India is a rich country inhabited by poor. India is rich because it is blessed with massive natural resources. For instance:
1. We are the 7th largest country in the world
2. We have 8129 kms long coastline giving us massive sea resources (fish, off-shore oil, ports and shipping industry)
3. Himalayas protect us from the chilly western winds and thus, we are safe from extreme climatic conditions unlike most countries in the world
4. 4th largest reserves of coal
5. 7th largest reserves of iron ore and manganese ore
6. 5th largest reserves of bauxite
7. 4th largest zinc reserves of the world
8. World’s largest reserves of thorium, along Tamil Nadu’s shores
9. Massive water resources for hydro power in North East as well as in neighbourhood, Nepal
10. One of the 20 major producers of copper, and so on
And yet, we are a big importer of coal, and are likely to be an importer of sand, yes sand, courtesy poor economic management of the country. India was world’s 3rd largest exporter of iron ore a couple of years ago but again, massive mismanagement and corruption has put paid to this sector and many steel companies are struggling to keep themselves afloat for iron ore needs. Our farm yields are about one third of the world averages but the farmers probably do not even know about it. India is burning into terrorism due to Kashmir problem but there is not even a talk about its solution. Manufacturing is shrinking when it ought to have been expanding like China and all government wants to do is to appease the farmers by making land acquisition difficult and burn its scarce resources into dole outs through food security laws. Courts in Singapore deliver judgments in days whereas our courts take decades. 97 percentile scorer in CAT is compelled to go to B or C class MBA institutions while 80 percentile scorer gets welcome call from IIM. Despite receipt of specific intelligence information from Mumbai attack in Nov’08, it was successful, and media reports all conclude that such attack if attempted today, is likely to be just as successful again. The whole scenario feels like India is a country struck with the disease dyslexia.
Most brilliant students prefer going to civil services that produce IAS, IRS and alike. Every single city in the country is ultimately controlled by an IAS as Collector or Commissioner. Each government department is headed by a civil servant. Each PSU is headed by a civil servant. And yet, each city, each government department and each PSU is a testimony of what it should not be. No PSU can really compete with any private sector company if both are made to operate within same set of rules. Air India is a classic example. It employs four to five times staff per air craft in comparison with other air lines in India, and yet, it faces strikes at the drop of hat. Not just Air India, almost each PSU is a blatant monument of the proof that it exists only for its employees and not the public it was meant to serve. Bank staff is frequently on strike to resist privatization under the pretext of public interest when they can’t hide the fact that they are scared of accountability that privatization will bring, and accountability is something a government servant simply doesn’t like. No wonder, each PSU that is in competition with private sector is in losses and only those which are enjoying monopolies could be in profit. PSUs that face increasing competition keep sinking deeper into oblivion as evident from yester years’ darlings like HMT, ALWIN, BSNL, INDIAN AIRLINES, AIR INDIA, many PSU Banks etc.
It reminds me of a five day seminar on Taxation for Finance Executive in Public Sector in 1983, held in Nagpur. I participated as I was working for HMT those days. Four days sessions were addressed by Income tax Commissioners from various regions who always appeared with a number of ITRs (Income tax reporters) with flags, and needed an assistant to help them frequently open up the flagged pages to refer to those bulky volumes during their discourse on income tax topics. Last day session was addressed by a chartered accountant, Mr. Bansi S. Mehta, who practiced in Mumbai. He came without any book or note-sheet with him. During lecture on capital v/s revenue expenditure, he cited hundreds of cases by heart without having to refer to any ITR volume at all. The difference in expertise between those IRS and this professional was striking. And this is despite the fact that all these gentlemen practiced income tax as full time and rather, this professional might have to devote some time to other parts of practice like auditing whereas income tax commissioner had absolutely nothing else to do but practice income tax.
Public service has come to an extent where entitlement of public comes only with binding obligation of the bureaucrat. If a bureaucrat is not bound to do something or reveal something, public is not entitled to it. This is an open secret, known to almost everybody who has ever sought any information under RTI. First reaction to an RTI query is refusal to accept it on grounds like, it does not concern this department, it does not concern you as applicant, it is not in prescribed format, it is not in hindi language, this issue does not come under RTI or the mode of payment of Rs 10/- the prescribed fee is not right etc. Once an applicant is past this stage, many parts of the query will be denied with replies like, what is sought is an opinion and not information, revealing of this information is not obligatory on the public authority, no such information is maintained etc. Underlying principle is not to implement spirit of the RTI law which seeks to ensure that public has a right to information which needs to be facilitated and guaranteed rather there is a screeching proof of resistance of bureaucracy against exercise of such right by the people. It is an unfortunate truth that spirit of law does not matter to the government anymore which only abides by letter of law and many a times, only after it is forced to do so by the courts.
Bureaucracy does not believe in specialization just like our ministers. There are frequently transferred from one department to another. A telecom secretary can become a finance secretary and then, become governor of RBI and so on, which means telecom and finance do not need different type of skills or knowledge? A commissioner in commercial taxes department is transferred as a Labour Commissioner and so on. No wonder, performance of the government does not differ from one department to another, and no wonder RBI has been a dismal failure in controlling inflation and upholding growth. It killed growth by constantly increasing interest rates and discouraging investment but couldn’t dent the demon of inflation. It refused to appreciate the fact that hoarders, who were not discouraged by 100% rise in prices, would not be discouraged by 0.25% increase in interest rates at all. Thus, bureaucracy knows no specialization or professionalism.
It reminds me of a joke, told by the poet, Surendra Sharma several years ago. Due to absence of science teacher in a school, the head-master asked the Hindi teacher to take his class. The Hindi teacher folded his hands and replied politely, Sir, I am a teacher and not a minister. I can teach only my subject. Only a minister can handle any subject.
In so far as the attitude is concerned, bureaucracy is generally negative. Policy making is the job of politicians and its implementation is the job of bureaucracy. Yet, we come across situations almost every day where a policy sounds one thing when announced on media, but devil is found in the details, the fine print. Surely, politicians do not produce the fine print which is the job of bureaucracy that reveals their attitude. To illustrate the point, let me give a few examples:-
- Madhya Pradesh government issued new Bhumi Vikas Niyam in June’2012 changing several provisions relating to real estate including building permissions, FAR etc. Since a Master Plan was applicable to Indore, statute needed a notification from state government to make these BVN applicable to Indore which did not come until Feb’14. Due to this delay, building permissions for high rise buildings were stuck for nearly 2 years in Indore hurting construction industry at a time when state government was elected for the third time on ground of development. Obviously, one cannot blame politicians for this failure but only bureaucracy.
- Where the BVN specified an FAR (Floor Area Ratio) of 2, the notifications issued in Feb’14 reduced it to 1.75. Now, construction industry is again stuck and notifications are as good as never issued, forcing industry either to lobby with government for rectification or move court. Again, it is evident that politicians couldn’t be blamed for this fiasco but only bureaucracy.
- Finance Minister while imposing fringe benefit tax in Union Budget, clearly mentioned that legitimate business expenditure would not be covered by this tax, yet fine print included legitimate business expenditure like travelling and telephone expenses, and remained so for several years. Evidently, this was the creation of bureaucracy and not politicians.
- Central Sales Tax Act was amended in 2002 to make C form compulsory, and from one in a year to be one in a quarter. Something that should have been abolished in the process of reforms was being sought to be quadrupled in a retrogate move which is surely a bureaucratic decision and not that of politicians. Not just that, subsequent departmental zeal to extract more revenue from tax papers, scope of this amendment has been expanded to deny the benefit of exemption to those already granted on cases where C form was not furnished. The aggrieved had to move high courts. At least three high courts have struck down such administrative circulars and yet, the commercial taxes departments of various states including MP, have refused to budge and are waiting for slap on their own face from their own high court. This is bureaucracy and not politics.
Any biography that we may read of any business tycoon of yester years in India, like the Tatas, Birlas, Bajaj, Ambani and so on, will tell us how badly the bureaucrats controlled the entire economy and took pride in enforcing higher wisdom over superior one. They decided India should not have second factory for viscose fibre, when the entire textile industry was queuing up in front of Grasim Nagda for their requirement for this material; or that Bajaj should not be allowed to set up another scooter factory despite the whole India queuing up for scooter delivery which was running into arrears for a whole generation requiring booking of a scooter on conception of a child for use when he will have grown up old enough to require its delivery. The country’s automobile market was driven on ‘black’ such that any new product would be successful only if it commanded premium in black market for spot delivery. The country was abounding by monopolies whether in private sector like Bajaj Scooters, Tata Trucks or Grasim viscose fibers or in public sector in almost any industry they operated in. In fact, public sector monopolized even private sector through back door which fact was exposed by Swaraj Paul, an NRI business tycoon from UK who woke up to the fact that public sector financial institutions held majority shares in almost any listed company in India. This was due to a mandatory “convertibility clause” that was enforced by monopoly public financial institutions allowing them to enjoy the comfort of a secured lender when a project was green field and bearing risk, and to reap the benefits of equity once the project turned into success by compelling the borrower company to convert full or part of the loan into equity “at par”. This was profiteering by the state! Thanks to the venality of our bureaucracy (and politicians as well), Swaraj Paul identified about 16 such companies where government institutions were holding majority shares and promoters’ stake was minor. This included Escorts and Tata Steel. He staged a hostile takeover of these companies in 1984 with the active support of government institutions and had almost thrown out the management of Escorts when the fate struck and Indira Gandhi fell to an assassination attempt and Rajiv Gandhi had a capitalist (modern, progressive and successful) vision for India and refused to allow government institutions to support such hijacking of India’s most reputed companies. Few years later, bureaucrats enabled Ambanis to take over L&T through back door but the issue again back fired and a strong headed V P Singh as the Finance Minister under Rajiv Gandhi’s visionary government, succeeded in thwarting such attempt.
The point is, India has been in complete control of bureaucrats one way or the other. There was a brief era of Rajiv Gandhi and then, N. Rao when politicians prevailed in diluting this control in the guise of reforms. These reforms are all but forgotten. Nobody talks about reforms any more. Today reforms mean permitting FDI into retail or higher FDI into insurance or permitting pension funds to invest in equity market. The basic purpose of reforms being making it easy to do business is not relevant anymore. No wonder, India’s work ranking on ease of doing business is not improving from 134 out of 184 countries. When Rajiv Gandhi and Rao reformed governance, the results were apparent. India grew to a potential world economic power thanks to the reforms, being loosening of bureaucratic controls on business, brought about by these visionary leaders, but is in a great danger of retreating into stagflation due to government being all bureaucracy under UPA once again, setting up one committee a day and prime minister himself being a bureaucrat unwilling to be anything else. eGovernance is no reform like taxis are no reform to the tongas. It is a simple progression of technology. In principle, government controls are increasing, and government is determined to squeeze its citizens who have, and to distribute part of it to those who vote in herds. Bureaucrats have forced government to lock its horns with USA jeopardizing the closest international friendship that India enjoyed (Bush is on record saying that India had no friend in the whole world closure than USA, and how true that was!). And this is when the subject bureaucrat, Devyani, is one of those 20 odd bureaucrats who produced false documents to get a flat in Adarsh Housing Society, and the enquiry commission has recommended action against them.
In effect, India has been so (mis)managed since independence that credibility has simply vanished from our public life. There is absolutely no authority in India whose worlds can be taken at par by the people. Prime Minister is repeated attacked by all and sundry, CAG is routinely attacked by the government, Election Commission is routinely attacked by political parties, and even Judiciary is routinely under attack for many reasons. Police, CBI, Income Tax, Commercial-Taxes etc are so hopeless that they are not respected in public life at all. Even Chief Justice’s office is under shadow frequently with affidavits casting huge aspersions of corruptions on half the former chief justices (of previous 16) citing circumstantial evidence as no direct evidence would be available. VIP culture is old, and replaced with VVIP culture. When rape or molestation is blamed on a journalist, police immediately takes action without even waiting for the victim to file an FIR but when another such accusation is made against a former supreme court judge, police refuses to act until formal FIR is filed despite preliminary enquiry upholding the allegation. Two completely opposite stands in the same country in the same month! In consequence, authorities have lost credibility, they have lost respect.
In public, judges are deemed to be above law. Despite corruption charges, they can only be “requested” to resign or proceed on leave, and if they refuse to oblige, the only action to be taken is to transfer them to another court as if that court will be happy to live with corruption. IAS is often humoured to be Indian Arrogant Service or Indian Adanga Service which explains their role in Modern India. It is high time specialization is introduced into government working as well. Each government department should specify the kind of specialization it needs and professionals from that area of specialization should only be promoted to head that department. IAS or IRS have outlived their utility and have no role to play in modern India anymore. They should be replaced with professionals like CAs, MBAs etc which will not only improve efficiency for the government but also will cost a loss less.
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