Improving the Capability of the Indian State 

Syllabus: GS2/ Polity and Governance 

In Context

• The states’ role and political and policy trajectories are critical for India’s governance.

Position of Indian states & Civil governance 

• With 28 states and eight union territories, 22 official languages, and 54 recognized state-based political parties, it becomes significant to improving the capability of the Indian states.
• Shortcomings:
  • In the G-20 group, the country has the smallest number of civil servants per capita. 
  • The public sector share in total employment in India (at 5.77%) is half the corresponding figures for Indonesia and China, and just about a third of that in the United Kingdom. 
  • With approximately 1,600 per million, the number of central government personnel in India pales compared to 7,500 in the United States. 
  • Similarly, the per capita number of doctors, teachers, town planners, police, judges, firefighters, inspectors for food and drugs, and regulators is the lowest even among countries at a similar stage of development.
  • The Indian state is relatively small on the other metrics, such as the tax-GDP ratio and public expenditure-GDP ratio. 

Challenges

• Scarcity on all grounds:
  • Be it public goods provisions, welfare payments, or the justice system, it is a story of scarcity rather than surplus. 
  • Due to an inadequate state capability, governments at the Centre and States end up outsourcing services that are better provided by the public sector, such as primary health.
• Low on performance:
  • The unwieldy state’s performance is disappointing on all fronts be it students’ learning outcomes, child and maternal mortalities, farm and firm productivity, traffic conditions, and crime rates, among others.
• Limitation of civil & political servants:
  • One of the significant problems is the perverse incentives created by public institutions and the skill gap among officials. 
  • These factors have eroded the ability of the political executive and civil services to make and implement sound policies. 
• Extreme concentration within departments:
  • There is an extreme concentration of policy-making and implementation powers within departments. 
• The technocratic gap:
  • The top policymakers need more technocratic skills to govern an increasingly complex economy. 
  • In the absence of adequate capability to deal with economic, financial, contract and other technical matters, the Centre and the States hire consultancy firms.

Suggestions

• Separating policymaking and implementation:
  • Experiences of countries such as Australia, Malaysia and the United Kingdom show that separating policymaking and implementation responsibilities expedites execution and encourages innovations, making the programmes better suited to local contexts.
    • The Indian case in point is the National Highways Authority of India, which is tasked with executing national highway projects, while policy decisions are made at the ministry level. 
  • This arrangement has drastically reduced delays and cost overruns.
• Delegating power to frontline functionaries:
  • Restrictions on the frontline personnel to decide on implementation-related issues foster a culture of mistrust and lack of accountability for poor implementation. 
  • The vicious cycle wherein poor delegation and a deficient state capability feed each other can be broken by delegating financial and administrative powers to the frontline functionaries, with clearly defined processes for using them.
• Filling the technocratic gap:
  • An institutionalised and regular lateral entry at the mid and senior levels can help fill the civil services’ size and technocratic gap. 
  • Qualified officers in non-IAS services (such as the Indian Revenue, Economic and Statistical Services) should get a fair shot at high-level positions if they have the talent and the expertise required. 
  • Civil servants at different levels can be provided subject-specific training under Mission Karmayogi (National Programme for Civil Services Capacity Building).
• Providing professional strength to SEBI & RBI:
  • There is a need to augment the strength of professional staff with market watchdogs, the Securities and Exchange Board of India, and the Reserve Bank of India (RBI).
    • The first has just about 800 professionals, whereas its counterpart in the U.S., the U.S. Securities and Exchange Commission, has more than 4,500 experts to govern the corporates. 
    • Similarly, the professional staff strength of the RBI, less than 7,000, is tiny when compared to the US Federal Reserve which is assisted by 22,000 odd professionals.
• Role of oversight agencies:
  • The oversight agencies must be sensitised to appreciate the context of policy decisions. 
  • They should factor in the costs associated with the actual decisions as well as their alternatives.
• Need of motivated personnel:
  • It is well known that performance-linked pay and incentive schemes such as bonuses, which work well in the private sector, are not very effective in the public sector. 
  • The public sector must attract intrinsically motivated individuals to contribute to the social good. 
• Cutting the breeding ground of corruption:
  • Except at the top, for most of the skill spectrum, public sector salaries are much higher than private wages. 
  • It breeds corruption in appointments as it makes government jobs very lucrative for all, socially driven or not.
  • The solution lies in moderate pay raises by the future Pay Commission and a reduction in the upper age limit for government jobs.

Way Ahead

• The Indian state is a paradox of too big and yet too small. There is a need for a bigger role for the state
  • Increased public spending on health, education, social security and 
  • A larger officialdom to go with it.