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Month: April 2011

The Agility of Modern Public Services #1

The more recent public service reforms originated in the UK and in Australia. The New Zealand reforms, which came in later, were more radical and influential internationally. Given my familiarity with Australian public services, I will focus primarily on Australian public administration reforms as an illustration of a modern public service. My exposition, based heavily on my experience, is biased towards issues which I believe are of particular relevance to India. The list I have drawn up below may therefore not match similar lists drawn up by academics.

At the outset we note that the Australian Constitution[i] has been the great enabler of reform in Australia, unlike its Indian counterpart. It is much shorter and non-prescriptive and allows Australian governments to legislate on matters of relevant detail. Australia has therefore innovated extensively by periodically reviewing its public service legislation. England retains even greater agility in its law making process, not having a Constitution in the first place. Australia has therefore remade its administrative framework three times in the twentieth century through its Public Service Acts of 1902, 1922 and 1999, unlike India which has not reviewed its bureaucracy since the 1850s or so. These Public Service Acts provide the framework for the Australian Public Service (APS) at the Australian Commonwealth (the Commonwealth is the counterpart of the Indian Central Government). Its states have also enacted their own public administration legislation, each reviewed and modernized independently. The other important high-level difference to note at the outset is that there is no ‘sharing’ of senior executives between the states and centre (Commonwealth). Each unit of administration in Australia recruits its public servants independently.
The Australian Public Service Act of 1902 required open competitive examinations to recruit public servants wherever practicable. It also laid down the primacy of merit in promotions. This sounds somewhat like the ICS of 1853. It created a Public Service Commissioner to inspect departments and promote efficiency. But over the years, the APS has diverged significantly from India’s ICS-type system and has transformed itself ‘from a centralised system with a complex classification structure based on permanent positions to a decentralised, simplified structure based on continuing employment and contracts’ (Professor John Halligan).[ii]
I have chosen to list nine key features of the APS below to contrast it with our fossilized IAS. These features show that flexibility and efficiency can be generated even within moribund public service institutions, and that we need not lose all hope for India! There does exist a better way to govern ourselves, if only we are willing to open our eyes.

[Note: This is an extract from my book, Breaking Free of Nehru]

[ii] John Halligan (University of Canberra) in ‘The Australian Civil Service System’, a paper prepared for presentation at Civil Service Systems in Comparative Perspective, School of Public and Environmental Affairs, Indiana University, 5–8 April 1997. See []. This paper forms part of Tummala, Krishna K, Comparative Bureaucratic Systems, Lexington Books, Lanham, MD, 2003, and also in Halligan, John, ed, Civil Service Systems in Anglo-American Countries, Edward Elgar Publishing, London, 2004.

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A private announcement: shutting down

It appears that google groups and yahoo groups and every other such group under the sun gives their managers the authority to subscribe others without prior authority. My email ID has therefore now become totally useless, being inundated with emails from hundreds of people who seek to force their conversations upon me, making it impossible to read the few genuine messages I do receive on this email account.

I have already informed those who matter to not use that email ID. Now I have deleted that account and migrated permanently to web-based email. 

May I also add that anyone who subscribes me to anything without prior permission gets PERMANENTLY blocked. I have no sympathy for those who presumes to impose upon my time.

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By 1850 or so, the Indian civil service was the best in the world

A short history of public services in India and England

The Indian system of public administration is thought to be one of the world’s oldest, barring perhaps the Chinese. In 322 BC “Chandragupta … established a complex bureaucracy to see to the operation of the state and a bureaucractic taxation system that financed public services”.[1] Among the more recent advances in public services in India, the model of land revenue collection designed by Sher Shah Suri in the 1540s is acknowledged as a major milestone in systematic governance. The Sher Shah model was then adopted by the Mughals and later by their successor—the East India Company.
The East India Company was one of the world’s oldest joint-stock companies; hence a pioneer. Like any good modern private company, it had built its own set of rules and procedures by 1757 to ensure that business policies laid down by its Board of Directors were complied with across its entire trading business. But after Clive’s political triumph of 1757 at Plassey, the Company was faced with the entirely new challenge of governing vast numbers of people and extensive areas of land, initially only in Bengal. It became a private company that ‘ruled’ people: a unique combination. It had to quickly come up with policies to deal with this completely new role. The bureaucracy it invented in response to this challenge was perhaps the first modern bureaucracy in the world. This bureaucracy was not accountable to the whims of kings, but to a private company’s Board of Directors; it developed as a private sector bureaucracy.
The Company started by creating a Covenanted Civil Service (CCS) whose members signed ‘good behaviour covenants’ with the Company’s Court of Directors. With a view to keeping wage costs low, members of this service were paid relatively modestly but they could ply their own commercial business on the side and thus make commissions on their trading activities. As would be expected, this model led to serious conflicts of interest. Given the lucrative opportunities created by the political patronage of their commercial activities, corruption began to flourish in British Bengal. That Robert Clive was impeached (unsuccessfully) on this ground says something about the enormous possibilities of corruption at the confluence of India’s feudal culture and a modern joint stock company which did not have checks and balances for its new role as a government.
The very concept of corruption being an impropriety was perhaps recognised for the fist time in India at this stage. Officers had been expected to use their office to coerce villagers into submission in all previous monarchical regimes. The British officers’ corruption was quite customary for India till then; no one thought it was improper. Chanakya had noted such natural tendencies among officers in his Arthashastra 2,400 years ago (“The Mahamatras are like fish. Does one know, when the fish is drinking water?”).

However, the expectation from public officers was changing. The change started in England where the Magna Carta of 1215 instilled some discipline in the king’s officers. The king of England agreed through this charter that ‘No Constable nor other Bailiff of ours shall take the corn or other goods of any one, without instantly paying money for them.’ This was revolutionary, as it created a new expectation that a public servant was only to live off his own salary.
Therefore the corruption in British Bengal was not commented upon adversely in India. It was in England that concerns were raised about it. The British Parliament took about a decade to make he Regulating Act of 1773. This Act created a Governor General for British India. A subsequent India Act,1784 laid the specific principles of governance of India by the Company. We cannot blame the British Parliament for taking so long to do something about corruption in India (it at least took some action: India’s Parliament, on the other hand, actively encourages corruption!). The British Parliament was relatively weak at that stage, and also unrepresentative. It was only in 1688 that it had gained the authority to continue to assemble without long interruptions imposed by British kings.
The second Governor General of British India, Lord Cornwallis (1786-93) seems to have laid the foundations of the modern Indian public services. He split the Company bureaucracy into two parts: the political branch responsible for civil governance, and the commercial branch responsible for its commercial activities. On entry, an officer of the East India Company had to opt for one of these branches. Commercial officers retained access to commissions on their trading activities. Those who opted for the political branch were compensated by Cornwallis through a significant hike in salary. With this, corruption came to a grinding halt in the higher echelons of British India’s government. Till independence, these higher echelons would distinguish themselves by remaining spotlessly clean. Indeed, this continued well into the early years of independent India even as our politicians were starting to become super-corrupt.
The political branch attracted talented British middle-class youth with scholarly tastes and policy interests. Wonderful writers emerged from amongst them who penned elegant and largely accurate accounts of the lives of ordinary Indian peoples. In some cases, these civil servants proved pivotal in the development of local Indian dialects and languages. They compiled dictionaries; even created scripts. The role of the District Collector, perhaps found only in India, also further evolved and became the hub of British administration. This office was particularly important given the poor means of communication available in those days, with the attendant need to empower local officials to make decisions on the ground without waiting for prior approval.
To streamline the processes of administration, Cornwallis created a civil service manual as part of the Charter Act, 1793. Carrying on Cornwallis’s foundational work, Lord Wellesley set up the Fort William College in Madras in 1800 to induct new entrants to the CCS. This college was moved to England in 1805 and became the Haileybury College. (A tidbit: among the teachers at Haileybury was the famous Thomas Malthus who was its first professor of Political Economy and taught British India’s civil servants from 1805 till his death in 1834. They were also taught the latest economic and political thought, including Adam Smith.) The Lal Bahadur Shastri National Academy of Administration at Mussoorie continues the tradition established in 1800, imparting a two-year induction package to new recruits.
Given increasing concerns that appointments to the CCS by the board members of the Company were not made exclusively on merit, the Company threw the Indian civil service open to competition in 1853. This was a significant reform that even Britain would not implement in its own government for the next sixty years. In 1854, William Gladstone commissioned Northcote and Trevelyan to report on the future of the Civil Service in England. They studied the British East India Office as a model, and a few other government offices in England and recommended that civil servants in England should also be recruited through an open competitive examination, and that promotions should be made on merit, not on the basis of seniority. The frequently cited precepts of an apolitical permanent career service, being not only recruited without political patronage but whose members offer impartial advice to the political leadership, arose from this report. When Gladstone became Prime Minister in 1868 he implemented some of these recommendations. Competitive entry started in England only in 1914.
In the meantime, the British India civil service had kept up its lead in public service reform. The Indian Civil Service Act was made in 1861. Next, the recommendations of the Public Service Commission of 1886-1887 were implemented. Later, in the 1910s, in response to Indian nationalists, the British allowed Indians to take the entrance examination for which they had to travel to England. From 1922, India was made an examination centre. The number of Indians in the ICS began to steadily rise. At the time of independence, in addition to the generalist civil service, the ICS, which provided high level governance functions, India had evolved nine other central services which managed specialist areas.
The point of sketching this history in some detail was to highlight that by the mid-1800s, the Indian civil service was perhaps at the cutting edge of public administration in the world. Regrettably, India’s public services have stagnated since then while the rest of the world has continued to evolve and reform. The design of the IAS today is based almost entirely on the model of 1853. The most important public administration reforms in the world since then include the abolition of tenure in the top echelons of the public services, and bringing in significant political strategy alignment. Let’s explore these changes.

[Note: This is an extract from Online Notes for my book, Breaking Free of Nehru

[1] John P. McKay, B.D. Hill anid J. Buckler (1988). A History of World Societies.Vol. 1. Boston: Houghton Mifflin Co. p.74 

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A comment on India’s bureaucracy in The Economist

Here's an interesting comment, that perhaps cements India's world-wide perception as the corruption and incompetence capital of the world:

India’s food bureaucracy is a byword for inefficiency and corruption. People steal from the cheap-food shops of the Public Distribution System (PDS) on an industrial scale. Newspapers call a case of theft now under investigation in Uttar Pradesh “the mother of all scams”. At one point, the country’s top investigative agency said it had given up even trying to cope with the 50,000 separate charges. [Source]

It came to my notice just as Sonia Gandhi is getting personally accused of corrutpion (as if that was a surprise).

Mera Bharat Mahaan.

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Why is our bureaucracy so inept? #3

Continuing from #2

The Shelter to Ineptitude Provided by the Constitution 

But aren’t IAS officers some of the finest minds of India? Wouldn’t they all know about these policy constraints and work diligently to anticipate and resolve them? Unfortunately, barring a few exceptions, this is not the case. The problem does not lie with the innate ability of IAS officers but with their professional competence and suitability for the jobs they perform. It lies in the end with their rigid, tenure-based incentives. These sluggish incentives quickly drain out any aspiration, or even scope, for world-class performance. There is no passion, no hunger in the IAS to adopt the world’s best practice; there are no rewards for outstanding policy advice and innovation; and there is no punishment for failure to deliver even the most basic outcomes. Instead, there are massive rewards for corruption and sycophancy.
Advanced countries have taken on board the latest advances and learnings of the past 40 years – from the literature of agency theory, public choice, knowledge management, innovation, human resource management and leadership – to build competitive, merit-based public service systems which are closely aligned to political representatives’ strategies and which reward policy expertise and leadership. In doing so, these countries have overcome most of the innate problems which all bureaucracies face and have transformed their public servants into dynamic agents of change and excellence.
India needs such outstanding agents of change, motivated from within themselves to deliver us the world’s best practice. But we are saddled with the antiquated public service model that the British bequeathed to us. Even that model, for whatever it was worth at one time, has become fetid upon coming into contact with our sectarian, caste-based and geocentric passions. Our stagnant and rotting model now stinks for miles and compares badly with the clear and fast flowing spring of dynamism found in the West.
This putrid build-up of bureaucratic toxins in India can be attributed to the hothouse provided to the IAS by our Constitution. It was Sardar Patel’s idea to keep the old British ICS structure almost entirely intact, without requiring any review. ‘Remove them [the ICS]’, Patel argued, ‘and I see nothing but a picture of chaos all over the country’. Nehru, who was not a fan of the ICS, did not have an alternative plan in mind. The Constituent Assembly thus created a very powerful sanctuary for the ICS and its successor all-India services through Articles 308–23 of the Constitution. Thus we came to be saddled with a bureaucratic machinery fully sheltered by the Constitution from any review or improvements.
While India was one of the few developing countries in 1947 that had a well-established bureaucracy and there is no doubt that Patel and Nehru were right in 1949 to stick with this bureaucratic machinery, they made two key mistakes: (a) embedding outdated public service structures directly into the Constitution – which is very hard to change, and (b) making no provision for a full review of the bureaucratic machinery in a few years’ time. Today our hands are largely tied behind our backs. Our Constitution defines the public services effectively as permanent and tenured through Article 312. Further, the process for removal from office of a member of the all-India services is so cumbersome that these positions have become sinecures. While tedious due process and inquiry may be fine where corruption is alleged, what about sheer incompetence? Why are citizens required by the Constitution to keep paying for officers who are ineffective? What about the rights of taxpayers to get value for the taxes?
A better way for Nehru and Patel to have resolved their dilemma was by including an enabling provision in the Constitution for the creation of relevant public service legislation from time to time. That would have left each generation free to create appropriate structures with relevant details, making the public services structures flexible and responsive. Changing the Constitution is always hard, but it is made even more so by the impregnable wall of self-defence now built up by vested interests in the IAS and other services. As a result, something that was a necessary evil in 1949 has become our bane. Our antiquated bureaucracy was designed for revenue collection and enforcement of law and order under a colonial administration. This so-called steel frame is ill-designed to deliver good governance in an environment marked by rapid change, dramatic gains in knowledge and specialization, and global competition. It is incapable of performing high level policy and project management roles since it is not a professional body but a feudal aristocracy.
Once the ICS (later IAS) became part of Nehru’s socialist formula, boom times began for these services. The public sector grew rapidly and created many prized positions with perquisites which kept civil servants salivating in anticipation even as the buying power of their salaries dropped precipitously under socialist dispensation. The Fifth Pay Commission (1994–7) ‘set right’ some of this salary decline. However, Pay Commissions are not designed to deal with public service reforms. The real question before us should be: Higher salaries for what? Higher salaries without systematic reform will add little value to the people of India. Nevertheless, low salaries, combined with tenure and poor incentives, are a recipe for disaster.
In the meanwhile, Britain and many other free countries have innovated extensively and moved far away from the static models of the 1850s. If you are interested, I have summarized the history of public services in India and England over the past 150 years in the Online Notes,[i] to show how, by the 1850s, the Indian civil service was perhaps at the cutting edge of public administration in the world. But also, very regrettably, India’s public services have stagnated since then while the rest of the world has continued to evolve and reform. The most important public administration reforms in the world since then include the abolition of tenure in the top echelons of the public services and bringing about alignment with political strategy. Let’s explore these changes.
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