The Hindu Business Line : Battle of the bureaucratic bulge

THERE is a significant concern in several quarters seeking to make investments in India that the country's inability to attract and implement the several schemes that would catapult it into world class economic stardom is stymied by the numerous bureaucratic layers these schemes would have to go past to see the light of day.

This is a major cause for the low FDI figures. India's FDI amounts to one-tenth of China's, and its share in world FDI is 0.8 per cent.

Is India's bureaucracy really too big? It is extremely difficult to get the optimal size of the bureaucracy right for a nation and, that too for the long run. First, there is a popular notion that all bureaucracies tend to expand, by some Parkinsonian or Weberian process and, in doing so, the outcome is the slowing down of various activities in a country. Institutional atherosclerosis sets in. This is government by the rules!

On the other hand, the presence of an excessively lean bureaucracy is equally fraught with concerns as the checks, balances and diversity of views available disappear. The rich experiences that are to be brought to bear by a group of trained individuals can often be replaced by the possibly idiosyncratic views of a small coterie of persons who, therefore, could hold a nation to ransom.

A little analysis

Here is an evaluation, over a 35-year period, of the trends in the size of the bureaucracy relating to the number of IAS officers in Maharashtra.

In dealing with the IAS cadre, I have taken into consideration the number of individuals there are likely to be at different points in time between 2000 and 2035, who had or would have completed 30 years of service by that time. This will provide an idea of the number of senior individuals, well into middle age, with well-formed opinions and views, who occupied the upper echelons of bureaucracy. Persons with 30 years in the system would be commissioners and secretaries to government of long standing.

If the government were to assess the motivation levels of its middle-aged civil servants the results would be very revealing.

Unsuccessful applicants, cynical at the lack of career success, through perhaps no fault of their own, would make efforts to be obstructive. In an effort to placate the many aspirants, jobs would be divided and sub-divided so that many senior secretaries to government would end up doing what was being done by a junior Deputy Secretary some decades ago.

This is exactly what happened in Maharashtra in 1959. While then there was only secretary for the joint department of Urban Development and Public Health (UDPHD), today there are six Secretaries to the Government in Maharashtra alone — three for Urban Development and three for Public Health — and there are four in Gujarat doing that one Secretary's job. Yes, the problems and issues have increased. But, not ten-fold!

On the other hand, too few senior civil servants of the middle-aged variety would mean that issues will not receive the in-depth analyses required to ensure holistic assessment. For example, an energy project would have energy demand, energy security, environmental, financial, land availability, employment, pricing, agriculture and foreign investment considerations, that can only be tackled by experienced officers. Further, an inadequate number of senior personnel in the long run would imply that the opportunities to acquire specialist knowledge in one's career would be limited.

What the facts reveal

For Maharashtra, and these trends are true for other States as well for the Central services, at the turn of the 21st Century, in 2000, there were approximately 65 members of the IAS with 30-plus years of service (see graph). By 2005, the number of such individuals had reached 90. A forecast showed that the middle-age bulge in Maharashtra's IAS bureaucracy would keep increasing for the next decade-and-a-half. In the first two decades of the 21st century, it would perhaps increase as much as 75 per cent. This is not good news.

After 2020, the trend will see a sharp reversal. Recollect that the number of individuals with 30 years service at any point in time is a function of past recruitment patterns. By the late 1980s and the early 1990s, the total recruitment to the civil services had slowed down considerably. The impact of this will be felt by 2025. In Maharashtra, by 2025 there will be 80 individuals with 30+ years of service. And the numbers would drop further, trimming the bulge to 67 per cent from its peak.

The next 15 years of bureaucratic flab

The next 15 years are the most critical for India, if it is to be a world economic power. The possibility of a slow-down in execution of infrastructure projects due to an expanding bureaucracy needs to be tackled.

The second important consequence of the middle-age bulge is the sharp increase in the number of de-motivated civil servants across the country. An early retirement scheme might encourage them to leave the service. In the Indian Civil Service, an individual can retire on full pension after 25 years of service.

Examples also abound of individuals from the ICS who retired prematurely and went on to full alternative careers. The late Annada Sankar Ray, of Bengal, who pursued a full-time writing occupation and emerged an eminent literary figure; the late A. D. Gorwala from Mumbai, who became an influential commentator, and the the late N. Dandekar from Chennai who became a well-known industrialist, to name a few.

A generation hence

A generation from now, by 2030, the bulge will shed some of its flab. As we've already seen, this can lead to a compromise on quality assessment and specialist expertise.

Such a situation will demand that the US model, in which external specialists join the bureaucracy at the highest levels for a limited period of time, before returning either to their professions or to their private sector occupations, be partially adopted in India. Thus, senior Secretaries to Government would be accountants, bankers, corporate executives, lawyers and others with specialist functional and sectoral expertise who would come in for a time to complement the pool of existing career civil servants in the bureaucratic set-up.

In fact, Britain has already globally advertised for applications to the senior-most rank in its civil service, that of Permanent Secretary. External recruitment will also fill the large gaps that are bound to occur in these senior ranks as alternative career opportunities become more attractive to India's youth.

Since the strategy of having external experts as policy-makers has to be adopted in the long run in India, it is worthwhile starting the experiment right away so that a generation from now the process is automatic. Thus, the second suggestion is: Commence a programme of lateral entry to senior-level government appointments from the private sector.

India's civil service simultaneously faces a situation of abundance and scarcity. Implementing a reforms programme, and taking India forward, requires bureaucracy of an optimal size.

Addressing this concern should be one of the most important items on the agenda of the head of government, and starting a lateral entry programme at the highest levels as well as an early retirement scheme are two simple solutions that suggest themselves as ways out of what may well become intractable issues if not recognised and dealt with immediately.

(The author is a Professor of Technology Strategy, University of Texas at Dallas, majumdar@utdallas.edu)