Draft, proposed cabinet decisions that LPI would take
if it were to govern India.
A note by Sanjeev Sabhlok, 1 July 2004
The risk with "bad" candidates
Assuming that LPI (originally planned for SBP) comes into power, we could have significantly issues around the quality of the first round of candidates. Such candidates would probably not be reformers and would threaten the existence of government by wanting to become a Minister in the more "powerful" ministries. There are great difficulties in managing power-hungry candidates in the Cabinet system. Even checks and balances in terms of the power of the party vis-à-vis the cabinet may not work. Since this is likely to be a very difficult matter, potentially leading to the breakdown of governance at the very initial stage, it is important therefore to plan for having excellent candidates. One way to do this is to ensure that a Shadow Cabinet is assembled in advance that is particularly competent in areas of its jurisdiction. We would also need to incentivise these excellent people to participate in elections. Not having the right incentives to participate in elections would lead to the good candidates backing off from the elections at the last minute, as has been reported in the past by Sharad Joshi.
The "risk" with good candidates
Good candidates have opinions on areas in which there are good at, or think they are good at (!). To prevent ad hoc decision making and debating sessions when the Ministry assembles, it is crucial that basic decisions be agreed to in advance. That is why the following "decisions" are being proposed, in advance of any political process being set in place.
1. The first decision for the Cabinet would be to significantly raise the salaries of all members of Parliament and all legislative assemblies. (Background: No society can prosper if its leaders are dishonest. Our society has created incentives for dishonesty among leaders. I explain this is in the appendix in some more detail. But the first principle is that a dishonest India and a corrupt India will never, ever, succeed in retaining its best people or in becoming an innovator and creator of wealth. To eliminate the incentives for corruption of leaders, numerous steps are needed. I have outlined these in the appendix two. It is my judgement that approximately 80% of our brightest and most creative people have left India permanently, or do not work in India. This brain drain has occurred in the past 50 years, and shows no sign of stopping. The regrettable part is that of the remaining 20% of the very bright people in India, almost none has joined politics in order to provide leadership. A nation that cannot attract its best people to politics is a nation that is designed to be mediocre.)
2. The Cabinet would approve a plan for restructuring the entire government in the next two years. The plan would require the closing down or merger of departments bringing their number down from over 50 to around 10. The details of the plan would be worked out the first three months and submitted to the Cabinet for approval. There would be a restructuring and redesigning of the roles of ministers as a consequence of the overall strategic plan. People appointed though open selection to positions in the rank of joint secretary and above through a separate decision (below) would be able to apply for the new positions created as a result of the restructure. Appointments made at the rank of joint secretary and above would be contractual, for a period of three years. In the event of these positions becoming redundant as a consequence of the restructure that would take place within two years of the government coming into power, they would be suitably compensated as per the terms of their contracts. (In particular, the Planning Commission would be shut down within three months of the government coming into power. The functions of the Planning Commission would be transferred to different ministries. A plan for this would be prepared by the vice-chairman of the Planning Commission. Those employees made redundant as a consequence of the closing down of the Planning Commission would be compensated as per a negotiated agreement.)
3. The next decision of the Cabinet would relate to local governments. It would become mandatory for each urban area to have a council with certain defined parameters (details later).
4. The next decision of the Cabinet will relate to the disposal of the government property. The concerned departments that own property in urban areas would be required to submit plans for restructuring the entire property including its sale and building of appropriately limited structures for example skyscrapers, and selling the rest of the property. The plan would have to be approved within three months of the Cabinet meeting and the approved systems will have to be set into place as per the plan within one year of the decision having been taken.
5. The next decision would be to require a clear plan for each government public sector undertaking within three months and each plan would be approved within the next six months for rapid implementation.
6. A complete package on electoral reforms would be introduced into Parliament within six months. The draft package would be approved by the Cabinet in its first meeting.
7. The Universities Management Bill would be introduced in Parliament. Fundamentally, universities would be converted into corporations and permitted to set their own fee structure in a phased manner with appropriate consultation with the parents and the community. Universities would be allowed to set any salary structure that they consider fit to provide the kind of service that they do, including minimising the activities they do, in order to make them more effective.
8. (see Background note below) The Constitution of India does not require that that members of the all-India services be given positions of significant policy impact. This tradition has to be immediately broken. The Cabinet will resolve that all positions in the rank of joint secretary to the government of India and above will be advertised publicly and filled through a process of candidates meeting required selection criteria. The compensation of these positions would be on par with senior multinational corporation positions. Members of the all-India services would have an equal opportunity to apply to these positions, and provide proof of their capability to meet these criteria. Each position would have specified the core competencies needed. Each department would be given precisely two months to come out with a well-defined set of competencies that would ensure that people manning these positions are capable of performing the roles that they have taken up. Within six months of coming into power all positions would have been advertised and filled. Members of the all-India services who could not qualify for these new decisions would be given the option of reverting to a junior rank or given a redundancy package commensurate with a negotiated agreement. Each of the newly appointed Secretaries would be required to submit a detailed strategic plan for their department for two years, during which period the overall restructure would be planned and executed, involving interim restructures of most departments. The two-year strategic plan produced by the newly appointed secretaries within three months of their taking charge would be implemented effectively and quickly, to ensure that all gains to trade, or opportunities for development are fully exploited.
Once the new structures are put into place, existing strategies would be reviewed and new ones designed, for the last 2 ½ years of the government's tenure.
9. The Cabinet's next decision would be related to a new Public Services Management Act to be placed before the Parliament within six months. Each department would be given complete delegation in terms of deciding its salary structure. This would be in keeping with best practice across the world. The basic underlying principle laid down by the Cabinet would be to ensure that we create a complete parity in the trends in the private and public sector to ensure that the government is able to attract the most competent Indians in the world for the specific roles that a government undertakes. It would also be required of each government organisation or agency to demonstrate through its annual report that it is following best practice in the world in terms of accounting, economic policy, health and safety of its employees and community expectations. All autonomous bodies of the government would be allowed to implement their own salary structures as part of the Public Services Management Act. This would include organisations like the Reserve Bank of India.
BACKGROUND ON THE BUREAUCRACY
In essence, if one were to underline the fundamental structural change that is needed in India, it could be summarised in the following -- Number one: Bring the best people to the top. Number two - see number one. Build a structure so that the best people in the country are available for each job. In almost all cases of public policymaking, this implies people with multifaceted skills, including significant academic knowledge, significant policy experience and very highly tuned people, relationship and negotiation skills. As an economy grows, the best people in of a particular capacity or quality are automatically attracted to those areas that reward them appropriately. If the highest civil servant in India is paid less than the starting salary of an average multinational company management trainee it stands to reason that there would be a significant disincentive for good brains and good talent to enter civil service.
The consequence is that bureaucracy in India simply does not reflects best practice. Indeed, it does not even reflect the quality of practice that was available in at the time when the British were in India.
When a person joins the Indian Administrative Service, he or she may be of a calibre that could potentially become suitably honed through training and experience into becoming a high quality strategic manager. However, the way things are presently planned and executed in India, the quality improvement of civil servants is extremely limited. Indeed, as they grow into senior positions, the quality of their decision-making becomes weaker or at least stagnates (I'm ignoring corruption which is a major driver of many bureaucrat's decisions).
They have not been suitably equipped with the kind of management philosophy and thinking that will enable them to demand the best possible analytical reports or quality of assessments that will drive best practice in their particular area. Till the end of the 1990s, they did not have even the equipment to get this kind of knowledge. That knowledge is now readily available from the Internet if only they were in a position to analyse that quality of information. For instance, the world's best laws and policy documents are now in the public domain not just for the country for which they were designed but for the entire world. Unfortunately, the ability to understand best practice is simply not available in the existing Indian bureaucracy. When the highest levels of an organisation do not understand or demand excellence it is obvious that anyone below them with aspirations towards quality is going to be frustrated and fail miserably in persuading the higher officials or policymakers in adopting a particular best practice policy.
Unfortunately it has not been the practice of Indian policymakers to benchmark themselves with the best in the world. There has not been regular practice in India for instance, of policy managers visiting the best organisations in the world and adopting their learnings. While the travelling costs might be high, the cost of not getting the best practice is much higher.
Therefore the very first step has to be to significantly upgrade the quality of the leaders in public policy. Managers of men and resources need to be suitably equipped with management skills. These skills are now abundantly available in the private sector, which recognises and rewards those who have such skills. The public sector in India is disadvantaged by its inability to attract such highly qualified and skilled people. Such people need to be attracted by two means - one, giving them suitable responsibility of significant proportions, and two, by rewarding them financially on par with what they were achieving in the private sector. The concept of parity with the private sector is of fundamental importance. It is also now becoming common practice across the world that people with significant theoretical skills such as academicians with significant industry experience, are being placed in positions of the governmental policy making, because they bring to bear the latest knowledge and comparative understandings from across the world. There are certain executive skills that they will need to be trained in, though.
As public policy has become more complex, the West has discovered that designing contractual arrangements so that the best person for a particular job is recruited from across the country or even the world, and that person is suitably compensated, brings the quality of analysis that is crucial to superior outcomes. This model has to be opted as the basic model of public management in India.
If merit is the only concern, as it should be, how does one ensure that merit is the only yardstick used for selecting people to be policy leaders? The practice in the West has now become that people have to market their own skills by applying appropriately and addressing selection criteria. If the process is completely transparent in terms of checks and balances, in different advanced countries, it is almost certain that quality can be maintained in most cases, and definitely well above the quality of existing Indian civil servants. The probability of finding good people and ensuring that merit is suitably rewarded is much higher with a system that allows open market intake at each executive position in government. There are numerous benefits when people move from the private sector into public sector and vice versa. This transfer of learning is critical for organisations to reinvent themselves. We will have to build systems that enable this to happen.