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A Historic Opportunity 3: Time To Reform The Bureaucracy

Sutanu Guru argues why it is critical for prime minister Narendra Modi to completely revamp the bureaucracy if labor, land, tax, agri and other reforms have a chance to be effective.

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Many Indian entrepreneurs have actually watched hilarious episodes of the iconic British series called Yes Minister that aired in the 1980s. If you have watched it, you will realize how formidable a challenge prime minister Narendra Modi faces as he tries to turn the Covid crisis into an opportunity to create a 21st century economic powerhouse. The simple question to answers is: who rules, governs or lords it over India? Many are under the illusion that it is politicians. But politicians come and go. What is permanent is the bureaucracy. It is the district magistrate, the collector and the Tehsildar who affect the lives of millions of lives in a daily basis.

During the Covid crisis, we have come across many examples of individual bureaucrats who have achieved some brilliant results. But collectively, bureaucracy is a drag on the Indian economy. One example will show how bureaucrats can make simple things complex. Till recently, there used to be a 4 PM daily press briefing where joint secretaries from health (Luv Agarwal) and home (Punya Salila Srivastava) along with top officials of ICMR provided the latest details and new rules and regulations. When the first lockdown was over, it was stipulated that shops would be open in neighborhood markets. Within a day, it was clarified that barber shops were not allowed to open. When asked why, Ms Srivastava said that only products, and not services were allowed to be sold. Punjab chief minister Captain Amarindar  Singh wondered why a "product" like liquor was not allowed to be sold when bankrupt state governments depended on tax revenue from liquor sales. 

That is just an example. And there are examples galore. Do remember that ever since the first lockdown was announced on March 24, more than 4,000 rules, regulations and clarifications have been issued by bureaucrats. 

Charitable critics say that the Covid-19 pandemic is so sudden, so unprecedented in living memory and so unpredictable that it would be unfair to blame the bureaucracy for making and changing rules as the impact of the virus keeps changing. The thing is Indian bureaucrats have earned a sterling reputation for orders and then a subsequent flurry of "clarifications". Remember the nightmarish six odd weeks after Prime Minister Narendra Modi announced demonitisation? Bank managers and clerks decided if your daughter was actually getting married so that you could withdraw a bit of your own money. There is a consensus now that botched up implementation of the exercise caused immense harm to the Indian economy, particularly the MSME sector. Equally botched up was the implementation of the GST whose effects continue to linger. 

This is because the Indian bureaucracy simply refuses to change its "Mai Baap" acquired during British Imperial rule. Indian bureaucrats might think that they constitute the steel frame that holds the country together. But the average citizen loathes and detests Indian bureaucrats. For the aam aadmi, the bureaucrat is inaccessible, arrogant, unaccountable and often corrupt to the core. This is not a sweeping generalization or judgement. Many individual bureaucrats are indeed inspirational role models. But as a group, they have behaved like parasites who have done everything possible to prevent the innate entrepreneurial energies of India from blossoming. Sure politicians too have done that. But many of them get kicked out by voters every five years or so. Not so with Indian bureaucrats.

The problem is that the bureaucracy, like an army of termites, has so deeply infiltrated every institution and organization of governance that they have become de facto lords and masters. The telecom regulator is usually a retired IAS officer. The Chief Information Commissioner is usually a retired IAS officer; someone who has perhaps spent his entire career thwarting transparency! The Competition Commission of India is usually headed by an IAS officer. The Election Commission is inhabited by retired IAS officers. The administrative tribunals are headed by retired IAS officers. The aviation regulator is invariably a retired IAS officer. The UPSC chairman is usually a retired IAS. The SEBI chairman is usually a retired bureaucrat. The current RBI governor is a retired bureaucrat; as is the new CVC...The list is endless. People in the know joke that it is a divine blessing that the Delhi Metro was headed by a technocrat like E. Sreedharan. If an IAS had headed it, the damn thing might still be under construction! The Modi regime has made some efforts by appointing industry experts and technocrats as senior bureaucrats in key ministries. But we are yet to see any decisive results of this exercise.

The Modi dispensation has started changing this. Many technocrats have been laterally appointed as joint secretaries who would play a key role in ministries that directly impact the economy. Many inefficient and corrupt bureaucrats have been compulsorily retired. This process was moving at a gradual pace as many thought the prime minister doesn't want to act in a hurried manner and alienate even efficient ones who have been delivering results. But this crisis offers a historic opportunity to Modi to completely revamp the bureaucracy. 


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