The Hindu Business Line : Competition for Bharat Nirman

Building India, among other things, requires the Government to introduce an element of competition to transform its officials. Put time pressure and free them from petty hassles about money, and see how they perform. This will reduce all impedances and create a virtuous-cycle, says P. V. Indiresan.

AFTER DISCUSSING the issues associated with the implementation of the Millennium Development Goals (MDGs), we can now turn to the manner the goals can be reached. Fortunately, the Prime Minister himself has launched the ambitious scheme Bharat Nirman, presumably, as the Government's solution to the problem.

According to newspaper reports, the project will cost Rs 174,000 crore and plans to reach the following targets: Bring an additional one crore hectares under assured irrigation; connect all villages that have a population of 1,000 (or 500 in hilly/tribal areas) with a road; construct six million houses for the poor; provide drinking water to 74,000 new habitations; give electricity to 125,000 villages and 23 millon households and telephone connections to 66,822 villages.

The Prime Minister has emphasised that stress will be on outcomes and not on inputs. For that reason, this scheme may succeed where similar schemes ended up in frustration. However, this modified approach too can be less clerical. For instance, why target precisely 66,822 villages?

Such precision diverts attention from the main task, and converts a noble exercise into one of counting beans. It will give a field day for the CAG to make nasty remarks in some future year.

Both the Planning Commission and the administrative departments concentrate on Driving Forces — how much and what inputs would take the nation to the desired goal. There are two flaws in this approach: (1) It assumes that if you take the horse to water, the horse will drink; if you open a school, children will attend. That is not necessarily true. (2) Every force tends to develop resistance, anti-bodies. At times, it is possible that, with every increase in force, the impedance increases in the same proportion, making all those inputs infructuous. Then, Driving Forces suffer from the vicious-circle syndrome. In engineering parlance, resistance is what happens immediately; impedance includes both what opposition occurs now and what builds up over a period of time. The government should worry more about impedances than about resistances. When impedances decrease, profits increase. Hence, there is an incentive to reduce impedance even more. Thus, reducing impedance creates a virtuous-cycle.

The Bharat Nirman scheme involves grants-in-aid: The Centre will still dispense largesse. As we have a culture of helping the incompetent, if the scheme fails anywhere, even more largesse will be demanded. The scheme will succeed better if it shifts from grants and subsidies to rewards and penalties. We have seen the wonders that competition has done in business. Hence, apart from (a) targeting impedances and (b) shifting from grants in anticipation to rewards for performance, we need competition even within government.

We should have the grace to admit that we remain one of the most corrupt administrations in the world. We have also some of the most honest officials to be found anywhere. Where there is transparency, such honest officials will dominate and provide competent administration too.

Hence, for Bharat Nirman to succeed, it should incorporate total transparency. Unfortunately, development projects are organised like black boxes.

To this menu, we should add one more condition about the quantity served. Most schemes in India are sub-optimal: schools, hospitals, roads, water-electricity supplies are all too small to make a dent or even be sustainable.

Often, the government adopts a plan for every one to have a shirt in five years by providing each one 50 cm of cloth each year. After five years, it wonders why no one is wearing a shirt even though everyone had been given enough material to stitch one. Admittedly, conventional schemes with marginal modifications here and there have not succeeded. Hence, I suggest that the government should experiment with radical ideas. Many thoughtful administrators would be sceptical of untried ideas and will find any number of reasons why any change is undesirable. Even if there is truth in their criticism, usually there will be, the Government should still launch a voyage of discovery, discovering better ways than the ones they have at present.

As a first step, I suggest that the Government should concentrate its resources and not spread them thin. There is a statistical rule, which comes out correct in most cases, according to which, in any exercise, 50 per cent of benefits accrue from 20 per cent of the samples, and the remaining 80 per cent will yield only the remaining 50 per cent. On that basis, the Government may launch the Bharat Nirman (or for that matter any other such scheme) not countrywide but in the most promising 20 per cent of the districts.

Bharat Nirman, which has a budget of about Rs 45,000 crore a year, will normally allocate about Rs 90 crore to each district. With the modification suggested, the top one hundred districts will get Rs 400-500 crore each, and the others will have to await their turn. These top districts will be selected by competition, on the basis of what each district commits to deliver in terms of outcomes, and on condition they will deliver in one year what Bharat Nirman normally spreads over four years.

In other words, the suggestion is to provide Rs 400 crore for one year rather than the same amount spread over four years, and with the stipulation, the district administration will finish the task within one year. It is more than possible that the combination of concentration and sense of urgency plus competitive selection will produce better results than a leisurely approach with thinly spread resources. Spread over four years, a district may see several District Collectors, and the resultant dislocation can destroy the initiative taken by each one of them. Where the scheme is selected by competition and restricted to one year, the probability of such dislocations is negligible. It may even be stipulated that no critical official will be disturbed during the short period of the exercise.

Apart from concentrated resources, and pressure of time, competition is a key element here. In the first year, top hundred of the five hundred districts are selected. In the second year, top 20 per cent of the remaining 400 districts, that is 80 of them, will be chosen, once again, by competition.

The same will hold true in succeeding years too with only the best 20 per cent selected each time. Then, the amounts disbursed will decrease cumulatively 20 per cent every year. The resultant saving may be offered as bonus to the successful competitors of earlier years — once again as a competitive reward.

Can the goals of Bharat Nirman be achieved in one year? Why not? The magnificent UN building was constructed in just ten months in spite of a restriction that no building material could be dumped on the road alongside, and no truck bringing material could block the traffic for more than a couple of minutes. The UN building was completed rapidly, not in spite of restrictions, but because of them, because restrictions forced builders to think better. Often, Indian officials have failed to deliver only because they had no time constraints.

It is a law of human nature that the quantum of constraints that administrations impose is more or less a constant for a given organisation. With four years given to complete a project, superior officials will, as a matter of abundant precaution, impose many checks and balances.

Once, time becomes a constraint, the same officials will urge rapid execution of the project, and relieve the executive agencies from needless bother. Time constraint has that effect on all of us; we act differently, we are different personalities altogether, when time presses on us compared to when we are at ease. The same is true of the government too.

It is also a question of faith. According to a story in Bhakta Vijayam, Namadeva, the great devotee of Vithala of Phandrapur, took a bet that within three days, he would make the stone bull in the temple eat the prasadam offered to the deity.

Then, Namadeva prayed and prayed to Vithala to fulfil his faith but nothing happened for three days. At the last moment, when Namadeva was about to commit suicide in frustration, the stone bull got up and ate the prasadam.

Namadeva was furious with Vithala that he was made to wait for three days. Vithala explained: "Your faith told you that I needed three days to make a stone bull to come alive and eat the prasadam; you did not think that I could have done it earlier. I have merely confirmed the extent of the faith you had in Me!"

The moral of the story is government officials will function according to the faith reposed in them. If the government is confident that a task can be done in one year, they will complete the task in one year; if the government thinks they will need four years, the same officials will take four years (or even more) to perform the same task.

The Government can transform its officials: All that it needs to do is to introduce an element of competition, put time pressure and free them from petty hassles about money.

(To be continued)

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

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