Of total funds sanctioned, what donors and government allow NGOs to spend is 90 per cent on projects and 10 per cent on admin which includes salaries, office and travel costs. Let us be charitable and allow government 20 per cent. Let us also add another 15 per cent spent on social infrastructure that would be required, and that we assume has been established. Were you to add the 15 per cent that apparently reach the beneficiaries, you’d get 50 per cent. This would mean that for the last 25 years, 50 per cent of expenditure on social spending has been siphoned off!
What Rajiv Gandhi found was that funds were going from the Centre to the states, who in turn were re-allocating these funds to the different projects. He probably assumed that the funds were being siphoned off at the state level; and so, to prevent misuse, he ordered the funds to be sent directly to the implementing agencies from the Centre. Despite the best of intentions, what this did was to lower the level of corruption: from the state government to the project head, who probably had to share the booty upwards too. I hope government’s latest initiative on Unique Identity Numbers, when implemented, will ensure that the beneficiaries gain from direct transfers to them by the centre rather than routing it through anyone.
By most reports, the NREGA scheme has been the most successful of government schemes what that means is perhaps, not 50 per cent, but a lower amount is being siphoned off. Let’s face it, the scheme is dependent on the Block Development Officer and the sarpanch to identify and confirm the beneficiary before payment is disbursed; what are the checks and balances in place to ensure that a nexus between these two does not lead to siphoning off of funds to non-beneficiary accounts? The BDO post is reportedly being auctioned off for as much as 5 crores these days, giving lucrative police station house officer postings stiff competition.
A worthwhile exercise for the Comptroller and Auditor General (CAG) would be to undertake a state-wide exercise to identify the number of NGOs that are founded by politicians or bureaucrats or through family members or fronts. Ideally, identify where (say) more than 0.5 per cent of the sanctioned funds for any one scheme in a state were sanctioned and then identify the organisations that received the funds. Then depending on the findings, to investigate those organisations where politicians or bureaucrats were involved to see how the funds were spent/disbursed, or at least to show the data on their website for others to study how the funds were actually spent. If these large amounts are being siphoned off it would need people in power to initially authorise the projects to the NGO, and then to sanction the payment to them which could be fictitious.
The shocking truth is that approximately 60 per cent of the central schemes are sanctioned directly to NGOs and social organisations, where the CAG has no purview for an audit (because these funds do not pass through the consolidated fund of the respective state)! The existing CAG audits would at least show misdemeanours, if any, about the past; if they were done in an effective manner, it would still scare these people in prominent positions about being exposed for their misdeeds in the future. We need processes to ensure pro-active methods to prevent corruption instead of just reporting it, but till we find such methods, the fear of future exposure could act as a real deterrent.
The CAG reports go to the Public Accounts Committee (PAC), which have been known to stall or delay action on these reports. PAC meetings are held in camera. Why hold them secretly? The public should be engaged in the PAC process when did they receive the CAG report? When and how did they act on it? The need is for transparency here.
It is good to see that the CAG is focusing more on outcome-based audits. For instance, if there is a project on female education, the audit in addition to what it does, shows the increase/decrease in the number of beneficiaries rather than just compliance with regulation.
Till about the mid 80s, if an officer was caught with his/her finger in the till, s/he was ostracised not only by the service but by society at large; most genuinely believed that bureaucrats were there to provide services for their betterment. In just 25 years all this has changed, and corruption has almost been accepted as kya kare, chalta hai. After years of a public perception that there was a nexus between politicians, bureaucrats and corporates that was responsible for the major corruption in our country, perhaps the new nexus between politicians, bureaucrats and the social sector will reveal corruption at an even bigger level.
Perhaps the most obvious product of this: the Prime Ministers/Chief Ministers Relief Funds, which encounter problems with donations with too small a fraction reaching beneficiaries, most philanthropists would not want to fund these bodies. Many who do are actually interested in political favours. It is deeply worrying that government, which can and should provide redress to those in distress especially after natural calamities, is not trusted even at that highest level. The PMs relief fund does not have sufficient credibility because he himself does not manage it, but someone down the line does. Is it time to bring in a credible and capable head from outside, and to introduce a proper governance structure? Such action would help in attracting more funds from NRIs and foundations. Long-term solutions need to be conceived of and implemented. Currently, the funds provide for immediate food and shelter, but lack treatment for trauma and longer-horizon sustainability for the affected once the doles are done with. If a more pragmatic and transparent approach were adopted, perhaps much more funding would flow in to help the affected. Could such action also be a catalyst for efficiency in governments other social-sector schemes?
The writer is CEO, Grassroots Trading Network for Women