Citizens' Issues
Planning Commission says Rs35 lakh expenditure is ‘routine’

The Planning Commission justified Rs35 lakh spend saying it as ‘routine maintenance and upgradation’. However, it has no answer on money spent for the non-feasible door access control system for toilets

After media reports surfaced on how the Right to Information (RTI) application revealed that over Rs35 lakh was spent on renovating two toilets, including the cost on installation of installation of Door Access Control System at Yojana Bhawan, the Planning Commission clarified that it is “routine maintenance and upgradation”, and said that it was found that access-control system was actually not feasible in practice. The RTI applicant has demanded explanation if this amounted to wastage of Rs5 lakh spent to install the system.

Subhash Agrawal, the RTI applicant, told Moneylife, “The clarification is an afterthought, seeing the media reaction on how money was blown up.  While the RTI reply itself indicated that such system is not feasible, the Planning Commission’s reply backed it.”

In a statement the Planning Commission said, “These toilet blocks are meant for shared use and are all being renovated to the same standard. Because there have been instances of pilferages of newly constructed toilets, an access-control system was initially tried, but was not found feasible in practice. Yojana Bhawan is an important public building and must have the essential facilities. The costing and execution of works is not done by the Planning Commission, but by the CPWD (Central Public Works Department) which is the authorized government agency to do the same. The entire work is being done within the budgetary allocation and following the prescribed procedure.”

In a reply to a RTI application by Mr Agrawal, the Planning Commission revealed, “Cost of installation of Door Access Control System is Rs5,19,426 for two toilets. Cost of renovation of two toilets where door access control system is installed is Rs30,00,305.”

A communiqué from Planning Commission clarified that, “It is unfortunate that what is routine maintenance and upgradation is being projected as wasteful expenditure. The toilets being repaired or renovated are public toilet blocks, and not private toilets for senior officials or members. While the amount of Rs30 lakh being mentioned is correct, an impression is being created that this has been spent on two toilets. This is totally false, because these toilet blocks have multiple seats in addition to separate facility for the differently-abled. Each of these blocks can be simultaneously used by approximately ten people.”

However, information furnished under RTI revealed that CPWD has provided 60 smart cards for accessing these toilets to users including senior advisors, advisors, directors, personal secretaries, etc, making it clear that it was for private use.
The Planning Commission also said that more than 1,500 meetings are held every year and thousands of people use these public conveniences. A common complaint over the years was the poor quality of the toilets in the building—a complaint made not just by the ministers and foreign dignitaries who visit, but also by the staff and the journalists. “Does this mean that if I go to Yojana Bhawan, I have to find one of the 60 smart card users before accessing the toilet? Now they are saying the system is not feasible. But they have to answer whether the system is still in place or not in use and also what happened to those smart cards. Also, does this mean that Rs5 lakh is wasted?” asks Mr Agrawal.
Experts point out that it is still unclear who is responsible for the expenditure for the renovation on the toilets.


Planning Commission toilets: How much it should have cost?

The renovation of the two toilets with “diplomatic embassy standards” and Japanese or German class fittings, should cost between Rs2 and Rs4 lakh in Delhi

The toilet controversies appears to be rocking the headlines in the print media and breaking news on television, and no less than the deputy chairman of the Planning Commission had to issue clarifications and press notes on the subject.

But one simple fact appears to have gone past unchallenged. Was the cost within rational levels, and if so, how much is our CPWD (Central Public Works Department), tasked with this job, spending on refurbishing toilets?

Based on quick television video grabs and media photos, I went on a walkabout in one of South Delhi's major “sanitary goods” market and the showroom of one of Indian’s most famous sanitary goods and bathroom boutiques. All are within two kilometres of where I live, and I have known some of the shopkeepers for about 30-40 years.

1) An estimate of renewing the bathrooms, including civil works, to what they refer as “diplomatic embassy standards”, was placed at between Rs2 and Rs4 lakh. This includes Japanese or German fittings, where required, or Indian equivalent. This is, as they say, for work done “with receipt”, which means they satisfy all mandatory and statutory requirements—except bribes. It is a considered opinion that the bribes involved through a chain of contractors and subcontractors would have been between 300% and 400% People smile at even higher numbers charged during the Commonwealth Games, and say, so what, nothing will happen.

2) A decent smart card reader configuration for 3-5 doors would cost between Rs30,000-Rs80,000, depending on configurations, and that would include 100 smart cards. And as we are all aware, a replacement smart card even for the Delhi Metro has a cash value of Rs50, while the actual cost when bought in bulk is in single digit Indian rupees.

Whether a building is 50 years old or almost new, rejuvenating a toilet which does not even have a shower cubicle from all appearances cannot cost so much money.

The bigger question to the Planning Commission, then, is this—would they like to use this as an opportunity to analyse how much a toilet should cost, whether it is for the exalted asses or ordinary human beings?

At Rs35 lakh, another friend who is senior enough in the hotel industry, could not help but say that it sounds like toilet humour —except that, it is we, the tax payers, who are paying for this joke.

(Veeresh Malik had a long career in the Merchant Navy, which he left in 1983. He has qualifications in ship-broking and chartering, loves to travel, and has been in print and electronic media for over two decades. After starting and selling a couple of companies, is now back to his first love-writing.)


RBI likely to go in for more interest rate cuts, says Nomura

Due to continued weakness in domestic demand and moderate core inflation Nomura expects a 25 basis points cut at the next RBI policy meeting on 18 June 2012

Brokerage and research firm Nomura has said that there will be an additional 50 basis points cut in repo rate in 2012 (25 basis points cut previously) due to continued weakness in domestic demand and moderate core inflation, with a 25 basis points cut at the next RBI policy meeting on 18 June 2012. The cash reserve ratio (CRR) is not expected to be cut on 18 June, as liquidity is closer to the RBI’s comfort zone and open market operations can be used to address the liquidity mismatch, predicts Nomura.

The interest rate cuts are only a quick fix to growth. Without concomitant fiscal tightening, loose monetary policy will likely fan inflation and lead to greater macroeconomic instability down the road.

The research firm is changing its policy rate call. It expects 50 basis points of additional repo rate cuts in 2012 (terminal repo rate of 7.50%), compared with its earlier forecast of 25 basis points, due to a continued weakness in domestic demand and rising downside risks to the global growth outlook. The reasons for the expected  25 basis points repo rate cut on 18 June 2012 include: (a) weaker-than-expected real GDP growth of 5.3% y-o-y in Q1 2012, belying Nomura’s and the RBI’s view that growth had bottomed in Q4 2012; (b) despite rising headline WPI inflation, core WPI (non-food manufactured) inflation has continued to moderate, which suggests that pricing power has declined (A further moderation in core inflation in May, data due on 14 June 2012, is expected); and (c) Brent oil prices have fallen to around US $100/barrel, more than offsetting the drag from the rupee depreciation.

Nomura has assigned a 20% probability to a 50 basis point rate cut at the RBI’s June 2012 meeting. While sluggish growth, low core inflation and weak policy rate transmission argue for a more aggressive 50 basis points rate cut, The brokerage expects a 25 basis point rate cut due to elevated headline inflation (primarily due to persistently high food inflation).

The CRR at 4.75% is close to the all-time low of 4.50% and needs to be kept ready as an emergency buffer to inject liquidity if conditions worsen, says Nomura. Upside risks in headline inflation are expected in the coming months. However, continued moderation in core inflation will likely prompt the RBI to accord a higher priority to growth. As such, following the expected 25 basis points repo rate cut at the June 2012 meeting, Nomura anticipates another 25 basis points cut in the second half of the year.

The current slowdown in growth is largely a payback from continued fiscal excesses and reflects slow government decision-making over the past year. Real effective exchange rate depreciation has already started to ease monetary conditions. As such, the current Indian stagflationary environment needs tight fiscal policy to create a more stable macro backdrop.

Nomura reasons that there are two issues with cutting interest rates: First, in the current tight liquidity environment, the transmission of policy rate cuts may be delayed and sub-optimal. Second, and more importantly, when inflationary expectations are in double-digits and potential growth is at risk of falling below 7%, it will not take much for inflationary pressure to rear its head. Without concomitant fiscal tightening, loose monetary policy will likely fan inflation and lead to greater macroeconomic instability down the road.

Thus, Nomura predicts a gloomy picture ahead for the banks and bond market—not to speak of instability in the equities and forex market—in India, in the absence of firm measures from the government.


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