B.CLIP was featured this week in Open magazine, which includes snippets the lectures of Takshashila Councillor Prof Mukul Asher on public finance and municipal budgeting.
When he throws the floor open to questions, there are several. Predictably, in keeping with the zeitgeist, there is a question about the Aam Aadmi Party. A student asks if AAP can afford to give away free water and subsidised power to the residents of Delhi. Asher’s response is a question. “In the 21st century, what is going to be the commodity that will be the scarcest?” he asks. There is a murmur of responses, then someone gives the right answer: water. “If something is very scarce, would you price it at zero?”
Asher then explains that although a free-water policy may appear to benefit households at the outset, it would eventually hurt them. As water becomes scarcer, the cost of supplying it will increase. Therefore the only way the Delhi government can afford to give its citizens water free is by finding an alternative source of revenue—it can either take money away from other infrastructure projects, or raise water prices for commercial establishments.
The first idea is obviously a nonstarter. And if the government opts for the second, it would increase the cost of doing business in Delhi, forcing commercial establishments to move to other cities. Such an exodus would come back to hurt households, because they are customers and employees of these businesses.
Read the entire article: School for Politicians, Priyanka Pulla, Open.
Professor Mukul Asher, Councillor at the Takshashila Institution visited Bangalore in December to teach B.CLIP students about public finance and municipal budgeting. He also analysed the Bangalore (BBMP) municipal budget for the class. Here he is interviewed by Subir Ghosh of DNA on the same:
One reason why the BBMP is under the public glare is that the Palike is sinking under the huge debt that piled up arguably because of its faulty way of accounting. According to the budget estimates of 2012-13, the BBMP was under a debt burden of Rs 5,325 crore.
According to Asher, though the BBMP budgets are classified by departments, line items aggregating to thousands of crores simply state “development works” or “Assembly constituency works” without mentioning the precise objective or category of work. This probably where the problem lies. On one hand the BBMP is biting more than what it can chew, and on the other the Palike is opaque about its own expenditure. The way out, Asher asserts, is for individual budgetary allocations aggregating to at least 90 per cent of total expenditure (excluding loan-related payments and overheads such as salaries, etc.), to clearly mention the purpose of the works in terms of either a category or one of the functions of the BBMP (such as solid waste management, storm water drainage, etc).
Read the entire article: Bangalore: BBMP? We should call it ‘BB empty’ instead, Jan 6, 2014.
Photo credit: DNA
Takshashila councillor Mukul Asher talks about Bangalore, public finance and urban governance in his interview with DNA. This was on the sidelines of his lectures on public finance, municipal budgeting and a review of BBMP’s budget for students of the B.PAC Civic Leadership Incubation Program (B.CLIP).
Speaking on the role of the programme, he said that B.CLIP can provide economic literacy to future politicians, enable them to ask the right questions and improve policymaking from the ground up.
Q: It’s agreed that Bangalore is in a mess. The most difficult thing to get out of a mess is to find a starting point. What can be a starting point for Bangalore?
A: Out mindset is still that we are largely a rural country. But India is rapidly urbanising. By 2040, the majority of the population will be urban. Yet, we have not given enough focus either on a policy level or in terms of governance structures or resource raising to urban issues. We find that Bangalore is not so unique in the Indian context. It is also not so unique in terms of middle income countries. For example, a city like Jakarta has many similar types of issues. It is not just one thing or one factor or initiative that will bring about a change. There should be a much higher priority for urban issues. And the urban management and urban accountability/transparency need to be aligned. We still have state governments who appoint municipal commissioners. Mayors have very little power. So, the time has come to rethink as to how we create an urban governance structure where there is a sense of responsibility, accountability and transparency. Multiplicity of agencies, the split relationships between states and urban bodies on one hand, and states and the union government on the other, are all leading to fragmentation of responsibility and the way resources are allocated. We now need a more integrated and newer ways of addressing urban problems. This is going to take time, but the debate has to begin. In the meantime, for municipal corporations like the BBBMP here as well as in other cities, there is a need to make them a lot more professional and provide them with the backup support that they need in terms of technologies, financial and budgeting system, so that we can begin to get better urban outcomes.
The full interview can be read here.
Professor Mukul Asher, Councillor at the Takshashila Institution spent two days, December 20th and 21st with B.CLIP students to teach the fundamentals of public and municipal finance, including a review of the Bangalore municipal budget. Below is his presentation on the latter.