The Hindu Business Line : Blind spots of India’s work culture

Implementation, maintenance and service delivery are at the very heart of India’s efforts to sustain and accelerate the pace of growth. And, yet, these three precisely are its blind spots, acting as a drag on the economy, says B. S. RAGHAVAN.

Every rupee spent on road maintenance generates net benefit of seven rupees, while user costs increase by over 50 per cent if roads are in poor condition.

The glowing self-satisfaction suffusing India’s intelligentsia and foreign commentators over the country’s rate of growth approaching nine per cent does not reckon with the fact that with a better work culture, more effective implementation, more efficient maintenance of assets created and higher quality of service delivery, it could easily have notched up a couple of points more without the need to invest a single rupee. Pushing up the levels of performance in all these respects has become imperative for another reason as well: The rate of growth should be taken to at least 15-20 per cent if the expectations and aspirations, demands and needs, of the burgeoning population are to be met without disruption.

Thus, implementation, maintenance and service delivery are at the very heart of India’s efforts to sustain and accelerate the pace of growth. And yet, these three precisely are its blind spots, acting as a drag on the economy.

It is seen from the Annual Report for 2006-07 of the Ministry of Statistics and Programme Implementation that of the total of 840 uncompleted projects as on October 1, 2006, 294 have contributed to time and/or cost overruns in relation to their original estimates. While the time overrun ranged between 1-195 months, the cost overrun resulted in a 14.45 per cent increase (or Rs 45,870.55 crore) from the original estimates. (sector-wise details in Table)

Outbursts of discontent

The plain truth is that in the Indian context, announcements are taken as accomplishments, and intention becomes synonymous with execution. This is where the Ministry of Programme Implementation can make a great difference by being proactive in anticipating and removing bottlenecks and making the implementing agencies function in a well-orchestrated manner.

Coming to maintenance, taking just one instance of India’s highway network, the World Bank points out that increasing the resources devoted to road maintenance will both reduce the costs to users arising from the dreadful condition of roads and bring down the costs of restoration needed because of a growing backlog of maintenance. Every rupee spent on road maintenance generates net benefit of seven rupees, while road user costs increase by over 50 per cent if roads are in poor condition. And, yet, India spends only around one-third of the amount of Rs 7,000 crore required on road maintenance, resulting in a deterioration of the existing road stock even while new capacity is being added. The situation is particularly bad for national highways, where the actual expenditure in the recent past was less than one-quarter of what was required.

The power sector is another instance where just by increasing the plant load factor from the 77.03 per cent (as of 2006-7) to 85 per cent in the overall and reducing transmission and distribution losses from 37 per cent (as of 2006-07) to 10-15 per cent (as against China’s eight per cent with a vastly extended grid) there would be an addition at no cost of the equivalent of 40,000 MW to the total power availability. It is possible to multiply such instances whereby, with proper and regular maintenance of existing assets, a tremendous boost can be given to the economy.

As regards service delivery, already, there are outbursts of discontent in the form of obstruction of traffic and resorts to destruction of public property and violence by the people when face to face with insensitivity and callousness of staff meant to provide their legitimate entitlements.

Evidence from surveys of the people’s perception of the working of service agencies is revealing: In a survey in Karnataka, of the 78 per cent of households using government (or government-aided) schools, only 16 per cent reported being “fully satisfied” with the behaviour of their child’s teacher. Only one per cent was fully satisfied in Punjab, three per cent in Orissa, five per cent in Haryana, and six per cent in Rajasthan. Similarly, while 72 percent of households used the Public Distribution System (PDS), less than one in ten were fully satisfied with the quantity, quality, or fairness of the system. Problems with access and satisfaction tend to be much worse in States such as Assam, Bihar, Orissa, Rajasthan, and West Bengal which figured the lowest in a ranking of the quality of service delivery across 16 major Indian states.

Strong language

India’s governing class, comprising politicians and officials, has traditionally been preoccupied with budgetary allocations and outlays on the one hand and expenditures and outgos on the other.

The thrust of the prevalent monitoring paradigm is on reviewing at varying intervals in the course of the year the amounts spent out of the allocations made.

Everyone involved in the process gets into a panic at the sight of unspent amounts at the close of the year and whips himself into a frenzy somehow to meet the targets of expenditure and leave no balance behind.

This is because, apart from the mindset which views outgos as outcomes, the accounting system does not permit the unspent balance to be carried over to the next year and subjects the lagging department to the pains of starting all over again with pleas for fresh allocations. This explains the irony of the Finance Minister, Mr P. Chidambaram, being constrained to caution as late as in 2005 that “outlays do not necessarily mean outcomes. The people of the country are concerned with outcomes. The Prime Minister has repeatedly emphasised the need to improve the quality of implementation and enhance the efficiency and accountability of the delivery mechanism.”

Few public functionaries — whether in government, public sector, or local bodies — paid out of taxpayers’ money feel answerable to anyone, least of all to the public, for timely completion of tasks entrusted to them or for performing the services expected of them in a spirit of dedication and with a sense of urgency.

No wonder, the World Bank was forced to use strong language by describing the quality of governance in many Indian states as “appalling”.

This, despite public officials being very generously treated compensation-wise. Mark these words culled from past World Bank reports:

“…even among equivalent jobs the public sector exceeds the private: A factory worker in a wholly central government-owned establishment makes 2.5 times more than in a wholly private establishment, regular public sector teachers earn several times more than the average among private teachers (or than teachers hired directly by communities). In fact, one of the drivers of higher wage inequality in the “liberalising” 1990s was that public sector wages grew much faster than private sector regular job wages or informal casual work. Real wages in the public sector increased by 44 per cent over this period — increasing the public sector premium for (observationally) equivalent workers from 48 to 68 per cent.

Overstaffing

“High wages with little accountability for actual service delivery make public sector agencies an obvious target for patronage hiring, which results at times in massive overstaffing. The Mumbai Municipal Water Corporation has 35 workers per thousand connections, whereas well-functioning utilities have about 3 per thousand. The UP Irrigation Department employs an astonishing 110,000 people…The overstaffing often comes at very low levels of the organisation… about 70 per cent of all government employees are support staff unrelated to public services — drivers, peons, clerks.

“While there are millions of dedicated civil servants — teachers, health workers, policemen, engineers, registration officials —attempting to do their jobs well in spite of the systems that work against this, it also cannot be denied that all too often attempts to seek services from the public sector encounter workers who are absent, incompetent, indifferent, and outright corrupt.”

These reports are a few years old. What with the bounties generously handed by the Central Fifth Pay Commission, and adopted in their entirety by the States for their employees whose duties and responsibilities can by no stretch of imagination be deemed to be on a par with those of the Central Government, the differentials between the public and private sectors would only have further widened in favour of public sector functionaries.

(To be concluded)

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