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Administrative reforms must for nation's long-term growth

Administrative reforms must for nation's long-term growth

Administrative reforms have to be undertaken in mission mode. We must have evangelising missionaries leading them, writes Prajapati Trivedi, economic adviser to the govt.

(Illustration: Raj Verma) (Illustration: Raj Verma)

Prajapati Trivedi
Prajapati Trivedi
I am convinced that development is all about the ability of a country to implement agreed policies, programmes and projects. The government's ability to implement is the most powerful predictor of future development. Experts agree that in the long run, the race among nations will be won or lost not on the basis of comparative advantage arising from resource endowment, but by the competitive advantage created by effective governments. Thus creating administrative machinery that delivers what it promises remains our main development challenge.

Management experts tell us that success in any institution depends on doing the 'right thing' and also 'doing it right.' Unfortunately, development experts spend all their energies debating what the 'right things to do' are. They do not seem to worry enough about how to 'do them right.' There seems to be a presumption that good policies, programmes and projects will self-implement.

Nothing exemplifies this better than the non-implementation of a recommendation of three successive Central Pay Commissions: the performance-related incentive scheme for central government employees. The Fourth Central Pay Commission had recommended variable increments to reward better performance as far back as 1987. The Fifth and Sixth Pay Commissions reiterated this recommendation in 1997 and 2008, respectively. All three times, the recommendation was duly accepted by the government. Yet this was never implemented.

A similar picture emerges in the case of other administrative reforms. Since Independence, a large number of reports have been prepared by all sorts of expert committees and commissions. In 2005, then-prime minister Manmohan Singh set up the Second Administrative Reforms Commission (ARC), headed by Veerappa Moily. The panel submitted its 15th Report on April 2009, and continued to work well into Singh's second term. Even though Singh returned with a larger majority, he was soon distracted by various crises and it became clear that administrative reform was the last thing on his mind. With the change in government in 2014, the implementation of the Second ARC appears to have been relegated even deeper into the abyss.

Arguably, the lowest point in this journey of disappointment with administrative reforms was reached when a group of around 80 eminent civil servants led by the former cabinet secretary, T.S.R. Subramanian, filed a petition in the Supreme Court in 2011 against the government for not implementing administrative reforms. The Supreme Court accepted two crucial suggestionsof the petitioners - a ban on oral instructions from political bosses and superiors and fixed tenure in postings. But even this judgment has not been implemented.

Alas, India seems to be caught in a vicious cycle. Because the government's capacity for implementation is weak, it is not able to implement administrative reforms to improve its capacity to implement policies and programmes, including administrative reforms.

But before we examine options for breaking out of this vicious cycle, let us look at some success stories. There are indeed lessons to be learnt from both successes and failures in this area.

Chapter 11 of the 10th Report of the Second Administrative Reforms Commission says: "Performance agreement is the most common accountability mechanism in most countries that have reformed their public administration systems." In June 2009, the then president of India, Pratibha Patil, announced in her speech in Parliament that the government would "establish mechanisms for performance monitoring and performance evaluation in government on a regular basis." Sure enough within 100 days, the prime minister announced the adoption of a Performance Monitoring and Evaluation System (PMES) for government departments.

At the heart of PMES is a performance agreement, referred to as a Results-Framework Document (RFD), between a minister and the secretary of a government department. The RFD is an agreement about the vision, mission objectives and priorities of the department, corresponding actions required to achieve them and success indicators and targets to measure the progress in achieving them. The RFD is finalised at the beginning of the year and the department's performance is measured at the end of the year. These results are included in the departments' annual reports and tabled before Parliament each year.

How they fared
How they fared
RFD scores have created benchmark competition among departments and a Ph.D. thesis at the Indian Institute of Technology, Delhi, has found this reform to have had an overall beneficial effect. Today, some 80 departments of the central government and 800 Responsibility Centres under them are covered by the RFD. In addition, 17 states, their governments cutting across the political spectrum, are at various stages of adopting PMES.

The resultant accountability and benchmark competition has also had a dramatic impact on many administrative reforms that had been neglected for years. For example, in a meeting with the then prime minister in 1997, all chief minsters agreed to achieve a citizen-centric government by adopting the policy of 'Sevottam' - a Hindi word meaning 'excellence in service'. It had three principal components: (a) a Citizens'/Clients' Charter outlining services and transactions of a government department and corresponding service standards to which the department is committed; (b) a Grievance Redress Mechanism to record, track and dispose of grievances; and (c) the certification of a management system of the department to deliver results.

Till 2010, there was virtually no progress in implementing these three components of Sevottam. In response, the then cabinet secretary decided to include these three components in the RFDs of all departments with measurable and verifiable key performance indicators. Data show that there has been significant progress on all three fronts since then. For example, the disposal rate of grievance redress went up from 50 per cent in 2010 to almost 100 per cent in 2013.

Impact of RFDs
Impact of RFDs
Similarly, the implementation of other reforms brought under the accountability regime of the RFD improved dramatically. After a Standing Committee of Parliament made some scathing remarks about the nonchalant attitude of departments towards observations of the Comptroller and Auditor General (paras), the cabinet secretary decided to include this too as a performance indicator in RFDs. Data show a dramatic reduction in the concerned paras. Truly, what gets measured gets done.

Memorandums of Understanding (MoUs) represent another success story. Like the RFD, the MoU is also a performance agreement between public enterprise CEOs and the secretary of the administrative ministry. It was recommended by the Arjun Sengupta Committee in 1984 and was formally made part of the Industrial Policy in 1991. It had two main elements. One, 50 per cent of weight in performance evaluation of public sector enterprises should be given to financial performance. Second, the bonuses of public enterprise staff, including that of CEOs, should be tied to profitability. This lit the fire in the belly of public enterprise managers and the improvement in performance of the public sector as a whole, barring select exceptions, has been phenomenal.

Improving profitability
Improving profitability

The following are the lessons to be learnt:

First, implementation of administrative reforms requires not only political will but also bureaucratic skill. Even when there is overwhelming political will, often the bureaucracy fails to deliver the right design and implementation strategy. Today's administrative reforms have become complex and require specialised knowledge.

Second, it is difficult for patients to heal themselves. Thus, politicians must make use of vast talent pool available outside government. Ideally, they should utilise the talents and experiences of civil servants who have taken leave of absence for long periods to serve in international organisations and specialised in a particular area of reform. They are likely to be much more effective than either rank insiders or rank outsiders. Fortunately, the available supply is large enough to satisfy any foreseeable demand.

Third, international experience with reforms suggests that the most difficult reforms have to be implemented at the beginning of the term of any government. Given that the second ARC had made close to 1,200 recommendations and 1,005 have been already accepted after rigorous scrutiny, one would have expected the new government to hit the ground running rather than reopen closed debates.

Fourth, administrative reforms should be implemented as part of a larger framework for performance management. Implementing administrative reforms should have consequences - efforts in this area should be rewarded and failure to implement should be punished. No one likes change and the bureaucracy is no different. I discovered that no one in the government was accountable for the implementation of administrative reforms. Ironically, this was particularly true of the Department of Administrative Reforms, long considered a punishment posting.

Fifth, the government must define what 'successful' implementation of administrative reforms means. We must know when to declare victory or defeat. In the absence of such a yardstick, I have seen departments claiming to have implemented some administrative reform merely on the basis of a memo issued asking others to take appropriate steps.

Finally, administrative reforms have to be undertaken in mission mode. We must have evangelising missionaries leading them. Successful reforms have been implemented by people who are passionate about them and believe in them.

ABOUT THE AUTHOR Early in 2009, when the Union government was appointing its first Chief Performance Officer, a secretary-level post, with a remit to manage government performance, it turned to Prajapati Trivedi. A former IIM Calcutta professor, economic adviser to the government, and a senior economist at the World Bank, Trivedi led development of a Results Framework Management System to evaluate government workers.

Published on: Dec 27, 2014, 12:47 PM IST
Posted by: Trupti Agarwal, Dec 27, 2014, 12:47 PM IST