Thoughts on economics and liberty

Tag: Indian bureaucracy

Building a New Bureaucracy for India

I must unfortunately conclude that our British India bureaucratic system is beyond resuscitation; it has terminal ailments and can’t be resuscitated. It needs a total rebuild, from ground up. It has to be dismantled and a new public service system erected to replace it. With political commitment, such a reconstruction should be possible within five years as detailed in Chapter 6. I highlight the key changes needed at this stage.

The key principles behind the new system will be deceptively simple:
  • Recruit the best people to leadership positions on salaries comparable with the private sector.
  • Let these leaders then similarly recruit the best people they can find; and so on, down the chain.
  • Spend all possible effort to develop these people into Level 5 leaders so they can become role models for others, and thus help to transform the competence and culture of the entire bureaucracy.

Recruit Senior Roles from the Open Market, and Abolish Tenure 

A first step would be to hire extremely competent people as public service leaders – people with multifaceted leadership ability including high quality people-management skills, significant policy knowledge and demonstrated strategic thinking skills. Obviously, such people have to be paid well. The open market intake should apply in the first instance only to senior executive positions but in a phased manner to allpositions. All senior appointments will have to be contractual, with the contracts permitting the government to let the executives seek better opportunities elsewhere (polite language for dismissal!) for underperformance without any rights created against such dismissals.
From what I know about the Indian system, it will be very hard, if not impossible, to find such people within the Indian civil services. Even IAS officers trained abroad are generally not in the league I am referring to. The hunt for talent would therefore have to focus on our private sector which has been developing an excellent reputation internationally. A few Indian academicians of international repute with extensive industry experience could also be potentially tapped. Such academicians will bring the latest policy knowledge and comparative understandings of the world, which are likely to prove crucial in designing strategic policy directions. The third category to look for would be Indians working in the private sector abroad in very senior positions.

Pay Senior Public Servants Salaries Comparable to the Private Sector

It will be crucial that salaries between the private and public sectors are broadly equalized – no open market intake can succeed without this. Such parity would of course apply only to senior executives appointed on contracts. No Pay Commission-type across-the-board hike should be contemplated. People must always be paid in terms of their productivity; the salary must be deserved. This policy will also help reduce corruption (the elimination of corruption will depend on a much wider set of reforms, including the electoral reforms touched upon in the previous chapter).

Reduce the Number of Departments

Ahmed Shafiqul Huque, an Associate Professor in McMaster University in Canada,has identified an explosion in the number of departments in the Indian Government over the years:
The number of departments in the central government of India grew from three (Public, Secret, and Revenue) in 1774 to eight in 1833, while the central secretariat was reorganised into four departments, namely, Home, Foreign, Finance, and Military in 1843. The number of departments rose to 10 in 1919, and 18 in 1947. These were subsequently re-designated as ministries. There were 20 ministries and departments in India in 1952, 54 in 1978, and 70 in 1993.[i]
Despite the great complexity of modern societies, increases in the complexity of the government machinery are not justifiable, as we saw in the Australian example. The disease of reckless expansion of the government machinery in India goes well beyond an increase in the number of departments. There has also been an exponential increase in the number of senior executive positions. Multiple departments with multiple secretaries exist today not to meet any genuine need but for the following two reasons:
  • First, to accommodate the large number of IAS officers recruited from the mid-1960s onwards who have been promoted through the automation of seniority.
  • There are also increasing pressures on Prime Ministers and Chief Ministers who often lead coalition governments today, to accommodate MPs and MLAs who want Ministerial berths in return for support – leading to pressures to create even more departments.
  • The solution to this fungal growth of low performing departments and officers is to significantly reduce the number of departments as well as positions of secretaries and joint secretaries. This can happen only with outstanding leadership, which means that open market recruitment will have to come first. That will have to be followed by very careful restructuring of the machinery of the government including the professionalization of departments. Only after that can the much tighter new structures be put in place.
* * *
The problems of ineffectiveness, lack of innovation, and corruption in the Indian bureaucracy can be speedily reduced through reforms such as these. Some people have pointed out to me the Herculean difficulties involved in such reforms. To paraphrase the key objections: ‘These reforms are too radical for the Indian situation. Who will select these top quality people; in particular, can we trust our Ministers to do this task well? What about Constitutional barriers to reform? What about the IAS itself – will its enormously powerful lobby allow these changes to happen?’ In reply I would suggest that India can seek assistance from other countries which have taken such steps in the past. As Professor John Halligan has kindly written to me, ‘the Australian reforms have been implemented over twenty-five years. It is important to lay the foundations for reform and to build on them with various levels of change’.
[Note: This is an extract from my book, Breaking Free of Nehru

[i] Huque, Ahmed Shafiqul, Asian Journal of Public Administration. Vol.16, No. 2, 1994, pp.249–59. 

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In-depth exploration of the IAS and other services #4 – final post


On a visit to Delhi from Assam in 1991, I was introduced to a young man in a restaurant by a friend. On finding out that I was originally allotted the Haryana ‘cadre’ but then moved to the Assam ‘cadre’, this young man asked me whether I changed cadres because there is more money to be made in Assam?[ii] This shocking aspersion on my integrity was made because of the widespread feeling among the public that IAS officers are largely corrupt. By now that perception has become even more widespread, and we know that it is not without basis. Although it is difficult to estimate the magnitude of bureaucratic corruption, I have no doubt that at least some IAS officers are now corrupt to their very core – though these are much fewer in numberthan Indian politicians who are almost all corrupt. Many other officers are either partially corrupt or on the way to becoming corrupt.
Let me talk about hard-core corruption first. These are officers who joined the IAS or civil services with the sole intent of ‘making money’. The following are some examples:
  • One of the persons who appeared in the civil services examination in 1981 along with me told me his aim was to join the Indian Revenue Service (i.e. the income tax service) because it is possible to make more money there than in the IAS. He was selected into a group B ‘central’ service in 1982. I don’t know what has happened to him after that.
  • An IAS colleague recruited along with me in 1982 said to me during our training days in the Academy about his objective of ‘making money’. He had been a member of the Indian Revenue Service prior to joining the IAS and had already acquired a flat each in Bombay in Delhi. The damage this person has caused in the last 25 years can barely be imagined; unless, of course, he had a change of heart. In conversations I had with permanent teaching staff when I taught at the national academy in 1994, I was told that the number of such IAS recruits who openly declare their corrupt intentions has been rising dramatically over the years.
  • I know detailed stories about the exploits of some IAS officers from sources that have dealt closely with them (i.e. lower staff who worked with them), to doubt that such ‘hardcore’ corruption is now endemic.
  • Apart from such hardcore corrupt IAS officers, who one hopes are still only a few, there are at least some who entered the service with the strong intention to remain honest but over the course of time may have become corrupt. It is important to consider what could cause such mid-career corruption.
Among the many problematic socialist policies in India, the absence of parity in salaries between executive positions in the public and private sectors has been a critical driver of such corruption. Recall that Lord Cornwallis had literally stamped out corruption from the ICS by paying its members handsomely. This principle worked well until its effect lasted into the 1960s. But as C P Srivastava showed, from Nehru’s time itself the buying power of a secretary’s salary started falling rapidly in comparison to its 1947 buying power.[iii] By 1985, a secretary to the Indian Government could afford to buy only a quarter of what his predecessors in 1947 could afford. In the meanwhile the country’s per capita was growing, albeit slowly; and private-sector salaries were booming despite artificial checks imposed on them by the government. Today, the highest paid civil servant in India, the Cabinet Secretary, is paid less than what a fresh management trainee is paid by some multinational companies.The consequences of this dramatic disparity are predictable:
  • First, there will a significant disincentive for high quality people with integrity to enter the civil services, thus restricting the pool of entrants to a much lower quality, or dramatically increasing the hardcore corrupt.
  • Second, for those who have entered the service long ago and attained senior positions now, the continuous devaluation of their lifelong financial net worth – relative not only to their friends who joined the private sector, but relative to young children around them, who, fresh from college, earn far more than they do – can have serious consequences. Those who can, try hard to leave as soon as possible. Those who can’t may well think of corruption.
As we would expect, officers who have upgraded their knowledge and capability over the years have started to resign en-masse, something that was unheard of in the past. Many have settled abroad, mostly in the USA. A few have joined the Indian private sector. As a result, the government is now being forced to increase its intake into the IAS due to the unexpected resignations of many senior officers. But such mid-career moves (generally made after 20 years so the officer can hold on to his or her voluntary retirement benefits) are not an option for everyone.
One can barely imagine the humiliation and pressures put on the vast majority of honest officers who are forced to continue at relatively poor pay, with forthcoming pressures to get their children educated abroad or to get their daughters married, and property prices shooting through the roof. The Indian society has always placed considerable value on material success. At such a late stage in their career they are cornered from all sides – the society lumps them together with the corrupt and doubts their integrity; their corrupt colleagues flourish in unprecedented ways; politicians scout only for officers who can assist them in their plunder. Under these circumstances one sadly wonders how many of these officers will be able to resist the temptations around them and emerge untarnished at the end of their careers.

By no means am I making an argument here for and across-the-board increase in civil services salaries through Pay Commissions. For the vast majority of civil servants, who have not opened a single book after entering the civil service (and who will definitely not read this book), higher salaries without a guarantee of radical improvement in productivity is notan option. The solution has to be found elsewhere; through a radical shift in incentives.

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

[i] See also a term paper I wrote some years ago during my studies at the University of Southern California, copy at [].

[ii] Well why did I go to Assam? I changed cadre from Haryana in 1984 after my marriage to a colleague from Assam, because I felt I would be more useful to the people in Assam which was economically more backward, than in Haryana which was much more advanced. It would also give me an opportunity to learn more about my wife’s state and her language. Plus, I found the Assam countryside extremely beautiful.

[iii] Srivastava, C P, Corruption: India’s Enemy Within, MacMillan, Delhi, 2001, p.121.

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My father’s compilation of views on the IAS

Here's something my father wrote a few months ago. I'm posting it here as I randomly came across it today. He writes a lot but doesn't use the blog I have created for him. (I should perhaps post his public emails – which are mostly on the Vedas – on the blog I've created for him).

Note also that in my view the issue is not the IAS but the entire system of bureaucracy. We deserve a modern governance model, that works.


What stops “WE the overeign People of India” in getting world BEST Public Service Model for our democratic secular country.
Dear All,
There is an urgent need for an all India debate on the subject of continuation of Colonial Model of IAS Bureaucracy in its present form.
Views of some former Retired/Ex IAS officers (B.S.Raghavan, Shankar Sharan, Dr S Sanjeev and many others) are given below.
A. Views of B.S Raghvan IAS (Retd Secy Govt of India )
1. Appointments based on one time competitive examination with no periodical weeding out of the incompetent and corrupt induces smugness and militates against accountability.
2. Healthy debate on some alternate model is necessary.
3. Originally IAS was seen as replica of the ICS- incorruptible, independent, public spirited and result oriented. Unfortunately the system did not work as originally contemplated. All this has been eroded in the last 60 years.
4. While the Armed Forces, Foreign Service and many other Central Services are indispensable and necessary for nation building, but without IAS country would not come to stand still.
5. There are instances when non IAS persons when posted into top echelons usually earmarked for IAS, distinguished themselves by their higher caliber and competence.
B. Views of Dr. S. Sanjeev PhD- former Secretary and Commissioner
1. If IAS as a Service does not want to be ousted, it must establish as its role mission the delivery of world-class standard…. Otherwise IAS is destined to be guillotined in the not too distant future.
2. Today IAS is a smashed up auto-riksha. They are busy in filling TA/DA forms, chasing after their pay slips, ensuring their pay scales remain higher than other services, chasing car/house loans and other bits and pieces of Personnel ministry, local treasury pursuing with Accountant General office lest they have trouble on retirement in getting right amount of Pension.
3. Most of the IAS officers confirm their own poor ability of leadership by passing the buck to politicians. There are umpteen areas where political leaders do not play any role in their work and functioning….Dr. S. Sanjeev has mentioned a large number of such areas in his well known book Breaking Free of Nehru. Let’s Unleash India available on Website>
4. Whole world public services are evolving and reforming. In IAS it is total stagnation in ideas. We apply principle of competition and merit in assembling cricket team but do not apply in IAS bureaucracy.
5. Till date in the last six decades IAS officers have not made any distinction between Independence , Freedom and Swaraj (governance to citizens). This lack of distinction has led to ineffective and weak local governments. Cities after cities are becoming urban nightmare under their non accountable and non transparent administration.
Etc etc…
Views of others
Politics the noblest Endeavour of Gandhi, Nehru, Patel under the strong steel frame of ICS officers has been made the dirty mafia Politics by the rusted steel frame of IAS bureaucracy’s selfish, non transparent and non accountable advice by ensuring that needle of blame always moves towards political leaders.
The famous saying In Bihar mentioned by an IAS former Secy to Govt of India- Bihar cadre- “IAS officers are “Garam, Naram and Be-Sharam” After training in the IAS Training Academy they are garam- highly enthusiastic, soon under political and senior officers pressures they become Naram- insensitive and players in shuttlecock game in regard to taking decisions and later they become Be-Sharam- freely resort to corrupt practices and encourage young IAS officers who are inclined to corrupt practices. All honest IAS officers are sidelined as OSD (officers on Special duties).
Ground Realities
Many Newspapers mentioned during recent Parliamentary Elections that in Mumbai many urban voters’ names were eliminated in the Voters lists. A study was made for Gurgaon Parliamentary Constituency. For a population of over 20 lakhs, the voters names in the lists were about 8.5 lakhs i.e. about 40% of the population against all India 71% of the population.  Again out of 8.5 lakhs urban voters were 2.36 lakhs and over 6 lakhs were rural voters. Thus Gurgaon a Millennium Urban City became a Rural Village as per Voters Lists. Clearly about 6 lakhs urban voters names (about one lakh having voters ID cards) were removed by/under orders of the District Electoral officer i.e. D.C Gurgaon (an IAS officer) CEC of India on residents’ complaint removed the D.C and asked the new DC to prepare an up to date correct Voters list. New DC also could not do so. He was also removed on complaint from residents/political parties.
In future Murder of Democracy is likely to happen if vested interests over take the democratic rights of the citizens. IAS officers need to become transparent, accountable, public spirited and result oriented to save the country being rated as a failed state.
The worst activity of IAS bureaucracy was they have virtually destroyed Local Governance system established by British Govt. Under their rule we had some of the world best cities Bangalore, Delhi, Lahore, Lyallpur, Hyderabad and many others.. IAS bureaucracy by destroying local governments, have made Indian cities as urban nightmare.
They devise all arguments so that Amendments numbers 73 and 74 to the Constitution of India are not implemented. They pass on this blame on political leaders and continue avoiding effective and strong local governments in India.
Under IAS bureaucracy maladministration, India is now visualized as a nearly Failed State as per World Development Report 2009 based on the analysis of an International Agency on 12 indicators/parameters.
With regards,
Prem Sabhlok
Some more views received from IAS officers (Retd)
1. Millions of confused socialist bacteria swarming in the brain of Indian leaders and IAS bureaucrats has become the cause of national cancerous disease of corruption and poverty..  
2. ICS officers were never accountable to the people of India but to the British rulers. IAS officers are trying to perpetuate the same and have become non transparent and non accountable to people of India but only to their political bosses Thus feudal outdated colonial structure continues.
3. IAS officers’ interest is not aligned with public interest and they feed public on false promises. 
4. There is no internal competition and as such 100% reach the top level in bureaucracy. Now lately they have started grabbing Head of the Department posts of Central Services as well- it can lead rebellion within the different services.    
5. We are not making IAS as whipping boy but IAS as Service. It is now neither a Service nor Administration. Need to have accountable, specialized contractual officers on hire and fire basis at the Top in ALL services. 
6. Malady is far deeper than projected in terms of simple IAS bashing. British style colonial service neither civil nor service should be replaced by American style Civil Service. IAS is no longer the first/top choice of bright candidates. Revenue Services are becoming the top choice. All services should terminate at Joint Secy level or even Director Level. (Retd IAS Chief Secy Maharashtra)
7. Sardar Vallabh Bahai Patel saw IAS as Steel Frame of Bureaucracy like replica of ICS- incorruptible, independent, public spirited and result oriented.
Now after 60 years all this has been eroded and the perception is self serving, insensitive and non accountable. (Retd IAS Secy to Government of India )
8. If IAS as service is scrapped country would not come to stand still.  
(Ex Dy. Army Chief)
I have received umpteen more views BUT not a single in support of continuation of IAS as Public Welfare Service.
The country is anxiously waiting for some remarks in favour of IAS as Public service even from retired/serving IAS officers.
Prem Sabhlok
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In-depth exploration of the IAS and other services #3

I'm combining two short points in this blog post. These are closely related.

Huge Gaps in Policy Knowledge

As already indicated, IAS officers are generally very poor at public policy analysis and design. Even if they do not have the time or expertise themselves to research each issue that they are faced with, they should be competent enough to know what to look for and how to acquire the relevant information. Unfortunately, most of them do not possess the basic skills to help them demand world-class policy briefings. Further, even though I know that things are changing fast, at least till seven years back most senior officers remained computer illiterate despite being offered many opportunities for training. Without having outstanding computers skills, the efficiency gains available to public servants today across the world simply cannot be tapped into.

Not Supported with Information and Knowledge Sources 

IT infrastructure in the Indian Government is extremely weak. There is no access to international standards and to the latest academic literature. Today that can’t be a major excuse, though. Simply having access to the internet should ease this problem considerably since policy documents of the developed countries are almost entirely available in the public domain. Indian civil servants can, if they so wish, literally cut and paste from the world’s best policies and at least partly circumvent the extensive and expensive policy development route followed in free nations. But a person can only take a horse to the water; he can’t make it drink. I suspect that even if this infrastructure is made available today, the vast majority of India’s current crop of public servants won’t open their minds and look for such things. I believe that for them to change, their incentives have to change; their sinecure has to be abolished.
[Note: This is an extract from my book, Breaking Free of Nehru]
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