Stuck in the past

The need to reform the mindset of those implementing the new policy framework has not got enough attention, says Sushma Ramachandran.

ECONOMIC REFORMS and the dismantling of the old controls regime were taken ahead forcefully by the liberalising fervour of the then Union Finance Minister, Dr. Manmohan Singh, and was given the political green signal by the then Prime Minister, Mr. P. V. Narasimha Rao. In their enthusiasm to march ahead to a brave new world, they kept the focus on reform of policies and procedures. The need to reform the mindset of those implementing the new policy framework was not, however, given high priority.

In cases where powers were taken away willy-nilly from bureaucrats such as the once-powerful Secretariat of Industrial Approvals and the Directorate-General of Technical Development, officials had little option but wherever discretion lay with the bureaucrat, the scenario remained unaltered.

In fact, the present Finance Secretary, Mr. Ajit Kumar, has often sought to explain the mindset of the Indian bureaucrats to prospective investors by pointing out that the so-called ``iron frame'' was created to colonise a country and not promote development. Bureaucrats in this country thus retain the colonial approach of seeking to control the people rather than function as facilitators of development. The approach is ``we, the rulers'' as opposed to ``them, the ruled'' which immediately rules out any scope for facilitation.

There is thus a critical need to reform or even entirely replace the antiquated system of the civil services and this was highlighted in the negotiations to bring foreign investment into the power sector. Bureaucrats who undertook negotiations with multinationals such as Enron and Congentrix had virtually no experience in this complex task and had to operate in the glare of a publicity blitz at every step. A better option would have been either to recruit technocrats from industry for the negotiations or simply to provide transparent guidelines and allow companies to bid for projects on this basis. The genesis of the current Enron imbroglio lies largely in the failure of the administration to cope with issues which were beyond its ken.

This is not to deny the individual genius of many bureaucrats who have made singular contribution to the country's governance. The issue is that those implementing liberalised policies have to adopt a radically changed approach to development. The national interest should be kept in mind at all costs but genuine development should not be curtailed by sticking to mindless procedures and rules, which promote corruption at all levels of the Government. Revenue collection agencies are among the worst offenders but lack of transparency in any organisation leads to such cancers.

One extreme suggestion is to wind up the civil services in their present form and opt for a different system, perhaps the spoils system that works in the U.S. The other option is to recruit more specialists and technocrats for specialised agencies rather than put the generalist in every chair.

In any case, there is no doubt restructuring and liberalisation of the bureaucracy are long overdue, otherwise economic reforms will ultimately be only partially implemented.

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