15 Dec

The Indian Omertà: Corruption and the Code of Silence

Posted by vramani in public affairs, public policy.

It was Mario Puzo’s book “The Godfather” and related readings on the Sicilian Mafia that made familiar to me the term “Omertà“. It referred to the restriction imposed on any member of the Mafia on maintaining silence even in the face of third-degree interrogation by the police. Any infraction of this code was punishable with death. This practice, prevalent in the Sicilian gangs, spread to American shores when waves of Italian migrants landed up in the USA in the late nineteenth and early twentieth centuries, and frustrated efforts to get at the real “godfathers” of illicit operations ranging from bootlegging and prostitution to narcotics. As I reflect on the phenomenon of corruption in India, I am struck by the very similar code of silence that prevails in transactions in India which are mediated by corruption in its various forms.

Let us recognise that corruption in India is a “womb to tomb” cycle. It begins while the child is still in her mother’s womb. Just imagine — if the child, like the mythical Ashtavakra, were blessed with the gift of imbibing every conversation even before she was born, she would hear the medical personnel at the public hospital asking the mother and her relatives to part with money to avail of the maternity facilities in the hospital. Thereafter, the karmic cycle of corruption unfolds at every stage of her existence, from the bribe paid for getting the birth certificate to the “donation” extracted at the time of school and, subsequently, college admission. The lifetime investment in the corruption machine takes place when the person has to grease her way into a job in the public services. Thereafter, the public functionary is engaged in recovering her past costs as well as providing for her (and her future generations’) material comforts, through means, legal and illegal. Finally, the cycle is complete when corruption oversees the issue of the death certificate and the process of transfer of assets to the next of kin.

What is noteworthy of the “corruption chakra” is the spectrum of silence that covers its functioning. To paraphrase Portia in the Merchant of Venice —

“The quality of corruption is not strain’d,

It droppeth as the gentle rain from heaven

Upon the place beneath: it is twice blest;

It blesseth him that gives and him that takes…”

Both the bribe-giver and the bribe-taker are aiming to participate in a “win-win” situation. Let us take the example of admissions to the pre-primary class in any private school. Every school thrives on the anxiety of parents to secure admission to a good school for the next thirteen years by charging a hefty entrance fee. Since this is not permitted by the state education authorities, the practice is to pay most of or the entire amount in cash, often through a broker, to the school. Both parties are willing accomplices in this generation of black money. Or take the case of any real estate transaction in India. The quantum of “black money” payment outweighs by far the cheque or “white money” paid. Try to insist on full payment by cheque or bank transfer and you get either a polite shove-off from the other party or a reduced offer. In the case of public functionaries, the procedure can vary from a weekly payoff to the superior (hence the term “hafta“) to case by case transactions, as in bribes for procuring driving licences, either through touts (euphemistically called “driving schools“) or through direct payments, to even part payment with the promise of future revenue deliveries, as in the auctioning of government posts. At the highest level, the cornering of scarce natural resources (land, minerals, etc.) requires a continuous, smooth working relationship between the benefactor and the bidder. Implicit in all these transactions is the “honour among thieves“. Once the trust is violated, either party takes steps to get the other party implicated, either through an anti-corruption trap or through anonymous/third party applications/PILs highlighting misdeeds of the concerned offending party.

A simple formula has been devised by Klitgaard (1998)[1] to describe the extent of corruption in a system:

C = M+D-A, or Corruption equals  Monopoly plus Discretion minus Accountability.

A socialist economy will see the existence of monopolies in a wide range of activities, ranging from coal and steel to telephones and motor cars. Given the limited number of producers, there will inevitably be a mismatch between supply and demand. The person allocating the good then has the discretion to favour one person over another, generally for a monetary consideration, or even on the basis of caste and kin relationships. A hybrid “socialist” economy like India’s, with its entry barriers in various sectors, develops its own version of the applicability of this formula. Industrial licensing for the private sector in various areas from the 1950s onwards gave the bureaucrat (and politician) control over who got the licence. The more recent example is the mechanism for allocation of coal blocks to end-users, recently struck down by the Supreme Court. With the state having the exclusive right of disposal of coal blocks, there was considerable discretion in the allocation process. While there may or may not have been mala fide in the process, the arbitrariness of the procedure attracted judicial criticism. Monopolies can be reduced through the introduction of competitive processes. The telecom and automobile sectors in India are examples of how choice has empowered the consumer and removed influence peddling and gathering of economic rent in these sectors. Not that monopolies can be totally wished away. Just think of the police force or the natural resource extraction (coal, metals, petroleum, etc.) sectors. The checks on these monopolies operate through the limiting of discretionary powers through use of technology and transparent bidding processes. Enabling filing of criminal complaints online removes the discretionary power of the police officer to register (or not register) the complaint. Granting extraction rights through an impartial bidding process ensures that the party giving the greatest economic value to society wins the bid. Of course, no system can be immune. Just think of the goodwill money paid to the police constable who comes for the passport verification and the on-money paid to the person who delivers the cooking gas cylinders. But, to a considerable extent, the enforcement of accountability in actions and the increasing use of mobile/online payments (think mobile wallets) can curtail the scope for discretion even further.

In the final analysis, it is the enforcement of accountability that acts as the greatest check on corruption. But as long as there is complicit collusion in the act of bribery between the giver and taker, it will be difficult to reduce corruption. This requires action on three fronts:

  1. Procedures for service delivery have to be clear to the service recipient. She should be aware of the time within which the service is to be given, the exact cost of the service and the redressal mechanism available to her in the event of service delivery failure. Public agencies need to specify these procedures on their websites and use mass media to educate consumers on their rights.
  2. The consumer has to assert her right to timely service delivery at the officially approved cost. It is here that the code of silence has to be broken. Where there is overcharging for services or there are attempts to delay service provision in the absence of sweeteners, social media should be extensively used to highlight instances. Websites like com seek to provide a forum for publicising corruption in the delivery of different public services.
  3. Supervisory levels in public agencies need to monitor service delivery systematically. Any deviation from the set norms should be analysed and, where there is evidence of wilful, mischievous intent on the part of the service delivery provider, she should be penalised.

 

 

 

 

[1] Klitgaard, Robert — International Cooperation Against Corruption (Finance & Development,  March 1998)

30 Nov

Coalgate: Cleaning up the coal sector

Posted by vramani in public policy.

My earlier blog (www.vramani.com, 31 October 2014) lamented the sorry state of affairs as far as India’s policy with regard to extraction of oil and gas resources was concerned. The coal sector in India presents an even more tragic picture — evidence, if any was needed, of the complete absence of a coherent energy policy in India. Over the past few years, there has been almost complete anarchy in this sector, commencing with the adverse reports of the Comptroller & Auditor General of India on the manner of allocation of coal blocks and culminating in the recent Supreme Court decision to cancel all allotments by the government, amounting to 214, since 1993. Retired bureaucrats have been dragged to court and fried in the media, all because of the lack of a transparent, impartial policy for allocating coal blocks. The recent decision of the Government of India to reallot a number of these blocks to public sector producers and carry out an e-auction of the remaining blocks to captive producers in the power and steel sectors is symptomatic of government’s proclivity to go in for half-hearted measures rather than a complete overhaul of a system that has been exposed as completely rotten over the past forty years.

The nationalisation of the coal industry in 1973 was part of the wave of state control over all major sectors of the economy, starting from the Second Five Year Plan in 1956. As with bank nationalisation, it not only enabled the government of the day to trumpet its socialist credentials but, more importantly, placed major sources of patronage and political control in the hands of the ruling dispensation, then almost exclusively from the ruling Congress party. We are all conversant with the way in which the control over the banking sector was used to waive loans to different sections of society, at the cost of bank profitability and the spread of an ethos that repayment was an avoidable nuisance. That this was, and still is, used by powerful business interests to evade their irresponsible management of enterprises should come as no surprise to us. The coal industry was no different. The public monopoly of production and sale of coal created entrenched, powerful vested interests, commonly known in public parlance as the “coal mafia”. This mafia was the source of money and muscle power for elections, even though democracy ensured that the spoils were distributed between political parties across the spectrum. The guarded decisions of the government in respect of resolving the present imbroglio in the coal sector are probably occasioned by the upcoming state assembly elections in Jharkhand. Since there is no predicting the outcome of these elections, one should not be too sanguine about the possibility of wide-ranging reforms in this sector, at least in the short to medium term, especially the opening up of the coal mining sector to private domestic and foreign companies..

This policy inertia in the coal sector (in fact, in the entire energy sector) has hurt the Indian economy and will continue to damage India’s energy and ecology. It puts pressure on the country’s energy requirements. With an annual coal production of 595 million tonnes in 2012, India was the third largest producer in the world. But it is also the third largest net importer of coal, with 158 million tonnes being imported annually. A major reason for this is the inefficient production techniques employed by the three monopoly public sector producers. Over 300 underground coal mines produce just over 50 million tonnes annually, while 177 open cast (or open pit) mines yielded over 425 million tonnes of coal annually. Even granted the relative ease of open cast mining, there is still scope for augmenting underground mine production, more so since coal bed methane is another useful energy product that can be produced. With India being the fourth largest net importer of crude oil in the world, there is need to step up coal production to meet energy requirements to ease the burden on the balance of payments. This is all the more so since India’s nuclear power programme has gone nowhere after the “nuclear deal” euphoria of 2008 and India is still neither a major producer nor user of natural gas.

Open cast mining has a deleterious impact on the natural environment. Acres of land are laid waste and water sources suffer pollution, not to mention the high air pollution in the coal producing areas. Environmental safeguards are meant to be rigorously implemented, but it is open to question how far pollution control boards at the state and national level will confront violations by public sector producers, especially given the low level of citizen awareness and organisation in the coal belts, most of which are located in some of the most economically and socially backward areas of the country. Administered prices for coal set by the government (kept on the lower side to cushion the price impact on end-users) also act as a disincentive to introduction of environment-efficient coal production. But the adverse effects of artificially government-fixed (as opposed to market-determined) pricing go far deeper. Firstly, it acts as a disincentive to efficient production by reducing the expenditure on research and development to develop more cost-effective methods of production. Secondly, the legacy of the freight equalisation policy, in force till 1993, by making coal available at the same price in areas in North, West and South India (where coal was not mined), removed any incentive to go in in a big way for end-user power, steel and cement plants in the eastern states, where the coal was mined. Till this day, these states are yet to recover from this warped policy, which saw power plants coming up in areas far removed from coal production, like Delhi, Panipat (Haryana) and Bathinda (Punjab). The recent Supreme Court order has sounded the death knell for these poorer states: with coal mine allocations to captive power and steel producers having been cancelled, there will be further delay in commissioning of these projects, more so if the e-auction process runs into any problems.

By far the most insidious and long-term impact of an unrealistic natural resource pricing policy is on the development of alternative clean renewable energy sources. Whether it be natural gas or coal, artificially low prices lead to depletion of scarce fossil fuels through excessive use in production processes. In the case of coal, the development of environmentally friendly production processes will raise its price even further. This is likely to make harnessing of renewable energy sources like solar, wind and geothermal energy more viable by making their costs of production competitive with that of coal and natural gas. Not only will this strengthen the country’s energy security, it will also improve the ecology and environment at a time when growth imperatives will place a great strain on fossil fuels.

In a blog written two years ago (www.vramani.com,  23 November 2012), I had outlined the path for decontrol of and attracting private investment in the coal sector. I had also sketched out a mechanism for offer of coal blocks through a bidding process, somewhat similar to what is being done in the petroleum exploration sector from the 1980s onwards. The sooner this course of action is adopted, the better it will be for the future of development of coal reserves in India. Hopefully, this day will dawn sooner rather than later.

15 Nov

The Mess in India’s Public Health Care

Posted by vramani in public policy.

“Eleven women die after sterilisation surgeries…” the newspaper headlines leap out at you first thing in the morning. The location does not matter, what matters is one more instance of how India’s public health system is miserably failing in its duties to its customers, largely the poor and disadvantaged. Amidst the glowing official reports of eradication of polio and reductions in child and maternal mortality rates, these news items serve as a rude reality check on the vast gap between the promise and performance of the Indian health system.

The designation Department of Health and Family Welfare carries, in the Indian context, its own peculiar meaning. What was originally “Family Planning” was converted to “Family Welfare” after the Emergency sterilisation excesses of the mid-1970s, in an apparent bid to allay public anxieties about the mandate of the health department. But talk to any official in the health department, or, for that matter, any politician or high-level bureaucrat in the government and you realise that family planning — limiting the size of the family — is the topic uppermost in their minds. The entire development literature on how reducing infant mortality, promoting livelihoods and income and giving girls greater access to education and empowerment can bring down population growth rates has apparently bypassed the entire swathe of the politico-bureaucratic elite in the country. Instead of focusing on these long-term (and admittedly more difficult) policy objectives, you find a maniacal, mindless obsession in government with setting ambitious sterilisation targets year after year. It is this preoccupation with family planning targets that has skewed the approach to a rational management of public health issues. Three unfortunate consequences have arisen out of this misguided emphasis:

  • Achieving the sterilisation targets has become the be-all and end-all of the public health machinery at the district level and below. Unfortunately, IAS officers, at the level of District Collector and even at the senior levels in the Secretariat, have been responsible for encouraging this mindset. I have seen the unedifying spectacle of District Collectors competing for the top spot in sterilisations in the state. One major outcome of this unhealthy competition among districts has been the tendency to focus on the easiest method for reaching the target. As always, it is the Indian woman who bears the brunt: having gone through the nine months of child-bearing, she is now required to go through the travails of an operation to stop having further children. Medical experts are agreed that male vasectomies are far easier to carry out and less complicated. But, in a patriarchal society and with the dominant male ego coming into play, there is little hope that the woman will be spared this additional burden. Hence, the chilling statistic that 0.44% of sterilisations are vasectomies and female sterilisations account for over 99.5% of all sterilisations.
  • Cash incentives for the woman undergoing sterilisation prove to be a big draw for families which are at the edge of poverty and induce them to persuade their female members to go in for sterilisation. There is also the incentive for the government functionary who participates in this exercise. District Collectors who organise big camps are seen as “go-getters” and are regarded highly in the government system. Medical Officers and other frontline staff who do not achieve the targets set for them are punished with poor confidential reports and postings to hardship areas. With such a skewed incentive pattern, it is little wonder that this task becomes one of the major annual preoccupations of the health department, to the exclusion of other, far more important tasks like antenatal care (ANC) for women and newborn child care, even though India (and particularly its worst districts and blocks) have appalling rates of neonatal and maternal mortality.
  • With non-health actors, like bureaucrats, enforcing the whip to achieve sterilisation targets, the process moves into a campaign mode rather than into a patient exercise to convince the woman (and her family) that sterilisation is in the interests of the woman and her children and carrying out the operation in an orderly, routine manner, after ascertaining that the woman is in a condition to go through the operation. The “camp” atmosphere also militates against ensuring safe hygiene levels and proper post-operative care. No effort is made to look at alternative, safe methods of birth control, such as counselling on birth spacing and the use of intra-uterine and oral contraceptive methods.

In the recent tragic occurrence in Bilaspur district of Chhattisgarh, questions are also being raised about the quality of the drugs supplied at the camp. This issue of procurement of medicines for the public health system is itself a topic for research. Most states in India have no laid-down policy for buying drugs and equipment, with interference at the ministerial and political level being the norm rather than the exception. Medicines are procured without any analysis of the disease patterns in different areas of the state and often without satisfactory pre-qualification of suppliers. The result is the accumulation of stocks of useless/sub-standard/dangerous medicines, many of which may have reached or passed their expiry dates.

The ultimate casualty in this frenetic exercise to control population through overuse of just one policy tool is the collapse of all protocols for guiding the mother through a safe pregnancy and ensuring the health of the mother and child in the post-partum period. ANC procedures are one of the most neglected areas in the public health arena in India. Ask any doctor in a Primary Health Centre (PHC) about high-risk mothers and you will most likely get a blank look. Even if there is a list of such pregnant mothers, with a history of medical problems and/or previous obstetric issues, chances are that this list does not lead to any proactive action on the part of the PHC doctors. An analysis of data shows that, in many cases, ANC visits simply do not take place. Where they do, it is often a mere formality. The required tests during the ANC visit are generally not carried out; where some tests are conducted, no follow up action is initiated on the basis of the tests. Weight gain by the mother during the gestation period is ignored; it comes as no surprise that the delivered child has very low birth weight, leading to high mortality in the neonatal period. Efforts in recent times to introduce mobile and computer-based systems to track the health and nutrition status of mothers and children have foundered on the unwillingness of the health bureaucracy to expose themselves to an audit of their performance in the first two years of a child’s life. The reason is obvious: no doctor or other frontline health worker has ever lost their job on account for the unconscionably high rates of maternal/neonatal mortality in their areas.

Public health systems will improve only when public functionaries are held accountable for measurable outcomes. It is astonishing that, even after so many years of emphasis on sterilisation as the primary tool of population control, no authoritative finding that rebuts its effectiveness is as yet the subject of public debate. As long as public policy goes in for quick-fix solutions rather than for long-term involvement with communities and families, we will be forced to echo (with some modifications) the poignant words of Bob Dylan:

“How many deaths will it take to be known,

That too many children (and mothers) have died?”

31 Oct

Father, forgive them, for they know not what they do

Posted by vramani in public policy.

It is truly ironic that, at a time when the Prime Minister of India is enthusiastically promoting the “Make in India” brand, one of his key Ministries has set in motion actions that, if carried to fruition, will ensure that a critical energy resource will be increasingly imported, at tremendous cost to the Indian nation. I refer here to the attempts by the Petroleum Ministry in Delhi to reframe the terms and conditions for the award of acreages for exploration for oil and gas in India. A contractual model that has stood the test of almost three decades and led to the discovery of petroleum reserves in India for the first time since independence by private investors, both Indian and foreign, is sought to be replaced by a revenue-sharing regime that has been hastily cobbled together on the basis of a report (the Rangarajan Committee Report) drafted by a Committee that had few members with any long term experience of the petroleum exploration sector, especially its contractual arrangements. For the lay reader, who would not be familiar with the jargon of petroleum contracts, I will discuss the issues in generic terms of what the actions imply for private investment in this sector.
Probably because of its experience in recent years with certain companies, where there were reductions in annual gas production in relation to estimates, the government wants companies to commit to a certain level of annual production, with penalties payable for production shortfalls beyond a certain level. This approach betrays a fundamental lack of understanding about the behaviour of petroleum reservoirs, scarcely what one would expect of a Petroleum Ministry! There is also a stipulation that revenues from oil and gas production will first flow into an escrow account, with government having the first right to revenues from this account. Any financial dispute between the company and the government can lead to choking off the access of the company to revenues from petroleum production, hampering its cash flows and hindering its future production plans. Not only that, no banker in her right senses would advance loans to a company which is insecure about its revenues from production. The revenue-sharing model itself suffers from some glaring infirmities — it is neither fiscally progressive nor does it provide any incentive to companies to develop marginally profitable oil and gas fields. Finally, the absence of contractual stability means that companies are dependent on the munificence of the government to not impose onerous fiscal terms on them in the future, again a sureshot recipe for hesitation in the financial community to fund such ventures, given the potential uncertainty of future cash flows.
In essence, what all the above adds up to is an exercise in contract micromanagement by the government, exactly what companies were exercised about over the last decade. The pervasive environment of distrust that the intended petroleum regime is set to engender will drive away potential investors. In all this, the government (and, more specifically, the Petroleum Ministry) has done no introspection on how its errors of commission and omission have contributed to a lukewarm investment climate in this sector, seeking instead to blame the existing contractual regime and so-called rapacious companies. Whether through oversight or design, the Directorate General of Hydrocarbons (DGH) was never developed into a highly professional regulatory organisation on the lines of the Norwegian Petroleum Directorate. Staffing of the DGH never took into account its multifarious tasks, which included functioning as a central repository for geological/geophysical data, strategising the bidding process for exploration acreages and managing the issues subsequent to award of contracts, ranging from coordination of grant of licences/leases by different governments, interpreting and handling contractual issues and effectively monitoring petroleum operations at every stage. As it transpired, confidence was never reposed by the government in the DGH to carry out its regulatory functions, with the result that, at every point, the DGH referred contractual issues to the government for decisions, although there was a Management Committee structure in place in the existing contracts. With the Ministry seeing a succession of generalist bureaucrats flitting in and out of the exploration desks, there was no overarching policy for dealing with issues raised by companies. The result was ad hocism of the worst sort, compounded by the ideological predilections of whoever happened to be the Petroleum Minister at the time. Add to this cauldron of indecision a cocktail of uninformed public and parliamentary criticism, ex-post facto comments from the Comptroller and Auditor General (CAG) and Central Bureau of Investigation (CBI) enquiries and you had a perfect recipe for bureaucrats reaching the conclusion that “no decision is the best decision”. Decisions on gas pricing and the like were kicked upstairs to the Group of Ministers while decisions on permitting additional exploration work programmes, approving development plans and costs incurred by companies on operations were tossed around in the Ministry. No effort was made to use dispute resolution mechanisms in the contract (sole experts, arbitration, etc.) to resolve issues. Finally, the government took the safest, time-honoured course of action: it set up an Expert Committee to overhaul the entire contractual system.
We are, therefore, in a situation today where the attitude of government towards private investment in the petroleum sector appears to be one of maximum revenue extraction, in contrast to the philosophy prevailing in the Petroleum Ministry corridors in the 1990s, when it was recognised that, to encourage risky exploration ventures, government had to be ready to forego some early revenues in the interests of promoting energy security. Unfortunately, in the atmosphere of mistrust and “trial by media” that exists today, any such approach would be immediately categorised as a sellout. The bureaucracy, habitually cautious by nature, sees no reason to stick its neck out and spend the next twenty years giving reasons in different fora for its decisions. The country is the ultimate loser in three ways: (a) not being one of the high potential petroleum-endowed countries, the present approach will drive away investors and reduce private domestic and foreign direct investment in this sector, thereby reducing chances of adding to petroleum reserves and putting greater strain on foreign exchange reserves, more so with the inability of the two national oil companies to make any significant petroleum discoveries in the last 25 years; (b) the total lack of clarity on gas pricing, and the subsidising of inefficient fertiliser and power producers through artificially keeping gas prices low, will adversely affect the economic viability of developing renewable energy sources, which remain uncompetitive, harming the future of both energy and ecology in India; and (c) the combination of (a) and (b) above will severely hamper energy security by dampening private enthusiasm to develop energy sources like shale gas and coal bed methane which (as the USA has shown) can completely alter the energy scenario in a few years. With the Middle East becoming more and more volatile by the day, India has to start seriously worrying about how its future energy needs are going to be met. Unfortunately, there does not appear to be any vision of the future guiding and informing the actions of the Petroleum Ministry mandarins. One can only wring ones hands and echo Jesus Christ “Father, forgive them, for they know not what they do”.

15 Oct

Maharashtra, the day of reckoning — whither after?

Posted by vramani in public affairs.

The Ides of October are here and Maharashtra is heading for its tryst with the 2014 election results after one of the most acrimonious state elections in recent times. With two political alliances unraveling within the space of hours (although the bickering was going on in full public view), the stage was set for a no-holds barred free for all. After the Lok Sabha elections in May, the ruling Congress (INC) -Nationalist Congress Party (NCP) coalition already faced an uphill task in retaining power in the state. After their split, the point of no return has been reached and both these parties will have to move to the opposition benches. Ambition got the better of the Bharatiya Janata Party (BJP), leading to it terminating its 25-year coalition with the Shiv Sena (SS). Both these partners, with their eyes set on the Chief Minister’s chair, were unwilling to go the extra mile in forging an alliance that could have almost certainly wrested power. Their split has left the arena somewhat more open for all four parties, with Raj Thackeray’s Maharashtra Navnirman Sena (MNS) filling in the gaps. While it would be foolhardy to predict the end-result in a multi-cornered contest, with many disgruntled elements from the major and minor parties in the electoral fray as independent candidates queering the pitch for the main contenders, it looks as though INC and NCP candidates will eat into each other’s votes and hand the election on a platter to the BJP. As things stand on Election Day, it appears that the BJP will end up with about 145 seats, the SS with 55 seats and the NCP and the INC with 30 seats each, leaving about 10 seats for the MNS, with independents and smaller parties taking the remaining 18 places in the 288-member Assembly. I am not a psephologist, so readers should take my prediction with a generous pinch of salt and a tolerant, amused smile. What does seem likely, though, is that the BJP, either on its own, or in alliance with the smaller parties, will come to power. One would certainly hope that Maharashtra is not condemned to a fractured mandate and a further five years of a squabbling coalition government. But what is disturbing in the current fire and thunder of election campaigning is the lack of any clear agenda for development and growth in the utterances and manifestos of all the five major contenders. Since they are mouthing the same old tired promises and clichés, with freebies being thrown in for each and every section of society, it is probably appropriate to try and highlight the areas that any government concerned with inclusive growth should zero in on.
The primary focus has to be on the sectors relating to what are traditionally known as the four factors of production — land, labour, capital and entrepreneurship. The formulation of a realistic land acquisition policy to replace antiquated acquisition procedures is urgently required, with adequate benefits to the person parting with her land, while also ensuring that the process does not take too much time. Infrastructure projects in Maharashtra have been hamstrung by inability to access land, leading to inordinate delays and cost escalations. Property rights have to be guaranteed; there are far too many disputes on title to land, leading to major uncertainties in land transactions. There was a lot of discussion in Maharashtra a decade ago on the move to a Torrens type land registration system, in vogue in many Commonwealth countries (Australia, Canada, New Zealand, etc.) for over a century, which gives an indefeasible title to those included in the register of land holdings maintained by the state. Apart from securing property rights, this system also makes land a fungible asset, with the owner being able to use this asset to raise capital. Of course, Maharashtra also needs to dispense with its Rent Control Act and remove the lingering legacies of the Urban Land Ceiling Act to free up land in its growing cities and towns for productive use.
Labour laws are the second area in urgent need of a complete overhaul. Investment in manufacturing will take place only when companies have a measure of freedom to employ and retrench workers. The latter can occur for a variety of reasons, including poor management and technological change. Rather than trying to keep a moribund concern going, it makes greater sense to retrain and redeploy workers in other productive areas of the economy. This, however, requires a thorough restructuring of labour legislation, aimed at providing for flexibility in the labour market, together with safeguards and safety nets to assist workers in the transition from one job to another. Today’s situation is a “lose-lose” one; the employer either goes in for labour-saving technology or simply shuts shop when a crisis threatens her unit. No wonder the unorganised labour force, with no job security, no skills and no adequate social safety net, constitutes 90% of the entire labour population. Maharashtra needs to take a leaf from the efforts of Rajasthan and some other states in this area (and go even further) if the state is to continue and grow as a manufacturing powerhouse in the decades to come, creating more and more jobs for a growing young population.
Access to capital has to be one of the primary engines of inclusive growth. This includes not only availability of credit to medium and small enterprises but participation in financial processes by the population at large. The Pradhan Mantri Jan Dhan Yojana should be aggressively marketed in the state of Maharashtra to ensure that every household has a bank account within the next two years. Consumers can then avail of not only bank finance for their needs, but also related instruments like insurance. The next government in Maharashtra should aggressively use technology and the Aadhaar card system to link all its citizens to payment systems, preferably with bank accounts or else mobile wallets. All government payments to employees, scheme beneficiaries, vendors, etc. should be through the electronic mode.
The fourth leg of reforms has to aim at encouraging a thriving entrepreneurship through both easy capital provision and, equally importantly, through simplifying procedures for setting up business. India remains one of the most difficult countries to do business in and Maharashtra, while somewhat better than the national average, still has a long way to go if it aims to benchmark itself against international rather than intra-national competition. The inspector raj which dogs entrepreneurs through their business lives needs to be eliminated through processes of self-certification. The same will also apply to the host of local government clearances that are needed to get a business off the ground. Setting specific time limits for clearances and holding public officials accountable for delays and/or attempts to secure illegal gratification will need to be pushed by the state government. In fact, the same levels of responsiveness and accountability need to be evident in the delivery of all public services, whether it is for a driving licence, a ration card, registration of a First Information Report with the police or a death certificate. Information technology can help, but up to a point; staff who delay/withhold service delivery with ulterior motives need to be shown the door at the earliest (though that subject will merit a separate blog). This will, of course, require a political leadership that is ready to eschew extraction of economic rent from decision making processes.
There are four other areas where government energies need to be focused. Building human resources to serve as an input for the knowledge economy requires achieving 100% compulsory secondary education, with skill development opportunities for future growth sectors. This involves a complete revamp of the current education system, with greater accountability for teachers, more meaningful curricula and a shift from meaningless university education bereft of any development of knowledge and/or skills. Managing water, especially groundwater, poses another major challenge for Maharashtra, given its fast depletion and the growing demand from industries and burgeoning cities, as well as from the agricultural sector. Significantly improving the power situation to promote industrial growth is yet another crucial area. Finally, as one of the most urbanised states in India, Maharashtra has to pay attention to making its cities the engines of growth. This implies devolution of powers to urban local bodies, developing efficient, responsive city government systems and attracting investment to these cities from India and the world.
I am not for a minute claiming that a government in Maharashtra will be able to address all these issues immediately or that there will not have to be a wider dialogue on policy and constitutional issues with the national and local governments. What I do hope for is a leadership in the state which recognises the centrality of these issues to the development story and is willing and able to devote itself to building a consensus on them. The history of nearly all the present actors in the political Mahabharata in Maharashtra gives one no cause for reassurance. Ultimately, it is for the leaders in Maharashtra to decide whether they wish to leave their imprint on the history of the state in the wake of a long line of distinguished political figures and social reformers, of whom the state is justly proud, or whether they are content to remain footnotes in history.

30 Sep

Hunooz Dilli Door Ast

Posted by vramani in public affairs.

More than twenty years after its first publication, I laid my hands on a copy of William Dalrymple’s “City of Djinns: A Year in Delhi”. As a Delhiwallah who spent nearly three decades in the city (though not at present), the book paints a fascinating picture of the history of a city in which I spent the formative years of my life. What struck me was his characterisation of British New Delhi as “imperial”. “In New Delhi” as he aptly puts it “…the individual is lost.” From there, my mind went back in time to Delhi’s past and fastened on a phrase I had first heard in the Son et Lumiere showcasing Delhi’s history at the Red Fort “Hunooz Dilli Door Ast”. These words were reportedly uttered twice; the first time by one of medieval Delhi’s great spiritual savants, the Sufi Nizamuddin Auliya, when informed of the intention of the then ruler of Delhi, Ghiyasuddin Tughlaq, to have him beheaded on his return to Delhi. The unperturbed old man merely observed that Delhi was still far away, since the Sultan’s threat was made while he was on a military campaign in Bengal. (As events transpired, Ghiyasuddin Tughlaq never made it back to Delhi, meeting his end in an accident en route). The second utterance did not have such a providential ending: the Mughal emperor Muhammad Shah Rangeela’s complacency about Nadir Shah’s distance from Delhi led to the ransacking of Delhi and the massacre of its citizens in the eighteenth century.

My current reflection is on an inversion of this phrase. While Tughlaq’s distance from Delhi was the theme of Nizamuddin Auliya’s utterance, I am more concerned with the distance of Delhi from what goes on in India that is Bharat. The immediate provocation was the mention in the Prime Minister’s Independence Day address that the Planning Commission in its present avatar is going to be wound up, to be replaced by a structure more suited to India’s current requirements. No sooner had this announcement been made than intellectuals (based for the most part in Delhi) wept bucketfuls at the imminent demise of this hoary institution. There were wistful encomiums to the luminaries of the Planning Commission of yesteryears. Some writers attempted to highlight the areas where, in spite of the almost total irrelevance of the central planning process, the Planning Commission had tried to make a difference in recent years. I must confess that I have no regrets on the passing of this grande dame of centralised planning: on the contrary, there is relief that one of the relics of the Soviet-style planning era is soon to become history. I am all for the government playing a major, indeed commanding, role in infrastructure development. However, the twisting of this logic to justify government entry into areas ranging from power plants to scooters and bread is quite bizarre, to say the least. This led to a stifling of individual initiative and the experience of a “Hindu rate of growth” of about 3.5% for almost three decades. The economic crisis in India, post the two wars with China and Pakistan and the recurrent droughts, led to the sidelining of the planning process from the late 1960s. From then on, politics dictated what the Planning Commission could do, which was largely the preparation of elaborate econometric models with little relevance to the realities of India. Apart from this, the Planning Commission determined the annual plan sizes of the various states of India. This created what I would term the development of a “beggar mentality” where Chief Ministers of states exulted when they felt they had been able to get a bigger plan size allocated to their states. It is another matter that, very often, this annual plan bore no resemblance to reality; come November-December, there would be cuts in plan size, when the financial resources of the state government came under strain, generally because of some populist concession to some group that the government of the day was keen to pander to. The bureaucrats of the Planning Commission, and of Ministries like the Finance Ministry, sit in judgment on investment decisions of public sector undertakings, of which they have little knowledge, as members of the Expenditure Finance Committee. I remember how, seeking clarifications on some technical issues of the investments of a huge company like ONGC, decisions were postponed for months and sometimes years, with concomitant adverse effects of deferred oil and gas production and cost escalations.

The bifurcation of expenditures into “plan” and “non-plan” is another inexplicable contribution of the Planning Commission and centralised planning to India’s economic wisdom. As a bureaucrat, I was mystified as to why a “plan” expenditure in one five year plan period became “non-plan” expenditure in subsequent plan periods. The babu twist to this logic was to press for at least a token plan allocation for some pet scheme of some politician; once inside the chakravyuha of the budgetary exercise, the scheme could merrily continue for years with no prospect for its exit. This subterfuge was a major contributory factor to the bloated bureaucracy that is not only a millstone around the neck of public finance but also a hindrance to efficient decision making. It would have made far more business and economic sense to classify expenditures as “capital” and “revenue” to ensure that governments balanced budgets and that capital investments were not hit by inadequate financing caused largely by unrealistic plan allocations.

There are also the “one-size fits all” centrally sponsored schemes that are thrust down the throats of state governments, regardless of how and whether the schemes fit in with their geography and economic and social priorities. The rural employment guarantee scheme, MGNREGA, exemplifies the wooden thinking of the Government of India. All districts are given allocations under this scheme, regardless of whether there is a demand for off-season employment or not. In a state like Maharashtra, high irrigation districts like Kolhapur do not require to provide off-season employment to rural labour. Recognising this economic reality, the Maharashtra Employment Guarantee Scheme (EGS), started in 1972, provided for starting rural works where there was local demand. The scheme was demand rather than supply-driven and expenditures on the scheme varied from year to year depending on the rural economic situation, being high in years of drought conditions and lower in years of good rainfall. The MGNREGA ostensibly has a similar provision for demand for rural works; however, the tendency is for the babus of the central government to issue good-performance certificates based on (you guessed it!) expenditures rather than outcomes in terms of man-days of employment and physical assets created. The scheme has also placed heavy reliance on a rickety (in many states, non-functional) local government structure. Not surprisingly, there are many complaints of misuse of funds and poor performance of the scheme in different states. In an ironic twist, the pioneer of the scheme, Maharashtra, is one of the poorer performers, a telling commentary on what happens when a state is made to fit into a universal straitjacket.

If the Central government wants to direct what goes on in every state and district in the country, can our elected representatives be far behind? The local area development schemes give every Member of Parliament Rs. 50 million annually and a Member of a Legislative Assembly or Council of a state gets anywhere from Rs. 15 million to Rs. 20 million annually. More than Rs. 60000 million or US$ one billion is annually at the disposal of what can best be termed individual discretion. Guidelines issued by the central and state governments have not always been followed; local governments, in whose areas the projects are implemented have no say in what would benefit their areas. Focusing these resources on meaningful schemes that add to the abilities of local communities would have been far more desirable.

India is far too big and too diverse a country to fit into any development mould, as Soviet Russia also learnt to its cost. With increasing private investment and recourse to capital markets, it is going to be well-nigh impossible to chart out a straitjacketed course of growth and development. Indian state governments are also getting increasingly assertive of their rights and competing for domestic and foreign private investment. In the decades to come, the central government should stick to promoting major infrastructure investment and managing macroeconomic stability. There is more than enough entrepreneurial initiative and enthusiasm in many states to propel their growth stories forward. The “laggard” states  have started displaying an appetite for development and people in most states have put their governments on notice for non- performance. It is time now to move the decision making process from Dilli to the galli.

 

 

 

 

15 Sep

India – The Flailing State

Posted by vramani in public affairs, public policy.

I am unabashedly borrowing my title for this blog from the characterisation of the Indian state by Lant Pritchett, a former World Bank economist who currently teaches at Harvard University. When he used the term ‘flailing state’ at a lecture to IAS officers at the Indian Institute of Management, Ahmedabad, I must confess to a feeling of resentment in me and my colleagues about what we felt was a somewhat uncharitable comment. Six years down the line from that occurrence, I am strongly inclined, in the context of my experiences within and outside government, to endorse his view. In fact, I feel he has been rather charitable to public institutions in India, given the frustration and often anger one feels when observing their functioning today. Pritchett used the term “flailing” in the context of a situation where the head, that is, the elite institutions comprising the state, is not in control of the limbs, the field agencies, which operate without any accountability to the hierarchies above them. I would go further to say that elite institutions in India themselves do not function with any significant level of accountability. India is a nation where, as another researcher has put it, there is a yawning gap between laws, as they exist on the books, and laws, as they are actually implemented on the ground. It is here that I find the hypocrisy of the Indian elite especially galling: they take great pride in the theoretical superiority of their institutions, without pausing to introspect on the abysmal failures in implementation in area after area of governance.

Let me expand on this theme in an area I have been working in over the past twelve years or so. Undernutrition in children under five years of age is one of India’s biggest public health problems, contributing to unacceptably high infant and child mortality rates. In fact, India fares worse than nations in sub-Saharan Africa, as far as rates of stunted and underweight children are concerned. One of my colleagues, who has been working for over two decades on IT solutions for social sector issues, has developed a GIS-based software to monitor maternal and child malnutrition and mortality. The software uses mobile telephony to set up a two-way flow of information that updates the health and nutrition status of mothers and children on a real time basis while also providing alerts to frontline health workers on interventions to be made at appropriate times. Efforts are being made to introduce this software in different Indian states to enable tracking of individual mothers and children so that timely healthcare can be provided. What has been clear from the process of implementation over the past three years is that the initiative gets going in a state when there is enthusiasm and encouragement from the top of the civil service. There is also a heart-warming response from field level health workers, who have to actually deal with the problem and who welcome the introduction of information technology to help them perform their tasks far more effectively. The problem arises at two levels: the supervisory levels above the frontline health workers resent the imposition of accountability for their actions. At higher levels at the district and state levels, the availability of up to date data invites scrutiny from a host of actors: NGOs, the media and civil society. Once the initial supporters of the initiative at the highest rungs of the bureaucracy move out from their positions, the project suffers from an ‘apathy attack’. Successor bureaucrats in the concerned departments are either hostile to their predecessor’s efforts (the “successor-predecessor syndrome”) or fail to appreciate the logic and rationale for the launch of the initiative. In either case, the existing system ensures strangulation of the project by either choking off funds or making it clear to middle-level managers in the department that they are at liberty to pay no further attention to the project.

I wish I could say this malaise was restricted to a few departments. Unfortunately, this tendency operates right across the board in government. The UIDAI Aadhaar project to provide unique 12-digit identity numbers to every Indian citizen was beset with similar problems. First, other ministries, like the Ministry of Home Affairs, claimed ownership of this exercise and resented what they saw as the interference of another body in their legitimate function, never mind that the objective of the Aadhaar project was totally different from theirs. Thereafter, getting other Ministries at the national level to link their service functions with the UIDAI was another mammoth task, with not every Ministry too keen to use the Aadhaar number for their operations. Finally, there was (and still is) the issue of enlistment of state government agencies in linking their service functions with the Aadhaar number. At the national level, there was not even consensus on enacting legislation to give a formal legal backbone to the Aadhaar card. This led to the Supreme Court ruling that direct benefit transfers, like the subsidy on LPG through the linkage of the Aadhaar number to consumer bank accounts, could not be made mandatory, defeating one of the possible major benefits of the Aadhaar scheme.

There are three major reasons why reforms in India hit roadblocks ever so often, all linked to what I would term ‘myopic vision’ of the ruling elites. The first relates to the lack of any sort of political consensus on the direction reforms should take. Whether it is the auction of natural resources, the introduction of the goods and services tax (GST) or the issue of foreign direct investment in retail, we go around in circles rather than facing the challenge head on. One political group will stick to tired statements about the public sector having to retain the “commanding heights” of the economy, while another political formation will shed tears for India’s farmers and retail businessmen, without any detailed cost-benefit analysis of what a particular policy will entail. Ministers of Finance from the centre and states will meet year after year without resolving a taxation issue that Europe resolved in the nineteenth century. More and more, it is clear that political parties are held hostage by sectional vested interests, even though such relationships do not even appear to pay political dividends.

A second reason, and a major one, is the inbuilt resistance of the Indian bureaucratic class to change. Large sections of the bureaucracy have thrived on the status quo, with guaranteed lifelong returns from the government (in terms of salaries and pensions) and with no accountability for performance in their jobs. Recommendations of Pay Commissions on downsizing the bureaucracy have been blithely ignored: no prizes for guessing who did not let these suggestions see the light of day. A large part of the bureaucracy, especially (but not only) at the middle and lower levels does not have any commitment to change – the top level, after a few feeble attempts, goes back to ‘business as usual’. A massive report of the Second Commission on Administrative Reforms (the Veerappa Moily Commission) is gathering dust five years after final submission. Has any officers’ association (of any of the elite All-India and Central Services) attempted to advocate reforms based on the Committee’s recommendations or even sought to encourage public debate on the same?

The third reason lies in the inertia and intellectual confusion of the large group of academics, journalists and other eminences who jointly comprise the intelligentsia. Positions are taken on the basis of ideological leanings and a vague nostalgia for the past rather than on the merits of each issue. Concerns are brought up without analysing whether they apply to the Indian context. Two examples will suffice. I have seen a number of media articles some years back which questioned the use of electronic voting machines (EVMs) in elections in India. Examples were trotted out of some Western democracies where misuse of this technology had apparently been detected. No attempt was made by these ‘experts’ to actually see and describe the freedom that the Indian voter, especially the dispossessed and disadvantaged one, got from the exercise of his franchise through the dual combination of an election identity card and the EVM. Having personally overseen two elections in Bihar (the best test case for assessing the efficacy of this technology), I can testify to the change in atmosphere between the 1998 and 2005 elections and the newfound assertiveness of the voter. The same intelligentsia today raises questions about the Aadhaar card and the intrusion on the individual’s privacy. What price privacy, I would ask, when you are not able to get entitled benefits that the state has promised you, only because enabling technology to remove the pernicious influence of the ubiquitous middleman has not been introduced?

The essential problem lies in the Indian elite’s reluctance to experiment with innovation in different areas of governance. Whether it is policy reform, civil service recasting or technology use in governance, leadership, both in government and civil society, has been found wanting in giving a sense of purpose and direction : the same old debates and the same tired arguments seem to dominate all discussions. Any policy shift leads to some winners and some losers: what is required is reasoned debate on the benefits and costs of the proposed policy to arrive at a via media that is acceptable to most and looks at longer-term benefits to the country than a purely short-sighted approach that panders only to current (and sometimes unfounded) fears and insecurities. Someone desperately needs to cut the Gordian Knot. Can we hope that we have reached that stage at least in 2014?

31 Aug

The Media is the Massage

Posted by vramani in public affairs.

It was Marshall McLuhan, the Canadian intellectual and philosopher, who coined the famous catchphrase “The medium is the message.” He observed that “societies have always been shaped by the nature of the media by which men communicate than by the content of the communication.” McLuhan avers that the consequences of the media are so pervasive in every aspect of life that they touch and alter every part of human existence. I confess I was not even aware that McLuhan was the co-author of a book “The Medium is the Massage” when I conceived the title for this blog. So it is rather apt that I emphasise in this blog the central argument of McLuhan that each medium has a different impact on the human senses, confining my discussion to the print and electronic media (what I would loosely term as “information media”) in India.
The era of the print media in India, spanning most of the twentieth century, was characterised largely by reporting drawing on agency reports. Investigative reporting was given a fillip by newspapers like the Indian Express, which documented the plight of women sold into sexual slavery, the cement for trust scandal in Maharashtra and the origins and consequences of communal riots in different parts of the country. However, the reader participated at most vicariously in most of these rather sombre accounts of the polity and society. They agitated some who sought to change the status quo but were largely “water off the duck’s back” as far as the silent majority of middle class readers were concerned. I do not, of course, refer here to blatantly inflammatory writings (which surfaced increasingly towards the close of the 1980s) in newspapers and journals espousing extreme religious views, which had the potential (often through misleading or false reporting) to inflame public passions.
The explosion of the television revolution in Indian homes and the exponential increase in electronic broadcast channels has had a phenomenal quantitative and qualitative impact on viewers. It cuts across barriers of gender and age in the ordinary household, unlike the daily newspaper, which was largely the staple fare of the head of the house (usually male). Again, this medium could be consumed around the clock, in contrast to its print predecessor, which lost its novelty by mid-morning. Post the 1982 Asiad, televisions entered almost every living room (and subsequently bedrooms) in India. I can’t help thinking, a little cynically, that the government of the day saw this as a medium to influence the masses (after all, Orwellian 1984 was fast approaching!). However, the early fascination was for soap operas (long denied to the starved Indian public) and religious epics. The latter probably spawned a rush of religiosity, reflected in subsequent electoral mandates to parties with specific sectarian appeals. Soap operas and family dramas stoked the aspirations of millions of viewers, with coiffured ‘bahus’ (even when rising from bed) and magnificent houses on display. In an economy and society with limited opportunities for upward mobility, one could at least dream of, in not actually attain, the Olympian heights of material success. The “massage” of the masses could well and truly be said to have begun.
The next wave of “media massage” was ushered in by the advent of 24-hour television news channels. Starting with English and Hindi, they expanded to every major regional language spoken in India. As their reach extended throughout the country with the spread of cable networks and, subsequently, direct to home (DTH) television services, news channels metamorphosed from purveying to shaping and influencing public opinion. When information is hammered relentlessly hour after hour on the consciousness of the viewer, the resulting “analysis fatigue” leads to a willingness to accept the presented version as the unvarnished truth. The dictum “No news is good news” was stood on its head and “Good news is no news” became the accepted norm. News channels, in their quest for “grabbing eyeballs”, started feeding on the anxieties of their viewers. I had personal experience of this more than a decade ago as a senior administrator in Maharashtra. A well-known Hindi news channel flashed a late night report of an earthquake in an area, when we were aware that the locals had reported some noises emanating from the ground and the local administration had already taken precautionary measures. The next two hours saw panic-stricken calls from the state government in Mumbai and verification calls from other journalists. The concerned news channel did not even clarify that their report had been exaggerated. I also remember vividly a prominent murder case in Mumbai where one news channel pronounced a guilty verdict on a friend of the deceased within hours of the murder, without even waiting for the police to complete their investigation and arrest the actual accused. In this case, too, there was no retraction or apology from the channel for having falsely maligned an innocent person. Today, we have channels which, under the guise of rapid news, will report every case of murder, dacoity, etc. Not only that, the pernicious practice of painting persons, including bureaucrats, as guilty solely on the grounds that they are questioned by investigative agencies has caused untold anguish and represents a violation of their rights as citizens. The public, attuned to the “bad news” of low moral and ethical values, is only too ready to lap up salacious details of any occurrence, with truth often being the first casualty.
Spirituality and astrology are two other areas where the Indian television viewer seeks refuge from the pressures of modern life. Adrift from her traditional caste and village moorings, the viewer absorbs messages from a wide variety of gurus and godmen, cutting across religious and caste lines. Anxieties about the future are also cleverly exploited by the legion of astrologers who have set up shop on different channels. One well-known astrologer on a regional religious channel predicted apocalypse two years back. The world continues on its merry ways, but the astrologer (alas!) has vanished from the channel. A wide variety of mantras, observances, medicines, amulets and stones are offered as solace to the hordes of seekers of jobs, marriage alliances, good health and progeny. What is noticeable is the intricate mesh of spiritual and temporal-commercial interests. After a few cursory suggestions, the viewer is provided with mobile numbers and websites to fix appointments and obtain remedies on payment basis. I am not passing value judgments on these practices on television channels, merely observing that the “massage” has moved from catering to aspirations to stoking insecurities to providing a quick fix to all the myriad problems that beset us in our daily existence.
What concerns me about the “media massage” phenomenon is the growing lack of discrimination of the television viewer. The lack of critical reflection on what one reads has already been one of the consequences of the sub-Rs. 100 book industry, with its “use and throw” philosophy. When this extends to a far more pervasive medium like 24-hour channels, the brainwashing of the individual can be far more thorough and comprehensive. Consumerism has already taken a firm hold on viewers, with infinite products displayed on channels dedicated to sale of a wide variety of products. Greed, rather than need, dictates buying impulses, in the mad rush to keep up with the Patels/Sharmas, et al. Superstitious behaviour is being given a fillip by programmes on supernatural events and dire predictions on events likely to occur in the near future as well as measures to ward off evil effects. There is also the concern that politics and history can be doctored to inundate the viewer with sectarian views aimed at creating collective insecurity and reinforcing separate community identities. With the phenomenon of paid news in the print media in relation to election campaigns, who is to say that poll predictions will not be doctored to meet the interests of different political parties? However, one remains optimistic given the number of dissenting and discordant voices which prevail on the media, as well as the competition among channels espousing different points of view. Finally, the enigmatic Indian voter, like the moving finger “writes and, having writ, moves on…” Thanks be for the eternally argumentative Indian and our noisy, occasionally exasperating democracy!!

15 Aug

Decentralising governance: the chicken and egg problem

Posted by vramani in public affairs, public policy.

At the height of the Anna Hazare Jan Lokpal movement in 2011, I was more than a little apprehensive of the draconian powers that this institution would exercise. I saw it then as the Indian version of the Jacobin Terror. However, as politics marches on in India, post the game changing 2014 Lok Sabha elections, the realisation is dawning on me that checks on institutional misuse of power, of which corruption is one major phenomenon, have to be strengthened in the Indian context if we are not to see the spectacle of the same old wine being poured into new bottles.
This train of thought has been set off by the advocacy of decentralised governance right upto the village level by influential academics, thinkers and public policy analysts. In itself, this concept is unexceptionable. What gives one pause for thought are the deteriorating standards of ethics and morality at all levels of the polity and government (and, indeed, society) in India. Motivated probably by Mahatma Gandhi’s mantra of gram swaraj, a number of state governments devolved financial and administrative powers to local governments in the 1950s and 1960s. One by one, starting with Maharashtra (a state I am familiar with) and then Karnataka, they gradually recentralised these powers in the state governments. Many other states did not even bother to attempt transfer of powers to local bodies. Part of the reason for this was the fear of state legislators and the state governments that their writ would cease to run in the rural and urban areas of the state. It was not uncommon in the 1960s and 1970s to see Zilla Parishad presidents in Maharashtra exercising greater authority than the local legislators. But the local governments also contributed to the diminution of their powers by irresponsible governance, a tendency that has become enhanced over the past three decades.
If, as has been suggested in different fora, a number of functions currently managed by state governments at the district and municipal levels, including crime and law & order policing, are to be transferred to local governments, what could be the legitimate apprehensions? Foremost among these is the likely suborning of the administrative process to meet the demands of local musclemen and ‘bahubalis’. The reprehensible habit of packing the local administration with pliable, compliant bureaucrats, right down to the police station and village levels, is already popular with legislators and ministers in different states. At a macro level, with more checks and balances and alternative centres of power, the scope for misuse, particularly in these days of media (and social media) overkill, is somewhat mitigated. Move the power down to the local level and the likelihood of abuse increases: local media is more vulnerable to threats and blandishments.
In such a scenario, the chances of unbridled corruption increase manifold. Today, the two elections that are fought with the greatest amount of bad blood and viciousness are those to gram panchayats and municipalities. Schemes like the MGNREGA have put huge funds at the disposal of gram panchayats; municipal councillors and corporators often have sizeable constituency funds, especially in the larger cities, apart from patronage powers in relation to vacant land, access to public hospitals and securing employment for favoured ones in municipal services. Not surprisingly, those left out of this “patronage gravy train” are bitter about their lack of powers. I have had innumerable grouses retailed to me by members of Panchayat Samitis (the intermediate tier of rural local government) in Maharashtra about how all resources are controlled by those either in the tier above them (Zilla Parishads) or in the tier below (Gram Panchayats).
The imagination boggles even further when we contemplate local bodies controlling law and order policing functions. Even today, the local police officer, because of caste and other considerations in postings, is often seen as the man of the powerful local overlord, who may often be a legislator/minister. Were local bodies to oversee police functioning in law & order matters, one can only speculate on the security concerns of disadvantaged groups and women, given that the current environment is itself a matter of grave concern.
And yet, we cannot again fall into the age-old trap of the “white man’s burden”, justified for over a century to deny self-rule to native colonies all over the globe. We have to repose faith in the dictum that a democratic transfer of power imbues, albeit over a period of time, those exercising these powers with a sense of their responsibility to those who have voted to vest this power in their chosen representatives. More importantly, there are three mechanisms which can serve as checks and balances on those in power in local governments (as indeed on those exercising power in state and national governments).
Deterrence, or the fear of punishment, is undoubtedly one of the major weapons for controlling irresponsible exercise of powers. The Lokayukta at the local level will exercise the same punitive powers that the Lok Pal (at the national level) and the Lokayukta (at the state level) will exercise. Apart from the bureaucracy, actions of all political functionaries at the local level will be liable to scrutiny by the Lokayukta. Karnataka has set an example wherein a sitting Chief Minister had to quit office when indicted by the Lokayukta. Independent investigation and prosecution wings attached to the Lokayukta will ensure that there can be no attempts by vested interests to interfere with the course of law.
Exposure is the second method to keep executive power in check. The Right to Information Act, by making available information to the public, has opened up public records to scrutiny. Section 4 of this Act has yet to be implemented in letter and spirit. Disclosure of government decisions and placing government data in the public domain should, to the greatest extent possible, be voluntary and web-based, so that the general public is aware of what their governments are doing. Of course, social media is a powerful tool available today to open up actions of public functionaries to instant scrutiny. The novel concept of citizen-journalists and the widespread use of smartphones have enabled the ordinary citizen to bring to public attention attempts to interfere with individual dignity and instances of misuse of public money. The fear of complaints “going viral” through the exponential spread of incriminating information ought to keep public functionaries on their toes and act as a check on arbitrary, unlawful actions on their part.
Processes constitute the third measure to enforce accountability in governance systems. These cover procedures related to public service delivery to make them transparent, impartial and timely and would often have to incorporate a substantial technology element. This blog column has, in the past, spoken admiringly of the flawless service and customer-focused responsiveness of private online retailers. It is heartening to note that public sector agencies like gas companies and electricity distribution companies have developed excellent internet portals to facilitate supply of gas cylinders and payment of electric bills. These services need to be extended to areas like old-age pension payments, registration of first information reports with the police, scholarship disbursements, etc. Reducing citizen interface with public bureaucracy reduces transaction costs not only by eliminating travel costs but also by cutting out opportunities for “rent-seeking”. E-tenders and online land records and systems for online registration of land transactions would go a long way in checking arbitrary exercise of executive power.
I need to stress here that the measures suggested are by no means limited to local governments; they apply with as much, if not greater, relevance to state and national governments. But the transfer of financial and administrative powers to local governments, accompanied by introduction of the measures mentioned above, would remove one of the facile excuses trotted out by state governments to delay the transfer of these powers (never mind that state governments themselves are no paragons of rectitude, probity and transparency in functioning). As we celebrate India’s sixty-eighth Independence Day, let us commit ourselves to decentralisation of powers, the only means by which citizens of India will have a greater voice in decisions impacting their future and the destinies of unborn generations of Indians.

31 Jul

Plus ça change, plus c’est la même chose: The more things change, the more they stay the same

Posted by vramani in irony.

Damodar Penwale eased through the glass doors of the New Administrative Building after swiping his identity card and crossed the foyer towards the lifts. He smiled at the receptionist seated towards his right hand side. She was immersed in directing a visitor how he should proceed to meet the Commissioner of Industries. The visitor’s face seemed faintly familiar to Penwale; maybe it was some captain of industry who had come to discuss his new project with the Commissioner. Not that there were too many such visitors nowadays, he mused. The process of automatic online approvals for all industrial projects approved in 2010 had done away with the need for industrialists to visit government offices to get their proposals cleared. He still remembered how, as a young clerk newly recruited in government at that time, he had heard his wizened Under Secretary, Harihar Kamdar, grumble that the move spelt the death knell of the bureaucracy. Prophetic words indeed, he thought, as he eased into the lift and headed for the seventeenth floor. The lift was one of those superfast Otis lifts that seemed to cover the vertical distance to his office in seconds, a far cry from the lifts he remembered when he joined service. Then, it was often a wait for anywhere from ten to twenty minutes while the lift huffed and puffed its way up to the top and then, just as reluctantly, made its way down. Nowadays, one never had to wait for more than a couple of minutes before entering the lift. Probably, one should give twenty percent credit to the technologically advanced lift and eighty percent credit to the reduced stream of visitors, he surmised.
He stepped out on to the carpeted passageway and made his way towards his department, located to the left as one emerged from the lift. Approaching his work station (office was such a dated term to use in this day and age!), he smiled at his co-worker seated in the cubicle to the left and switched on his computer. Ever since the advent of the paperless office in 2015, there was no need to conduct any work using paper or to maintain any paper records. He pressed his right thumb on the fingerprint recognition panel on the computer to access his files. In fact, a message had already gone to his supervisor intimating her that Penwale was at his seat. No more of those days when you could enter the building and make a beeline for the canteen to enjoy a cup of hot tea, he wistfully mused. But then, the installation of the self-serve tea and coffee machines (two on each floor) enabled any employee to get her tea/coffee as and when she wished, at just one rupee for a cup of tea and two rupees for a cup of coffee.
There was an urgent email from one of the districts communicating the daily rainfall figures; Penwale frowned – the data should have been automatically uploaded by the district in the ready-made software. He made a note mentally to inform the district that emails transmitting such routine data would not be favourably viewed by his department. Oh, yes.. sending material by the old postal system was now considered almost a crime!
A buzz on his intercom awoke Penwale from his reverie. It was his superior, alerting him that the note for the cabinet had to be expedited. Cabinet notes, too, were no longer transcribed on paper: an electronic copy, after approval by the departmental Secretary & the Minister, went to the Chief Minister’s office via the Cabinet Secretary. Ministers could only scan the cabinet notes on computer monitors in their office; the software prevented printing of paper copies. Thank God, thought Penwale, at least they were spared the allegations of leakage of cabinet papers to the press before the cabinet meetings! Even at Cabinet meetings, the notes for each item on the agenda flashed on the consoles in front of each Minister, who was not allowed to carry any paper in or out of the Cabinet Room. Penwale had once cajoled his friend in the Cabinet Secretariat to allow him to take a peek at the Cabinet Room: the technology on show there had awed him, what with huge LED screens and dozens of computer monitors. There was even a provision for cabinet meetings to be conducted through videoconferencing, when no face to face discussions were felt necessary or when the Chief Minister needed to convene a meeting at short notice.
Penwale was just putting the finishing touches to the cabinet note when a message flashed on his computer screen, informing him that the Joint Secretary of the department would be videoconferencing in half an hours’ time with all the supervisors and assistants to review the action plan of the department and the items pending for action. There were now only four levels of officials in any department — the Secretary, Joint Secretary, Supervisor and Assistant. The Secretaries and Joint Secretaries were on five-year contractual appointments and the renewal of their contracts crucially depended on their achieving the action plan goals. Not that Supervisors and Assistants were any more secure, Penwale reflected; a perceived indifferent performance could cost them their jobs, as three of his colleagues had experienced recently.
It was almost 11 a.m. and Penwale calculated that he had just enough time to go down the corridor and grab a cup of coffee. As he made his way down the corridor, he exchanged pleasantries with a number of supervisors and assistants, who were moving purposefully in the same direction. Discussions around the tea-coffee machine ranged from the latest movie releases to India’s prospects in the upcoming World Cup cricket tournament. Sipping his coffee with relish and participating in the conversation around him, Penwale never noticed how time slipped by, till, glancing inadvertently at his watch, he realised, to his horror, that it was 11.27 a.m. and he had to be in his seat in two minutes to be in time for the videoconference with his martinet of a Joint Secretary. Crumpling his paper cup and turning sharply around, he lost his balance and collided with a portly supervisor standing just behind him…..
…..Penwale was jerked to wakefulness by a growing murmur of discontent from the employees milling around him, one of whom had accidentally bumped into him, throwing him off his balance. As Penwale’s consciousness returned to the present, he realised that both the lifts had stopped functioning. Many employees had been complaining for weeks about the weird noises and jerks emanating from the aged lifts as they went up and down on their daily business. Trust that crotchety Deputy Secretary in charge of building administration not to have cleared the file for annual maintenance of lifts, he thought resentfully, as he turned to the staircase and commenced the Sisyphean climb to his seventeenth floor office for the third time that week, past paan-stained walls.

« Older Entries
Newer Entries »