I, like many Moneylife readers, love to blame the bureaucrats for the present mess in our country. Moneylife readers will be aware of silly demands made by tax authorities including issuing notice for Rs10 discrepancy.
We have also seen complaints by industry and individuals about the need to improve 'ease' of doing business. But the question is: why is it so complicated? What makes these bureaucrats behave so? Let us first look at some real examples. (Details have been changed to protect the concerned parties.)
Some Real Bureaucratic Experiences
A chief engineer from a top municipal corporation once told me that his desk computer was inoperable for two weeks because the mouse was broken. He explained, if he bought a mouse from the stationery shop close by, it would cost him around Rs400, but he will have to face inquiry about why he did not route it through the procurement portal. He cannot initiate the process through the portal because he did not have a mouse, so he has to make a paper application and that has not been processed as yet. So, he was stuck. And so were all of us!
The head of the department, which deals with Municipal hospitals, was faced with a few problems. First, by law he was required to invite tenders for the critical parts of magnetic resonance imaging (MRI) machine manufactured by a multi-national company (MNC). His argument to the municipal commissioner was that if machine was made by MNC, then how can we procure original equipment manufacturer (OEM) parts from non-MNC party at lower rates? He was asked to invite the tenders. His second problem was the L1 bidder for the critical parts had quoted 1/10th the price MNC had quoted. This made no sense to him. But he was constrained by policy to award the tender to L1 bidder.
One engineer in charge of road works found himself in unusual situation. He was faced with contempt of the High Court since he was not getting the road repaired, as per the terms of award of contract. His dilemma was complicated. The contractor refused to repair the road because he had paid off the commissioner and the head of the department and his payment was already sanctioned. A creative advocate found a way out for him. The signed approval papers releasing the payment to the contractor were to be sent by municipal corporation’s office courier to head office for preparation and release of cheque. The approval papers were recorded in out-register but thereafter magically disappeared. They reappeared at the head office AFTER the contractor understood and repaired the road. The High Court order was thus complied with.
What Ails the Bureaucracy?
Bureaucrats are bled into the system by using auditor approach. A bureaucrat who wants to work for the nation-building quickly realises that he is suffocated. The tool—show cause notice. The Indian Administrative Services (IAS) lobby is established such that if you become part of the system, things flow smoothly. Improving the system invites show-cause. Thus, the system incentivises non-corrupt officers to lie low. Such officers enjoy good standing but only if they do not attempt to change the system.
Bureaucracy thrives on de-attribution. Their tenure is supposed to be limited and jobs transferable. Hence, the work has to have standardised procedures and bureaucrats are plug-and-play employees. Alert citizens may be amused (or horrified) to see the chief secretary of mining become finance secretary or be transferred to health department but that is the design of the system. Therefore, no decision can be traced to a person—only to the chair.
The system itself, a relic of corrupt times, is designed to create bottlenecks or gates. These bottlenecks serve as rent-seeking opportunities for the gatekeepers. The procedure becomes complicated so that the gatekeeper at the top can seek rent from the gatekeepers lower down. So, what looks like a mess to the citizens, is a masterfully designed rent-seekers' paradise. That is why I think our bureaucrats are quite competent if they apply their minds.
But do they apply their mind? Bureaucrats do not apply their mind; they put their nose to the paper and follow the procedure. Bureaucrats cannot take the goal-oriented approach to their work. Else, they fall out of the system, which means, half-salary and no top-up earnings. Therefore, in many cases High Courts check if the concerned officer has 'applied his mind' to the problem before him. Sadly, High Courts discover it only when they themselves apply their mind.
Dealing with Bureaucracy
Jack Welch has described a great approach to dismantling the bureaucracy within General Electric Co (GE). While, Mr Welch and his management of GE has come under fire recently, we cannot find fault with his dealing with the GE bureaucracy. Mr Welch seized the GE's vast bureaucracy by the scruff of the neck and shook it till it saw stars. Welch focused on two parameters—efficiency in meeting objectives and performance.
If not the radical management style of neutron Jack, as Mr Welch was called, there are other strategies to improve the bureaucratic processes. The principles of total quality management have not reached the bureaucracy. We need to see objective based management of departments, kaizen-based approach to improvement. These ideas are well-understood in corporate world but seem alien to world of government.
Lee Kuan Yew (LKY) fixed the bureaucracy with few simple elements. A vision of service to the country which prime minister (PM) LKY himself lived by, unflinching focus on meritocracy and a fair and just salary structure. Bureaucrats in Singapore are trained in the best universities and exposed to diverse work practices before taking up responsibilities within government. Sir Kenneth Stowe described it as “a good piano playing good music.” Both the objectives, i.e., good music, and the system, good piano, were important to Lee Kuan Yew. The Indian bureaucracy is a decent piano but playing the wrong music.
Unlike popular perception, bureaucrats need to be made directly and personally liable for their performance. This is called attribution. When projects like Konkan Railway and Delhi Metro were handed over to E Sreedharan, when the election commission was handled by TN Seshan, things looked up.
Attribution makes bureaucrats responsible for their actions. It works in public projects carried out private players as well. In a recent Twitter conversation Sucheta Dalal highlighted the importance of Tanmoy Chakrabarty from TCS for improvement in Passport Services.
Imagine if we gave recognition to the chief of Hindustan Aeronautics Ltd and put the expectations on him, will we get more Tejas, Sukhois and other aircrafts that function better? I think so.
(Rahul Prakash Deodhar is an advocate, Bombay High Court and a private investor. He can be reached at [email protected], on twitter at @rahuldeodhar or at his website www.rahuldeodhar.com