Several Union government departments will likely be combined and others collapsed into the most compatible ministries under an administrative reorganisation exercise to be undertaken by the new government immediately after assuming office on Thursday. As a result, the finance and agriculture ministries will get larger while some other wings of the government such as the ministry of heavy industries and PSEs will either be dismantled or cut to size.
According to an official source, the whole exercise is aimed at removing operational discords due to multiple command centres and thereby imparting more efficiency and speed to the decision-making process. While the first Narendra Modi government had the motto “minimum government, maximum governance”, it achieved little on the front.
So, the new government will rather work in the same direction but without an ostensible purpose to cut the size of the government, the source added. “The idea is to bring about better synergy in implementing sectoral programmes and policies,” he added.
So, the department of public enterprises (DPE) of the ministry of heavy industry and public enterprises could be integrated into the department of investment and public asset management (DIPAM) in the ministry of finance. Similarly, department of fertilisers (now part of the ministry of chemicals and fertilisers), department of land resources (now with ministry of rural development) and the irrigation section in the ministry of water resources might all be brought under the agriculture ministry in keeping with the renewed policy focus on the sector.
The second Modi government could also streamline the administration of the energy industry, which is currently fragmented among petroleum, renewable energy, power and coal ministries. A similar exercise could also see consolidation of infrastructure ministries. However, it is not immediately clear which of these departments will be integrated. Such omnibus ministries, though could have one Cabinet minister each, two or more ministers of state will be required to share the workload in each ministry.
Among the other changes, a new department for trade facilitation and logistics might be created for better coordination among different government units on this front and this could be housed in the ministry of commerce and industry. Logistical constraints are a major hindrance to Indian industry’s efforts to achieve competitive edge in global markets.
“In order to ensure better implementation of policies and coordination, we will merge similar and complementary departments into sectoral ministries. This will allow policymakers to frame holistic and comprehensive policies on the one hand and ensure smooth implementation on the other,” the BJP manifesto for 2019 general elections noted.
DIPAM, formerly the department of disinvestment, is credited with garnering a whopping `1 lakh crore disinvestment revenue in FY18 and Rs 85,000 crore in FY19 from stake sales in PSUs and other firms, helping the Centre contain fiscal slippages even as tax revenues faltered. The department was renamed in Budget FY17 as it was given a wider mandate to manage the government’s investments, rather than just disinvestment of government equities in companies.
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However, increasingly there is a sense that the PSUs are hamstrung by the need to report to multiple departments/ministries on operational issues. Currently, the DPE issues general guidelines for these firms, but their implementation rests with 45 different administrative ministries. If information has to be collated on how the guidelines such as closure of sick PSUs, monetisation of assets or investment are being followed by 257 PSUs, one has to reach out to all administrative departments, delaying crucial policy decisions. Unlike in India, China’s State-owned Assets Supervision and Administration Commission of the State Council (SASAC) performs investor’s responsibilities, supervises and manages the state-owned enterprises.
Similarly, agriculture sector needs to be addressed in a holistic manner for better outcomes. “Fertiliser, irrigation, land resources and agriculture & allied activities have to be brought together,” the official said. The government runs a `70,000 crore per annum fertiliser subsidy programme for the farmers but the department is now part of a ministry, which also oversees chemicals, petrochemicals and pharmaceuticals.