Archive for February, 2015

28 Feb

Reconstructing the bureaucracy

Posted by vramani in public policy. Tagged: .

Anyone familiar with the “Yes Minister” and “Yes Prime Minister” television series that highlighted how the British government bureaucracy ran rings around their political “masters” would have realised that its Indian counterpart is no laggard when it comes to teaching its political bosses some of the tricks of the trade (and more). It was only after forty years of mutual coexistence of the babu and the neta that the political class, in a crisis situation in 1991, started to tinker with the apparatus of controls that had placed the babu in an all-powerful position. But there was a flaw in this approach: while the license-permit raj was dismantled, the babu raj was left to flourish merrily. Successive governments in the past twenty years have blithely ignored the recommendations of the Fifth Central Pay Commission (FCPC) (1997) on downsizing the bureaucracy as well as the weighty (literally!) reports of the Second Administrative Reforms Commission (SARC) (2009). While the present government in New Delhi promises to sweep the stables clean, there is the ever-present danger that the sprawling babudom right from Delhi to the galli will ensure that all efforts at reform of systems and institutions are brought to nought. The BJP government in Delhi would, therefore, do well to carry out fundamental reforms in the selection and functioning of the bureaucracy, in Delhi for a start, in the states run by its governments as a parallel measure and, through public support for improved governance consequent on such reforms, at levels of local governance.

At the apex level, the bureaucratic structure comprises the All-India Services (the Indian Administrative Service (IAS), the Indian Police Service (IPS), the Indian Forest Service (IFoS)), the Indian Foreign Service (IFS) and the various All-India Services with specific functions, like the Revenue Service, Postal Service, Audits & Accounts Service, etc. Below these are the vast army of subordinate services that man the Secretariats in Delhi and innumerable field offices in Delhi and all over the country. The first issue that arises in any discussion on administrative reforms is the range of functions that the national government in Delhi has arrogated to itself, through both legislative measures and administrative diktats. Drawing on the views expressed by the FCPC (though not entirely agreeing with it), the national government should confine its functioning to the areas of national security, international relations, macroeconomic management, natural resource management and major infrastructure development. This obviously implies a steep reduction in the number of government departments and agencies at the national level. The national government can be whittled down from over 80 Ministries and departments to barely 20. Most of the functions that need to be carried out at a national level can be entrusted to specialised regulatory bodies and agencies. A majority of these functions should be handed over to the states, with professional advisory bodies providing knowledge inputs in the areas of urban management, health, education, rural development, etc. The national government then plays the role of an enabler and facilitator, with state governments implementing policies in a wide range of areas, free of central control.

The sweeping changes in the scope of responsibilities of the national government will have major implications for the structure and management of governance systems at the national level (as well as for state and local governments, where similar reforms should be carried out in a phased manner):

  • The existing top civil service systems should be recast. The All-India Services had a vital integrative function at the time of independence, as envisaged by Sardar Patel. The challenges faced in the post-partition period and the imperatives of nation building in a country with a multiplicity of administrative systems, inherited from the British and the princely states, necessitated a professional civil service which provided a link between the national government and the states. With established political systems in every state and a growing integration of peoples, arising through inter-state migration, (although the occasional regrettable xenophobic incident rears its ugly head from time to time) the need for persons of one state being sent to man the administrative apparatus in another state is an idea that has outlived its utility. The All-India Services can, therefore, be phased out in a fixed period of time, with currently serving members being given time to acquire the skills/expertise necessary to enable them to readjust themselves in the new dispensation at the national level or to seek employment opportunities in state governments, local governments or the private sector. Other central services will continue, with a truncated role, based on the functional requirements of the national government.
  • Ministries will be lean (though not mean!) In line with what the SARC has recommended, it is proposed that the standard ministry at the Secretariat level will have just three levels of staffing,one at the top management level, the second at the middle management level and the third at the back office support level. Since a large number of even such functions as remain with the ministries will be hived off to autonomous regulatory bodies and specialised agencies, the ministries will be thinly manned, with their major functions being piloting legislation through Parliament and securing budgetary support for the organisations functioning in their sectors. Regulatory bodies and agencies will also have the same three-tier structure of staffing. With the clubbing together of departments under nodal ministries, each Ministry would function with one Secretary, a number of Deputy Secretaries covering the departments under the Ministry and assistants to handle back office responsibilities.
  • Public service employment will be for fixed contract periods. Recruitment to government will be only on a contractual basis, at all levels, for a period of five years. Persons will be free to move from the government to other sectors on completion of their contract periods, with movement in the other direction also being actively encouraged to draw the best capabilities into the public governance stream. Qualifications for hiring will be based on the specific skills and knowledge, as well as experience, required for each level. While the upper age limit for holding a post would be 60 years, there will be no age bar for entry into government jobs at any level.
  • Any citizen of India will be eligible to apply, subject to meeting the necessary qualifying standards. At the end of the contract period, the post(s) will be advertised afresh, with the current incumbent having the right to compete with new applicants for the post. The same process will be followed for ministries, regulatory bodies and agencies. Applicants for positions in the Government of India will be expected to have passed qualifying examinations in English, Hindi and any one other language listed in the Eighth Schedule of the Constitution of India; at the state and local government levels, working proficiency in English and one of the languages used in that state and listed in the Eighth Schedule can be made mandatory.
  • Performance norms will be enforced. Contractual appointees will be assessed on the basis of their performance during the contract period. Ministry/agency heads will be judged on the basis of their attaining the specific objectives/outcomes they have committed to achieve. Performance of other levels will be assessed on the basis of their contribution to the organisational goals. At the time a post comes up for fresh appointment, one of the criteria for considering the current incumbent will be her performance (in terms of outcomes achieved) during the contract period. Annual remuneration will be tied to performance achievement, with variable pay determined both by the performance of the individual and the performance of her organisation during that year. Established misconduct and/or financial turpitude will lead to termination of the contract, after due process of law is followed.
  • Perquisites will not be offered. With a downsized bureaucracy, the national government will be able to offer attractive pay packages that, even if not in line with private sector packages, will, nevertheless, be attractive enough to attract talent drawn from a cross-section of society covering serving and one-time babus, academia and the private sector. All perquisites currently on offer, including transport, housing, etc. will be withdrawn, with contractual employees expected to arrange for their accommodation and travel to and from work.
  • The business of government will not be business. Ministries will divorce themselves from the day to day management of public services and public sector undertakings. The national government will reduce its holdings in all public sector companies such that it no longer exercises management control over these enterprises. This will include the railways and banking sectors, with the railways being spun off as a series of companies, managed by a holding company. As a shareholder, government will be entitled, like other shareholders, to appoint its nominees as directors on the boards of these companies in line with its share of equity. This will cover all sectors of the economy, including defence and atomic energy. After all, if the country can rely to such a great extent on foreign supplies of defence equipment and foreign knowhow for atomic energy plants, there is no reason why the domestic private sector cannot be a participant in these ventures. Infrastructure projects will be managed by special purpose vehicles, manned by contractually appointed professionals. Procurement and purchase decisions will be made within the respective organisations, with strict tendering norms being followed.
  • Accountability for decisions will be rigorously enforced. The public ombudsman, the Lokpal, will exercise scrutiny over the actions of public officials at the national level. She will be assisted in this function by an audit wing, on the lines of the Comptroller and Auditor General and by an investigative wing similar to the Central Bureau of Investigation. Special courts will expeditiously dispose of cases where the Lokpal sees fit to launch prosecutions against officials. Any official convicted of an offence will, apart from being liable for penalties under the law, be debarred from thereafter applying for public office. The Lok Ayukta will have similar powers to deal with state level and local public servants.

 

One can already hear howls of protest from politicians that they are being denied the right to take decisions in important matters like procurements and purchases. Given the track record of political decision-making in these matters over the past so many years, I don’t think too many tears will be shed on the abridgement of this dubious “privilege”. Standardisation and automation of procurement procedures will remove a large element of discretion in such decisions. The fear of prosecution and lengthy jail terms will deter public officials from taking anything other than professional, impartial decisions. Elected representatives, in any case, have a choice: if they so much wish to be part of the decision-making process, they are free to apply for any post in government that is advertised. Since bureaucrats and politicians both have five year terms, with no guarantee of reoccupying the position after five years, they are more or less on the same pedestal. As for the babu, the removal of lifelong security of tenure will, it is hoped, remove the national obsession with “sarkari naukri” and create an atmosphere where innovation and entrepreneurship will be fostered.

 

15 Feb

AAP Ki Kasam

Posted by vramani in public affairs, public policy.

January 2015 has been a watershed month for the Indian political system. A David has single-handedly slain not one, but two Goliaths. Delhi witnessed scenes of exultation probably last seen after the defeat of the Congress party in the 1977 general elections. As the Chief Minister and his Council of Ministers seek to come to grips with governing a highly complex metropolis, a number of question marks will inevitably raise their heads. These arise after going through the party’s manifesto for the Lok Sabha elections (“the Manifesto”) as well as its 70 point Action Plan for Delhi (“the Action Plan”). Though the former gives pointers to the overarching strategy of the Aam Aadmi Party (AAP) in its search for a national presence, it is the latter that assumes more immediate relevance, since the day has dawned when promises will have to be translated into performance. Without wanting to sound like a modern-day Cassandra, I see three areas where AAP will need to clarify its approach, if it is to meet the aspirations of the people of Delhi and emerge as a viable national alternative by 2019.

The first relates to what may be termed an “anti-institutional” worldview. The AAP was born out of the ferment of the Jan Lokpal agitation of 2011. At that time itself, the effort of the agitators was to virtually stampede the government of the day and Parliament into passing the Jan Lokpal Bill as formulated by them, without debate and without taking other points of view into consideration. It is true that the speed of functioning of all public institutions in independent India is enough to drive any Indian to tears. Still, that does not justify an attempt to push through legislation which, if enacted in its proposed form, could have impinged on the right to liberty of the citizen. The Manifesto and the Action Plan repose their confidence in the very same, unadulterated version of the Jan Lokpal bill, which vests enormous powers in an individual, virtually ushering in a fresh era of the Jacobin Terror with the Lokpal as Robespierre. Not only that, the Manifesto also talks of seizure of assets of corrupt judges. The very foundation of a democracy based on separation of powers would be shaken if the judiciary is sought to be regulated by an outside agency. In fact, the thrust of AAP seems to be on punishment of errant individuals rather than the reform of outdated laws and systems that, coupled with a judicious use of information technology, could vastly circumscribe the scope for corruption.

A second area of concern is the apparent disregard for the principles of sound public finance. The Action Plan promises many concessions and substantial public expenditure on items ranging from concessional power and water to toilets, education, healthcare, housing and social security. The emphasis appears to be on the government as the sole provider, without any involvement of the private or non-profit sectors. Services are sought to be ramped up by increased public employment, without analysing why existing staff (which is considerable) has not been able to deliver, especially in the crucial health and education sectors. There is no mention in the Manifesto of the large, often dysfunctional public sector that bleeds the financial resources of the country and what steps will be taken to make it more efficient. Also, while the poor implementation of social sector schemes has been mentioned in the Manifesto, there is no elaboration on whether these schemes will be redesigned to plug leakages and reach those really in need. The Action Plan also talks of introducing the lowest VAT rates in Delhi. Put all these together and what you are headed for is a huge budget deficit. Delhi may still survive on hand-outs from the central government, but the picture will change for the worse if AAP seeks to run any other state government or, indeed, the central government, on the same financial principles.

The third area of unease relates to the likely impact of AAP’s economic policies on growth. In its Manifesto, AAP talks of placing India on “a sustainable, equitable, globally competitive and high-growth trajectory”. The Action Plan wants a “Delhi that is prosperous, modern and progressive”. But a number of points in the Action Plan are calculated to make private investors wary. It opposes contractualisation of labour and supports permanency of employment in jobs that require round the year employment. While this has been stated in the context of public sector employment, it is quite likely that the same dispensation will extend to employment in the private sector as well. This is going to dampen private investor sentiment; companies need to have the flexibility of ‘hiring and firing’ in a globalised economy (of course, with social security mechanisms and job/skill retraining opportunities). The Action Plan opposes FDI in retail; this is in line with what the party calls “trader-friendly policies”. The problem is that policies which meet trader interests often act against the interests of farmers and organised industry. The repeated references to “crony capitalism” and “encouraging honest businessmen and traders” seem to indicate a mistrust of large-size businesses. Again, one needs to stress that strong institutional mechanisms, including competent regulatory systems and simplified procedures, are crucial to checking corruption. India has an abysmal record in the speed of starting and ease of doing business: one certainly looks forward to the end of the Inspector Raj, enunciated in the Action Plan. Finally, the budget deficits inherent in a populist economic approach and the consequent increased government borrowing will have its adverse impact on private sector access to low-cost capital.

This is not intended to be a critique of AAP’s policies, just a flagging of some concerns that are too often given short shrift by intellectuals and the media in the first heady flush of victory. The AAP has been given a historical mandate. “Aap ki Kasam” can be translated as “on my honour”. To honour its commitment to good governance, AAP needs to adopt a pragmatic and non-confrontational approach to issues, guided by economic realism and political and social realities. It’s progress in national politics will be determined by its success in managing its government in Delhi. To the extent that it is able to do this, it can have voters on a larger platform crooning (in 2019) that popular song from the film Qurbani:

आप जैसा कोई मेरी ज़िन्दगी में आए, तो बात बन जाए…

(If someone like you comes into my life, then my life is made)