governance, political economy, institutional development and economic regulation

Archive for the ‘bureaucracy’ Category

Taming killer highways: Booze ban a marginal solution

booze bar

Thirsty travellers on highways are going to miss the inviting LED signboards offering “cold beer” to alleviate their boredom. But ask those who have lost a loved one in an accident, or been maimed in one — and they will enthusiastically support the Supreme Court’s ban on the availability of booze along our state and national highways. When the issue is emotive, the reflex response of both the judiciary and the executive is to do anything that appears adequately responsive. What could be easier than banishing booze from the highways, knowing full well that this could be just optics.

Target drivers and the owners of vehicles with punitive action

Traffic police

Curbing drunken driving requires that drivers, a small fraction of all travellers, be targeted. Most travellers are passengers. It doesn’t matter whether they tipple or not. Many of those at the wheel are licensed, professional cab, bus and truck drivers — much like commercial pilots. Surely the owners of these commercial vehicles should be held criminally accountable, along with the driver, for accidents caused by drunken driving, unless they can prove that they test their drivers randomly. This would automatically incentivise owners to use drivers who don’t drink. But this is a narrowly targeted option that requires follow-on administrative action and effective policing. Far splashier, instead, to go in for a blanket ban on booze —  and never mind if it causes collateral pain.

Our bias against booze is vested in the Constitution

Directive Principles

The origin of our half-hearted approach to the problem lies in the Directive Principles of our Constitution which enjoin the State to implement prohibition. These define the higher moral ground that we all must aspire to. But they are not mandatory and need a law to be passed to become implementable. We implement these only selectively — like universal education —  where there is near complete consensus. But we ignore others, like prohibition, where a consensus is missing. Hence the tension between the constitutional directives and reality.

We do not have a fundamental right to drink or sell booze. We do so only at the pleasure of the State. It can be withdrawn at any time. Many would argue it should not be summarily withdrawn, specially when it will disrupt ongoing business. And because other options exist to curb drunken driving. If we are uncomfortable with the ideals specified in the Directive Principles, then the correct approach is to amend them and expand the fundamental rights to include the freedom to drink responsibly. But who will support such an amendment?

We are not French – we have no tradition or social acceptance of booze

indian meal

Mainstream India has no tradition of the neighbourhood bar, from where it is all right to stagger home, helped along by acquaintances or friends. Yes, there is communal drinking in tribal areas and on special occasions in villages, where there is a lot of staggering about. But these are rare occasions. In the plains of India, most regular tipplers are men as drinking is done outside our homes. It is the anonymity of highway drinking that is attractive for furtive, male drinkers.

Economic impact of booze ban marginal – because tipplers will find a way to drink

How terrible will the booze ban be for the economy? The measure simply aims to make drinking and sale of liquor physically invisible from highways. Tippling will shift a couple of minutes away onto back streets, possibly with far worse consequences for public order. But its revenue impact will be negligible. Businesses will adjust. Web-based apps will guide travellers to back street bars and booze shops; private caches of pre-mixed booze in flasks will proliferate as will the illicit supply in dhabas along the highway.

Judiciary not the culprit – amend the constitution if you want a right to drink

Blaming the judiciary for ham-handedness is the easy part. But the Government of India and several state governments, including Delhi, Madhya Pradesh, Andhra Pradesh and Telangana, have accepted the verdict. Eighteen other states didn’t bother to contest the decision. This shows that the judiciary is aligned with the national and state-level executive in moving India, gradually, in the direction to which the Directive Principles point us.

The real culprit is drunken driving- only intelligent policing can help

Drunk driver

But without effective patrolling, behavioural change among drivers is highly unlikely. Ask any highway traveller. There is nothing more reassuring than regularly passing by a police patrol car, specially at night. Drunken or irresponsible driving can only be curbed if the Centre, with the consent of all state governments, directly polices all our national highways. Centrally-monitored and controlled mobile patrols, responsive to distress calls and SMSes like the National Ambulance Service, equipped with paramedic and trauma support teams, should be frequently visible along the 90,000-km national highway network.

Create a National Highway Police & Trauma Support System- NHP&TS

NHP

A National Highway Police Force should be created and empowered to regulate traffic; challan errant driving; provide trauma support in case of accidents and keep the highways free of crime and irresponsible social behaviour. Back-of-the-envelope calculations suggest that an officer-oriented, multi-skilled force of 11,000 employees would cost Rs 1,000 crores annually in overheads, maintenance and salaries, with a one-time capital cost of Rs 800 crores for equipment and housing. Sounds expensive? Implemented over a period of five years, it is just 0.3 per cent of the annual revenue expenditure and 1.5 per cent of the capital expenditure for the police in the Union Budget.

Compare this with the avoided cost of Rs 1,400 crores, being the value of lives lost (42,000 persons in 2009) in accidents on national highways, computed on a present value of Rs 3.5 lakhs per life lost, based on the average per capita income, over a residual working life of 20 years. The avoided cost of injuries to 1.5 lakh people (2009) is around Rs 180 crores, assuming medical treatment and lost wages at two months’ wages per injured person. The cost of vehicles and goods lost and cost of trauma suffered is over and above this.

The economic payback of a NHP&TS system is under one year

An international-quality high way security and trauma support system makes economic sense. More important, it is yet another bond sealing the social compact between Prime Minister Narendra Modi’s government and the travelling public — urban immigrants, business people and tourists —  estimated at around 230 million passengers in 2016 (assuming an average lead of 75 km) by the National Transport Development Policy Committee in 2013. There can be no better social impact investment than one which offers an economic payback of under one year.

Adapted from the authors article in Asian Age, April 8, 2017 http://www.asianage.com/opinion/columnists/080417/tame-killer-highways-liquor-ban-just-optics.html

grief

Basic income transfer- Modi’s next big thing?

poor woman

Irrespective of its economic virtues, demonetisation — an aggressive, unprecedented initiative of Prime Minister Narendra Modi, brought rich dividends for the BJP in the Uttar Pradesh election. Above all, voters were impressed with his determination to punish those who have become fat on black money. That the move also “punished” those who had no black money — via extended inconvenience, loss of business or employment — was collateral damage.

An incredible 41 per cent of voters gave a thumping majority to the BJP, including possibly those who were collateral fodder or the target — proving, yet again, that in politics, good intentions trump technically appropriate action.

The next frontier

So what can the Prime Minister do next to shock and awe the Opposition and win minds and hearts across India? Elections loom in Karnataka in 2018, currently ruled by the Congress, and national general election is in 2019. The chosen programme must be elegant not clunky; effective not merely palliative; quickly deliverable and fiscally prudent.

The Union government currently uses clunky, partially- or fully-funded schemes, implemented by the state governments, to establish its human face. There were 1,500 such schemes, which the Modi government has pruned to around 657. Most are massively inefficient. Arvind Virmani, a former chief economic adviser, claims they follow the one-third rule. Only one-third for the targeted beneficiary, one-third for administrative expenditure and one-third for corruption.

Mind you, it is expensive to provide access to public services and goods even via a cash support mechanism. Prof. Abhijit Banerjee of MIT assesses the average administrative cost, across countries, of cash support programmes at 50 per cent of the amount delivered.

A universal, unconditional income transfer in cash to all citizens is the most efficient option. But it suffers from bad optics. The same amount of money is given to a beggar as to a real estate baron. But Sudipto Mundle of NIPFP argues that select exclusions are possible without massively retarding efficiency. The most obvious exclusion is anyone in urban areas. The average income in urban areas is consistently higher than in rural areas, where 80 per cent of the poor live.

Substitution or additional support

Others, like Jean Drèze, are sceptical about the cash transfers, specially for food support. We know food prices spike during drought. During such extreme events, the transferred income would be insufficient to buy the targeted amount of food. Those living at the edge cannot afford to be caught in such a situation.

Clearly, basic income transfer is not a substitute for all other existing social support mechanisms in education, health and social protection, but it can substitute those mechanisms which are the most wasteful and poorly targeted.

Reform wasteful, leaky de-merit schemes 

The Economic Survey 2017, lead-authored by Arvind Subramanian, chief economic adviser, does signal service by evidencing the problem of misallocation of fiscal resources in the existing schemes. The share of the districts, where 40 per cent of the nation’s poor live, in allocation for anti-poverty schemes, like the mid-day meal scheme is just 20 per cent and just 24 per cent in the Swachh Bharat Mission. Such misallocation is wasteful.

SEWA pilot shows the way in MP

SEWA

A pilot done by SEWA in four villages in Madhya Pradesh, over a period of two years, covering 6,000 people along the universal coverage principle, transferred Rs 3,600 per year to each adult, with lower amounts to children. The results are impressive. The most significant outcome is that even four years later, many of the initial achievements with respect to the enhanced decision-making role of women; sustainable income from assets — mainly livestock — and the continued productive use of income remained strongly in place. Similar pilots are being done in Africa. But the caveat is that pilots involve significant handholding and oversight without which, as in Ghana, sustainable income enhancement is negligible. This cautions that even with a universal basic income scheme the role of handholding will remain.

A first for India

India could become the first country in the world to use a “qualified-universal” basic income transfer to end poverty. The real problem is how to find the money. Arvind Panagariya, the Prime Minister’s key economic adviser and vice-chairperson of the Niti Aayog, however, highlights the fiscal requirement. At just Rs 10,000 per year per person the cost is equivalent to the government’s entire revenue of 10 per cent of GDP.

Use second best options – sequential implementation; finance the poverty gap

But there are viable second-best options. First, smaller amounts could be transferred. The poverty gap has been estimated at around Rs 3,500 per poor person per year as in the SEWA pilot. The Economic Survey records that an annual transfer of Rs 3,240 to every female would cost one per cent of GDP. The cost can be reduced further by a quasi-universal scheme focused on females only in rural areas, with girl children getting less and women getting more, as in the SEWA pilot.

Subsidy reform is overdue. The Prime Minister had also adopted the approach of “subsidy tyaag” the voluntary giving up of subsidy by those who were well-off. It is also possible to make it administratively more difficult to access demerit subsidies like on cooking gas; fertiliser and income-tax exemptions with the target of eliminating them altogether.

In the meantime, a “quasi-universal” basic income transfer scheme can be started by allocating just Rs 75,000 crores (just 0.3 per cent of anticipated GDP in 2017-18) to one-third of the poorest districts. The programme can be expanded to other districts by allocating just two-fifths of the incremental revenues, especially if growth trends upwards beyond eight per cent per year.

PM should grasp the moment

Prime Minister Modi is not one to be hesitant about funding innovative ideas in the public interest. The quasi-universal basic income scheme is one door that he should consider walking through, specially if he is confident that India shall grow at above eight per cent.

Adapted from the author’s article in the Asian Age, March 31, 2017  http://www.asianage.com/opinion/columnists/310317/basic-income-transfer-modis-next-big-thing.html

poor children

Public sector angst

So, what is it about social media which gets sarkari types hyperventilating about their gripes and grouses? First, we have members of the para military forces seeking sympathy for the poor living conditions they suffer on duty. Next, we have a General, passed over for promotion, pedaling conspiracy theories around his being overlooked. To cap it all the managing director of Air India laments that a CBI investigation into improper procurement could sabotage the critical turn-around of the publicly owned airline. 

Why for instance do the owners and employees of private companies not do the same. Why didn’t Mr. Ratan Tata wring his hands on social media about the underhand way his successor was cutting the ground from under his feet? Or, for that matter, why hasn’t Netaji – Mulayam Singh Yadav – done the same about the goings on of his son? Why don’t we get to hear more stories of backstabbing, sell outs and short-circuited ambition from the private sector? I suspect the private sector guys feel that exposing their angst on social media is unlikely to generate any public sympathy for them. Working to improve the bottom line of a private company does not gel with the popular concept of national service. Never mind that using resources efficiently and maximizing output and productivity are the corner stone of growth oriented, competitive economies. In India “profit” remains a dirty, exploitative word.

Not even bumbling saints

At the very least public sector officers could be bumbling saints – role models of honesty, diligence and accomplishment. But forget efficiency most do not even have the basic attributes of rectitude. We saw this in the abandon with which public sector bank employees participated in the conversion of old black into new black recently during notebandi. The reasons why more sarkari types do not conform to the ideal are complex. Low organizational expectations from them; a performance system which provides huge rewards for competing successfully for the market (getting a public-sector job) but virtually no rewards for competing in the market (continuously improving performance in the job); lax disciplinary procedures for miscreants and low accountability, all serve to cocoon the public servant in an impregnable miasma of collective might versus citizen demands.  

Antiquated management systems

Continuously improving public sector systems are part of the job of a public servant. But India, today, has possibly the most antiquated public management processes. This despite the availability of funds for purchase of equipment, procurement of technical expertise and the powers to make changes in existing rules being pervasive. But for years the job of managing the household efficiently has taken a backseat to racing ahead with announcing new initiatives for public good and spinning old initiatives into new ones.

High overheads

The overhead cost or, tail to teeth ratio, is very high in the public sector. Just the expenditure on salaries and pensions is around a quarter of the net revenue receipts of the central government. The administrative costs of managing offices – purchase of consumables, electricity, purchase of new equipment, maintaining and constructing offices and government houses, travel and communication costs are additional. 

In public sector accounting, employees matter more than machines. Getting boots on the ground and waving the flag is more important than empowering the employee. That is why Bollywood delights in stereotyping the bumbling cop who ambles up to a crime site gamely swinging nothing more than a lathi. A lathi costing Rs 300 is the sole piece of equipment the average policeman has. Never mind that the average police constable costs the government upwards of Rest 20,000 per month. Providing jobs is a means of empire building for politicians and far too often becomes a lucrative business for the recruiters.

It is no wonder then that “zero based budgeting (ZBB)” never took off. How could it? ZBB is based on the axiom that you can always do better. The past is nothing more than a sunk cost which must never hold back good decisions making in the future. But our public sector operating mantra is to never accept that a mistake has been made which needs to be corrected. Government auditors view all mistakes as evidence of waste. Never mind that individuals only learn by committing mistakes. A baby who is fearful of falling would never walk, let alone run. 

So, what is it that we can do differently in the public sector?

First, by providing cradle to grave employment, even at the officer level, we create a collective (the cadre) where only individuals need exist. Government must dispense with the cadre system for recruiting officers, which is at the heart of the problem. Recruit instead for specific positions against specific eligibility criterion. Open recruitment, on contract, would keep the officers on their toes. 

Second, adopt cost accounting metrics for budgeting. This would make operational systems more efficient and facilitate performance evaluation across verticals.

Third, decentralize financial and administrative powers extensively whilst making the reporting chain flatter. This is the first change Suresh Prabhu made as Minister for Railways in 2015. The beneficial impact is already visible. The IAS should be as adept at organizational development as at strategy or policy making. The incentive today is to shine in service delivery achievements. This is self-limiting once the low hanging fruits have been plucked.  

Fourth, we should experiment with flexible budgeting by broad banding expenditure allocations across schemes. This would enable the executive to maximize the physical impact of budgetary allocations based on the performance of schemes in the field. Parliamentary approval should be limited to setting the macro variables (primary deficit, revenue deficit, fiscal deficit, current account deficit, debt to GDP ratio and the assumption of economic growth) and approve the specific tax proposals. The specifics of how the money is spent should not be held hostage to Parliamentary approval. Parliament must safeguard the macroeconomic bottom line not become part of the executive in micromanaging expenditure via the power to allocate expenditure. 

Lastly, disciplining of errant public sector staff can be salutary. Mistakes happen. What is more important is that they should be corrected once they are detected. Severe sanctions should apply for those who commit rule infractions themselves or those who turn a blind eye to infractions by their subordinates, whilst managing to keep their own desk clean. Conversely, rewards must accrue for others who adopt a positive and proactive approach to rule infractions made without mala fide intention. Greater rewards should accrue, for those who can propose thoughtful changes in rules to plug loopholes and avoid repeat infractions in future.

Managing a government is very much like managing a large, noisy joint family. A combination of encouraging pats, dissuading slaps, a great deal of open discussion and well intentioned decisions made in public interest are the failsafe ingredients for a happy and productive public sector family.

 

 

Us versus Them

IAS

Prime Minister Modi addresses young IAS officers – the elite civil service of India, February 16, 2015.

“Tribes” exist in India other than the ones provided for in Part X of the constitution. The largest is the “Tribe” of government servants – to be distinguished from the even larger body of public servants.

Sheltering under the benign glow of the Ashoka Pillar lions, this tribe is the worst afflicted by the “Us versus Them” syndrome. The “Them” in this case being private entities, derisively called “box wallahs” during the colonial period. This is odd for an economy where the private sector contributes around two thirds of value added. How can we develop more empathy between the two “tribes”?

Bridge the chasm

First, systematically bridging the chasm between government systems and private sector processes can help. Yes, private business works for profit whilst government works in public interest. But both work in the same economic environment. There is little reason then, for such a wide chasm in systems and processes.

mamta

Winds of change: Firebrand Chief Minister, Mamata Banerjee “Didi” of West Bengal has Amit Mitra previously of FICCI (a premier business association) as Finance Minister. Seen here rapping with Kolkata industrialists. Photo credit: The hindu.com

Better accounting systems

One such chasm is the system of accounts used by the two. Government follows the cash based accounting system. The formal private sector uses accrual based accounting. In a cash system, the focus is on cash-in and cash-out. But the cost of future liabilities and potential receipts foregone tend to be overlooked. Government can afford to do this. It can print money or just raise taxes to bridge the deficit. But like in a Ponzy scheme, fiscal unsustainability catches up and eventually ends the party, although at huge economic cost. Government already disciplines itself with strict constrains on public deficits. We should not relax this constraint.

But it is also important to transparently cost our contingent liabilities and share these with citizens. We do not do this very well. As a result, even government managers lose sight of these because the eventual cost of adopting the business-as-usual approach is hidden. Similarly, the opportunity cost of indifferent asset management is largely ignored within government. Accrual accounting helps generate such future costs.

Factor in the cost of risk

Second, government routinely underestimates the cost of risk incurred from operations. For example, government cars or buildings are never insured against loss or damage. Project estimates never factor in risks like the cost of time overruns or cost creep, despite a long trend line of evidence to the contrary. The cost of failing to meet targets is left open ended.

Consider the case of nuclear power. Our strict liability law requires private suppliers to bear the risk of damage from contamination. But the real risk is borne by a publicly owned General Insurance Company and indirectly by the government. It is the same with public sector banks whose losses from massive bad loans in the past, are now being borne by the government. Government must be more transparent whilst accepting risk. Accrual accounting unearths the data required for factoring in the risk of failure.

Government as a participant

Third, government is unused to be a mere participant in the commercial eco system. This derives from its sovereign mandate to be a rule maker and regulator. It also has sovereign functions. No one would want to replace the Indian army with private military contractors. Citizens prefer better policing to paying for private guards. No one wants unelected non-state entities to make our laws. Similarly preserving natural resources and the provision of public goods are best regulated by the government and not by markets.

But modern governments have added on a host of non-core social and economic functions, including the actual delivery of public services. Some of these can be outsourced  to the private sector – electricity supply or transport services. For others building “Chinese walls” between officials who discharge sovereign functions- like formulating policy, proposing legislation and developing programs – and others who implement programs and projects can internalize private sector concerns into the government.

Government entities like the Indian Railways; defence production units; public research laboratories; drinking water utilities; irrigation departments; public works departments; public institutes of tertiary education and hospitals can be usefully extracted from government, into publicly owned corporations subject to all the regulatory requirements as the private sector.

Stepping out of the “confining glow” of government and becoming a public limited corporation, even if it is 100 percent owned by the government, changes the organizational culture. In colonial days, financial relief to rehabilitate drought hit farmers was handed out by District Collectors. Since the late 1970s we have used public sector banks for this purpose. Today, crop insurance is the financial backstop for failed crops. This will incentivize even private banks to expand rural lending for profit. And farmers will not have the incentives they have today to exchange loan forgiveness for votes.

In the Union government alone, 66% of the 3 million civilian staff can be hived off to corporations. If this mammoth task seems undoable, look back to 2000, when the Department of Telecommunications (DOT) was restructured and 320,000 staff hived off into the Bharat Sanchar Nigam Limited (BSNL) leaving the DOT with just around 3000 staff.

Copy-paste the Telecom story

Telecom grew unshackled once the government stopped worrying only about protecting BSNL.  The empowered regulator -Telecom Regulatory Authority of India- in sync with the government since 1999, developed a fiercely competitive market. Private providers cater to 90% of the market. Subscribers have increased from a paltry 0.3 per 100 in 1999 to 88 per 100 population – pretty close already to China, which has 95 per 100 but at a per capita income five times higher than India. Indian telecom tariffs are a fraction of what they were in 1999 and are the lowest in the world. A telephone connection with a direct dialing facility was the preserve of business and the elite, fifteen years ago. Today a mobile is in the pocket of the common man and has become a can’t-do-without tool for empowering women. Low cost, high quality wireless internet access is expected to double, the 300 million internet users today, by 2019.

This transformation was achieved by deliberate, visionary steps taken to restructure the government and the telecom market for growth and efficiency. Application of these principles, across all sectors, can liberate the economy from the shackles of inherited, institutional constraints; bridge the “us versus them” chasm and squeeze out the fat in government.

computer

Digitally savvy India’s young are its future Photo credit: Globallearninggroup.com

 

The tax collectors’ revolt

ITax

Last week’s “revolt” by senior income tax officers, meeting in Mumbai, against alleged micro management by the Union Revenue Secretary is unlikely to bother the average citizen. If anything, citizens would welcome glitches in tax collection behind which they can hide.

Mind the growing gap

But the revolt deserves attention because it illustrates a growing gap between officers and the political leadership. A similar gap resulted, earlier in 2015, in the extended and emotive agitation by army pensioners, for implementing the principle of One Rank One Pension (OROP). They and serving officers believed that it was a just demand being scuttled by the civil bureaucracy which acts as a gate keeper between the army and the political leadership. The revolt of the tax collectors is the second time that short circuited wires, between the political leadership and field level officers, are being exposed.

Bad strategy but genuine angst

The instrument chosen, by the tax officers, to voice their concerns via a resolution is questionable in terms of its efficacy as is the selection of the flash point for making their case. Unlike the army, income tax officers are no ones’ favourite person. The income tax department is, unfortunately, generally perceived as being self-serving and uncaring of citizen rights. Consequently, an upsurge of public sentiment in their support, as was the case for OROP, is unlikely. More likely, citizens would advocate even harsher disciplinary measures to pull up the department. Collecting tax is a thankless job.

The choice of flash point is similarly questionable — the transfer of a tax officer who allegedly adopted unfair means to boost his end-of-year performance. He issued a huge tax demand on a public sector bank just prior to the annual deadline and then allowed a refund of most of the tax amount immediately thereafter — a cynical “win-win” strategy for both the officer and the bank.

No one could possibly defend the officer’s use of “temporary tax terrorism” tactics. But the summary manner in which he was “punished” by being transferred (not officially a punishment), on the intervention of the Revenue Secretary, seems to have rankled. It does not help matters that the Revenue Secretary is traditionally from the Indian Administrative Service (IAS) but exercises oversight over the functioning of the Central Board of Direct Taxes (CBDT) under which around 8000 Indian Revenue Service (IRS) officers work. Incidentally there are seven senior officers of the IRS in the CBDT — the apex body for exercising operational control over direct tax administration. But none of them can ever break through the glass ceiling prescribed for them of the rank of a Special Secretary. This is lower than that of the Revenue Secretary, though they get the same pay.

Only empowered agencies perform

In India, we have not developed a culture of equality between field agencies and the secretariat. It is only in the armed forces that the correct equation between the secretariat and the field agency is maintained. This is visible during the republic day celebrations. In the line up to greet the President, the Vice President and the Prime Minister, the Defence Secretary stands lower down than the three service chiefs of the army, the air force and the navy. This is how it should be for all field level entities of the government. The officer in the secretariat must never be the person perceived to be in charge of the field level operations. Maintaining the principle of unity of command and responsibility is a pre-condition for efficient functioning within an agency.

Towards a more nerdy Secretariat  

nerd

The job of the secretariat is to assist the Minister in parliamentary work. It is perverse to adorn secretariat positions with high level administrative powers. The nuts and bolts of administration must be outsourced to the concerned agencies created specifically for the purpose. The role of the secretariat must shrink. The example of Minister for Railways, Suresh Prabhu, is worth emulating. One of the first things he did, on assuming charge, was to delegate away most of the operational powers, centralized in his office, to the Regional General Managers. A secretariat officer enhances value, not by banging people on their heads, but by skillfully using an insider’s appreciation of the operating environment and superior analytic skills to facilitate the functioning of field agencies. Making officers in field agencies perform better is squarely the job of the head of the concerned agency.

In a more evolved work environment, the secretariat is where policy and legislation is formulated. The field agency is where programmes are fleshed out and operations monitored for results. The relationship between the two must not be hierarchical as it inevitably is today. Policy formulation and programme implementation are two entirely different albeit symbiotic specialisations. There must be give and take between the two. One way of ensuring this is to make the heads of both the secretariat and the field agency of equal rank. Indeed, this is one way a Minister — who often might not be well acquainted with her charge — gets a rounded perspective of the issue at hand.

The bottom line is that, whilst the Mumbai IRS officers have chosen their battle badly, their cause, as indeed the cause of all other specialised government agencies and cadres, needs deeper consideration.

We should be moving over to a new governance architecture which values specialisation and extends equal opportunities to all cadres, particularly those which already exist in the Union government. IAS officers, unlike officers from the IRS, are on deputation from the state government cadres to the Union government. The IRS is a home grown, central government cadre. The logic for not letting the IRS manage its own house is questionable. Inserting an IAS officer between the political leadership and the IRS seems an archaic and inefficient way of managing the vital tax function.

The manner in which a majority of the senior positions in the Union government are “reserved” for the IAS is archaic because it does not recognise the heightened role for specialisation in modern administration. Law, Tax, Public Finance, Infrastructure, Human Development, Industry and Trade, Natural Resource Management, Defence, Security and Intelligence are all stand-alone disciplines in which practitioners spend their entire working lives. It is inconceivable that value can be added in policy formulation; program conceptualisation or project implementation, without the relevant experience and skill.

Lift the glass ceiling for specialized central services

Inflection points are always graphically depicted by glass ceilings getting smashed. Institutional wisdom lies in removing glass ceilings as soon as they develop cracks and well before they are smashed by the force of change.

smash

 

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