Prime Minister Narendra Modi, replying to the debate on the motion of thanks to the President’s address to the Lok Sabha, made a strong case for the privatisation of PSUs and said: “If one becomes an IAS officer will he also run a fertiliser factory… Will he run a chemical factory too… Will he fly aeroplanes? What are we going to achieve by placing the country in the hands of the babus?”
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In the 1950s and ’60s, the private sector had neither the capability to raise capital to build these plants nor the ability to manage them. The state had to take on the role of industrialising the country by establishing PSUs. This was in tune with the thinking of the time that the commanding heights of the economy should be in public hands.
The civil services became the natural choice for establishing and managing these units. They delivered substantially, if not fully. Even after privatisation, the bureaucracy would be required for the transition of PSUs from the public to the private sector and providing the needed state support to make privatisation a success.
The PM’s goal of making India a $5-trillion economy needs a coherent structural transformation agenda and extraordinary implementation capacity. Since Independence, the political survival of Indian regimes has required pleasing a powerful land-owning class and a highly concentrated set of industrial capitalists.
The elites of business houses and land owners share no all-encompassing development agenda. They confront the state seeking advantage for themselves. This does not lead to a coherent transformational agenda but a flabby comprise of a dominant coalition engaged in, as Pranab Bardhan put it, “a spree of grabbing of public resources”. Can the present regime find a way out of this conundrum?
The second challenge is to implement the developmental agenda. While the agenda is an outcome of political choices, the thinking goes that market mechanisms should be used as far as possible to make economic choices. This argument is at the heart of the privatisation of state assets.
However, markets operate well only when they are supported by other kinds of social networks, which include non-contractual elements like trust. They are also inextricably embedded in a matrix of cultural understandings and intertwined with forms and policies of the state. Particularly in industrial transformation, there must be an essential complementarity of state structures and market exchange.
Only a competent bureaucracy can provide this. It is for this reason that Max Weber argued that the operation of large-scale capitalist enterprise depended upon the kind of order that only a modern bureaucratic state can provide. He pithily added that capitalism and bureaucracy have found each other and belong together. This may seem strange because bureaucracy, in general, is associated with delays in operation, action centred on opaque standards, excessive requests for documentation, or even countless difficulties in meeting users or customers’ requests.
However, a state without a bureaucracy cannot exist. Sardar Patel, speaking in the Constituent Assembly, said: “These people (civil services) are the instruments. Remove them and I see nothing but a picture of chaos all over the country.” He continued that the service must have independence and sense of security: “The union will go — you will not have a united India, if you do not have a good All-India Service which has the independence to speak out its mind, which has a sense of security that you will stand by your word, and after all there is a Parliament, of which we can be proud, where their rights and privileges are secure.” He made it quite clear that the political and permanent executives had to work as a team through mutual respect for each other’s roles as defined in the Constitution.
Every slip from these ideals has lowered the capacity of the state to deliver. This is the result of electoral politics where the essence of the state action is the exchange relationships between the incumbent governments and its supporters. The incumbents directly distribute resources to the supporters through subsidies, loans and jobs. And create rents for the favoured by using its rule-making authority to restrict market forces and imports through tariffs or quantities.
All this is achieved by undermining the impartiality of the bureaucracy in implementing rules and giving opinions frankly. The power to transfer is weaponised to bring the bureaucrats to heel and it works because authority sits with the position not the person. A difficult person can be replaced and sidelined. The pressure on officials to behave contrary to the ostensible purpose of the department undermines to a great extent the ability of the state to promote development. If privatisation is to work, then the corruption-transfer mechanism and its effects on the bureaucracy has to go.
This is not all. There has to be a corporate coherence within the bureaucracy and a buy-in to the transformative agenda of the government. Corporate coherence is the ability of the bureaucracy internally to resist the invisible hands of personal maximisation by undercutting the formal organisational structure through informal networks. If this goes too far, then everything becomes open to sale and the state becomes predatory.
The central question is: Do we as a society have the ability to fight the increasing tendency to grab public resources and replace it by a shared developmental agenda acceptable to both business and landed elites and restore to the bureaucracy its autonomy of action as envisaged in the Constitution by de-weaponising transfers?
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- In the Large States category (overall), Chhattisgarh ranks 1st, followed by Odisha and Telangana, whereas, towards the bottom are Maharashtra at 16th, Assam at 17th and Gujarat at 18th. Gujarat is one State that has seen startling performance ranking 5th in the PAI 2021 Index outperforming traditionally good performing States like Andhra Pradesh and Karnataka, but ranks last in terms of Delta
- In the Small States category (overall), Nagaland tops, followed by Mizoram and Tripura. Towards the tail end of the overall Delta ranking is Uttarakhand (9th), Arunachal Pradesh (10th) and Meghalaya (11th). Nagaland despite being a poor performer in the PAI 2021 Index has come out to be the top performer in Delta, similarly, Mizoram’s performance in Delta is also reflected in it’s ranking in the PAI 2021 Index
- In terms of Equity, in the Large States category, Chhattisgarh has the best Delta rate on Equity indicators, this is also reflected in the performance of Chhattisgarh in the Equity Pillar where it ranks 4th. Following Chhattisgarh is Odisha ranking 2nd in Delta-Equity ranking, but ranks 17th in the Equity Pillar of PAI 2021. Telangana ranks 3rd in Delta-Equity ranking even though it is not a top performer in this Pillar in the overall PAI 2021 Index. Jharkhand (16th), Uttar Pradesh (17th) and Assam (18th) rank at the bottom with Uttar Pradesh’s performance in line with the PAI 2021 Index
- Odisha and Nagaland have shown the best year-on-year improvement under 12 Key Development indicators.
- In the 60:40 division States, the top three performers are Kerala, Goa and Tamil Nadu and, the bottom three performers are Uttar Pradesh, Jharkhand and Bihar.
- In the 90:10 division States, the top three performers were Himachal Pradesh, Sikkim and Mizoram; and, the bottom three performers are Manipur, Assam and Meghalaya.
- Among the 60:40 division States, Orissa, Chhattisgarh and Madhya Pradesh are the top three performers and Tamil Nadu, Telangana and Delhi appear as the bottom three performers.
- Among the 90:10 division States, the top three performers are Manipur, Arunachal Pradesh and Nagaland; and, the bottom three performers are Jammu and Kashmir, Uttarakhand and Himachal Pradesh
- Among the 60:40 division States, Goa, West Bengal and Delhi appear as the top three performers and Andhra Pradesh, Telangana and Bihar appear as the bottom three performers.
- Among the 90:10 division States, Mizoram, Himachal Pradesh and Tripura were the top three performers and Jammu & Kashmir, Nagaland and Arunachal Pradesh were the bottom three performers
- West Bengal, Bihar and Tamil Nadu were the top three States amongst the 60:40 division States; while Haryana, Punjab and Rajasthan appeared as the bottom three performers
- In the case of 90:10 division States, Mizoram, Assam and Tripura were the top three performers and Nagaland, Jammu & Kashmir and Uttarakhand featured as the bottom three
- Among the 60:40 division States, the top three performers are Kerala, Andhra Pradesh and Orissa and the bottom three performers are Madhya Pradesh, Jharkhand and Goa
- In the 90:10 division States, the top three performers are Mizoram, Sikkim and Nagaland and the bottom three performers are Manipur and Assam
In a diverse country like India, where each State is socially, culturally, economically, and politically distinct, measuring Governance becomes increasingly tricky. The Public Affairs Index (PAI 2021) is a scientifically rigorous, data-based framework that measures the quality of governance at the Sub-national level and ranks the States and Union Territories (UTs) of India on a Composite Index (CI).
States are classified into two categories – Large and Small – using population as the criteria.
In PAI 2021, PAC defined three significant pillars that embody Governance – Growth, Equity, and Sustainability. Each of the three Pillars is circumscribed by five governance praxis Themes.
The themes include – Voice and Accountability, Government Effectiveness, Rule of Law, Regulatory Quality and Control of Corruption.
At the bottom of the pyramid, 43 component indicators are mapped to 14 Sustainable Development Goals (SDGs) that are relevant to the States and UTs.
This forms the foundation of the conceptual framework of PAI 2021. The choice of the 43 indicators that go into the calculation of the CI were dictated by the objective of uncovering the complexity and multidimensional character of development governance
The Equity Principle
The Equity Pillar of the PAI 2021 Index analyses the inclusiveness impact at the Sub-national level in the country; inclusiveness in terms of the welfare of a society that depends primarily on establishing that all people feel that they have a say in the governance and are not excluded from the mainstream policy framework.
This requires all individuals and communities, but particularly the most vulnerable, to have an opportunity to improve or maintain their wellbeing. This chapter of PAI 2021 reflects the performance of States and UTs during the pandemic and questions the governance infrastructure in the country, analysing the effectiveness of schemes and the general livelihood of the people in terms of Equity.
Growth and its Discontents
Growth in its multidimensional form encompasses the essence of access to and the availability and optimal utilisation of resources. By resources, PAI 2021 refer to human resources, infrastructure and the budgetary allocations. Capacity building of an economy cannot take place if all the key players of growth do not drive development. The multiplier effects of better health care, improved educational outcomes, increased capital accumulation and lower unemployment levels contribute magnificently in the growth and development of the States.
The Pursuit Of Sustainability
The Sustainability Pillar analyses the access to and usage of resources that has an impact on environment, economy and humankind. The Pillar subsumes two themes and uses seven indicators to measure the effectiveness of government efforts with regards to Sustainability.
The Curious Case Of The Delta
The Delta Analysis presents the results on the State performance on year-on-year improvement. The rankings are measured as the Delta value over the last five to 10 years of data available for 12 Key Development Indicators (KDI). In PAI 2021, 12 indicators across the three Pillars of Equity (five indicators), Growth (five indicators) and Sustainability (two indicators). These KDIs are the outcome indicators crucial to assess Human Development. The Performance in the Delta Analysis is then compared to the Overall PAI 2021 Index.
Key Findings:-
In the Scheme of Things
The Scheme Analysis adds an additional dimension to ranking of the States on their governance. It attempts to complement the Governance Model by trying to understand the developmental activities undertaken by State Governments in the form of schemes. It also tries to understand whether better performance of States in schemes reflect in better governance.
The Centrally Sponsored schemes that were analysed are National Health Mission (NHM), Umbrella Integrated Child Development Services scheme (ICDS), Mahatma Gandh National Rural Employment Guarantee Scheme (MGNREGS), Samagra Shiksha Abhiyan (SmSA) and MidDay Meal Scheme (MDMS).
National Health Mission (NHM)
INTEGRATED CHILD DEVELOPMENT SERVICES (ICDS)
MID- DAY MEAL SCHEME (MDMS)
SAMAGRA SHIKSHA ABHIYAN (SMSA)
MAHATMA GANDHI NATIONAL RURAL EMPLOYMENT GUARANTEE SCHEME (MGNREGS)