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Here are the discussion questions:
1). How much do you know about India?
2). After reading the article,
what do you think that are restraining the economic development of India?
3). In which area do you think people can do better than market?
4). Bonus: Why do we describe the economy of India as tiger?
India's economy
What's holding India back?
Mar 6th 2008
From The Economist print edition
Failure to reform a bloated civil service is putting the country's huge economic achievements at risk
“THE tiger is under grave threat,” India's finance minister, Palaniappan Chidambaram, intoned at one point in his budget speech on February 29th. He was referring to the stripy animals that prowl the country in declining numbers. But India's tigerish economy, which has grown by 9% a year on average over the past three years, is itself under threat.
In many ways India counts as one of liberalisation's greatest success stories. For years, it pottered along, weighed down by the regulations that made up the licence raj, producing only a feeble “Hindu” rate of growth. But over the past 15 years it has been transformed into a far more powerful beast. Its companies have become worldbeaters. Without India's strength, the world economy would have had far less to boast about.
Sadly, this achievement is more fragile than it looks. Many things restrain India's economy, from a government that depends on Communist support to the caste system, power cuts and rigid labour laws. But an enduring constraint is even more awkward: a state that makes a big claim on a poor country's resources but then uses them badly.
The state's cage
It is not unusual for a country's bureaucrats and politicians to be less efficient than its businesspeople; and the Indian civil servant, with his forms in triplicate, has been a caricature for so long that it is easy to forget the impossibility of many of the jobs involved (see article). But India's 10m-strong civil service is the size of a small country, and its unreformed public sector is a huge barrier to two things a growing population needs. The first is a faster rate of sustainable growth: the government's debts and its infrastructure failings set a lower-than-necessary speed-limit for the economy. The second is to spread the fruits of a growing economy to India's poor. By the government's own admission, most development spending fails to reach its intended recipients. This is bound to stir up resentment—and risks causing a backlash against business.
Like his prime minister, Manmohan Singh, Mr Chidambaram is by instinct a liberal and a reformer. He is remembered for his “dream budget” of 1997, which cut both taxes and tariffs—and helped spur today's boom. The new budget is his government's final one before it calls a fresh election, probably later this year. He gave an assured performance, doling out money freely and leaving voters appeased, opposition parties stumped and bondholders unruffled (see article). But the budget also confirmed several sad truths about how little reform the government has made during the good years.
Take the public finances. The government is predicting a budget deficit of 3.1% for the current fiscal year and 2.5% next. But these numbers are artificially low. They omit the states' deficits and also most of the cost of fertiliser and fuel subsidies (which all told add another 3.5% of GDP). Other big emerging markets have been less complacent, leaving India in the worst fiscal shape of the lot.
If growth slows, so will tax collection—and India's vigour may be ebbing already. Growth of 9% now looks more like a cyclical peak than a permanent achievement: bottlenecks throughout the economy mean it cannot go faster without setting off inflation. The effects of overheating became clear in an inflationary scare early last year. Growth has since slowed a tad, to 8.4% in the year to the fourth quarter, thanks partly to the intervention of a nervous central bank. India cannot absorb a lot more foreign capital without worrying about stockmarket turbulence or the strength of the rupee. Much of the foreign money it has attracted has gone into inflating share prices or just accumulated unproductively in foreign reserves.
The government's other boast is to have fostered “inclusive growth”. In his budget, Mr Chidambaram duly handed out extra money to a long list of worthy schemes, from school meals to rural road-building. But as he himself conceded, outlays and outcomes are not the same thing. Standing between the two is an administrative machine corroded by apathy and corruption. The government's subsidies fail to reach the poor, its schools fail to teach them and its rural clinics fail to treat them.
Mr Singh made administrative reform a priority when he took office in 2004, and he duly set up a commission to look into it. But even the finance minister admits that most of its deliberations have been academic. The civil service is expected shortly to be awarded a huge pay rise, which will be swiftly embraced, along with tougher performance standards, which will be studiously ignored. One indication of officials' resistance to change is Mr Chidambaram's new proposal to erase the debts of 30m small farmers. This loan waiver may be costly (over 1% of GDP) and crude, but it has one big virtue: it transfers money to relatively poor people at the stroke of a pen, bypassing the cumbersome machinery of the state.
Unleash peepul power
Reform has not completely petered out. The government has called for more independent scrutiny of public programmes and better monitoring of the money it hands out to some 1,000 schemes. It also plans to experiment with “smart cards” for the poor that could cut out bureaucratic middlemen. But administrative reform needs to go deeper than this—if only to prevent the public sector throttling economic growth.
The government's debt burden leaves it short of money for infrastructure. It is reluctant to free banks, pension funds and insurers to serve the market better, because it needs them to buy its bonds. The miserable record of its social spending deprives firms of well-nourished, well-schooled workers, and saps the political will for reform. State governments are left scrabbling to appease rural disgruntlement rather than investing in efforts to lift the productivity of land and labour.
The tiger may be the animal most Indians associate with their private sector; but a more apt symbol is the peepul (sacred fig) tree. Revered by many Indians, the peepul has a habit of making room for itself, poking up through roads, sometimes smothering its rivals. India's dynamic private sector has shown a similar skill. But if the next government again flunks reform, it could be the peepul itself that is smothered.
India's civil service
Battling the babu raj
Mar 6th 2008 | DELHI, JALAUN AND KOCHI
From The Economist print edition
India has some of the hardest-working bureaucrats in the world, but its administration has an abysmal record of serving the public
RIGZIN SAMPHEL, a 33-year-old civil servant, wakes to the screeching of peacocks outside his bedroom window. Stepping into the gentle sunshine of a north Indian spring morning, he hears the lowing of three brown cows tasked with providing his milk. A scuffling attends him, as armed guards, peons, gardeners and orderlies—tasked with catering to Mr Samphel's other needs—hop to attention.
A four-year veteran of the elite Indian Administrative Service (IAS), Mr Samphel is the district magistrate of Jalaun, in Uttar Pradesh (UP) province. More often called the collector, or district officer, the district magistrate is the senior official of India's key administrative unit, the district. In Jalaun, an expanse of arid plain between the Ganges and Yamuna rivers, Mr Samphel is in charge of 564 villages and 1.4m people.
After a hearty breakfast, he leaves his residence—requisitioned from a local maharajah around 1840—and gets into his car: a white Ambassador, curvaceous clone of the 1948 Morris Oxford, complete with siren and flashing blue light, which has symbolised officialdom in India for six decades. Mr Samphel takes the back seat; a policeman rides machinegun in the front; and in two minutes they arrive at Mr Samphel's main office, the “collectorate”.
There for the next four hours, beneath a portrait of a beaming Mohandas Gandhi, Mr Samphel receives a stream of poor people. A turbaned flunkey regulates the flow, letting in a dozen at a time. Many are old and ragged, or blind. Paraplegics slither to the collector's feet on broken limbs. Most bring a written plea, for the resumption of a widow's pension that has mysteriously dried up; for money for an operation; for a tube-well or a blanket. Many bear complaints against corrupt officials. One supplicant wants permission to erect a statue of a dead politician: a former champion of the Hindu outcastes who comprise nearly half of Jalaun's population.
Mr Samphel listens, asks questions and, in red ink, scrawls on the petitions his response. For desperate cases, he orders an immediate payment of alms, typically 2,000 rupees ($50), from the district Red Cross society, of which he is president. More often, he writes a note to the official to whom the petition should have been directed in the first place—or, wretchedly often, to whom it has already been directed: “Act upon this according to the law.”
Mr Samphel reckons he spends 60% of his time dealing with individual supplicants—also outside the collectorate. As the Ambassador turns back on to the road, it is waylaid by a tractor bringing a cartload of petitioners in from a distant village. Then one of Mr Samphel's three mobile phones bleeps. Someone wants firewood; Mr Samphel calls a forestry official to relay the request. It is a hugely impressive performance. Mr Samphel works 16 hours a day, seven days a week, and reckons he has had two days off since 2003. But this is hardly an efficient way to minister to a needy population almost half the size of New Zealand's.
Indeed, all India's administration is inefficient. According to the Congress-led government's own estimate, most development spending fails to reach its intended recipients. Instead it is sponged up, or siphoned off, by a vast, tumorous bureaucracy. That is why, despite India's commitment to universal health care, water and education, only five countries have a lower portion of health spending in the public sector; over half of urban children are educated privately; and nearly all investment in irrigation is private. Under stress of tube-wells and a four-year drought, the water table in Jalaun has fallen by up to 15 metres. Despite the proximity of two great rivers, only 40% of the district is irrigated; no canal has been dug since colonial times. As the harvest approaches, over half of Jalaun's peasant inhabitants are growing nothing.
On coming to power in 2004, Manmohan Singh, the prime minister, said that administrative reform—“at every level”—was his priority. Some economists see India's malfunctioning public sector as its biggest obstacle to growth. Lant Pritchett, of the Kennedy School of Government at Harvard, calls it “one of the world's top ten biggest problems—of the order of AIDS and climate change”. Yet it is hard to find progress on Mr Singh's watch. Perhaps the best that can be said is that a policy of the previous government, a hiring freeze on two-thirds of vacant civil service posts, continues: since 2001 around 750,000 jobs have been left vacant. A right-to-information law, passed in 2005, also contains at least a promise of official accountability. But a more seismic reform, a 16-year campaign to decentralise power from the states to local elected bodies known as panchayats, cutting out much of the bureaucratic cancer altogether, has hardly moved.
Armies of clerks
Including railway workers, who comprise one of the world's biggest payrolls, India's central government employs around 3m civil servants and the states another 7m. They include vast armies of paper-shuffling peons. The number of senior “Category One” bureaucrats—broadly speaking, “decision-makers”, according to Satyananda Mishra, boss of the Department of Personnel and Training (DPT), which runs the civil service—is only 80,000. And the elite IAS, which mostly runs India, numbers a mere 5,600.
Its ranks include almost all the collectors of India's 604 districts, and over 60% of senior officials and managers working in government ministries and publicly owned corporations. (The rest are mostly police and railway officers.) As the successor to the colonial Indian Civil Service—the “steel frame” of British rule, according to one prime minister, Lloyd George—the IAS was designed to perform the same unifying function. It is a national and permanent service, theoretically apolitical, and recruited and trained at the centre. Yet its members serve mostly in the states—the main exception being 600 of the most senior babus who, in Whitehall fashion, advise ministers and draft policy in Delhi.
Across India, the IAS commands both reverence and contempt. Male recruits are among India's most marriageable: more suitable, it is said, than the elite geeks of the country's booming computer-services industry. Indeed, India's recent run of 8% economic growth has if anything increased their prestige, by creating more senior positions for which IAS officers are required. This year 140 people will be recruited into the IAS from around 200,000 applicants, one of the biggest intakes ever.
Yet the steel frame has now become a serious bind on badly needed reforms. As the author of a typical recent IAS history and former mandarin, Sanjoy Bagchi, puts it: “Overwhelmed by the constant feed of adulatory ambrosia, the maturing entrant tends to lose his head and balance. The diffident youngster of early idealistic years, in course of time, is transformed into an arrogant senior fond of throwing his weight around; he becomes a conceited prig.”
Part of the problem, such critics say, is that the quality of IAS recruits is falling. They identify a number of reasons for this: falling education standards; growing competition for talent from the private sector; increasing political interference; and, above all, caste-based reservations, which now retain half of all IAS posts for outcaste and low-caste Hindus and members of tribal communities. Former mandarins also point to chronic and worsening standards of probity across the public service. And yet, compared with the hirelings of almost any other Indian institution, IAS recruits remain excellent.
Overload may be a better explanation for the service's failings. In Jalaun, Mr Samphel is theoretically the boss of 65 government departments. Around one in five of these, he estimates, is run by a competent deputy. He laments: “If I don't put pressure on my juniors, everything gets largely corrupted.” For general administration, Mr Samphel, whose collectorate contains not one computer, has an annual budget of $22.5m.
Compared with his British forebears', Mr Samphel's list of duties has grown crazily. Like them, he is primarily responsible for maintaining order and collecting land revenues in his district. In the first case, he mostly defers to the local police chief, Jalaun's only other first-rate official. But in the district that was once home to a notorious, now murdered, female bandit, Phoolan Devi, Mr Samphel is also regularly called on to authorise arbitrary police actions: for example, to extend summary detentions under the “Gangster Act”.
Mr Samphel's second core responsibility, collecting revenue, is a lesser burden. Land taxes, which have scarcely risen since British days, are now principally a means of updating the land registry. Yet the corruption and incompetence that dog this process—of crucial concern to peasant India—propel many supplicants to Mr Samphel's door. In addition, India's collectors manage two other, not inconsiderable, events: elections and a decennial census. They also organise the government's response to natural disasters, such as the tsunami which, in 2004, killed over 7,000 in southern Tamil Nadu.
The collectors' other great burden—overseeing the design and management of massive welfare and development projects—is one the IAS was never designed for, and by and large performs abysmally. Mr Samphel, for example, oversees the spending of another $25m on 30-odd welfare programmes. Over the past year he has doled out $14m for a charitable ditch-digging project, the National Rural Employment Guarantee Scheme (NREGS), which is to be spread across India this year. As the drought bites, he has requested another $13m for this project; it has yet to arrive.
Political entanglements
In even the best of worlds, Mr Samphel's would be an impossible job. In India's corrupt democracy, the collectors' burden is made much heavier by interfering politicians. The problem is most grievous in north India, where civil servants tend to attach themselves to politicians for enrichment, advancement—or in despair of otherwise getting their jobs done. The habit is said to have been implanted in the system during India's 1975 state of emergency, when, with the help of senior bureaucrats, Indira Gandhi grabbed power for 21 months. One IAS officer tainted by the hiatus was Navin Chawla, a senior civil servant in Delhi with strong ties to the Gandhi family, Congress's leaders. A government inquiry into the emergency ruled that he was “unfit to hold any public office which demands an attitude of fair play and consideration for others”. The current government has made him deputy chief of India's election commission.
Under India's constitution, politicians cannot sack IAS officers. Instead they tend to misuse their power to transfer or suspend them. On January 31st four IAS officers were suspended by UP's chief minister, Mayawati, a champion of outcaste dalits. Their crime was to have penned friendly words about Rahul Gandhi, Mrs Gandhi's grandson, a rising force in the Congress party. Indeed, after any transfer of power in UP, Madhya Pradesh (MP), Orissa and Bihar, scores of senior civil servants are routinely shunted—including Mr Samphel's predecessor, who was, not coincidentally, of the same Hindu caste as the outgoing chief minister. During a riotous eight-month rule over MP in 2003-04, a politician called Uma Bharati transferred 240 of the state's 296 IAS officers.
To mitigate the damage done by such shake-ups, the DPT, of which Mr Mishra is chief, recently changed the civil-service code, fixing the minimum job tenure at two years. Alas, only a handful of states have accepted this—as they are constitutionally obliged to do. And yet other decent plans and proposals exist. Continued retrenchment is one; according to Sheila Dikshit, Delhi's chief minister and the widow of an IAS officer, around half of senior civil service posts could be scrapped. Another proposal is to lower the upper age limit for IAS recruits, thereby, it is argued, improving their quality.
Civil service pay, currently $500 a month for a district collector, might also be increased. A decennial pay commission, due to report this month, is expected to recommend this. Logic—though little evidence—suggests that this might reduce the tendency of senior babus to steal. It might also fend off growing competition for India's brightest talent from private companies, though retaining civil servants is not yet proving difficult; over the past year, fewer than 20 IAS officers have quit the service to join the private sector. Getting rid of corrupt or incompetent civil servants is rather trickier. In a 40-year IAS career, B.K. Chaturvedi, a former head of the civil service, can recall only three officers having been dismissed.
A Band-Aid on a corpse
Sensible as these changes may be, however, reforms written by civil servants are unlikely to provide the necessary transformation in India's civil service. Nor is technology the instant elixir it is sometimes considered to be. Inspired by a crusading IAS officer, in the past two years Karnataka state has built 800 privately managed “telecentres” where citizens can access land records, birth and death certificates and driving licences online. Following its lead, the central government is rolling out 100,000 similar terminals, with additional services in education and health care. The benefits of skipping a rung or two of rent-seeking officialdom are manifest.
But in a mostly unreformed system, rent-seekers have a habit of clawing back. The title of a draft paper by researchers at the Massachusetts Institute of Technology is apt: “Putting Band-Aid on a corpse: incentives for nurses in the Indian public health-care system”. To encourage a batch of Rajasthani nurses to show up for work—which, on any day, over 60% did not—its authors began monitoring their attendance at village health centres by computer and sending the results to the state health ministry. Threatened with fines, half of the absentees returned to work. Six months later, they began breaking the computers and reporting “machine problems”. After 16 months, the health centres featured in the study were no more likely to contain a nurse than any other.
No doubt Mr Singh is right: to provide poor Indians with halfway decent public services, the bureaucracy needs, root-and-branch, to be made accountable. But this will not happen soon. Indeed, one of the more hopeful changes will be organic. As India's economy grows, inflating land prices and increasing opportunities for private contractors, corrupt politicians and bureaucrats may find reliable sources of rent that do not involve stealing directly from the mouths of the poor. More managed and substantial reforms, including the right to information and decentralising power, are also hopeful. Yet they are in their infancy, partly because of resistance from jealous bureaucrats.
India's panchayats, or local governments, are in theory responsible for managing welfare and development schemes in their district or urban area. But many are powerless. In only two states, Communist-ruled Kerala and West Bengal, have they been given control over their own budgets—with patchy success.
Kerala, for example, has put 90% of development spending in the hands of its panchayats. In addition to central government schemes such as the NREGS, village panchayats in the southern state have $250,000 a year to spend as they choose. This has reduced the collector to a regulatory role: overseeing land records and advising the panchayats. On paper, this looks terrific. It also helps that Kerala is one of India's least corrupt states. And yet panchayat leaders, often drawn from feudal or political elites, can be as self-serving as any babu. S.M. Vijayanand, chief official of Kerala's Local Self Government Department and a main architect of the reform, concedes that the new system also misses the collector's managerial skills. He says: “It's more equitable, more accountable, more democratic, but there's a cost also in efficiency.”
In Kochi, the state's seaside capital, the district collector, Muhammad Hanish, enjoys the same trappings of office, and suffers many of the same burdens, as Mr Samphel. Stepping out of his white Ambassador, Mr Hanish, who is 38, inspects a suburb of Kochi with relish. (“This is the end of my town; after this, the Arabian Sea.”) He has just spent four hours dealing with 200 poor supplicants. He is in charge of 60 departments. Yet, unlike Mr Samphel, he has no control over their budgets. Nor is he directly responsible for planning and implementing the public works that they are called on to perform. After three-and-a-half years in the job, during which time he reckons to have seen 10,000 project proposals, Mr Hanish says he has forced the local panchayat to drop “less than ten” of them.
That is as it should be. Elected panchayats, unlike elite civil servants, can be held to account. But it may take years before poor Indians enjoy the benefits of this. For now, Mr Hanish says the new system has made his job more difficult and the delivery of public services poorer. “Most panchayat leaders are incompetent. Too many are corrupt.”
Yet elsewhere the picture may be worse. In most states, including UP, politicians and bureaucrats have denied the panchayats even modest power. The ditch-digging NREGS is an example. It is hard to know what UP's panchayats exist for, if not to identify and organise its wretched beneficiaries. But it is the collectors who mostly control the scheme.
And so in Kochi, after a hellish long day, Mr Hanish goes home to work until 2am on the next day's files. Meanwhile in Jalaun, 2,400km to the north, Mr Samphel sets out to inspect freshly dug ditches, and listen to the infinite complaints of their ragged diggers, by torchlight.
1). How much do you know about India?
2). After reading the article,
what do you think that are restraining the economic development of India?
3). In which area do you think people can do better than market?
4). Bonus: Why do we describe the economy of India as tiger?
India's economy
What's holding India back?
Mar 6th 2008
From The Economist print edition
Failure to reform a bloated civil service is putting the country's huge economic achievements at risk
“THE tiger is under grave threat,” India's finance minister, Palaniappan Chidambaram, intoned at one point in his budget speech on February 29th. He was referring to the stripy animals that prowl the country in declining numbers. But India's tigerish economy, which has grown by 9% a year on average over the past three years, is itself under threat.
In many ways India counts as one of liberalisation's greatest success stories. For years, it pottered along, weighed down by the regulations that made up the licence raj, producing only a feeble “Hindu” rate of growth. But over the past 15 years it has been transformed into a far more powerful beast. Its companies have become worldbeaters. Without India's strength, the world economy would have had far less to boast about.
Sadly, this achievement is more fragile than it looks. Many things restrain India's economy, from a government that depends on Communist support to the caste system, power cuts and rigid labour laws. But an enduring constraint is even more awkward: a state that makes a big claim on a poor country's resources but then uses them badly.
The state's cage
It is not unusual for a country's bureaucrats and politicians to be less efficient than its businesspeople; and the Indian civil servant, with his forms in triplicate, has been a caricature for so long that it is easy to forget the impossibility of many of the jobs involved (see article). But India's 10m-strong civil service is the size of a small country, and its unreformed public sector is a huge barrier to two things a growing population needs. The first is a faster rate of sustainable growth: the government's debts and its infrastructure failings set a lower-than-necessary speed-limit for the economy. The second is to spread the fruits of a growing economy to India's poor. By the government's own admission, most development spending fails to reach its intended recipients. This is bound to stir up resentment—and risks causing a backlash against business.
Like his prime minister, Manmohan Singh, Mr Chidambaram is by instinct a liberal and a reformer. He is remembered for his “dream budget” of 1997, which cut both taxes and tariffs—and helped spur today's boom. The new budget is his government's final one before it calls a fresh election, probably later this year. He gave an assured performance, doling out money freely and leaving voters appeased, opposition parties stumped and bondholders unruffled (see article). But the budget also confirmed several sad truths about how little reform the government has made during the good years.
Take the public finances. The government is predicting a budget deficit of 3.1% for the current fiscal year and 2.5% next. But these numbers are artificially low. They omit the states' deficits and also most of the cost of fertiliser and fuel subsidies (which all told add another 3.5% of GDP). Other big emerging markets have been less complacent, leaving India in the worst fiscal shape of the lot.
If growth slows, so will tax collection—and India's vigour may be ebbing already. Growth of 9% now looks more like a cyclical peak than a permanent achievement: bottlenecks throughout the economy mean it cannot go faster without setting off inflation. The effects of overheating became clear in an inflationary scare early last year. Growth has since slowed a tad, to 8.4% in the year to the fourth quarter, thanks partly to the intervention of a nervous central bank. India cannot absorb a lot more foreign capital without worrying about stockmarket turbulence or the strength of the rupee. Much of the foreign money it has attracted has gone into inflating share prices or just accumulated unproductively in foreign reserves.
The government's other boast is to have fostered “inclusive growth”. In his budget, Mr Chidambaram duly handed out extra money to a long list of worthy schemes, from school meals to rural road-building. But as he himself conceded, outlays and outcomes are not the same thing. Standing between the two is an administrative machine corroded by apathy and corruption. The government's subsidies fail to reach the poor, its schools fail to teach them and its rural clinics fail to treat them.
Mr Singh made administrative reform a priority when he took office in 2004, and he duly set up a commission to look into it. But even the finance minister admits that most of its deliberations have been academic. The civil service is expected shortly to be awarded a huge pay rise, which will be swiftly embraced, along with tougher performance standards, which will be studiously ignored. One indication of officials' resistance to change is Mr Chidambaram's new proposal to erase the debts of 30m small farmers. This loan waiver may be costly (over 1% of GDP) and crude, but it has one big virtue: it transfers money to relatively poor people at the stroke of a pen, bypassing the cumbersome machinery of the state.
Unleash peepul power
Reform has not completely petered out. The government has called for more independent scrutiny of public programmes and better monitoring of the money it hands out to some 1,000 schemes. It also plans to experiment with “smart cards” for the poor that could cut out bureaucratic middlemen. But administrative reform needs to go deeper than this—if only to prevent the public sector throttling economic growth.
The government's debt burden leaves it short of money for infrastructure. It is reluctant to free banks, pension funds and insurers to serve the market better, because it needs them to buy its bonds. The miserable record of its social spending deprives firms of well-nourished, well-schooled workers, and saps the political will for reform. State governments are left scrabbling to appease rural disgruntlement rather than investing in efforts to lift the productivity of land and labour.
The tiger may be the animal most Indians associate with their private sector; but a more apt symbol is the peepul (sacred fig) tree. Revered by many Indians, the peepul has a habit of making room for itself, poking up through roads, sometimes smothering its rivals. India's dynamic private sector has shown a similar skill. But if the next government again flunks reform, it could be the peepul itself that is smothered.
India's civil service
Battling the babu raj
Mar 6th 2008 | DELHI, JALAUN AND KOCHI
From The Economist print edition
India has some of the hardest-working bureaucrats in the world, but its administration has an abysmal record of serving the public
RIGZIN SAMPHEL, a 33-year-old civil servant, wakes to the screeching of peacocks outside his bedroom window. Stepping into the gentle sunshine of a north Indian spring morning, he hears the lowing of three brown cows tasked with providing his milk. A scuffling attends him, as armed guards, peons, gardeners and orderlies—tasked with catering to Mr Samphel's other needs—hop to attention.
A four-year veteran of the elite Indian Administrative Service (IAS), Mr Samphel is the district magistrate of Jalaun, in Uttar Pradesh (UP) province. More often called the collector, or district officer, the district magistrate is the senior official of India's key administrative unit, the district. In Jalaun, an expanse of arid plain between the Ganges and Yamuna rivers, Mr Samphel is in charge of 564 villages and 1.4m people.
After a hearty breakfast, he leaves his residence—requisitioned from a local maharajah around 1840—and gets into his car: a white Ambassador, curvaceous clone of the 1948 Morris Oxford, complete with siren and flashing blue light, which has symbolised officialdom in India for six decades. Mr Samphel takes the back seat; a policeman rides machinegun in the front; and in two minutes they arrive at Mr Samphel's main office, the “collectorate”.
There for the next four hours, beneath a portrait of a beaming Mohandas Gandhi, Mr Samphel receives a stream of poor people. A turbaned flunkey regulates the flow, letting in a dozen at a time. Many are old and ragged, or blind. Paraplegics slither to the collector's feet on broken limbs. Most bring a written plea, for the resumption of a widow's pension that has mysteriously dried up; for money for an operation; for a tube-well or a blanket. Many bear complaints against corrupt officials. One supplicant wants permission to erect a statue of a dead politician: a former champion of the Hindu outcastes who comprise nearly half of Jalaun's population.
Mr Samphel listens, asks questions and, in red ink, scrawls on the petitions his response. For desperate cases, he orders an immediate payment of alms, typically 2,000 rupees ($50), from the district Red Cross society, of which he is president. More often, he writes a note to the official to whom the petition should have been directed in the first place—or, wretchedly often, to whom it has already been directed: “Act upon this according to the law.”
Mr Samphel reckons he spends 60% of his time dealing with individual supplicants—also outside the collectorate. As the Ambassador turns back on to the road, it is waylaid by a tractor bringing a cartload of petitioners in from a distant village. Then one of Mr Samphel's three mobile phones bleeps. Someone wants firewood; Mr Samphel calls a forestry official to relay the request. It is a hugely impressive performance. Mr Samphel works 16 hours a day, seven days a week, and reckons he has had two days off since 2003. But this is hardly an efficient way to minister to a needy population almost half the size of New Zealand's.
Indeed, all India's administration is inefficient. According to the Congress-led government's own estimate, most development spending fails to reach its intended recipients. Instead it is sponged up, or siphoned off, by a vast, tumorous bureaucracy. That is why, despite India's commitment to universal health care, water and education, only five countries have a lower portion of health spending in the public sector; over half of urban children are educated privately; and nearly all investment in irrigation is private. Under stress of tube-wells and a four-year drought, the water table in Jalaun has fallen by up to 15 metres. Despite the proximity of two great rivers, only 40% of the district is irrigated; no canal has been dug since colonial times. As the harvest approaches, over half of Jalaun's peasant inhabitants are growing nothing.
On coming to power in 2004, Manmohan Singh, the prime minister, said that administrative reform—“at every level”—was his priority. Some economists see India's malfunctioning public sector as its biggest obstacle to growth. Lant Pritchett, of the Kennedy School of Government at Harvard, calls it “one of the world's top ten biggest problems—of the order of AIDS and climate change”. Yet it is hard to find progress on Mr Singh's watch. Perhaps the best that can be said is that a policy of the previous government, a hiring freeze on two-thirds of vacant civil service posts, continues: since 2001 around 750,000 jobs have been left vacant. A right-to-information law, passed in 2005, also contains at least a promise of official accountability. But a more seismic reform, a 16-year campaign to decentralise power from the states to local elected bodies known as panchayats, cutting out much of the bureaucratic cancer altogether, has hardly moved.
Armies of clerks
Including railway workers, who comprise one of the world's biggest payrolls, India's central government employs around 3m civil servants and the states another 7m. They include vast armies of paper-shuffling peons. The number of senior “Category One” bureaucrats—broadly speaking, “decision-makers”, according to Satyananda Mishra, boss of the Department of Personnel and Training (DPT), which runs the civil service—is only 80,000. And the elite IAS, which mostly runs India, numbers a mere 5,600.
Its ranks include almost all the collectors of India's 604 districts, and over 60% of senior officials and managers working in government ministries and publicly owned corporations. (The rest are mostly police and railway officers.) As the successor to the colonial Indian Civil Service—the “steel frame” of British rule, according to one prime minister, Lloyd George—the IAS was designed to perform the same unifying function. It is a national and permanent service, theoretically apolitical, and recruited and trained at the centre. Yet its members serve mostly in the states—the main exception being 600 of the most senior babus who, in Whitehall fashion, advise ministers and draft policy in Delhi.
Across India, the IAS commands both reverence and contempt. Male recruits are among India's most marriageable: more suitable, it is said, than the elite geeks of the country's booming computer-services industry. Indeed, India's recent run of 8% economic growth has if anything increased their prestige, by creating more senior positions for which IAS officers are required. This year 140 people will be recruited into the IAS from around 200,000 applicants, one of the biggest intakes ever.
Yet the steel frame has now become a serious bind on badly needed reforms. As the author of a typical recent IAS history and former mandarin, Sanjoy Bagchi, puts it: “Overwhelmed by the constant feed of adulatory ambrosia, the maturing entrant tends to lose his head and balance. The diffident youngster of early idealistic years, in course of time, is transformed into an arrogant senior fond of throwing his weight around; he becomes a conceited prig.”
Part of the problem, such critics say, is that the quality of IAS recruits is falling. They identify a number of reasons for this: falling education standards; growing competition for talent from the private sector; increasing political interference; and, above all, caste-based reservations, which now retain half of all IAS posts for outcaste and low-caste Hindus and members of tribal communities. Former mandarins also point to chronic and worsening standards of probity across the public service. And yet, compared with the hirelings of almost any other Indian institution, IAS recruits remain excellent.
Overload may be a better explanation for the service's failings. In Jalaun, Mr Samphel is theoretically the boss of 65 government departments. Around one in five of these, he estimates, is run by a competent deputy. He laments: “If I don't put pressure on my juniors, everything gets largely corrupted.” For general administration, Mr Samphel, whose collectorate contains not one computer, has an annual budget of $22.5m.
Compared with his British forebears', Mr Samphel's list of duties has grown crazily. Like them, he is primarily responsible for maintaining order and collecting land revenues in his district. In the first case, he mostly defers to the local police chief, Jalaun's only other first-rate official. But in the district that was once home to a notorious, now murdered, female bandit, Phoolan Devi, Mr Samphel is also regularly called on to authorise arbitrary police actions: for example, to extend summary detentions under the “Gangster Act”.
Mr Samphel's second core responsibility, collecting revenue, is a lesser burden. Land taxes, which have scarcely risen since British days, are now principally a means of updating the land registry. Yet the corruption and incompetence that dog this process—of crucial concern to peasant India—propel many supplicants to Mr Samphel's door. In addition, India's collectors manage two other, not inconsiderable, events: elections and a decennial census. They also organise the government's response to natural disasters, such as the tsunami which, in 2004, killed over 7,000 in southern Tamil Nadu.
The collectors' other great burden—overseeing the design and management of massive welfare and development projects—is one the IAS was never designed for, and by and large performs abysmally. Mr Samphel, for example, oversees the spending of another $25m on 30-odd welfare programmes. Over the past year he has doled out $14m for a charitable ditch-digging project, the National Rural Employment Guarantee Scheme (NREGS), which is to be spread across India this year. As the drought bites, he has requested another $13m for this project; it has yet to arrive.
Political entanglements
In even the best of worlds, Mr Samphel's would be an impossible job. In India's corrupt democracy, the collectors' burden is made much heavier by interfering politicians. The problem is most grievous in north India, where civil servants tend to attach themselves to politicians for enrichment, advancement—or in despair of otherwise getting their jobs done. The habit is said to have been implanted in the system during India's 1975 state of emergency, when, with the help of senior bureaucrats, Indira Gandhi grabbed power for 21 months. One IAS officer tainted by the hiatus was Navin Chawla, a senior civil servant in Delhi with strong ties to the Gandhi family, Congress's leaders. A government inquiry into the emergency ruled that he was “unfit to hold any public office which demands an attitude of fair play and consideration for others”. The current government has made him deputy chief of India's election commission.
Under India's constitution, politicians cannot sack IAS officers. Instead they tend to misuse their power to transfer or suspend them. On January 31st four IAS officers were suspended by UP's chief minister, Mayawati, a champion of outcaste dalits. Their crime was to have penned friendly words about Rahul Gandhi, Mrs Gandhi's grandson, a rising force in the Congress party. Indeed, after any transfer of power in UP, Madhya Pradesh (MP), Orissa and Bihar, scores of senior civil servants are routinely shunted—including Mr Samphel's predecessor, who was, not coincidentally, of the same Hindu caste as the outgoing chief minister. During a riotous eight-month rule over MP in 2003-04, a politician called Uma Bharati transferred 240 of the state's 296 IAS officers.
To mitigate the damage done by such shake-ups, the DPT, of which Mr Mishra is chief, recently changed the civil-service code, fixing the minimum job tenure at two years. Alas, only a handful of states have accepted this—as they are constitutionally obliged to do. And yet other decent plans and proposals exist. Continued retrenchment is one; according to Sheila Dikshit, Delhi's chief minister and the widow of an IAS officer, around half of senior civil service posts could be scrapped. Another proposal is to lower the upper age limit for IAS recruits, thereby, it is argued, improving their quality.
Civil service pay, currently $500 a month for a district collector, might also be increased. A decennial pay commission, due to report this month, is expected to recommend this. Logic—though little evidence—suggests that this might reduce the tendency of senior babus to steal. It might also fend off growing competition for India's brightest talent from private companies, though retaining civil servants is not yet proving difficult; over the past year, fewer than 20 IAS officers have quit the service to join the private sector. Getting rid of corrupt or incompetent civil servants is rather trickier. In a 40-year IAS career, B.K. Chaturvedi, a former head of the civil service, can recall only three officers having been dismissed.
A Band-Aid on a corpse
Sensible as these changes may be, however, reforms written by civil servants are unlikely to provide the necessary transformation in India's civil service. Nor is technology the instant elixir it is sometimes considered to be. Inspired by a crusading IAS officer, in the past two years Karnataka state has built 800 privately managed “telecentres” where citizens can access land records, birth and death certificates and driving licences online. Following its lead, the central government is rolling out 100,000 similar terminals, with additional services in education and health care. The benefits of skipping a rung or two of rent-seeking officialdom are manifest.
But in a mostly unreformed system, rent-seekers have a habit of clawing back. The title of a draft paper by researchers at the Massachusetts Institute of Technology is apt: “Putting Band-Aid on a corpse: incentives for nurses in the Indian public health-care system”. To encourage a batch of Rajasthani nurses to show up for work—which, on any day, over 60% did not—its authors began monitoring their attendance at village health centres by computer and sending the results to the state health ministry. Threatened with fines, half of the absentees returned to work. Six months later, they began breaking the computers and reporting “machine problems”. After 16 months, the health centres featured in the study were no more likely to contain a nurse than any other.
No doubt Mr Singh is right: to provide poor Indians with halfway decent public services, the bureaucracy needs, root-and-branch, to be made accountable. But this will not happen soon. Indeed, one of the more hopeful changes will be organic. As India's economy grows, inflating land prices and increasing opportunities for private contractors, corrupt politicians and bureaucrats may find reliable sources of rent that do not involve stealing directly from the mouths of the poor. More managed and substantial reforms, including the right to information and decentralising power, are also hopeful. Yet they are in their infancy, partly because of resistance from jealous bureaucrats.
India's panchayats, or local governments, are in theory responsible for managing welfare and development schemes in their district or urban area. But many are powerless. In only two states, Communist-ruled Kerala and West Bengal, have they been given control over their own budgets—with patchy success.
Kerala, for example, has put 90% of development spending in the hands of its panchayats. In addition to central government schemes such as the NREGS, village panchayats in the southern state have $250,000 a year to spend as they choose. This has reduced the collector to a regulatory role: overseeing land records and advising the panchayats. On paper, this looks terrific. It also helps that Kerala is one of India's least corrupt states. And yet panchayat leaders, often drawn from feudal or political elites, can be as self-serving as any babu. S.M. Vijayanand, chief official of Kerala's Local Self Government Department and a main architect of the reform, concedes that the new system also misses the collector's managerial skills. He says: “It's more equitable, more accountable, more democratic, but there's a cost also in efficiency.”
In Kochi, the state's seaside capital, the district collector, Muhammad Hanish, enjoys the same trappings of office, and suffers many of the same burdens, as Mr Samphel. Stepping out of his white Ambassador, Mr Hanish, who is 38, inspects a suburb of Kochi with relish. (“This is the end of my town; after this, the Arabian Sea.”) He has just spent four hours dealing with 200 poor supplicants. He is in charge of 60 departments. Yet, unlike Mr Samphel, he has no control over their budgets. Nor is he directly responsible for planning and implementing the public works that they are called on to perform. After three-and-a-half years in the job, during which time he reckons to have seen 10,000 project proposals, Mr Hanish says he has forced the local panchayat to drop “less than ten” of them.
That is as it should be. Elected panchayats, unlike elite civil servants, can be held to account. But it may take years before poor Indians enjoy the benefits of this. For now, Mr Hanish says the new system has made his job more difficult and the delivery of public services poorer. “Most panchayat leaders are incompetent. Too many are corrupt.”
Yet elsewhere the picture may be worse. In most states, including UP, politicians and bureaucrats have denied the panchayats even modest power. The ditch-digging NREGS is an example. It is hard to know what UP's panchayats exist for, if not to identify and organise its wretched beneficiaries. But it is the collectors who mostly control the scheme.
And so in Kochi, after a hellish long day, Mr Hanish goes home to work until 2am on the next day's files. Meanwhile in Jalaun, 2,400km to the north, Mr Samphel sets out to inspect freshly dug ditches, and listen to the infinite complaints of their ragged diggers, by torchlight.
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