The Hindu Business Line : Development on autopilot

Looking at the issue of development from an engineering point of view, N. VITTAL draws upon his experience in government service to come up with three ideas for changing the system and putting the country’s development on autopilot.

All of us want development in terms of economic growth, effective governance and full employment. All Governments, irrespective of their ideology, try to achieve these objectives, or at least declare so.

Financial resources and systems of administration play a very important role in achieving development. Leaving the issue of ideology and the fashions of the day aside for a moment, can we look at the whole issue of development in terms of economic gr owth, employment, prosperity and social justice from an engineering point of view?

Engineers design various complex systems and machines. Intelligent machines are able to continuously monitor their performance and take corrective action where necessary. A machine with such a corrective mechanism is called a servo mechanism.

When we say a plane is on auto-pilot, we mean that the plane is flying by itself. The control systems in the plane and the servo mechanisms are such that automatically the plane flies safely. Can we apply this concept of technology to achieving development in our country?

The essence of a self-guiding and self-correcting mechanism is a virtuous cycle of feedback. The system balances itself internally and makes corrections when necessary. Having spent 42 years of my life in public governance, here are three ideas for changing our system and putting the development of our country on auto pilot.

We can begin with sustainable development.

Green principles

Industries create pollutants that harm the environment and threaten the quality of life. If we want to have environment-friendly development, on auto pilot, we will have to build our system on a simple principle.

One industry’s pollutant may be the raw material for another. In other words, industries based on industrial waste products can provide a way out if we design a chain of industries to achieve development on a green autopilot.

For example, in the manufacture of chemical fertilisers, the solid, gaseous and liquid pollutants themselves can be used downstream for better purposes. From 1982-1987, I was Managing Director of Gujarat Narmada Valley Fertilisers Company which operated world’s largest single-steam Ammonia Urea Plant. We were producing 800 tonnes of urea and 1,350 tonnes of ammonia per day.

We also produced as pollutants 400 tones of coal ash, 6.5 million gallons of effluent water and sulphur oxides from the fuel oil that was our raw material. We were able to recover sulphur from the fuel oil and market the product profitably. The 6.5 million gallons of effluent water was treated and brought up to ISI irrigation standards.

This was gratefully received by the farmers living in the downstream villages who could cultivate wheat and cotton in lands that were earlier barren. The 400 tonnes of coal ash were used for landscaping and levelling of the ravines in the city of Bharuch. This not only added to the beauty of the city, but improved the environment by reducing the danger of malaria from mosquitoes which were breeding in the lands where water was stagnating.

There are other examples of how a system can be made self-reliant. Neyveli Lignite Corporation, for example, has been doing wonderful work in planting millions of trees in the land left after the open-cast mining of lignite.

Elsewhere, deep holes created by excavation of rocks in mining operations have been put to positive use by filling them with water. The resulting lakes have contributed to the enhancement of beauty and preserve the ecology by creating new sanctuaries for migrating birds.

Examples can be multiplied but the basic principle is this. Development is possible by putting the entire system on a green autopilot. What is required is an imaginative set of policies by the government to encourage investment in industries where the pollutants and waste products are the raw inputs. Those may involve subsidies and pay exemptions to begin with, though these need not be a permanent element.

Department design

My second idea for development on auto pilot is in the design of government organisations and departments themselves. Government departments are run by very intelligent people but governments as a whole appear to be incompetent. The secret is the tunnel vision of the employees.

The objectives of the government departments are different. Departments such as finance, sales tax, income-tax or Customs are designed to collect taxes. The employees in these departments examine, all the time, how to raise resources.

All other departments of government are spending departments. They are designed to see that their budget funds are spent before the financial years ends. Thus we have two cultures in administration. One is a culture of raising revenue and the other is a culture of spending.

This dichotomy in the departmental culture leads to sub-optimum results.

A simple method of ensuring that government organisations display financial responsibility is to create situations by which every department will have to raise the resources for meeting its requirements or, in turn, become self-financing.

Today, in the private sector, business enterprises have to raise resources to meet their objectives. Successful enterprises are able to manage raising resources, adding value, providing a service and also give reasonable returns to investors and stake-holders.

Self-financing units

Why cannot all government organisations become, in principle, such self-financing units? It is obvious that not all departments are amenable to this approach.

The next logical step is to combine the department’s resource-raising capability with those that do not have the capability but that can help raise resources. For example, the Ministry of Commerce always has a frustrating experience. It comes up with imaginative plans and schemes for promoting exports, only to have them shot down by the Ministry of Finance, Department of Expenditure.

This is mainly because of the difference in the organisational culture of the two Ministries. Suppose the Department of Customs were to be combined with the Commerce Ministry; and the Department of Excise, which deals with industry, is combined with the Industry Ministry. Automatically, such an integrated department will try to optimise the resource-generation option with the expenditure.

Trouble-shooting

We need, all the time, innovative ideas to improve a system. My third idea deals with this.

Many a time, once a system is installed in government, inertia creeps in and inefficiencies are not noticed. After all, Newton’s law of inertia operates very strongly in government. Our anxiety must be to ensure that there is no wastage of financial or human resources.

It is human nature that we are very prompt at finding fault with others whereas, we are not aware of the fault of ourselves. We must install a system in government such that every department should point out what is wrong and wasteful in the other departments.

A continuous exercise of fault-finding in other departments, besides being thoroughly enjoyable, will create a valuable database of waste and inefficiency in government. This could be the starting point for productive reform in performance.

Many a time, people outside the department are able to point out a better way out of a problem than those within the department. That is where the advantage of the fresh pair of eyes and objectivity and ignorance comes in.

In short, we can think in terms of designing development on autopilot only if we are clear about the objectives and can intelligently build networks where the different strengths and weaknesses of people and organisations are finely tuned and matched so that the result is a self-correcting, balanced system, continuously progressing on the path of development.

(The author, a former IAS officer, has held the posts of Chairman, Telecom Commission and Central Vigilance Commissioner.)