To Do What Thatcher Did To Our System’s Source

Long years ago, when I was ambassador to the World Trade Organisation in Geneva, a foreign colleague expressed his open admiration for the Indian civil service’s capacity to reinvent itself, adapting to changing economic and social needs in a dynamic environment. “I can’t imagine how you gave up your powers in a restricted economy and opened it up dramatically,” he said in the context of the economic reforms of 1991 and beyond. Indeed, the reform package announced in Parliament demanded a complete reversal of all that we as civil servants were accustomed to for years.

We were products of a system characterised by such principles as socialism, mixed economy, import restrictions, curbs on foreign exchange outflows and on acquisition of foreign technologies, controlled exchange rates, and the host of social evils—smuggling, corruption and the rise of dons—that such policies spawned. This system’s dismantling entailed a sea change in our modes of thinking. That civil servants front-ended this change and paved the way for a long period of sustained growth is a tribute to their capacity to rise to new challenge and their openness to new modes of thinking.

Throughout India’s history, civil servants have been responsible at the field level for handling any crisis, whether it is militancy, flood, drought, economic downturn or any other issue that needs to be dealt with immediately. They have originated new ideas, carried through hundreds of projects, evolved new practices, solved local problems, and defused difficult situations firmly yet diplomatically. India owes much to its faceless civil servants working selflessly in the background. Of course, there are black sheep, but in which class of people are black sheep absent? Where black sheep exist, root them out mercilessly as has been done in the revenue department in the past few days. This will only be appreciated by others in the system.

Those who believe the administrative system will undergo remarkable transformation by just bringing in people from the corporate sector do not know the first principles of public administration. They must understand that civil servants come from the same stock as corporate managers, from IITs, IIMs and top colleges. There are others who come into the civil service from rural areas, with diverse social backgrounds, and their greater understanding of ground realities adds much value to the administrative process.

Corporate managers have a clearly defined objective—the company’s bottomline, profitability and shareholder value. In public administration, we have to chase multiple objectives, many of which are not sharply defined and also varying as governments change and priorities change, sometimes suddenly and without warning. We deal with people, after all, not customers or figures. I am tempted to quote Arun Maira, who distinguished himself at different periods in his life as corporate manager, as consultant and also as public administrator in the capacity of Planning Commission member. In his book An Upstart in Government, he says, “I must admit that it is much harder to get tangible results in the government… I have to also explain that the scope of the government’s responsibilities is much larger than that of any private sector company. To produce outcomes that are equitable, and not only efficient, in providing health services to all citizens, for example, is more difficult than selling medicines to only those who can pay the price that covers their cost of discovery and production. The government’s job is not to make a profit; it is to improve the world for everyone.”

Today, there are at least three former civil servants in the Union council of ministers. The PMO too is manned largely by civil servants. This is acknowledgment that the present dispensation values their contributions. After 13 years as CM and five years as PM, Narendra Modi is the best judge of what works for him and what doesn’t.

Public administration is a specialist area in which skills acquired through years of experience cannot be randomly replaced. The need for specialist personnel is largely met by specialist services within the administrative system. It is only in certain positions of a technical nature that induction of persons with the required background from outside the system would help. But the problem of administration is not really one that can be dealt with by wholesale change of personnel. It is the system that needs fixing.

Referring to the battle royale in the CBI last year, Lord Meghnad Desai wrote in the Financial Express: “Even before this happened, I have argued that the administrative system needs drastic reform. The British have reformed their system at least twice in the last 50 years.” The way forward is to make the system more performance-oriented. Reform of the British system started with Margaret Thatcher. Her determination to bring about change in the system we are familiar with in the BBC serials Yes Minister and Yes, Prime Minister even led to a civil services strike in 1981. Her attempt was to turn the system on its head, giving primacy to results and making officials accountable.

The goal of administrators in the traditional system inherited from the British is to avoid mistakes and focus on processes alone without regard for results. Since the Thatcher days, the British adopted what is popularly known as SMART goal setting, where the objectives are Specific, Measurable, Attainable, Realistic and Timely. Australia and New Zealand followed suit, and, closer home, Malaysia developed its system led by the Performance Management and Delivery Unit (PEMANDU). PM Modi appreciated the Malaysian system when he visited Malaysia in 2015 and a cooperation agreement was signed in this field for implementation through the NITI Aayog.

The basic principles of New Public Management and its later avatar, New Public Governance, are clearly worded performance agreements, thus making administration accountable for results, revamping of financial systems to support the achievement of results, emphasis on cost centres and efficiency in utilisation of budgetary resources, strong management information systems and regular monitoring on the basis of agreed milestones. There is autonomy and flexibility too, and related changes in personnel management. There is consultation with civil society and people’s representatives on a large scale, particularly in Australia and Malaysia. These system changes fructified only because they were led from the top by the PM and the cabinet.

The Indian system is highly process-oriented. There are penalties for mistakes made, not consequences for failure to achieve results. We have appointed commissions, prepared reports, made recommendations on administrative reform. But piecemeal change will lead us nowhere. We have the ingredients of a system in New Public Management as practised in different countries that can give us insights on the way forward, but we have to design a system that best suits our large, populous, federal country. A beginning was made a few years ago to introduce a goal-oriented system through Results Framework Agreements, but it ground to a halt in a few years for lack of political ownership.

Our systems can change, but reform has to be integrated into the fabric of administration and led from the top. In the field of administration, we can bring about a wholesale change as was done in the economic arena in the 1990s. This alone will strengthen our administration, give it the confidence it needs, change beliefs and attitudes. Our system needs to facilitate decision-making and monitoring at multiple levels. Centralisation of decision-making comes with the risk of many things not being done at lower levels as everyone is focused on what the central figure wants. An Authority on Good Governance, headed by the PM at the central level and the CMs in the states, can make reform a continuing and productive process that meets the rising aspirations of our people.

(The writer, a former cabinet secretary, is Chairman, Centre for Development Studies, Trivandrum.)