Chennai: “Once I was walking back with my wife and kids to my hotel after shopping, and I realised I was being followed by four thugs… I asked my wife to take the kids and cross the road… When I reached a spot where there were some people, I abruptly turned around and confronted my followers… I was quite nervous about being robbed of my cash and passports and was very relieved when they fled,” writes Subra Ramamurthy in his book, ‘Pursuing Reforms across Countries: Perils, Stresses and Rewards‘ published by The Notion Press.
The economist, who has worked in over 25 countries with top financial giants such as Commonwealth Fund for Technical Cooperation, United Nations, World Bank, Arab Monetary Fund and Asian Development Bank, has faced some thrilling, scary experiences in his career.
“My first book, also on public finance, dealt with how to fix weak governance and obsolete systems. Review of the economic performance of some countries in euro zone revealed disturbing trends; their fiscal deficits were above the limits in the Maastricht Treaty, indiscriminate borrowing, lax tax administration, rising levels of unemployment and falling standards of productivity. The trends were concealed by poor budget practices and fiscal accounting,” he told News Today.
“After my first book, I decided to write on my experiences in various countries. I had the unique opportunity of working on IMF assignments on these reforms to create transparency and accountability for use of government resources. The readers will know the challenges in these countries – geographical, political, legacy systems, cultural differences, etc.”
Despite facing many problems, Subra says he was determined to make changes in the finance sector. “Once I committed myself to reforms, there was no going back,” he adds.
When asked how students can make it big in the finance sector, Subra says, “They must aim to acquire solid educational and professional qualifications acceptable worldwide in financial management.”
Subra is generous to share vital lessons he learnt. “The main challenge was from mid-level civil servants who felt threatened by reforms and changes to business practices and feared IT-assisted solutions due to its unfamiliarity,” he recalls. “I made them understand the changes through training programmes and made them accept ownership of the changes.”
Talking about government fiscal management in India, he says, “India’s government budget and fiscal management systems are derived still from pre-Independence British system. For instance, there is a public account besides consolidated and contingency accounts.”
“So transactions in public account conceal the true level of public debt and government expenditure. The accounting system still uses cash basis instead of accrual which also conceals real level of expenditure. This makes it difficult to make consistency check with the system of national accounts used for GDP.”
He adds, “This is strange since the British government has already reformed their fiscal accounting practices using accruals falling in line with major international standards. The budget format uses classifications that don’t distinguish between functions and economic categories. There is no linkage between annual budgets and medium term macro-economic forecasts and goals. The government IT systems are built around existing manual practices and don’t use full potential of investments in IT systems. The above deficiencies must be addressed to bring Indian system in line with modern trends.”