V. Ramani's web The world through my lens

Any newly born nation nurses a sense of insecurity, more so since the nation state is a relatively recent phenomenon in human history. There are also enough doomsayers hovering around with their dire prophecies. The Indian nation-state has had more than its fair share of such pessimistic prophets in the early decades after independence. It also had to contend with the aftermath of the Partition and the amalgamation into the Indian Union of over five hundred princely states, not all of them exactly ecstatic about the prospect. There was, therefore, an overwhelming opinion in the then leaders of the Indian government that, given the daunting challenges faced by the nascent Indian state on the economic, social and political fronts, a strong centre was a prerequisite for not just the development of, but even the survival of India as an independent nation. Not surprisingly, the Indian republic came to be categorised as “a unitary state with federal features.”

Interesting though it is as a subject, this article is not focusing on the political aspects of centralisation but rather on the impact on governance of such centralisation of powers. It needs to be made clear that concentration of powers is a vice that affects every political formation, indeed every organisation that operates in the public and private spheres in India. It is also an accepted axiom that each level of government is in favour of devolution of administrative and financial authority only upto its own level. Thus, while state governments, especially of different political persuasions from the government at the central level, have harped, right from Tamil Nadu in the late 1960s, on greater devolution of powers to them, they have been conspicuously silent when it comes to devolving powers to local governments. The three experiments in democratic decentralization in the states of Gujarat, Maharashtra and Karnataka have been aborted over time to protect the economic and political interests of state-level politicians. The implications for governance, especially at the level of the aam aurat/aadmi, have not been exactly salubrious.

There are both charitable and uncharitable explanations for the propensity to centralize economic and political powers. The “charitable” ones include:

• the colonial mindset, prevalent to this day, that the natives are not fit to govern themselves. Politicians and bureaucrats, at central and state levels, never tire of relating horror stories about the misdemeanours of local governments;
• the mistaken assumption that centralisation of financial powers and procurement decisions lead to savings;
• the continuing faith in the efficacy of a Soviet-era centralized planning system, where the know-it-all bureaucrat sitting in a cubby hole in Mumbai/Delhi hands out schemes and money to the public.

There are also some “uncharitable” reasons for this love for centralisation:

• the realisation of the state-level politician that his continued existence depends on justifying his utility to the system. This politician is aware that the emergence of powerful grass root leaders is a threat to his future in politics. This phenomenon, observed in the Indian National Congress since the 1970s, has since percolated to every political party. Devolution of powers to local governments would also obviate the need for top-heavy governments at the central and state levels, thus rendering many politicians jobless;
• the bureaucracy being seen as a vehicle for guaranteed, lifelong employment, without any accountability for performance. There is the rather patronising belief that bureaucratic interventions can solve all problems, hence the operation of Parkinson’s Law with a vengeance in the Indian government system: staff expands to create more work, with, in fact, a diminution in efficiency. Increasingly, public service has also become a self-service system and a foolproof mechanism for rent-seeking, the stress being on kimbalam (illegal gratification) rather than sambalam (salary), to use Tamil terminology.

Centralisation can take the form of intervention in procurement contracts, discretionary distribution of scarce resources (land, public funds, primary schools, colleges, universities, etc.) and formulation of policies from above imposed on those whom schemes are intended to benefit, as well as the imposition of rigid guidelines which the “street-level bureaucracy” is expected to follow in letter and spirit. The damage resulting from such a system can be long-term, often resulting in serious misallocation of resources, with concomitant effects on economic development. Drawing on my three decades of experience in the civil services in India, I have identified six major consequences of centralized decision-making:

• Corruption: Lord Acton rightly observed “…absolute power corrupts absolutely”. In the Indian context, we can safely say that absolute centralization corrupts absolutely. Primary education has been one major casualty; ministers deciding where and when schools are to be run, and by whom, have spawned a multi-million rupee black market in school education. The same pattern has been emulated in the case of higher education, with even more profitable results. Influential politicians and their backers run huge education empires today, often of extremely dubious quality. Maternal and child nutrition is another area where the Supreme Court Commissioners have documented a number of instances of state governments sidestepping the Supreme Court guidelines to award food supply contracts to monopoly contractors, ignoring local self-help groups. Recent actions of the central and most state governments indicate a tendency to favour individual contractors over local groups in food supply, ostensibly on the grounds of improved nutrition, although the evidence of years of centralized monopoly supply strongly indicate otherwise (as verified personally by yours truly at anganwadis (day care centres) in rural Maharashtra). It can always be argued that no corruption has been specifically established but then Caesar’s wife must be above suspicion: the antecedents of these contractors and their political connections leave ample room for suspicion.
• Faulty policy design: Decisions in Delhi often do not work in the gallis (streets). The examples of three major policy initiatives of the previous government which continue under the present government show how top down policy making can stymie the best of intentions. Take the Mahatma Gandhi National Rural Employment Guarantee programme (MGNREGA). Designed to provide 100 days of employment to each member of the rural population who seeks work, the scheme drew on earlier examples such as the Employment Guarantee Scheme (EGS) of Maharashtra, which was intended to provide on-demand work at times when there were no work opportunities in agriculture. The problem with the MGNREGA lies in its design. Unlike the EGS, the MGNREGA is implemented across all districts in a state regardless of whether the prevailing economic conditions warrant such a wage programme. Common sense would dictate that there would be few takers for such a programme in a district like Kolhapur in Maharashtra with its extensive irrigation facilities and well developed agriculture and ancillary activities. It takes me back to 1989 when a precursor central programme, the National Rural Employment Programme (NREP), was implemented across all districts of Maharashtra. We found it almost impossible to get labour for this programme in a district like Parbhani in Maharashtra, where rural employment was abundantly available in the irrigated agricultural areas. In such a scenario, the local bureaucracy ends up subcontracting the entire programme to local contractors, who then use machinery to carry out the work, defeating the very purpose of the programme. Food security and education are again two areas where the ambitious universal thrust of the programmes does not take into account the glaring deficiencies in the public distribution and education systems in most states. Nor does it appear that the budgetary provisions the Government of India is making and that state governments are likely to make will enable universalisation of these two programmes.
• Inefficiency: In my days as an IAS probationer, it was drilled into us that, as District Magistrates, we should assume a proactive role in firmly tackling violence between or directed against communities. The recent judicial commission report on the Muzaffarnagar violence of 2013 has faulted the district administration and the local police for inaction in preventing and subsequently containing violence during the riots. My surmise would be that the District Magistrate and the Superintendent of Police were looking over their shoulders for directions from their higher-ups on how to deal with elements that obviously had powerful political backing, instead of moving swiftly to nip the trouble in the bud through preventive arrests and a show of force. Centralisation in times of crises deters prompt, effective action. Yet another example comes to mind from a sector I am familiar with. The Directorate General of Hydrocarbons (DGH) was set up to regulate petroleum exploration and production activities in India. Over the years, a paranoid mindset in government agencies and the “intelligentsia” has led the DGH to refer every investment decision involving private operators to the Petroleum Ministry for approval. Contractual timelines for approval of proposals were blithely ignored while the mandarins in government wrestled with the decision process. That golden mantra of centralisation, referral to a committee, ensured that natural gas prices took years to be finalised. The final solution has satisfied neither the companies nor the command economy socialists in the intelligentsia, while the chimera of market-determined gas pricing recedes further into the future.
• Demotivated street bureaucracy: Centralized programmes lay down rigid guidelines with almost no scope for exercise of innovation by those actually responsible for ground-level implementation of these programmes. Accompanying this is the tendency to distrust the lower bureaucracy, doubt their commitment and make scapegoats of them for faulty policy design. Complex and arduous reporting requirements tie up field staff in paperwork, not giving them time to attend to their clientele. It is no wonder then that there appears to be little enthusiasm for meaningful programme implementation with a specific focus on outcomes. The sense of a larger purpose in their professional life and of engaging in a noble mission is never inculcated in grass root workers. We observe this in the large majority of teachers and health and nutrition workers. No encouragement is given to primary level workers to use their initiative to resolve local problems, nor are small amounts of money made available to them to meet their basic infrastructure requirements or to experiment with ideas that can contribute to the success of the programme.
• Disempowered communities and individuals: Programmes handed down from above almost never draw on the problem solving abilities of local communities. It is evident in the very designation of the recipient of the scheme as a “beneficiary”, effectively ruling out her participation in the design and implementation of the scheme meant for her. An overburdened, often disinterested bureaucracy is largely concerned with delivering the inputs and completing its targets, with no emphasis on either the processes of implementation or the desired outcomes.
• Damage to democracy: The process of centralized decision making is, in the final instance, detrimental to the development of an aware, active citizenry that can contribute to the democratic process. As passive recipients, people are deprived of the capacity to participate in decisions that significantly impact their lives. When programmes fail to deliver the desired results, the consequent disenchantment often drives the disempowered into the clutches of demagogues who promise them the earth and capitalise on their fears to undermine the democratic framework of society.

Recent trends in the pattern of budgetary transfers from the central government to the states give more cause for concern. Devolving more untied funds to states will place more unbridled discretion for patronage in the hands of unscrupulous politicians and bureaucrats. State governments have, in any case, never been enthusiastic promoters of democratic decentralization. With little accountability for the manner in which public money is spent (or rather, misspent) and with little fear of being brought to book for their misdeeds, it looks as though, in the words of the Harvard University economist Lant Pritchett, India’s “flailing” governments will continue to flail away.