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Cost Cutting

Along with the many ideas being floated for enhancing revenue generation, it is important to find innovative ways for cutting non-development costs and curtailing expenditures. There is a fair amount of recurring wastage and only strict control at every tier of administration can keep this to a very minimum. Add to this the losses due to inefficiency and corruption and we can get quite substantial savings by installing checks and balances at various nodal points to ensure effective monitoring of financial outlays in the system.

There is a dire need to reduce the number of departments in the civilian bureaucracy as well as personnel. There may be a hue and cry about unemployment but it will be far more economical to have people stay at home and collect their salaries than load the government with additional financial burden because of individuals making private telephone calls, excessive use of electricity, misuse of government transport and personnel, etc. Most of these departments have overlapping responsibilities and are breeding grounds for corruption. They burden the already overloaded taxpayers with additional “demands”, both official and unofficial, so much so that tax-payers are in danger of being declared an “endangered species”. To effect meaningful reduction, it will be necessary to do a systematic processing of needs that are vital for the running of the nation matched against the means to accomplish these needs.

A comprehensive proforma should be devised and issued to every department and sub-department for study and completion by a three-member committee belonging to the same department but appointed by the next higher authority. This proforma should indicate the number of appointments, in the sub-unit, the responsibilities/tasks of each person, their salary/allowances for the year 1999, the number of telephone and vehicles being used and their expenditures (individually) in use thereof, etc. The committee would then recommend where money can be saved by making reductions without effecting performance. They can then recommend a budgetary figure for the year 2000, the idea being to cut costs by at least 30% and then stay with the projected budget for the coming year. To ensure compliance it would be necessary to appoint a budget oversight officer, preferably from among the Committee that did the “self-assessment” in order to ensure continuity. In a pyramidical fashion this “self-assessment” by three member committees must continue vertically upwards in the structure each tier considering the consolidated structure of the lower level and recommending reductions, if any. If the three member committee at any tier has not recommended the complete abolishing of a sub-unit or drastic reduction themselves for their entity, which one does not really expect them to do, the next higher committee should not shirk from that task. There may be a tendency to avoid elimination of departments and reduction of number of jobs because of humanitarian considerations. Everyone must understand that the elimination of a post does not mean automatic unemployment, people would be transferred to a Central Surplus Pool by categories. They may be offered a Golden Handshake if attempts for their gainful employment do not materialise and if on reorganization/restructuring they cannot be slotted into a job. Even then it would be cheaper to keep them “on hold” rather than on any job.

A major portion of the Federal Budget goes to Defence Services. It is reported that the Chief Executive (CE) has initiated a serious cost-cutting exercise to reduce recurring expenditure by as much as 30% without compromising the effectiveness. Obviously this must be a systematic exercise that will cut waste down to a minimum as well as curtail/eliminate those areas that are not vital to the Army’s mission. In a series of articles over the years entitled “MORE BANG FOR THE BUCK”, we have been recommending radical changes to convert the Army from a 19th Century institution to a fighting force for the 21st Century. While the CE’s initiative for the 7-point agenda is welcome for this country, in a “Physician, heal thyself” — exercise he needs a scalpel for surgery on the indulgence and sloth that is manifest everywhere except in the fighting arms and some elements of the supporting arms and services. Nowhere in the world except in South Asia, and that also not in Sri Lanka or Nepal, is there a concept of a “buffer” between the officers and man as are the Junior Commissioned Officers (JCOs), a residue of the British Raj which the British themselves recommended for elimination as far back as 1921 when the first Indian officers started to be inducted in some number into the army. A mechanism has been suggested to gradually eliminate JCOs, however as far as batmen/orderlies are concerned the Government would do well to eliminate them altogether immediately and give an allowance to the officers in lieu. There are many, many ways to be cost effective, where there is a will, a way can be found. Charity to the nation starts at home.

In 1967-68, as an Adjutant of an infantry battalion posted in 11 Division, Lahore I was tasked to ensure 100% reserve for all specialist positions in the unit, i.e. mortar, engineers, signals, Mechanical Transport (MT), commandos, etc. With respect to drivers training, the unit MT received 3,000 additional gallons from the Brigade. At that time a civilian driving school would take approximately Rs 800-900 per person for drivers training right upto getting the individual a civilian driving Licence. We negotiated this down to Rs 600 per driver and inducted 50 personnel for MT training, meeting the Rs. 30,000/= budget from our unit funds. Our premise was that before we allowed any new MT trainee get onto the controls of any military vehicle, particularly into the “F echelon”, i.e. the fighting vehicles, the person would already have experience of driving vehicles on the main roads. The conversion would avoid wear and tear on the vehicles, particularly the clutch plate and the engines, even other vehicles (and persons) hit en route by drivers under training on heavy vehicles. POL would also be saved. The money spent on the individual for his drivers’ training and Licence would be recovered from him when he was leaving the service, thereby replenishing the unit find. The soldier would be happy, as it would cost him far more to get a civilian driving licence as a civilian, not including the hassles and the times wasted. The unit was proud of the innovation, the brigade was uneasy but non-committal, the Division HQ was aghast as to our sacrilege! What to talk about being rewarded for an original idea, we were lucky to survive in the same rank. As an SSG person and being what he is, one is sure the CE must have gone through similar experiences during his service, and been frustrated because any initiative would have been taken to be against the prevailing norm and dealt with summarily. To effect change, one has to certainly take in the consequences and if the result is going to be for the better, one has to be bold in taking a decision, sooner rather than later. Luckily the buck stops with the CE and he can effect change across the board in the Armed Forces. The entire fiefdom being his to now command, the CE has to start with the Defence Services so that he can credibly ask the civilian bureaucracy to make similar “sacrifices”. A budgetary saving of Rs 50-60 billion in both the civil and military establishments, along with the increase in revenue collection by a similar amount, will go a long way in reducing budget deficits while making more funds available for development. That development is the key engine for growth.

Some departments are superfluous and can be eliminated altogether, some can be dovetailed to streamline the efficiency and making these cost effective. The penchant of bureaucracy is to maintain the status quo, not to allow fresh ideas to germinate, to see the light of day. We must militate against the status quo, we cannot afford to cut down performance, we have to enhance it. As such it is important to get in some effective cost-cutters, those who will reduce overheads and excess without compromising efficiency, rather enhancing it.

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