Not just lateral appointments, India needs major – administrative reforms

To achieve the vision of a “Viksit Bharat” (Developed India) by 2047, India must focus on not just lateral appointments but also a comprehensive overhaul of its administrative framework. This involves streamlining processes, enhancing efficiency, and fostering transparency to support sustainable growth and development.

Need for Comprehensive Administrative Reforms in India

Recently, there’s been significant debate surrounding lateral entry into the civil service. However, this issue is relatively minor compared to the larger need for comprehensive administrative reforms in India.The broader concern is that India requires major administrative reforms in addition to ongoing economic reforms to address systemic issues within its bureaucracy.

• Challenges with Bureaucracy: The bureaucracy in India is often criticised by both businesses and citizens. Citizens report difficulties in accessing the benefits of various schemes, while businesses complain about excessive compliance requirements and bureaucratic hurdles that hinder ease of doing business.
• International Comparisons: China’s major administrative reforms, implemented in 1995, followed 15 years of economic liberalisation, underscoring the importance of synchronising administrative reforms with economic changes. India’s previous efforts, such as the Second Administrative Reforms Commission established during UPA 1.0, produced recommendations that have largely remained unimplemented, highlighting the need for updated and actionable reform strategies.

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Analysis of India’s Civil Service Structure

• Civil Service Size and Composition: India’s civil service is relatively small compared to international standards, with a notable imbalance in the distribution of roles. There is a disproportionately high number of clerical and administrative staff compared to the number of technocratic experts, teachers, and health workers. This disparity highlights a potential inefficiency in the allocation of human resources within the civil service.
• Generalist vs. Specialist Approach: The civil service in India operates on a generalist model, where civil servants are often appointed based on general administrative skills rather than specific areas of expertise. In contrast, many countries appoint civil servants based on their specialized knowledge and expect them to contribute in their areas of expertise throughout their careers. This difference in approach raises questions about the effectiveness and efficiency of India’s civil service structure.
• Employment Statistics and Global Comparisons: In the 1990s, government employment in India accounted for approximately 1% of total employment. This is notably lower compared to other Asian countries, where government employment typically represents a higher percentage of total employment. For instance, Malaysia and Sri Lanka have around 3% of their workforce in government roles. This statistic underscores a comparative lack of government employment in India relative to its regional counterparts.
• High Cost Relative to GDP: Despite its relatively small size, India’s civil service incurs high costs relative to the country’s per capita GDP. The ratio of the average government wage to per capita GDP in India is 4, which is the highest in the world. This indicates that government employees’ wages are four times the per capita GDP, placing a significant financial burden on the country. This high cost relative to income levels highlights a major fiscal challenge for the Indian government.
• International Wage-to-GDP Ratios: To provide a comparative perspective, the wage-to-GDP ratio in other countries varies significantly:
  • Vietnam and China: The ratio is approximately 1, meaning government wages are about equal to the per capita GDP.
  • Indonesia, Sri Lanka, and the Philippines: The ratio is around 2.5, indicating that government wages are 2.5 times the per capita GDP.
  • South Korea, Thailand, and Malaysia: The ratio ranges from 3 to 4, reflecting that government wages are 3 to 4 times the per capita GDP.
• Implications for India’s Civil Service Structure: The juxtaposition of a small civil service with a high cost relative to India’s GDP suggests that maintaining the current civil service structure may be financially burdensome given the country’s economic context. This discrepancy highlights the need for a reevaluation of the civil service framework to balance efficiency, cost-effectiveness, and the capacity to meet the country’s administrative needs.
• Pay Disparity in Civil Service High-level positions such as Cabinet Secretary and Chief Secretary receive lower salaries relative to their private sector counterparts. This has been a point of concern as these roles are crucial for effective governance. Conversely, lower-level civil servants receive higher wages compared to their private sector peers. This has led to a disparity where lower-level wages are relatively more competitive.
  • Compression Ratio: The compression ratio, which measures the wage difference between the highest and lowest grades, has decreased over time. This reduction in disparity indicates a more uniform wage structure, although challenges remain.

Impact of Pay Disparity

• Decline in Quality at Higher Levels: The disparity in salaries between high-level civil service positions and private sector counterparts has led to a decline in the quality of inductees at the upper Posts. Potential candidates may be discouraged from pursuing or remaining in high-level positions within the civil service due to relatively lower pay compared to what is offered in the private sector.
• High Demand for Government Jobs at Lower Levels: At the lower end of the civil service (which constitutes about 90% of the workforce), salaries are higher than in the private sector. This, combined with job security and benefits, drives high demand for government positions. The attractive compensation and stability contribute to a preference for government jobs over private sector opportunities.
• Impact on Expertise and Policy: The elite administrative service, which is crucial for policy-making, often lacks the time and depth needed for specialised expertise. This gap in expertise can result in less effective policy formulation and implementation. In contrast, other countries with well-developed administrative systems benefit from having experts in various domains who contribute to better policy outcomes.

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Needed Reforms in Civil Service

• Promotions and Testing: Implementing a performance-based system for promotions is essential. Promotions should be based on regular testing and performance evaluations rather than time-bound tenure. Age should not be a criterion for advancement; instead, performance should drive career progression. This approach would align the civil service with contemporary standards and expectations.
• Specialisation: Enhancing specialisation within the upper levels of the bureaucracy is necessary. Specialisation allows for more informed and effective policy-making by leveraging deep expertise in specific areas. India could benefit from studying and adopting best practices from East Asian countries such as Japan, South Korea, Singapore, and Taiwan. These countries have demonstrated success in creating efficient and specialised bureaucracies.
• Early Selection and Grooming: Emphasising the selection and grooming of civil servants early in their careers for specialisation can lead to a more skilled and knowledgeable administrative workforce.
• Regulatory Bodies Reform: Many regulatory bodies, such as the Telecom Regulatory Authority of India (TRAI), are often led by retired officials rather than domain experts. This can impact the effectiveness and technical proficiency of regulatory oversight. The regulatory structure is perceived as complex and opaque, with excessive government regulation potentially curtailing rights and stifling private sector growth.
• Need for Modern Regulatory Structure:
  • Transparency and Simplicity: The regulatory framework should be more transparent and less complex, facilitating easier navigation and compliance.
  • Domain Expertise: Regulatory bodies should be headed by professionals with relevant domain expertise rather than by retired bureaucrats. This will enhance the technical competence and credibility of these bodies.
  • Open Competition: Selection for regulatory positions should be based on open competition, ensuring that the most qualified individuals are appointed.
  • Minimise Regulatory Capture: The aim should be to reduce regulatory capture while avoiding excessive regulation that could hinder private investment and economic growth.
• Public Expenditure Allocation Public spending is not excessively large but is inefficiently allocated. A significant portion (50%) of government expenditure is non-developmental.
  • Major Expenses: Key expenditures include administrative salaries, pensions, and interest payments. To achieve developmental goals by 2047, there needs to be a shift towards more productive spending.
  • Imbalance in Spending: There is a disparity in spending levels, with high central and state expenditures and low local administration spending (4%). Local administrations, being closer to the ground realities, can allocate resources more efficiently and effectively. Increased local spending can lead to more teachers, nurses, and other essential personnel, improving local services and performance monitoring.

Challenge in Implementing Reforms

• Coalition Nature of Current Government: The coalition nature of the current government may pose a challenge to implementing comprehensive reforms. Diverse political interests and potential conflicts within the coalition could slow down or complicate the reform process, making it difficult to achieve consensus and push through necessary changes.

Way Forward

• Need to Modernise Colonial-Style Administration: The existing administrative framework, rooted in 19th-20th century colonial practices, needs modernization to meet contemporary needs. This involves updating outdated procedures and structures to align with current administrative, technological, and governance standards.
• Importance of Lateral Entry: Lateral entry is crucial for specialised agencies and regulatory bodies to infuse them with expertise and fresh perspectives. Bringing in professionals from outside the traditional civil service can enhance the effectiveness and technical proficiency of these organisations.
• Professional Training for Core Government Functions: Core government functions require a civil service that is professionally trained and skilled. Ensuring that civil servants are equipped with relevant expertise and competencies is vital for efficient governance and effective public service delivery.
• Balancing Act: Achieving modernization while maintaining efficiency and integrity is a delicate balancing act. Reforms must be designed to modernise the administrative system without compromising its operational effectiveness or ethical standards. Striking this balance is essential for fostering a more dynamic and accountable civil service.

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Conclusion

To realise the vision of “Viksit Bharat” (Developed India) in the 21st century, comprehensive administrative reforms are imperative. These reforms must take a holistic approach, addressing key areas such as the size, composition, pay structure, and specialisation of the civil service. By adopting a well-rounded strategy, India can create a more efficient, transparent, and effective administrative system. 

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