Govt has failed to evaluate itself

Presenting his Budget speech in February 2010, the Finance Minister, Mr Pranab Mukherjee, informed Parliament that an Independent Evaluation Office would be constituted “to undertake impartial and objective assessment of the various public programmes and improve the effectiveness of the public interventions”. The IEO would be a separate body with a governing council chaired by the Deputy Chairman of the Planning Commission. Last month, the Union Cabinet cleared the proposal for the proposed agency as an independent outfit reporting to the Planning Commission; in all likelihood, the search is on for the skills required to evaluate “public interventions”.

Mr Montek Singh Ahluwalia is eminently suited for the purpose of guiding the IEO, having served as the director of the IMF's own Independent Evaluation Office in the early years of the last decade.

UNINSPIRING PAST

Will the Indian IEO work? As an independent body attached to the Planning Commission, what will its powers be, other than to simply evaluate? And to do that will it not depend on access to internal documents, if there are illuminating ones available from Ministries, to form the kind of judgments needed to increase the efficacy of public spending? The IMF's internal IEO could be used to benchmark standards of the institution's functioning; will the Indian equivalent have the power to influence the way ministries work or, more accurately do not deliver, at the Centre and in states?

Given the vast amount of evidence over the decades, the likelihood of IEO succeeding is remote in view of the evaluation processes in operation. Apart from the various Parliamentary Committees (PCs) overseeing departmental expenditures, the Infrastructure and Project Monitoring Division in the Ministry of Statistics and Programme Implementation (Mospi) “collects at one place information about ongoing projects and provides management services to the government for concurrent decision making and corrective action for efficient and effective management of projects”.

Consider just how effective this body has been.

Of 434 mega, major and minor projects on the monitoring system, 204 were running behind schedule with delays ranging between one and 132 months, 189 projects had cost-overruns of 33 per cent in relation to their latest approved costs, and a little over a fourth had both time and cost overruns.

That was in June 1999. A decade later, in its flash status report dated October 2010 on central projects worth Rs 100 crore and above, the Ministry virtually repeated itself.

Of the 559 projects monitored, 293, that is 52 per cent, were delayed. Why? Land acquisition problems, “termination of contracts due to poor performance, delays in getting forest clearances…” all man-made except for “inclement weather conditions”. Like parallel lines that do not meet ,monitoring agencies file reports and the ministries continue to work as they have always done, with decisive inaction or futile activity. So much for accountability.

ANOTHER FAILED EFFORT

On February 28, 2005, the then Finance Minister, Mr. P. Chidambaram announced a new initiative to enable those parallel lines to meet right where the intersection could make a difference. Drawing a distinction between outlays and outcomes, the Finance Minister stressed the need for every ministry to “improve the quality of implementation and enhance the efficiency and accountability of the delivery mechanism”. The experiment struck at the heart of the problem of accountability: The outcome budget put the onus right where it ought to have been all these decades; at the door of the project managers themselves, the ministries concerned at the Centre and states that would have to self-evaluate by reference to guidelines prepared by the Finance Minister's Department of Expenditure.

But the outcome budget too has failed. A study by Mr Anand Gupta “(Evaluation of Governance: A study of the government of India's outcome budget November 2010 available on www.economicmanagement.com) tells us how and why: Shortcomings in the guidelines, lack of the right incentives. These are relatively easy to correct. What is not is the “mindset” — the perpetuation of a sense of accountability, which an anonymous senior official calls “defendability”. Accountability boils down to defending one's actions rather than considering their impact in the public domain.

This hidden gem tells us more about why public projects are delayed or why social programmes do not reach the intended beneficiaries than all the data on missed targets put together.

PROBLEM IN THE DISCOURSE

It also illuminates the entire discourse of policymaking through the decades after the ground rules for a social compact and planning system were first laid by Pandit Nehru. So long as governments could defend their current actions (which boil down to spending) by an appeal to some time-tested markers, there was little reason to undertake a critique of their effectiveness.

Since Budget speeches and most public policy documents do not critically examine their past or existing social or welfare programmes involving Budget outlays except in the most perfunctory way — usually by adding to or slicing away at the corpus — they appear the same in their recall of original principles, such as inclusive and expansive growth.

In this sense, public policy appears timeless, a-historical and devoid of context; Part One of the Budget for 2011-2012 with its inclusion and social programme drumbeats, could just as well have been heard in 1991, or in 1951, when a social welfare agenda was introduced as a panacea for accumulated deprivation.

Most public policy is, therefore, self-referential and replaces the old policy statement in the way that repeatedly saving a Word document on a drive simply replaces an existing one. And if the outcome budgets, the best antidote to careless management, appear to have failed to make public policy more accountable, how can an independent watchdog, an outsider twice removed, fare any better?

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