Wanted: A New Kind Of Governance

Updated: Nov 16 2003, 05:30am hrs
I recall the old adage Time is money. In India, thanks to an archaic system of governance more time is more money. This explains why there are unconscionable delays in implementation be it policies, programmes or projects. By one account that I read some time ago, there are unfinished projects in India in which Rs 100,000 crore have been sunk. These include irrigation projects, road works, railway lines, power plants and buildings.

The delay in each case can be attributed to a host of reasons. An examination of the reasons will reveal that the one factor common to all delayed projects is government decision-making. Other commonly found reasons are lack of budgetary support, change of personnel, revision of designs or specifications, and disputes.

How does the government work Obviously the rules of government have to be more detailed, restrictive and non-discretionary. There will also be a hierarchy for decision-making. The decision-making process is bottom to top. The first note will be written by the officer at the lowest rung of the ladder, and the file will travel upward rung by rung. Each officer is expected to give his free and frank opinion. When the file reaches the decision-maker, he or she will consider the views expressed on the file and, presumably, take a decision. Some cases will be submitted to the minister for approval.

The process seems simple and straightforward, but it is not. The ministry does not work in a collegiate manner. At every level external influences are brought upon the decision-making process. A simple expedient to delay the process is to refer the case for legal opinion to the ministry of law! Even after the ministers approval some cases must go to the finance minister, some to the Prime Minister and some to the Cabinet.

This is not how the private sector works. Decisions travel from the top to the bottom. A hands-on chief executive or executive director will ensure that a decision is taken by the board of directors or by a committee of directors, and will transmit the decision downward for implementation. If a lawyers or chartered accountants opinion is required, the lawyer or chartered accountant will be called in to advise, not that the case will be sent out for advice. To bring the decision-making process of the private sector into the government would be a virtually impossible task. Other countries have attempted to re-invent government, but with little success. Bureaucracies everywhere are the curse of the system. To the best of my knowledge, Singapore works differently, but Singapore is a city state and its systems cannot be replicated in large countries.

Funding is another problem. In the private sector, when a project is approved and the financing is tied up, the funds will be available through the period of implementation. There is no concept of funds lapsing at the end of the financial year. Government works differently, budgets have to be approved every year and new funds have to be provided every year.

Personnel changes are another nightmare. One person will conceive and design the project, another will get the approvals, there may be a third, and a fourth or fifth, during the period of implementation, and finally there may be another unsuspecting individual who will take the credit or blame for success or failure. The problem can be corrected by fixing tenures that correspond to the time taken for implementation of a project. In government, however, the obvious solution is the last thing that will be accepted.

We, therefore, have to find alternative systems for implementation. The public sector was an answer.

Two developments wrecked the public sector. The first was the practice of government appointing the chief executive and the functional directors instead of allowing the enterprise to have its own human resources policy and promoting people to higher levels. The system degenerated further when IAS officers were deputed to run public sector enterprises. The second development was when the courts declared that public sector enterprises were state that is government and that all the rules that applied to government would apply to the public sector as well. These two developments virtually brought the curtain down on the public sector experiment. It is a miracle that a handful of public sector enterprises have survived and prospered in this environment.

Other alternatives were tried with mixed results. C-DoT was an experiment, but it seems to have floundered after the exit of Mr Sam Pitroda. The mission mode has succeeded partially in some areas, but our experience has been that the mission was usually taken over by the department concerned. Alternative organisations have been created in some areas the NHAI as an alternative to the CPWD, MTNL and BSNL as alternatives to the department of telecommunications, Prasar Bharti as an alternative to the ministry of information and broadcasting etc. Some have succeeded but most have turned into new and fancier bureaucracies.

Despite all the difficulties, there have been success stories. The legendary engineer Mr Slocum built the Bhakra Nangal dam in record time. Mr E Sreedharan set great examples in building the Konkan Railway and Delhi Metro. The NTPC has an enviable record in putting up new power plants. The NHAI is able to build 11 kilometers of road every day, although it is moving East-West, North-South corridor projects.

There is obviously no single solution to the problem in different areas. One size does not fit all. Universal primary education may require one kind of solution, population control may require another kind and tourism may require a third kind. But some common requirements can be identified. Firstly, the man or the woman who heads the project must be given a tenure equal to the period of implementation. Secondly, the organisation must be given the funds required, not on an annual basis, but on a project-cost basis, with power to draw and spend. Thirdly, the organisation must have its own human resources policy, and deputation should be barred. Finally, the head of the project must be held accountable both rewards and punishment must be laid out before to begin the work.

We do not yet have an organisation, which incorporates these, and other principles and can be a model for a new kind of governance.

(The author is a former Union finance minister)