CONSULTATION PAPER ON ‘AGENDA FOR ADMINISTRATIVE REFORMS’ October 24, 2009

1. Preamble

It is now widely accepted that the quality and efficiency of delivery of goods and services by government institutions and agencies is unacceptably low. As far back as 1985, the then Prime Minister, Shri Rajiv Gandhi, had estimated the efficiency of transmission of government delivery system at 15% (15 paise in a rupee). Since then the efficiency has taken a further dip into a single digit zone. The governance in any modern economy cannot possibly function at such derisory levels of efficiency and a very significant improvement in the efficiency and quality of delivery channels is urgently required if the social and economic development is to continue.

Lack of ethics in governance and widespread corruption is a well documented cause why so little reaches the intended beneficiaries. This would be covered in a subsequent seminar “Ethics in Governance”, scheduled for early 2010. But there are several other administrative mazes which severely curtail efficiencies in the delivery system.

Prime Minister Manmohan Singh recognised the primacy of citizens and the government (and its employees) as an institution subsidiary to citizens and said in his speech on 24.04.06 at Civil Service day celebrations.

“Historically governments have viewed themselves as administrator of public delivery systems. They have viewed citizens as outside beneficiaries of government action. Citizens were expected to accept whatever was provided with little or no choice. This situation is changing everywhere. Citizens are expecting good service from governments as a matter of right. Governments are expected to deliver efficient public services or facilitate privatisation. An effective and efficient system of public service delivery is increasingly being demanded as a basic right of the citizen. Government is expected to be service provider rather than a mere administrator of a public-delivery system. This change in orientation is the key challenge facing the governments of this day”.

2. HISTORY:

The Government has been aware of the inadequacies in administrative setup and several Commissions and Committees were mandated to look into various aspects and recommend steps to improve the administrative performance. Details of these are placed at Annexures – I and II.

3. EMPOWERING CITIZENS

3.1 Principle of Subsidarity

In a functioning democracy, sovereignty vests in citizens. Citizens are the source of all powers and their welfare is the sole purpose of all activities of the state. The powers and the resources are selectively delegated by citizens to institutions created by them and on their behalf for a purpose specifically assigned to that particular institution. These institutions are required to carry out the work outsourced to them by citizens on the principle that a centralized authority should have a subsidiary function and should perform only those tasks which cannot reasonably be performed at a level which is more local to the beneficiary citizens. The main idea of subsidiarity is that citizens, as sovereigns and as stakeholders in a democracy, are the final decision-makers. The principle of subsidiarity stipulates that the functions of the state and its institutions should be carried out closest to the beneficiary citizens and the powers gets delegated downwards by the citizens, at their discretion, to the most local of the institutions of governance, unless it is considered desirable by them that certain specific functions are discharged by institutions of governance centralized to a variable degree for reasons of efficiency and cost effectiveness. The fundamental principle in a democracy is and shall always remain that institutions of governance, and persons working for these institutions, are subsidiary to the citizens, unlike in autocracies or dictatorships. Centralisation delegitimises democracy, alienates the citizen, perpetuates hierarchies, and breeds corruption and inefficiencies.

Application of the subsidiarity principle has advantages of improvization of efficiency,
self-reliance, competetiveness, and innovativeness at the local level. Once decisionmaking and its consequences are integrally linked at the local level, people become aware of their responsibility that leads to enlightened citizenship, and maturing of democracy. It tailors local public expenditure to local needs. It also increases transparency, curbs propensity to abuse authority and promotes accountability of the institutions and its employees to the citizens. For this reason, the locus of governance should shift as close to the citizen as possible in order to facilitate direct participation, constant vigil and timely intervention. Only in an empowered local government can the ordinary citizens hold public servants accountable in the face of the asymmetry of power exercised by the bureaucracy. The 73rd and 74th Constitutional Amendments were enacted in 1992 as a step in the direction of democratic decentralization. However, while the local government structure and attendant institutions are created by the constitutional mandate of the 73rd and 74th Amendments, the actual functions and powers to be devolved on local governments were not reflected in the Seventh Schedule of the Constitution, which remained unaltered.

Consequently, effective decentralisation from states to local self governments never really took place due to unwillingness on the part of states to let go the levers of powers and the intentions of the Parliament in making these Amendments was nullified. This is a major cause of failures in the system of delivering services and goods to citizens.

In the districts, the funding for district development comes mainly from the Centre, but the states do not provide adequate resources for local governments and divert the funds. Due to various hindrances and diversions in public delivery, supply of the deliverables dwindle down both in quantity and quality and ultimately over time, even basic necessities have been turned into privileges to be extended to common man on patronage basis.

3.2 Effective delineation and devolution

There is an urgent need to delineate the functioning and powers of institutions of local governance vis-vis state governments in the Constitution including amendments to the Seventh Schedule, if the objectives of the 73rd and 74th Amendments are to be achieved. Both, the National Commission to Review the Working of the Constitution (NCRWC) and the 2nd Administrative Reforms Commission (ARC) have recommended the use of the phrase “shall by law vest” as against the existing “may by law endow” in Articles 243 G and 243 W, thereby making devolution to institutions of local governance mandatory rather than discretionary. Similar changes are required in Articles 243 H and 243 X. The 2nd ARC has also recommended that this third tier of Government should also have a stake in making laws in the State Legislatures and the Legislative Councils may be recast as a council for local governments. Where the Legislative Councils do not exist, they should be constituted. With this, the local governments would be effectively empowered to frame regulations, make plans, take decisions and enforce their will within their legitimate sphere of action. Such empowerment should be clearly defined by the Constitution and the state legislatures and should include fiscal devolution to the local governments.

3.3 Convergence of services.

Convergence is based on the recognition that the citizens’ needs and concerns are indivisible. Even in an otherwise efficient and honest administration, isolated functioning of disparate government agencies and departments complicates the citizen’s life immeasurably. Therefore, convergence must be a key principle in the organisation of local governments. The citizen is compelled to deal with a multiplicity of authorities to access even the basic amenities and services. The local functions of all these authorities therefore need to devolve on local governments. The citizen must be enabled to interact with all service providers through a single window as far as practicable.

3.4 Citizen’s centricity

The citizen is at the heart of a democratic system. Therefore, all governance institutions, particularly local governments should be judged by the satisfaction of citizens and the direct empowerment of people. Measurement of citizens’ satisfaction as the consumer of public services is an important mechanism. Report cards, citizens’ feedback at delivery and service counters, call centres and other forums for the citizens’ voice to be heard, feedback to be counted and needs to be institutionalised in decentralised governance. In addition, social audit through credible community based organisations, civil society groups and prominent citizens would ensure citizen centricity.

3.5 Non-Transparency of government policymaking

There is a lack of transparency in decision making, disclosure of standards of delivery and openness in the every day functioning of the administration. According to a transparency survey conducted by the Centre for Budget and Governance Accountability (CBGA) in collaboration with the International Budget Partnership, Washington DC, the Indian government doesn’t share complete budget information with the general public as opposed to countries such as United Kingdom. The recent events also show that even the Union Budget is now passed by the Parliament without any debate. Thus even members of Parliament excluded from the detailed budget information. Though enactment of RTI Act has led to grudging disclosures of information on public finances and resources, there remains a large scope for the government to make the process of policy making participatory and transparent. Attempts to sabotage the provisions of RTI Act are also being made, both by raising procedural objections and by legislative means as is evident from Section 19.19 to 19.21 on pages A59-60 of the Direct Tax Code proposed by the Government.

4. SIMPLIFYING GOVERNANCE

4.1 Isolated functioning of government agencies and departments

The government agencies and departments often formulate their plans, programs and policies without regard to ground reality or perception of inter-se priorities of common citizens. Thus dancing fountains and golf courses get priority over provision of essentials like sewerage, drinking water, electricity, shelter, schooling and health care. The sole consideration seems to be spending money with minimum effort (and maximum benefit to self), so that the fiefdom can expand further in next years’ budget. We would all have seen other results of the isolated functioning of government agencies and departments, e.g. road being dug up by a government agency as soon as another government agency has finished resurfacing that road.

• Most of the schemes exist in silos, planned and implemented as stand-alone schemes without any horizontal convergence or vertical integration, resulting in multiple district plans, unrelated to each other, often mutually conflicting, prepared without any integrated vision or perspective.

• The schemes are often rigidly designed and do not have flexibility required for adaptation according to the differential development needs at the local level.

• There is no consistent approach in the design of delivery mechanisms. Often independent structures are created for each scheme resulting in a multiplicity of such structures at the local level with no interaction or co-ordination among them.

Further, isolated functioning often result in mindlessly conceived rules, regulations and procedures. They are very often contradictory or even self-contradictory. Worse still, these rules, regulations and procedures are so well buried in archived files of disparate government institutions that not even government officials are aware of most of these rules and therefore create their own rules, according to current convenience, as they go along.

Isolated functioning also leads to a general disharmony in the functioning of the government. Various elements of government work at cross-purpose with one another, without any consideration for the intended goals. In fact, goals themselves remain poorly defined and lacking in harmony.

All these side effects of isolated functioning of disparate government agencies and departments not only impact the functioning of delivery channels adversely, they also make common citizens run from pillar to post, very often fruitlessly, to obtain their rights. It is not surprising that common citizens, harassed for decades, now have nothing but disdain, if not outright hostility, towards government and its officials. Days when government officials commanded respect of people by virtue of their position have long gone and the term “sarkari afsar” is now often used by common man as a pejorative. The system of governance must change, and urgently, if this feeling of derision and hostility is to be reversed. The alternative can only be collapse of the nation-state in not too distant a future.

4.2 Complicated and outdated laws, rules, procedures and processes

Independent, democratic India continues to follow laws, rules and procedures which were promulgated in mid 19th century. These laws, rules and procedures do not reflect current ground realities. Moreover, when new laws, rules and procedures are enacted, they are mostly superimposed on outdated laws, leaving the contradictory provisions of pre-existing laws also intact. This further compounds the confusion. Further, the laws and rules are written in a language and format which are incomprehensible to the commoner and may be, even to its author(s). This provides a fertile ground for legal battles, a principal cause of judicial overloads and pendencies.

There is a crying need to have a law which prescribes automatic sunset provisions for various categories of laws, codes, rules and procedures. This would force renewed look at the laws, codes, rules and procedures at regular intervals if they are to be kept alive.

In the mean time, all Ministries/Departments should be required to constitute in-house core teams of external experts and persons well versed with procedures, to get feedback from citizens, analyse all processes from the point of necessity, simplicity, rationality and citizen centricity etc. and to prepare a roadmap for carrying out a process simplification exercise that involves changes (weeding out where possible) in Rules, Regulations and Laws. Government while performing regulatory functions should regulate only when necessary. Even then, it should regulate simply, effectively, transparently and do so in a way that keeps common man’s interests above all else. It should involve citizens’ groups and professional organizations in the regulation activities.

5. e- Governance, the technology tool for improving Governance

The 2nd ARC, in its 11th Report has defined e-Governance or ‘electronic governance’ as “basically the application of Information and Communications Technology (ICT) to the processes of Government functioning in order to bring about ‘Simple, Moral, Accountable, Responsive and Transparent’ (SMART) governance.”

e-Governance is about reform in governance, facilitated by the creative use of ICT to exchange information with citizens, businesses or other government departments and for speedier, qualitatively better and more efficient delivery of public services at a reduced cost. A well designed and executed e-governance project necessarily involves simplification and restructuring of administrative processes for cogency. It must lead to easier and faster access to better quality of information and services to citizens and result in a government that is more accountable to people. It must also result in simplification of the functioning of government, enhanced and better quality decision making and increased efficiency and productivity across government. The e-Governance program provides a suitable platform for quickly reducing some of the aforesaid problems, particularly the following.

i. There is a need to create a compendium of each and every rule, regulation and procedure that apply to various aspects of governance and to make the compendium freely available, both in hard copy and softcopy on a government website, to all citizens. Only those rules, regulations or procedures that appear in the compendium should be considered legally applicable.

ii. Most of the schemes exist in silos, planned and implemented as stand-alone schemes without any horizontal convergence or vertical integration, resulting in multiple unrelated plans, often mutually conflicting, prepared without any integrated vision or perspective and without taking advantage of learning from the past experiences of similar projects. Due to lack of consistency in approach in the design of delivery mechanisms, independent structures are created for each scheme resulting in a multiplicity of such structures at the local level with no interaction or co-ordination among them. e-Governance promotes convergence.

6. Summary of common recommendations on Revamping of Delivery Systems

The following commonalities may be found in reports of various Committees and Commissions.

6.1 The system of governance should follow the principle of subsidarity. To this end, institutions of local governance should be strengthened and empowered, through constitutional amendments, to provide all services to citizens except those which cannot reasonably be provided by the institutions of local self governance.

6.2 The parastatal agencies created by state governments to take over functions which are in the natural domain of local governance institutions ( e.g. primary and secondary education, water and power distribution, primary health etc.) must be disbanded and the responsibility handed over to the democratic and decentralized institutions of local governance.

6.3 Unnecessary laws, rules, regulations and codes should be weeded out and the rest modified and simplified to make the institutions and the practice of governance more transparent, responsive, citizen-friendly, resource efficient and accountable.

6.4 The current tendency among government agencies to work in silos or isolation must be reined in and a concerted effort be made so that these agencies work in convergence.

6.5 Use of tools of e-Governance should be speeded up in a planned and co-ordinated manner to achieve the above objectives.’

7. Issues for consultation on Revamping Delivery System

7.1 What are the best ways to accelerate the introduction and empowerment of institutions of local self governance?

7.2 How should the government and the legislatures proceed to bring about simplification of rules, regulations, laws and codes and to weed out the obsolete ones? Should there be an omnibus legislation to specify sunset clauses for existing and future laws and codes?

7.3 What should be done to give impetus to e-Governance? Would appointing an eminent technocrat from outside the government, to head the e-Governance project, in the manner done in the case of the UID project, help in its faster and more efficient implementation?

8. Refurbishing Human Resource Pool and Enforcing Accountability

As mentioned in Para. 2 above, several commissions and committees have been set up in the past to examine various aspects of Public Administration in India. They have collectively emphasized the need for major reforms in the process of Civil Services recruitment, periodic training, promotion and posting strategies and career management. Domain expertise, leadership qualities and capacity to envision, encourage and manage changes are some of the essential attributes required in Civil Services of today. Recommendations of Committees/ Commission that submitted their reports during the current decade are summarized at Annexure - II.

9. Summary of common recommendations on Refurbishing Human Resource Pool & Enforcing Accountability

9.1 All civil servants should undergo mandatory training at frequent intervals and also before each promotion and each officer/official should be evaluated after each training programme. Successful completion of the training programmes should be made mandatory for promotions.

9.2 The personnel policy including placements, postings, minimum and maximum tenure, promotions, transfers and fast-track advancements on the basis of forward-looking career management policies and techniques should be managed by autonomous Civil Services Boards constituted under statutory provisions.

9.3 Above a certain level—say the Joint Secretary level - all posts should be open for recruitment from a wide variety of sources including the open market. Applications to fill up these posts would be invited from interested and eligible persons from the open market and also, from serving eligible officers. Government should specialize some of the generalists and generalize some of the specialists through proper career management which has to be freed from day to day political manipulation and influence peddling.

9.4 The services have remained largely immune from imposition of penalties due to the complicated procedures that have grown out of the constitutional guarantee against arbitrary and vindictive action (article 311). The constitutional safeguards have in practice acted to shield the guilty against swift and certain punishment for abuse of public office for private gain. A major corollary has been erosion of accountability. Articles 310 and 311 should be repealed and safeguards against arbitrary action against government servants should be provided after the repeal to ensure that the honest and efficient officials are given the requisite protection but the dishonest are not allowed to prosper in office.

9.5 The administrative structure and systems have to be consciously redesigned to give appropriate recognition to the professional and technical services so that they may play their due role in modernizing our economy and society. The specialist should not be required to play second fiddle to the generalist at the top. Conceptually we need to develop a collegiate style of administrative management where the leader is an energizer and a facilitator, and not an oracle delivering verdicts from a high pedestal.

9.6 A parliamentary legislation under article 312(1) should be enacted. It should be debated in professional circles as well as by the general public.

9.7 In posting officers in Government of India, the primary consideration should be to select the most suitable person for the post that is on offer. Domains should be assigned by the Central Civil Services Authority to all officers of the All India Services and the Central Civil Services on completion of 13 years of service. State Governments should also constitute State Civil Services Authorities on the lines of the Central Civil Services Authority.

9.8 Government should expand the scope of the present performance appraisal system of its employees to a comprehensive performance management system (PMS). Annual performance agreements should be signed between the departmental minister and the Secretary of the ministry/heads of departments, providing physical and verifiable details of the work to be done during a financial year. The actual performance should be assessed by a third party – say, the Central Public Services Authority – with reference to the annual performance agreement. The details of the annual performance agreements and the result of the assessment by the third party should be provided to the legislature as a part of the Performance Budget/Outcome Budget. Each head of office should ensure that a congenial work environment is created in the office. His/her success in this should be an element in evaluating his/her performance. 9.9 A system of two intensive reviews – one on completion of 14 years of service, and another on completion of 20 years of service - should be established for all government servants. The first review at 14 years would primarily serve the purpose of intimating to the public servant about his/her strengths and shortcomings for his/her future advancement. The second review at 20 years would mainly serve to assess the fitness of the officer for his/ her further continuation in government service. The services of public servants, who are found to be unfit after the second review at 20 years, should be discontinued. A provision regarding this should be made in the proposed Civil Services Law. Besides, for new appointments it should be expressly provided that the period of employment shall be for 20 years. Further continuance in government service would depend upon the outcome of the intensive performance reviews.

10. Issues for consultation

10.1 What are the best ways to accelerate implementation of the recommendations in paragraphs 9.4 and 9.6 above regarding repealing Articles 310 and 311 of the Constitution and enactment of a legislation under Article 312 (1)?

10.2 What are the best ways to accelerate implementation of the recommendations in paragraphs 9.3, 9.5 and 9.7 regarding widening the talent pool for selection to posts of Joint Secretary and above by opening all these posts to all existing members of the Civil Services as well as candidates from outside the government, ensuring that the selection is based on merit rather than on membership of any particular cadre and allocation of domains after 13 years of service experience and prior to becoming eligible for selection to posts of Joint Secretary and above?

10.3 Whether in view of 10.2 above, it would be better to defragment the Civil Services by merging all existing All India Services and Group ‘A’ Central Services into a single unified cadre so that fast tracking the careers of members of Civil Services is done uniformly and after a reasonable period (say 8-10 years) of on-job assessment of their capabilities, competence and leadership qualities.

• First, the system of governance remains far too centralized with innumerable layers of Babudom. Although the 73rd and 74th Constitutional Amendments were enacted in 1992 as a step towards decentralized democratic governance, effective decentralisation from states to local governments never really took place due to unwillingness on the part of states to let go their powers and the intentions of the people through their Parliament in making these Amendments have been nullified. Consequently, the plans, policies and schemes, conceived in national or state capitals only occasionally reflect the needs of the people or the ground realities. The actual timing of delivery due to blockages or delays in the elongated delivery channels often make a mockery of the schemes. Eventually, the funds are many times diverted to some other purposes than the ones they were intended for. It is not the contention that the amount that does not reach the ultimate beneficiary is all lost due to leakages and corruption. Some administrative overheads are unavoidable. The problem is that these administrative overheads, which also mask the leakages and corruption, now form over 90% while less than 10% reaches the beneficiaries. The systemic complexities and rigidities together with over-centralization have made even the most honest and well-meaning politicians and government officials ineffective, helpless and demotivated. This is a major cause of failure in the system of delivering services and goods to citizens. This failure had also contributed to initial local support to Maoist violence and its unfortunate spread. Thus, over-centralization is, in a way, threatening the very foundation of democracy in our country.

• Second, rule, regulations and procedures laid down are conceived mindlessly and are very often contradictory, even self-contradictory. They are designed with distrust of citizens in mind. Worse still, these rules, regulations and procedures are so well buried in archived files that not even government officials are aware of most of these rules and therefore create their own rules, according to current convenience, as they go along. The Government agencies working in their own silos compound the confusion. There is a need to create a compendium of each and every rule, regulation and procedure that apply to various aspect of governance and to make the compendium freely available, both in hard copy and softcopy, to all citizens. Only those rules, regulations or procedures that appear in the compendium should be considered legally applicable. E-governance program provides a suitable platform for achieving this end, in addition to other benefits that it can provide.

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  Another reason is a general disharmony in the functioning of the government. Various elements of government work in isolation and at cross-purpose with one another, without any consideration for the intended goals. In fact, goals themselves remain poorly defined and lacking in harmony. There is a fragmentation of Civil Services to an unhealthy extent, leading to much infighting and energy loss in trying to establish and retain fiefdoms. Defragmentation of Civil Services and making changes necessary to bring about their harmonious functioning, with well entrenched channels of accountability to citizens, is essential for efficient operation of delivery systems.
  
  Though independent India has witnessed some major achievements in social and economic fields, there remains a very wide chasm between planned and actual delivery of services to the common man, which is almost entirely attributable to failures of administrative machinery to apply itself to the tasks at hand. The same administrative machinery had also acquitted itself very creditably in cases of massive human disasters such as huge migration into West Bengal prior to creation of Bangladesh and the more recent Tsunami disaster. This indicates that the root cause of the collapse of delivery channels is an utter failure of top layers of the administrative machinery to rise above their narrow self interests and provide the leadership expected of them. Given the leadership, the administrative machinery is quite capable of delivering the goods.