Posted by Anand P. Gupta, Director, Economic Management Institute, New Delhi, India
The article "Reforming the Management of Public Expenditures on Forests: Some Thoughts" (Full text:Download gupta1.pdf) published in Social and Public Policy Review, Volume 2, Number 1 (2008) reviews the available data on forest expenditures of all public entities in India, identifies and articulates the weaknesses in the management of these expenditures, and argues that, with these entities not spending even their current allocations for the forestry sector, inadequacy of financial resources can not be regarded as much a reason for the current dismal state of India’s forest sector as it is made out to be. The article asserts that a good part of the solution to India’s forest problems lies in reforming the management of its public expenditures on forests, with the focus on strengthening the expenditure-outcome link.
This requires: recognition by those responsible for managing the forestry sector’s finances that expenditures do not necessarily produce the intended outcomes and that it is the outcomes that the people are concerned with; definition of the intended outcomes in measurable and monitorable terms; and delivery of the intended outcomes with a strong sense of ownership to be shared down the line up to the cutting edge levels through effective communication. These are major challenges, with the challenge of delivering the intended outcomes being the most difficult. But the challenge can be met. This will require several things.
- Firstly, with increasing the forest and tree cover to 33 per cent by 2012 as against the baseline cover of 23.03 per cent in 2001 being the intended outcome, one will need to examine the available evidence on the actual outcomes of the outlays on the forestry sector. Given that the total public outlay on the forestry and wildlife sector currently adds up to well over Rs. 5,000 crore a year, one needs to know the increase in forest and tree cover that may be attributed to this outlay. In case credible data on this are not available, one will need to take cost-effective measures to fill this gap.
- Secondly, one will need to raise a fire alarm for any failure in achieving the commensurate increase in forest and tree cover.
- Thirdly, with the fire alarm raised, one will need to investigate what caused the failure. This will involve identifying the various possible breaks in the chain between a given public spending on forests and its transformation into the targeted increase in forest and tree cover, and then pinpointing the break(s) responsible for a given failure. The various possible breaks may be: the composition of spending may not be appropriate; even when the composition of spending is appropriate, the implementing agency may not receive the money; even when the implementing agency receives the money at the right time, the implementing agency may not have the capability to implement the project that is funded, or may missuse/divert the money to unrelated activities; finally, even when the implementing agency has the capability to implement the project that is funded and does not misuse/divert the money to unrelated activities, its incentives to implement the project may be weak.
- Fourthly, the investigation of what caused a given failure, will allow one to understand the forestry situation at the micro level. This, in turn, will allow one to develop a strategic action plan, including the requisite incentive-creating, institutional-strengthening and capacity building measures, for correcting the failure and thereby for efficiently converting the forestry outlays into the intended outcomes. It must be added that while preparing a given action plan, one will need to budget the allocations required for delivering the intended outcomes at the micro level. As a consequence of all this, the action plan may differ from, say, one State to another and within a given State, from, say, one district to another.
- Fifthly, one will need to agitate for the implementation of a given action plan by the concerned Forest Development Agency/Forest Department. Arrangements will also have to be made for monitoring the action plan’s implementation.
- Finally, one will need to subject the action plan’s implementation to an independent, rigorous evaluation.
