Cleansing of institutions to usher predictability in the system

India's institutions may seem weak after scams of recent years but the cleansing will usher in predictability in the system, says Former Comptroller and Auditor General Vinod Rai.

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

Former Comptroller & Auditor General Vinod Rai
Former Comptroller & Auditor General Vinod Rai
ABOUT: Vinod Rai is arguably among India's most impactful public servants in recent years. A career bureaucrat from IAS' 1972 batch, Rai, as the Comptroller & Auditor General, shone the spotlight on revenues foregone by the exchequer. The most controversial of instances among those flagged by the chief auditor were the 2G and coal scams.

Many in India argue that over the years Indian institutions have failed. But I continue to live with a contrarian view. Institutions are not failing in India but are waking up. In every vibrant democracy, like the one we have, there are institutions that have to perform different roles. Every strong nation requires empowered institutions for predictability of things.

WHATEVER THE BUREAUCRACY DOES, WHATEVER THE OPPOSITION DOES, IT IS THE POLITICAL EXECUTIVE - THE GOVERNMENT - WHICH CALLS THE SHOTS. The onus is on them to frame long-term perspective, plan formations, investment opportunities and priorities.

Let's take a closer look at how Indian institutions have fared. There are political institutions, there are economic institutions. In the present system, the legislature is supreme. Once Parliament is elected, the majority party forms the government. Whatever the bureaucracy does, whatever the opposition does, it is the political executive - the government - which calls the shots. The onus is on them to frame long-term perspective, plan formations, investment opportunities and priorities.

And, there are accountability institutions, which in my view are the most important. Look at how the Election Commission (EC) works in India - it's a fine example. In our political space, the EC's writ runs, the processes of elections are fair, and regardless of whether there is democracy in the structure of political parties. But, more on that later.

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I have a strong case to back my belief that institutions are waking up and now this democracy is producing. For instance, the role of urban local bodies (ULBs) and panchayati raj institutions (PRIs) has started playing up over the last few years. Today they are exerting themselves and are becoming more active. A few years ago, the government decided to launch NREGA and the National Rural Health Mission - big-ticket programmes in terms of their budgets of Rs 40,000 crore to Rs 50,000 crore - through PRIs or ULBs and not through the regular development channels of the state government.

Institutions are waking up
When the programmes were launched, the ground-level capacity had not matured as such. Suddenly, we had a scenario that a panchayat, which was handling a budget of Rs 35 lakh to Rs 50 lakh per annum, suddenly was given Rs 5 crore to Rs 6 crore. The panchayat was just not equipped to account for it. But today, these institutions have started to transform. There is wisdom, especially the way these institutions are bringing in more public participation in the planning process. They are matching their resources, formulating their priorities, based on local needs. Today, there are many examples of PRIs formulating policies based on demands, rather than the earlier supply-based approach.

That said, the other institution, the bureaucracy - the civil services, the police service - has gone into regress. It was a byproduct of the fact that the political executive started exerting itself, but I believe that India has come full circle. The defining moment for the executive was 2012 - the flash point was the protests after the rape of an unfortunate girl in Delhi. That was a time when youngsters wanted to work for the nation but didn't have any direction. Anna Hazare had launched his campaign much earlier, but when these kids came out in the streets at India Gate and Jantar Mantar, not because someone asked them to come out but it was the power of social media, they came not to protest but to just express their concern. Sitting there quietly, lighting candles, none of them were protesting or raising slogans.

But, the executive didn't know how to deal with them and water-cannoned them - which I believe is the biggest mistake the administration made. A small-time district magistrate would have handled the situation very well. The top bureaucracy got involved and made a mess out of it. What were the youngsters saying? The institutions are not working. They were expressing their concerns. They wanted to do something for the society, but were asking "how". All this churning has led to a very healthy paradigm.

Cleansing process
Cleansing process
The accountability institutions came in and saw empowerment. Take the Central Vigilance Commission (CVC), Central Information Commission (CIC), Comptroller & Auditor General (CAG) - each one of these institutions are feeling their strength. People have asked me this question several times, when I was in office, if I quit what will happen to the system. My answer always was - and it is proven now - that the institution has seen empowerment. Now the ground swell in the institution is such that no CAG, who even if he wants to play poodle to the government, will be able do it. He will always fear that if the information leaks, this will impact his credibility and the institution's credibility. If you remember it was the CIC which passed the order that the political parties will have to declare their sources of income. The commissioner was a former bureaucrat and he took on the political parties. This is empowerment of the institution.

The emerging paradigm out of this is going to be very good. From a single-person body, the EC now is a plural member set up. If any politician fears anything, it is not so much the court but it is the EC. In a single-line order, the EC can disqualify any politician and that would be the end of the story. Today, the elections are free and fair. Just imagine that from the picture a few years back when there were stories from various parts of the country of rigging and booth capturing. It is the same bureaucracy that every politician and Indian runs down, which delivers these elections - without any such incidents today.

{mosimage}Similarly, if there are faults, the CAG points out the mistakes - be it in Haryana, Gujarat or Maharashtra - without any fear. Similarly, the CVC ordered criminal investigations after receiving the complaints from various politicians about appropriation in coal mine allocations. Don't forget that it is not even a constitutional body but a statuary one. But it could take on the administration. All this contributed to the ethical, sustainable governance in our country. The politician now knows that if the decisions taken don't fall in the stated line of procedures, he would be held accountable.

The bureaucrat, too, today has this realisation that he should be careful. He cannot take a decision which cannot withstand scrutiny. He is forced to think on the lines that some day questions would be asked on his decisions. You may call this a cleansing process or say the transparency was induced in the system.

Let's move on to the judiciary. The organs of the state - legislature, executive and judiciary - are in what I'd call a zero-sum game. If any one among them cedes space, the other is bound to move in. The government and executive was ceding space during the United Progressive Alliance (UPA) regime. Let's face it: if the quality of decision making is not good, you are bound to be questioned. If the executive isn't able to give satisfactory answers, the judiciary has to move in. Our judiciary, by and large, has held its ground. You may call it judicial activism but someone or the other in the institutions was not taking decisions correctly.

A classic example of this is at Rajdeep Sardesai's recent book launch. Karan Thapar was interviewing P. Chidambaram [former finance minister] and Arun Jaitley [current finance minister]. There, Chidambaram committed that when the CAG report about 2G licences came, he went to the prime minister and advised him to cancel them. This means, the decision which was to be taken by the government was not taken correctly and, hence, the judiciary had to step in. We advised the government that we are giving you a draft report on coal mines, it is evident that the allotments have gone awry, why don't you put it in abeyance, and examine them on a case-by-case basis. Reissue them if you find them alright. The decision was not taken and they waited for the judicial decision - which in the end was more painful.

We still have a problem with our regulators. The major problem in these institutions lies in the laws itself. Be it the Telecom Regulatory Authority of India, Insurance Regulatory and Development Authority of India, Pension Fund Regulatory and Development Authority, or Reserve Bank of India, the law clearly states: the government reserves the right to issue directions.

The electricity regulators are just advisory bodies. It is not binding on the state government to revise tariffs. The government must look for ways to bring in healthy practice to bring in more respect for these institutions. The present government, which has a majority in the Lok Sabha, can easily manage this. The regulators must comprise domain experts, not be a haven for retired bureaucrats. These institutions should be allowed to play their roles and by the rules of the book.

(As told to Anilesh Mahajan)