By – Amar Yumnam
I learnt my foundations in Economics from the Imphal College in the early 1970s. We then had wonderful teachers. Oja Mani was so superb in his explanation of the various concepts and theories. Oja Ibopishak was so contemporary in the subject; he was possibly the first product of the Delhi School of Economics teaching in a college in Manipur. So does Oja N. K. Sarma and Oja Manihar taught us so well during our Honours days in the college. Going to Bombay University with this background was just wonderful. In Bombay, we had teachers who were established scholars in their fields of specialisation. Among them, there was Professor P R Brahmananda who was very vocal and straight in putting his points of view. Besides, for every two weeks or so, we used to have one international scholar visiting the Department for lectures. Listening to the original scholars and hefty debates after left permanent positive externalities on us on articulations and debates while the society was being put in the middle.
Now, why am I retelling the whole story of student days? The Theory of Public Finance: A Study in Public Economy written by Richard Musgrave and published in 1959 happens to be the first theoretically extensive work on Public Finance. Later Public Finance In Theory and Practice written with his wife was the most popular textbook on Public Finance for quite many years. In the Bombay Department, Professor Brahmananda would tell any student, who had not read Musgrave, is a Stupid one. Musgrave happens to provide a perspective on how government should go about her finances. He said: “…there is more to a history of fiscal doctrine than the tools of economic analysis. This history also responds to changing economic and social institutions. With the decline of feudalism, the property income of the Crown had to be replaced by taxation; and as the rise of modern legal and financial institutions came to be reflected in the tax structure, the complexity of tax structure analysis increased vastly. The growth of popular democracy, in turn, altered what is viewed as the appropriate range of governmental functions, with budget policy replacing the barricades as the area of struggle among group and class interests.”
I am remembering the words that one who has not read Musgrave is Stupid in the context of four recent news about the finances of the State of Manipur. First, the State Finances are determined and allocations are decided upon own resources and the share in the Centre-State Pool by the legislature. This implies that the targeted areas of expenditure are pre-determined by the Constitutional Body consisting of the Elected Representatives. This being so, how the large issues of reallocations arise? Second, well let us accept that contingencies might arise needing urgent attention of the State. If this is so, what it is so impossible to submit details of the areas of reallocations and the expenditures made? Third, the non-submission of utilisation reports is not just for the contingencies, but it spreads to all the sectors and over years. Fourth, with the difficulties being faced and the imperatives for investments on the social sector, there is a huge fund in terms of thousands of Rupees lying unutilised.
I have not mentioned the reported amounts intentionally for data manipulation has become a “rich” acquired character of governance in this country. Public Finance is now called Public Economics: “In the broadest interpretation, public economics is the study of economic policy, with particular emphasis upon taxation. The subject therefore encompasses topics as diverse as responses to market failure due to the existence of externalities and the determination of optimal social security policies. This characterization reflects an extension of the scope of public economics from its initial emphasis upon the collection and disbursement of government revenues to its present concern with all aspects of government economic intervention. “Public policy entails “the reduction of budget deficits and structural debt; • the maintenance of political control over the economy in the face of the increasing influence of globalisation processes; • the fulfilment of increased public expectations with respect to the levels of services provided; • the increasing competition between public authorities at local, regional and international level; • the management of the redistribution conflicts associated with the long-term exclusion of certain social groups; • the need for the more professional management of (increasingly)scarce public resources; • the democratic imperative of a systematic evaluation of the effects of laws and regulations; • the political integration of minorities and the consensual management of the conflicts that result in their opposition to the majority.” Given the realities and responsibilities of Manipur Government, should not all the liabilities be accounted for? Is it a case of individuals or a collective liability? All these should be enquired into and accountability established.
