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Adam Smith's Limited Support for Public Works: A Contemporary View from India

Eamonn Butler highlights the nuanced perspective of Adam Smith on public expenditure, emphasizing its limitation to essential projects for commerce, such as infrastructure and education. Smith does not advocate for public projects as a wholesale substitute for private commerce. This restrained endorsement poses a challenge when considering the scale and diversity of modern state undertakings.

Connecting Smith's Perspective to Contemporary India:

Examining India's public works department in the present day, one can observe a multitude of large-scale projects spanning diverse sectors. While Smith's endorsement is specific to projects essential for commerce, contemporary public works in India often extend beyond these boundaries. This raises questions about the alignment of current state initiatives with Smith's limited support for public works and prompts a critical evaluation of the evolving role of the government in economic development.

To lead a life three things are very necessary, in India we call 'roti, kapda and makan' which means food, clothes and shelter. To connect to Emon- Butler's paragraph with an Indian scheme, I connect this with the central government's housing scheme, the Pradhan Mantri Awas Yojana (PMAY), which is a flagship programme that aims to provide shelter for the needy, as over 25 crore people living in utmost poverty.

A good scheme can be ineffective in various ways like corruption, poor project planning, lack of transparency, inadequate oversight, political interference and much more. But due this ineffectiveness of the government planning administration only causes huge wastage of hard-earned taxpayers' money.Pradhan Mantri Awas Yojana (PMAY) was launched in 2015 with the aim to provide housing at an affordable price to the weaker sections of the society, lower income group people, urban poor, and rural poor.

The Yojana involves a construction of around 20 million houses at an affordable price. In the Budget 2023, the outlay for the Pradhan Mantri Awas Yojana was enhanced by 66% to over Rs.79,000 crore. The Pradhan Mantri Awas Yojana has two components:

Pradhan Mantri Awas Yojana Gramin (PMAY-G)

In West Bengal the State Government was given the duty to implement the scheme in the state but it was observed that the scheme is failing as there was no proper implementation of the scheme and the scheme was used as a tool to earn money by the ministers and the people involved in it, and the poor people was left out from the scheme.[1]

According to reports, The state and the central government will split construction costs 60:40 in order to build affordable concrete homes in urban and rural areas by 2024. However, in Bengal, claims of a lack of accountability and transparency have surfaced when purportedly ineligible names appeared on the list of PMAY candidates.[2] In the given report it was seen that people those who already have a house were given the benefit of the schemes and the people who need it were rested to suffer.

Cut money' is the term for money taken as bribe by local panchayat officials for including people as beneficiaries in several welfare schemes, including PMAY. This type of incidents generates a feeling in the minds of taxpayers that the tax which is been given is not used for benefit either to society or the person who is paying the tax.

In India implementing a scheme is more hard than making a scheme and that is a part of government officials and in India there is always a political interference when it comes to implanting a scheme which has money in it, even if the list is out it takes years for these government authorities to fulfil the targeted scheme, so it's the place where private players can do the work more transparently and more efficiently. Tamil Nadu failed to receive eligible grants of Rs 1515.60 crore under Pradhan Mantri Awas Yojana-Gramin (PMAY-G) due to non-fulfilment of stipulated conditions from 2016 to 2021, CAG report said.

The other major lapses noticed included non-receipt of union government grant, non-inclusion of eligible beneficiaries, shortfall in coverage of SC/ST beneficiaries, fraudulent sanction of houses and poor monitoring. Out of Rs 3798.37 crore eligible, as of October 2021, a sum of Rs 2,282.77 crore (60%) alone was received by the state. Similarly, the union government did not release the second instalment for 2018-19 and instalments due for 2019-20, as the proposal of state government was not in the prescribed format[3].

The foundation for identifying beneficiaries, SECC data revealed a sizable number of families with one or more people with the name "Unknown." Due to the abuse of this SECC data flaw, a sizable number of households were unfairly sanctioned. A total of 3,354 dwellings were improperly sanctioned to ineligible beneficiaries in the sampled blocks by abusing the word "Unknown" in the name column of SECC data, resulting in an irregular expenditure of 50.28 crore.

If this matter is looked at for the entire State, the number of houses sanctioned fraudulently may rise. Information obtained by CAG revealed that beneficiaries listed as "Unknown" in the PWL were chosen and changed to someone from a different family at the time the sanction order was issued.[4]

Few years back the passport issuing department was under government control, where it takes months to have a new passport, but now as private player like TCS has entered this space there is lot more transparency and a effectiveness in the work done, which helps to save time and effort for the taxpayer, Another key component in today's world is technology if the private players can do it why the government which has a huge resource having taxpayers money cannot. If the PMAY can be monitored by the government in a more advanced way like tracking the money, if it has reached to the right persons or not, that will be the correct way to use the taxpayer's money.

The statement from Eamonn Butler that refers to the unbridgeable distance might be extended to worries about possible overreach or inefficiency in the design and implementation of infrastructure projects in India. The size and complexity of contemporary government initiatives, such as significant infrastructure projects, might be criticised as necessitating strict scrutiny, transparency, and accountability in order to prevent waste and guarantee that they actually serve the public good.

In conclusion, the passage from Eamonn Butler's viewpoint on Adam Smith's ideas on public expenditure can be connected to current discussions about government involvement in significant infrastructure projects in India, emphasising the need for effective management and accountability in public works departments to adhere to the principles of limited government intervention.

  1., Trinamool feels the heat as allegations of corruption in PMAY surface, SHIV SAHAY SINGH.
  3., By Express News Service.

Award Winning Article Is Written By: Mr.Soumyadip Chakraborty Authentication No: FB51017745628-26-0224

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