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Tag Archives | UPA

Words in budget speech

Budget speech usually proposes multiple ideas and it is essential for analysts to followup on the actuals – Varun(@_quale)

As the current NDA government is about to finish first year in office, social media and traditional media is awash with analysis and comparisons with the previous government. The budget speech is usually a good barometer that indicates the priorities of the government and this post explores the text contained in budget speeches.

In order to undertake a rudimentary text analysis of the budget speech, the text of the first full-budget speech delivered by UPA  and NDA were used to obtain the following word clouds.

NDA year 1_17968

NDA budget speech for year 1 had 17,968 words

NDA interim budget_6595

The interim budget presented by NDA had 6,595 words

UPA year 1 budget_13148

UPA budget speech for year 1 had 13148 words

Word clouds are presented without any comment and it is left to the readers’ judgement to draw conclusions. It must however be noted that word clouds merely provide a pattern in the text and in a document like the budget speech  it is natural for the finance ministers to use terms like government, tax, per cent etc. One must also be cognisant of the fact that the budget speech is a combination of political and economic tools, with the scale tilted towards politics.

The following two images show the word clouds for all the budgets presented by UPA-I and UPA II between 2004-05 to 2013-14

UPA - I_72996

UPA I’s budget speeches had 72,996 words in total(inclusive of the interim budget in 2009-10)

UPA- II_65117

UPA II’s budget speeches had 65,117 words in total

The word “propose” features very highly in all the budgets, which signals the necessity to check the actual numbers that are published 2 years after the budget is presented.  Typically,  the budget estimates are presented for year n, along with the revised estimates for (n-1)th year and the actuals for (n-2)th year. Do read my colleague Pavan Srinath’s essay that outlines 5 broad ideas to read the budget commentary better.

Addendum:

The words “propose”, “government”, “tax”, “crore” ,”per cent”, “duty”,”lakh”, “year”, “http://indiabudget.nic”  were removed from the speech to obtain the following word clouds.

NDA budget 1 sans

NDA first full budget speech without the words “propose”, “government”, “tax”, “crore” ,”per cent”, “duty”,”lakh”, “year”, “http://indiabudget.nic”

UPA-I sans

UPA I speeches without the words “propose”, “government”, “tax”, “crore” ,”per cent”, “duty”,”lakh”, “year”, “http://indiabudget.nic”

UPA II sans

UPA II speeches without the words “propose”, “government”, “tax”, “crore” ,”per cent”, “duty”,”lakh”, “year”, “http://indiabudget.nic” .

 

Note:- The tool wordle was used to obtain word clouds. Hat-tip to @gkjohn for introducing this author to wordle.

Note 2- The complete text for UPA budgets can be found at UPA-I and UPA- II. NDA year 1 budget speech can be found here

Varun Ramachandra is a policy analyst at Takshashila Institution and tweets @_quale

 

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Improving MNREGA

Yash Daga

As seen in the 2009 elections, the UPA’s MNREGA program has earned the Government significant popular appeal. The program is also credited for securing the livelihood of several unemployed Indians, particularly in rural India. However, while the program has a very noble purpose, it is arguably ridden with several serious flaws, which have reduced social welfare instead of enhancing it.

From the issuance of the MNREGA cards, to the remittance of due payments- the implementation of the program is ridden with corruption and misuse. Moreover, MNREGA works are intentionally labour intensive, even when more efficient and cheap mechanised ways are available for the same job. So for instance, if a road costs ‘x’ to build, we spend ‘2x’ to get it built.

The main problem with the program is that it creates a disincentive for people to work. A labourer within MNREGA has little incentive to work harder, faster and more efficiently , because his supervisors are not judged by any performance metrics other than “number of people employed”.  These labourers therefore work slower than they would in a farm or factory making it detrimental to the society. If a labourer in MNREGA is offered a job at a local factory, his opportunity cost for taking that job is now the wage he gets at MNREGA, plus the cost of extra work that he will do at the factory.

This is artificially raising the input cost of farming and manufacturing and is also creating labour shortages in several farms and factories – in some cases labourers are simply refusing alternative work. In these cases, MNREGA is not just giving welfare to the unemployed, but is actually driving employed labour to move away from the industry and into the program. The country then ends up paying more than it should towards this welfare program.

These problems, as listed above, can be cured with a simple modification to the MNREGA program, to create the program into a Public Private Partnership. Private employers across sectors should be allowed to draw labour from the MNREGA pool. This would somewhat work in the following manner:

  1. If a farmer is hypothetically interested in hiring MNREGA labour – he may apply to the local administrator and file an application for say 25 people.
  2. A verification process is created to ensure that the workers are given a safe work environment, are treated fairly etc.
  3. The farmer in turn, commits to giving employment to these labourers for 100 or more days per year, and maybe even puts down a deposit for a part of the wages in an escrow.
  4. MNREGA allots 25 people to the said farmer and maintains checks to ensure that the terms mentioned in point 2 (above) are met.
  5. The minimum wage set by MNREGA still applies. In the case of excess demand for workers, the labourers are allotted to the employer that offers the highest wages.
  6. In case the demand from private employers is less than the supply, MNREGA allots the work to the labourers as per current practices.
  7. MNREGA charges an administration fee to cover related expenses from the employer.

Involvement of the private sector in this manner benefits the government, economy and society . It ensures that the MNREGA covers only those individuals who are genuinely unemployed and not those that have other opportunities for employment. This reduces the burden of welfare on the government drastically and keeps general productivity of labourers high. There is no incentive to leave productive workforce to join MNREGA. Furthermore, in some cases, this also provides a high degree of skill development for the workers, which MNREGA related jobs may not do. In turn, no employer suffers a workforce shortage on account of MNREGA, and the livelihood of all citizens is ensured.

Finally, it is important to note that MNREGA is not a program that can be easily suspended for strong political reasons. Such tweaks however, can bring about the desired outcomes without negative political ramifications. It may be the best solution for all stakeholders involved.

Yash Daga is a graduate of New York University’s, Stern School of Business, and is the Executive Director of RBBR Infrastructure Pvt Ltd.

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