The Hindu Business Line : Can contract appointments enliven bureaucracy?

Is putting government officials on contract the answer to the problem of non-performing bureaucracy. It may be so but only if leads to greater functional freedom and there is judicial support. Even then, the question of selection and recruitment remains, says P. V. Indiresan.

FIFTY-THREE times in the past, the government attempted to reform the bureaucracy. Fifty-three times, nothing substantial resulted. One more attempt is on the anvil. This time, it could be different; significant changes could occur.

According to an old tale, a bird had made its nest in a field of grain, and its chicks were greatly perturbed when they heard the master ordering the servants to harvest the field. The mother-bird assured them, and advised them not to worry.

The next day, the chicks became even more anxious as they had heard the master ask his son to harvest the field. Once again, the mother-bird was unmoved. The third time, the chicks warned the mother that the master had been saying that he would start harvesting the next day. Then the mother-bird tells the chicks that it is time to move.

All these years, the government had asked experts to prepare reform packages. They made no impact. The government set up committees to prepare reports; the reports merely gathered dust. This time, the Prime Minister himself has taken the initiative; he has decided to institute reforms himself. Therefore, this time, reforms can actually happen.

We want reforms because officials are not performing satisfactorily. Then, we conclude that officials perform badly because they are bad. If we were to take a poll today, overwhelmingly, people will express a low opinion of our officialdom. That attitude is known as X-theory according to which officials are intrinsically bad, lazy and irresponsible.

As a remedy, the Hota Committee has suggested contract appointments for senior officials. Presumably, these contracts will remove the immunity from dismissal for non-performance, which is one of the entrenched privileges that government officials enjoy.

Once persons are on contract, so the argument goes, non-performing officials can be eased out without legal hassles. At first sight, that is a clever move; on second thoughts, it is fraught with bad consequences.

It is common knowledge that politicians have cowed down top officials merely by controlling their transfers. Officials still enjoy total security of income and even career promotions. In all States, there are a number of Director-Generals of Police, or Chief Secretary-level officers merely to accommodate senior officials who have been passed over for the top post.

In spite of that financial and (nominally) promotional security, officials are reluctant to resist even the most improper demands made by ministers and petty local politicians.

That being the case, how much stronger, how much more sincere or effective will officials on contract be when they have no guaranteed future? Will officials, who do not know where and how they can feed their families a few years' hence, perform better than those who do not have at least that worry? X-theory is the usual justification for contract appointments: It presumes that because officials are not trustworthy, they should be kept in check; they should be told what they should (or should not) do at every step; they should be watched all the time.

Who performs that check or directs every step or keeps a constant watch? In our system, legislators or officials handpicked by ministers do so. Thereby, we assume that such people are unlike those below, that they are not bad, nor lazy, nor irresponsible like lower officials.

Such faith in the top echelons of the government is not necessarily logical. What guarantee is there that legislators and their handpicked officials will be more honest and more responsible than, say, bank managers? Would you deposit all your life savings with your local legislator as confidently as you routinely do with bank officials? Almost certainly, you will not! Then, how can you justify entrusting politicians and their hand-picked top officials with the responsibility of directing, monitoring, checking all officials?

Apart from the poor reputation of many of our legislators and the kind of officials they handpick, it is common knowledge that state agencies perform better when they are autonomous and when legislatures do not interfere, and that wherever and whenever legislators interfere, the state apparatus performs poorly.

Hence, it is a mistake to assume that administrative reforms are all about more discipline, more checks and more controls. Bad officials are slippery; they know how to wriggle out of regulatory checks. Hence, if administrative reforms concentrate on chasing bad officials, and neglect good ones, little progress results: Bad ones escape and good ones get no chance to perform better.

Past administrative reforms failed because they did not make a distinction between good officials and bad ones. They failed also because their approach towards officials was negative, not positive, because they sought to punish, to constrain, not to reward, nor to empower. We need to draw the lesson from Birbal who made a line shorter merely by drawing a longer line alongside. We should make bad officials less offensive by making good ones stronger.

Then we should adopt Y-theory, which is the counterpart of X-theory. Y-theory postulates that people are mostly good, that they enjoy work and that they like to take on responsibility.

Even in the prevailing sad condition of Indian officialdom, barring a small minority, Y-theory describes our officials better than X-theory does. Therefore, we need reforms that encourage, reward and empower officials rather than discourage, punish and constrain all of them for the reason a few of them are bad.

We need contract appointments not to punish bad officials but to encourage good ones. We need contracts that empower not those that constrain. Contracts that constrain will remove even the few incentives officials enjoy at present. They will reduce further the small probability we have that officials will stand up to extortionate demands from unscrupulous politicians. Contracts that empower may make the same officials stand upright, become responsible and perform diligently.

Above all, we need contracts that removes the appalling asymmetry that exists between ministers and politicians: ministers claim an unquestionable right to suspend or transfer officials on the mildest suspicion of mismanagement. At the same time, they claim a fundamental right to continue in power in spite of gravest charges of heinous crimes. Our politicians should heed the adage: Physician heal thyself.

Fortunately, in the matter of contract appointments, we have a useful precedence in the case of Directors of the Indian Institutes of Technology. Their contracts guarantee a personal professorial position for all the years left of their career whenever the directors step down.

Hence, when they leave the director's chair, they are not on the streets; they may not get the same salary or perquisites but enough to lead a decent life. That security helps.

By convention, the IITs have also enjoyed operational autonomy, and freedom from political interference in day-to-day administration. In their case, the government sets the budget, prescribes policy norms but in administrative functions, the directors are free to decide on their own.

With the approval of a local committee of professional experts, they have the freedom to select, to promote employees without reference to the Ministry. Likewise, they can finalise all purchases locally. They have autonomy in student admissions too. Such contract appointments enhance authority and assure security too.

Why should not the same freedom be extended to the heads of all quasi-government institutions or subordinate offices of the government?

For instance, would the country have not benefited greatly had the CEOs of Indian Airlines or Air India enjoyed similar privileges? Why should not the government confine itself to formulation of policy and the allocation of the budget and leave all matters of administration to acknowledged experts?

That is, we need contracts not because officials are bad but because the existing controls and maze of rules make even competent experts impotent.

Unfortunately, in the matter of enforcing contracts, the Indian judicial system has a poor international reputation. It takes typically ten years or more to finalise contractual disputes. Courts freely admit writs and issue stay orders without looking into opportunity costs, the cost of opportunities missed because of stopping work.

Before Independence, the courts rarely issued writs and that too with great circumspection. Now, stay orders are routine. At the slightest whiff of doubt, the judicial practice is to stop all movement. If Indian bureaucracy has been vitiated by political interference, it has also been paralysed by judicial interference, by the way writs are handed out without verifying how much they affect the public.

A truly comprehensive contract will recognise that in public affairs there are three parties, not merely two: The political superior, the Executive and the affected public. Invariably, when disputes arise, there is none to represent the interests of the public.

Most writ petitions are in support of individual grievances and often are opposed to public interest. As arbiters, legal luminaries should ponder how far they have contributed to the deterioration of discipline and quality among government officials.

We do need contract appointments but they should lead to greater functional freedom and judicial support too. Even then, the question of selection and recruitment remains.

(To be continued)

This is 133rd in the Vision 2020 series. The previous article was published on September 20.

(The author is a former Director of IIT Madras. Response may be sent to indresan@vsnl.com)

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