final result indicators from 6 in FY23 to three in FY24 with out rationalization, duly eradicating (i) participation of women- in proportion, (ii) participation of SC – in proportion and (iii) participation of ST – in proportion, as if this evaluation has turn out to be redundant.
Any dropping of indicators with out rationalization is fraught.
Second, Pradhan Mantri Awas Yojana-Gramin (PMAY-G) – That is one scheme the place the outlay has jumped from Rs 20,000 crores in FY23 to a lot wanted Rs 54,487 crores in FY24. That is certainly an enormous soar within the outlay. The scheme focuses on the measurable output of the “development of pucca homes with ample fundamental companies.” This certainly is the necessity of the hour. Output indicators with targets are properly outlined (i) variety of homes accomplished in lakhs (57.33) (ii) variety of masons skilled 50000 (iii) variety of SC & ST beneficiaries in lakhs (30) and (iv) proportion of homes owned by girls & males beneficiaries (65 p.c).
Given the extreme crunch of reasonably priced pucca homes in villages, this is among the true flagship applications of scale of the federal government.
The scheme has a clearly outlined final result “extra HHs stay in dignified properties with entry to fundamental companies.” Consequence indicators and targets too are measurable- (i) change in houselessness (85 p.c), (ii) change in pressured migration because of houselessness (15 p.c) and (iii) satisfaction stage of beneficiaries of the schemes reported in FY24 (99 p.c).
I’ve just one discordant note-In FY22-23, the scheme had six measurable output indicators and targets. Within the present yr funds, the identical stand lowered with the axe falling on – (i) variety of landless beneficiaries to be supplied land- one lakh and (ii) variety of homes sanctioned- 50 lakh. I’m foxed by the deletion of those classes except the federal government is bound that each one the needy who want reasonably priced homes underneath the scheme have been sanctioned and no new sanction is required, and the agricultural space doesn’t have any extra landless household that wants a house underneath the scheme.
Having lined the arrival of PMAY and witnessing its progress on floor, I posit it’s the scheme whose time arrived a lot earlier and is making a dent in homelessness however nonetheless, I discover it a humungous job to measure the end result when it comes to outlined final result indicators and targets.
Nonetheless, the scheme scores slightly excessive on my evaluation.
Third, Pradhan Mantri Gram Sadak Yojana (PMGSY)- The outlay underneath the scheme for the FY24 at Rs 19000 crore is unchanged from the outlay of FY23.
The result funds eloquently talks of the ‘availability of high quality all-weather street and its well timed upkeep’ with the six output indicators with targets – (i) street size added- 38000 km (ii) work inspected by NQM in numbers-8 (iii) accomplished works rated unsatisfactory (5 of inspected works by NQM, common of final Three years) (iv) upkeep works rated unsatisfactory (5 of inspected works by NQM, common of final three years lower than 15) (v) proportion of complaints associated to PMGSY older than 1 month addressed on MeriSadak App-100 p.c and (vi) street size constructed utilizing inexperienced know-how -18000 km.
I discover the end result goal for FY24 aspirational. “All-weather street connectivity of eligible habitations can be pathways for entry to training, well being, market and mobility” aspirational however that is what the necessity is. The result indicators and targets for one yr at 100 p.c of the 5 eligible habitations are extra grounded in actuality.
That is what it should be.
However listed here are two discordant notes-
Firstly, in comparison with FY23, the next output indicators and targets are lacking from the FY24 final result funds with out explanation- (i) sanctions underneath PMGSY-III-in km- 25000 km (ii) street size upgraded underneath PMGSY III-in km-35000 km (iii) street security audit achieved for PMGSY-III roads- as variety of roads-1100 numbers.
Such vanishing acts with out rationalization make the duty of analyser troublesome.
Secondly, I discover it troublesome to just accept {that a} system, a statistical system, that’s unable to successfully measure the progress of flagship scheme MGNREGA is certainly successfully measuring the output and final result targets of the PM Sadak Yojana, extra so as a result of the previous efficiency just isn’t documented for comparability and evaluation.
Fourth, Deendayal Antyodaya Yojana-Nationwide Rural Livelihoods Mission (DAY-NRLM) is one other scheme with Rs 14,129.17 crore outlay in FY24 in opposition to Rs 13,336.42 crore in FY23.
The scheme has laudable outputs like social mobilisation of poor households and establishment constructing, sustainable livelihood companies to the poor, SHG members working small companies, talent coaching & placement and monetary inclusion of Self Assist Group (SHGs). It additionally has a measurable goal. Transferring from output to final result, once more the end result is sanguine – Sustainable livelihoods of the poor by talent constructing, entry to credit score, advertising and different livelihood companies and monetary inclusion of SHGs.
However within the absence of precise efficiency of the scheme in earlier years, I’m unable to analyse the identical.
MINISTRY OF RAILWAYS
The Railways Ministry this yr has obtained the highest-ever allocation from the budget- Rs 2,40,000 crore and its present yr capital outlay is at an all-time excessive at Rs 2.60,000 crore. Right here, I try to analyse the Indian Railways FY23-24 final result funds duly evaluating the identical with that of FY22-23. Under is the evaluation of chosen railway schemes-
One, development of latest strains, gauge conversion and line doubling- The mixed outlay in FY24 for the three schemes is Rs 67,199.Four crore with the trifurcation-new strains (Rs 31,850 crore); gauge conversion (Rs 4,600 crore) and line doubling (Rs 30,749.Four crore). This outlay is considerably increased than Rs 40,201.08 crore mixed outlay in FY23 with trifurcation being-new strains (Rs 25,243 crore); gauge conversion (Rs 2,850 crore); line doubling (Rs 12,108.08 crore).
That is one thing to cheer at.
Past the outlay, the measurable output is– ‘the better velocity of development of latest strains, gauge conversion and line doubling.’ The output indicators for FY24 of completion of 600 km new line and 2800 km line doubling in FY24 is means above the completion of 300 km newline and 1700 km line doubling goal in FY24. The gauge conversion lowered goal from 500 km in FY23 to 150 km in FY24 displays not a lot is left for conversion from MG and NG to BG.
This reveals Indian Railways (IR), after a long time of stagnancy, is lastly chugging alongside the appropriate path. For lengthy, the IR’ declare to fame has been the completion of 766 km of Konkan Rail in hostile terrain in file seven years. It’s time to break the mould.
Nonetheless, I posit that the IR development file has been poor and expediting the identical remains to be a piece in progress. I posit it because- firstly, the end result funds doesn’t point out to what extent the output goal of earlier yr was met; secondly, the output goal stays incremental and never aspirational and thirdly, for India to cut back its logistics value utilizing sustainable transport mode, the outlay and consequent output and final result goal just isn’t sufficient.
Transferring past the output, the end result parameter just isn’t robust- ‘including 14 new areas in FY24 with better entry to unconnected areas (in opposition to 19 in FY23)’ doesn’t speak of the extent of the nation’s space on the rail map, nor does it give a clue of what number of areas have been delivered to the rail map in recent times.
For line doubling the end result is ‘better security and throughput in addition to extra freight companies on congested routes’ with final result indicators being – 14 p.c improve in passenger throughput and a 5.Four p.c improve in freight throughput in FY24 in opposition to final yr. But, there isn’t a clue accessible as to the bottom realities and the hole but to be bridged in opposition to. One doesn’t get a real and truthful image of the IR which is persistently shedding freight to roads and passengers to buses and air.
Whither Indian Railways?
On the time of independence, the rail route km in India was 54983 km (25170 BG, 24153 MG and 5370 NG). It carried over 80 p.c freight and 90 p.c passengers. Since independence, the IR has barely added 14000 km route size on the price of 167 km per yr.
In 2020, the IR route size elevated to 67,995 km (63949 km BG, 2402 km MG and 1809 km NG) which carries lower than 25 p.c of nationwide freight throughput and 10 p.c of passenger throughput.
It places the IR in a terminal existential disaster. And if it has to realize the goal of carrying 45 p.c of freight throughput of the nation by 2030, it requires nothing lower than an entire transformation in the way in which IR conducts its enterprise.
If we step again and take a look at China, which India will dethrone this yr as probably the most populous nation, in 2022, operationalised a 3300 km new line and can add one other 3000 km in 2023. China was means behind India in 1950 however has galloped to 150000 km rail route size in 2022 in opposition to India’s 67000 km and it’ll have 200000 km rail line by 2035 and through the identical interval, China will even double the size of high-speed line (already world’s longest) from present 42000 km.
If India has fast-pruned its logistics value drastically to show a developed nation by 2047- it has to metamorphize its rail community.
Two, as regards mounted infrastructure overhauling, the monitor renewal and strengthening assumes better salience- whereas the FY24 outlay of Rs 17,296.84 crore for monitor renewal is above Rs 13,335.47 crore of FY23, I posit it’s not commensurate with the precise want. Firstly, the end result funds doesn’t speak concerning the present arrear of the quantum of monitor renewal. Secondly, it’s silent about monitor upgradation to fulfill the velocity of 160 kmph requirement, at the least on trunk routes or on the trail the place Bande Bharat trains are working or quickly will function.
The output goal for monitor renewal- ‘Higher size of tracks renewed is notable’-at 4800 km in FY24 in opposition to 3700 km in FY23. However one doesn’t understand how a lot of the previous yr’s 3700km goal was really met as the end result funds is silent on the precise efficiency. Additionally, the specified final result and final result indicators in opposition to the monitor renewal are absent. No less than the FY23 funds talked about an opaque “lowered pipeline of monitor renewal works” with out mentioning from how a lot to how a lot, although it talked about it was finishing all of the sanctioned works in 2-Three years. What about monitor renewal work not but sanctioned? Has the IR accomplished all the monitor renewal train it wanted? There aren’t any solutions. An final result funds that’s non-transparent certainly wants additional reform.
Clearly, rather a lot is required to take the duty of monitor renewal and monitor strengthening to the specified stage and final result funds must be quantified correctly.
Three, ‘rolling inventory is probably the most important transferring asset’ wanted to fast-track freight and passenger throughput. The FY24 rolling inventory funds of Rs 37,581 crore is praiseworthy 4.5 instances that of the FY23 outlay of Rs 7977.84 crore.
Output final result goal for rolling inventory
The FY24 final result funds measures the output when it comes to “acquisition of rolling inventory of every sort” with the output indicators – variety of electrical locomotives operationalized (1190), variety of LHB coaches operationalized (6978) and variety of monitor machines operationalized (150). That is in opposition to 685 electrical locomotives, 5489 LHB coaches and 150 monitor machines respectively in FY23.
From the output funds, I’m unable to get a cling of the a lot talked out program of operationalizing 300 Vande Metro trains, 1,000 eight-coach Vande Bharat trains, and 35 hydrogen trains repeated by the IR.
Coming to the end result framework for rolling inventory for FY24, the IR goals to realize “better throughput in freight and passenger companies” – 10 p.c in passenger throughput and a 4.Eight p.c improve in freight throughput, each over the earlier yr. The comparable goal of final result for FY23 was an 88 p.c improve in passenger throughput (PKM) from the decrease base because of Covid and a 5.Four p.c improve in freight output (NTKM).
However the issue with the present OOMF is, it doesn’t point out what a part of the final monetary yr’s budgeted output-outcome was really achieved or how a lot of current outdated ICF coaches are in pressing want of substitute by LHB coaches. Worse, it provides no clue to the specified stage of all varieties of rolling inventory augmentation to make sure railways pie within the constant 7-Eight p.c GDP progress and the freight motion by the IR. It doesn’t give a clue how the IR will obtain 45 p.c freight throughput of the nation. It wants a tough purposive motion on the bottom as there isn’t a magic wand.
The above clearly reveals the necessity for extra basic reform to the output-outcome funds as the current framework stays patchy and incomplete.
4, the client facilities– FY24 funds gives an outlay of Rs 13,355 crore in the direction of passenger facilities for the IR. It’s the place the buyer intersects with the IR system. This allocation is 5 instances (Rs 2,700 crore) of FY23 and appears exceedingly good on the face worth.
However I deep dive into the output final result funds underneath the top passenger facilities and the image that emerges just isn’t that rosy. The measurable output- ‘constructing higher passenger facilities’ is laudable. But it surely doesn’t inform how a lot the hole is. The IR has to achieve from the place to the place. Extra so as a result of passenger facilities are usually not rocket science.
The result funds talks of two varieties of passenger amenities- one, the variety of stations upgraded. The goal for a similar was 30 stations in FY23 and the FY24 output goal is 50 stations. The result in opposition to this measurable output is slightly obscure – “better passenger satisfaction-passenger satisfaction index of 85 p.c each in FY23 and FY24.”
As somebody who has been anxiously following the conundrum of railway station improvement for the final 18 years, I can solely pray that at the least 10 of the proposed 50 stations are upgraded within the monetary yr. Such has been the travesty of the station modernization program of Indian Railways. To me, that itself shall be an enormous achievement.
The second merchandise passenger facilities are the development of 150-foot over bridges each in FY24 and FY23. The output funds doesn’t present any clue of what number of foot-over bridges are wanted on railway stations throughout the nation, what number of have been sanctioned within the present tenure of the federal government and what number of of them have been accomplished.
Yours actually is actually completely happy that at the least for as soon as, the IR when it comes to the capital outlay and modernization is getting its due, however for the final 75 years, its neglect has been so whole that nation wants a really transformative agenda to deliver again railway to its previous glory.
The creator is a Multidisciplinary Thought Chief and India-based Worldwide Influence Advisor. Making tomorrow’s infrastructure occur at this time is his ardour. He works as President Advisory Service of consulting firm BARSYL. Views are private.
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