For over a decade there have been reports of central funds meant for the north-eastern region going into the wrong hands. The Government of India has proposed creation of the post of joint director in the Central Bureau of Investigation exclusively for the north-east to check the leakage of development funds. Though late in coming, this is a welcome move.
The Government of India’s (GoI)proposal (25 March 2013) to create the post of joint director in the Central Bureau of Investigation (CBI) exclusively for north-east India to check the unabated leakage of development funds in the region is a right move though it has been late in coming. For over a decade now, there have been reports of central funds going into the wrong hands in the north-eastern region (NER).
With huge sums of central funds being pumped into the NER through special packages, the focus has once again shifted to monitoring and curbing leakages of funds which has reached an alarming proportion. However, the magnitude of this leakage is difficult to estimate because of “intelligent” siphoning off. The Eleventh Plan outlay for the Ministry of Development of North Eastern Region (DoNER) was Rs 14,409.08 crore and the possibility of a substantial amount being siphoned off is high.
The swindling of public funds is one critical factor that can perhaps justify the resentment of citizens in that part of the country in regard to the wide development gaps as compared to the rest of India. Further, this “pattern” of development has confirmed their fears of the home-grown mafias and syndicates dictating the development and governance “agenda” despite the presence of democratically-elected governments.
Another serious measure contemplated is that of setting up an exclusive wing of the Central Vigilance Commission (CVC) for the region. In its report to Parliament, the Standing Committee attached to DoNER has expressed its satisfaction about the move to create a separate wing of the CVC in the NER. The Parliamentary Panel recommended that early action may be taken in this regard.
The allegation that people in the region are being deprived of their due as a large chunk of the central funds, earmarked annually, goes to politicians, their patrons, contractors, builders, and the rich influential class is not untrue. Thus the felt need is to have a monitoring mechanism in place in the region to see that funds are not misused or salted away.
Magnitude of the Problem
The magnitude of the problem has been expanding. In August 2010, the DoNER admitted in Parliament that there was massive leakage of central funds but pleaded its inability to gauge the extent. It stated that in the last three years (2007-09) the CVC had detected irregularities in three of the five cases of alleged corruption.
The unearthing of the Rs 1,000 crore scam in Dima Hasao district (earlier North Cachar Hills district) in Assam in 2010 was a shocking eye-opener. The scam involving official-underground militant nexus was probed by the National Investigation Agency (NIA) and the CBI separately and reports of development funds reaching the hands of the underground outfits, particularly in the insurgency-affected states of the region, have alarmed the centre if not the state concerned.
The siphoned off money is alleged to have been used by the Dima Halam Daogah (Jewel Gorlosa) (DHD-J) led by Dilip Nunisa to procure arms and ammunition and wage war against the Indian nation state. The real challenge here is to establish the veracity of allegations and guage the magnitude of scams involving public funds.
It has been reported that the United Progressive Alliance (UPA)-I government was forced to suspend funding of social sector schemes in Manipur after evidence of funds being siphoned off and reaching the hands of the militants surfaced. In 2006, the then union minister of state for commerce Jairam Ramesh had accused politicians in the north-east of misusing central funds meant for the region’s developmental works.
“The central government spends Rs 150 billion each year for the north-east. Had the money been given directly to the people, poverty would have been alleviated by now,” the minister stated while delivering a lecture on “North East India and Look East Policy” in Shillong.
The flow of funds from New Delhi to the NER without a foolproof accountability and transparency mechanism has contributed in aggravating social tensions and creating an “elite”. Special fund arrangements like the Non-Lapsable Central Pool of Resources (NLCPR) created in 1997-98 (operationalised in 1998-99) has increased resource availability in the region without strict bookkeeping.
The compulsory link between development and politics prevents the arrest of this downslide as the nexus ensures that strict governance measures are not adopted. The fear of a political backlash prevents serious and sincere investigation into these cases. The profiteering link between insurgency – industry – political class and pliant officials has played a dubious role in pushing the NER into a regressive state.
Stopping the Leakage
As of now, the DoNER as the nodal channeling agency for all GoI fund programmes has laid major emphasis on monitoring and evaluation of its schemes and programmes. The “rigorous” scrutiny of the detailed project reports (DPRs) within the ministry, as well as through line ministries has been the mainstay of monitoring and evaluation (M&E) with a technical cell to facilitate the process.
The ministry claims to follow a strict regime of utilisation certificates and field visits to monitor the implementation of its schemes in the north-eastern region. With the latest move on curbing leakage, the pressure is now expected to mount on the DoNER to train its focus on vigilance and monitoring of utilisation of central funds more stringently (Rangkachak 2010).
Taking note of the revenue leakages in several departments in Meghalaya, Chief Minister Mukul Sangma said (25 March 2013), in one of his first official statements after returning for the second term, that the state government is contemplating a strong surveillance system to keep a tab on the anomalies that have had a huge impact on the fiscal health of the state. Sangma accepted that there have been repeated reports of revenue leakage but little has been done so far to address it.
Admitting that this is a matter of grave concern and needs to be addressed in right earnest, he said that the Meghalaya United Alliance (MUA)-II government would streamline the various revenue-generating departments by putting in place a strong monitoring system. It was emphasised that proper use of technology (more of information communication technology and e-governance measures) would vastly improve the monitoring levels.
Improved web presence of various departments, whereby every transaction at every stage is captured and monitored online so as to minimise revenue losses is among the suggestions made to curb leakage. Such proactive state-level mechanisms to curb leakage and corruption constitute the first step towards good governance efforts and it is the need of the hour for long-term stability and growth in each state of the NER.
In this, the role of the North Eastern Council (NEC), the nodal agency for implementation in the NER will be critical. Strengthening the internal governance mechanisms and procedures to deliver and administer programmes within the NEC has been a deficit area that has been overlooked for long.
Missing Governance Ethics
Is a “third eye” the only mechanism to check pilferage and unethical practices? It certainly cannot be so and it is imperative that other ways and means are explored without delay to see that people’s trust in government and service delivery does not deteriorate in the NER.
A majority of the states in the NER are under the rule of the same party that is also in power at the centre. While the flow of central funds to the states have been steady and generous in those and other states of the NER, these states should have been in political synchronisation with central efforts in reaching out to the constituencies with programmes and services meant for the public. The absence of this amounts to political sabotage on the part of the state political units against the parent party that runs the government at the centre. In other words, allowing misuse of central funds by not ensuring proper fund utilisation and check on misuse amounts to a dysfunctional political culture within the party system.
The gross impropriety in fund mismanagement points to a wider crisis in governance. In a situation where the political executive assisted by the administrative class performs its duties legally and ethically, the question of having a third party monitoring and checking on fund misuse would not arise, as is the case today. Does not a “monitoring” for development put a big question mark on the entire administrative structure and performance in the region?
The latest move of the centre can be cited as questioning the very trust and capacity of the states and their leadership in the NER to work with political and administrative responsibility and trustworthiness. Do not such moves also put a question mark on the very political and administrative legitimacy of the state administrations? It is time that these aspects are seriously considered by the state authorities and their advisory teams.
Blurred Vision
The North East Vision 2020 visualises the path to a bright future in the NER, as expressed by Prime Minister Manmohan Singh while releasing the vision document in 2008. “It is a very important report of momentous importance to the future development of the north-eastern region. The Vision is a tribute to the democratic sensibilities and traditions of the people of the north-eastern region; the creation of the Vision an exemplar of participatory governance”, he said (PCI 2008). The NEC in its 56th plenary session in 2008 approved the Vision 2020 document, emphasing its importance in enabling holistic and sustainable development of the region in 12 years. It aims to ensure that the region plays the lead role in realising the fruits of India’s Look East Policy.
Other important goals include improvement of infrastructure in surface and air transport, telecommunication, waterways and the power sector. It estimated that accelerating growth in the NER will require investments to the tune of Rs 13 lakh crore in the next 12 years. Overall, the stakeholders adopted the NER Vision 2020 with the purpose of closing the yawning gap between the region and the rest of the country and restoring the north-east to a “position of national economic eminence”.
The North East Industrial and Investment Promotion Policy 2007 visualises rapid industrialisation of the region supported by an enabling and good governance environment as provided by the state governments. The NLCPR created in 1997-98 (operationalised in 1998-99) provides for a mandatory 10% budgetary allocation of all ministries/departments for the NER.
The broad objectives of the NLCPR has been to ensure speedy development of infrastructure by way of filling the existing infrastructural gaps (economic and social) in the region by making funds available from the non-lapsable pool. By and large, most centrally-sponsored schemes provide assistance to the north-eastern states with a grant component of 90% as against 30% to 75% in the case of other states.
Further, there has been special emphasis on sector and area-based programmes. For instance, the Ministry of Road Transport and Highways has initiated mega road development programmes in the north-east under the “Special Accelerated Road Development Programme in North East (SARDP-NE)” since 2005. The Integrated Scheme for Women’s Development for north-east has been designed to address the socio-economic need of the region for empowerment of women and development of children under the Ministry of Women and Child Development.
In 2011, the government allotted Rs 1,900 crore to create a dedicated North-East Region Rail Development Fund (NERRDF) for national rail projects in the north-east under the non-lapsable category. With external trade and commerce ramifications, the Look East Policy is being pushed through to ensure that the region derives maximum trade and economic benefits through regional and international trade with the south-east Asian economies.
These are all essential and critical push factors to see that the region makes progress. At stake is the development of a sound infrastructure network that is fundamental to promote the NER and which has major international ramifications vis-à-vis the south-east Asian economies.
Citizen Vigilance
As we continue to look for track II or III measures to deal with the region’s poor development performance, what about citizen vigilance panaceas one of the solutions? What if the common citizens and their leaders in the NER start looking for solutions within their reach, say, seeking documents and accounts of policy programmes from decision-makers?
The advantages of the Right to Information Act are all about bringing in accountability and transparency of service delivery and programmes. An informed and vigilant citizen can be the most potent tool to ward off tendencies inimical to the region’s development. It is time that people’s power in the NER becomes more vocal and assertive in demanding and asking for accountable and transparent governance and service delivery.
The citizens must be empowered to account for public money being spent by the administration in each and every stage of the development curve. Compulsory social audit in every government scheme and communitisation of major public service programmes can be the first few essential solutions that must take precedence towards the rational use of public funds for the public good in the NER.
(About the Writer: Syed Sultan Kazi is Chief Executive of the North East Development Foundation, Guwahati)
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