Maximum government, minimum governance

“Minimum Government, Maximum Governance” is what India was promised when Prime Minister Modi and the National Democratic Alliance rode to power in May 2014. In recent months many commentators have expressed their disappointment in the Modi government’s ability to live up to the promise of minimum government, particularly when it comes to running the economy. And in the bargain, we’ve ended up with more government in places we least expected—telling us what to eat and how best to be patriotic.

But what of governance? Has the Prime Minister been able to bring the “efficiency” and “decisiveness” that he was known for as chief minister into running the country and how substantive is his “maximum governance” reform agenda?

A quick survey of how the central government is functioning today would suggest that this government’s most definitive contribution to governance in India has been its ability to unleash the creative bureaucrat, who can now give an advertising agency a run for their money when it comes to coining catchy slogans and tongue twister acronyms. This talent is best displayed in the newly released “transforming India”—a document prepared by a specially constituted group of secretaries. India is now set to transform through “UlHAS” for health, “UNIQUE” for elementary education, “Wi-Fi in every Village” and “Internet Haath Mein” for improved digital connectivity.

Sloganeering apart, the Modi government’s reform package offered so far has largely focused on using technology to monitor bureaucrats and streamline business processes to ensure files are pushed faster and decisions taken with speed. Important as these reforms might be, they are neither substantive nor radical enough to achieve the goal of maximum governance.

Take, for instance, two key reforms that grabbed headlines these last two years: the effort to discipline bureaucrats by introducing biometric attendance for central government employees and the attempt to reduce discretion through instruments like JAM (the Jan Dhan-Aadhaar-Mobile) that bypass the corrupt, inefficient bureaucrat and transfer benefits directly to citizens.

Implicit in these reforms is the assumption that India’s deep-seated governance failures are a consequence of the unruly, corrupt bureaucrat who rarely shows up to work. There is some truth to this as is revealed by the many surveys on government doctor and teacher absenteeism. But even if monitoring bureaucrats through biometrics may get them to show up (although there are now enough studies that point to the ease with which such technologies can be gamed) these reforms fail to address the deeper challenge of empowering bureaucrats with tools that enable them to get their jobs done.

This is best illustrated in the effort to use JAM to transfer benefits like pensions, scholarships and subsidies directly to citizens. The rationale for JAM is that it can lower corruption and enhance efficiency by reducing bureaucratic intervention.

But as a recent World Bank study on pensions by Shrayana Bhattacharya, Maria Mini Jos, Soumya Kapoor Mehta and Rinku Murgai shows, corruption is only one and often insignificant reason why benefits don’t reach the poor. The bigger hurdle is bureaucratic procedure that makes identifying the poor and enrolling them in to the pension programmes near impossible.

The problem of governance gets even more challenging when it comes to implementing the Prime Minister’s ambitious agenda of “Swachh Bharat” and his more recently stated objective of improving learning quality. These goals require the bureaucracy to move beyond rules and procedures to be more nimble, to deliberate with citizens, identify problems, and innovate solutions that are best suited to the needs on the ground.

As my co-author Bhattacharya and I argue in a recent paper this requires the reform agenda to move beyond technological quick fixes and focus on changing mindsets of officers by empowering them to act as real-time problem solvers, not merely rule-followers. This requires reforms that focus on administrative design, recruitment policy and performance management that incentivize creativity.

Instead, the Modi government’s reform pillars of technology and discipline run the risk of undermining creativity by curbing discretion. But perhaps the deeper problem is that it serves to entrench a culture of distrust. And it is this distrust that is revealed in the Prime Minister’s personal style of governance that centralizes all decision-making within the Prime Minister’s Office (PMO).

Rather than encourage a culture of problem solving, this centralization has resulted in destroying the bureaucracy’s ability to take decisions as bureaucrats at the highest levels now simply wait for signals from PMO. While this approach may have resulted in short-term gains when the Prime Minister was a state chief minister but in the long term it can serve to erode institutional systems and decision-making processes which could be disastrous.

As the Prime Minister enters his third year in office, two seemingly unrelated policy shifts, afford him a unique opportunity to change the narrative on governance reforms. The first is the implementation of the 14th Finance Commission recommendations to enhance devolution to states, which, as this column has long argued, if done right can empower the central government to incentivize innovation, experimentation and competition among state governments.

The second is the shift in government rhetoric, combined with the attempt initiated by the NITI Aayog to move policy measurement away from infrastructure and inputs to performance and outcomes. Taken together, this combination of incentivizing innovation and competition with measurement of performance and outcomes could unleash a broader administrative reform agenda that focuses on getting administrative design right such that there is a balance between the need for autonomy and discretion to innovate with accountability for performance.

For the moment, barring a few tweaks in the financing structure of central schemes and some debate on identifying outcome indicators, the reform narrative within the central government is missing this bigger picture. Instead, the rhetoric of blame has taken over.

The failure to deliver, it is argued a consequence of an obstructionist political opposition and an over-reliance on bureaucrats who constantly block new ideas. But this narrative will not take the Prime Minister far. Voters want maximum action not maximum blame. The Prime Minister and his government have the opportunity, let’s hope they make this the year of action.

Yamini Aiyar is senior research fellow, Centre for Policy Research, and director, Accountability Initiative.