‘If we look around, what is the happiness index of the average citizen vis a vis the government? My own surmise is that there is considerable dissatisfaction with governance and the agents of governance.’ — Dr Manmohan Singh at the Conference of Congress Chief Ministers, Chandigarh, October 8, 2005

India is today one of the fastest growing economies of the world. However, high growth achieved through private enterprise has not been translated into satisfactory progress on the public front, suggesting limited impact of government programmes. Delivery of public services requires financial resources, but more importantly the quality of expenditure and government-public interface in these areas must improve. It is not the size of allocations on pro-poor services alone that matters.

The Central Government transfers more than Rs 30 billion every year to the states. If even half of it were to be sent to the 60 million poor families directly through a money order, they would receive more than Rs 70 a day! Thus, public expenditure needs to be effectively translated into public goods and services for it to have an impact on public satisfaction.

Unfortunately, different kinds of distortions can come in the way of resource allocations reaching the intended beneficiaries.

Perverse incentives are not the only factor undermining the effectiveness of the bureaucracy. Its composition is also skewed. For instance, in most states, about 70 per cent of all government employees are support staff unrelated to public service—drivers, peons and clerks. Key public services—education, healthcare, police and judiciary are starved of people, whereas many wings are overstaffed. Even when employees are deployed in productive sectors, their productivity is low and accountability weak. The prevalent rent-seeking behaviour makes most basic services inaccessible to the poor and marginalised sections.

There is enough evidence to show that government’s capacity to deliver has declined over the years due to rising indiscipline and a growing belief widely shared among the political and bureaucratic elite that state is an arena where public office is to be used for private ends. Weak governance, manifesting itself in poor service delivery, high cost, and uncoordinated and wasteful public expenditure, is one of the key factors impinging on development and social indicators. For instance, teachers need to be present and effective at their jobs, just as doctors and nurses need to provide the care that patients need. But they are often mired in a system where the incentives for effective service delivery are weak, and political patronage is a way of life.

In a well-functioning democracy, the political process would ideally find answers to governance problems, but this is not happening in India. We need to build a new code of accountability for the politicians and the officials alike, which would force them to perform their functions for the betterment of the people. The vicious cycle of distortions in politics leading to bureaucratic apathy (and vice versa), and both resulting in poor service delivery can be set right through taking a large number of simultaneous measures.

At the same time, the bureaucracy must realise that good governance is also undermined by lack of transparency, weak accountability, poor organisational and technical capacity, lack of responsiveness, inefficiency and poor motivation. These are the areas where civil servants have to take initiative. Some of the ways it can be done are described below.

Transparency builds external demand for reform and makes administration more responsive and performance oriented. As an experiment, all muster rolls in employment schemes should be put on the internet in at least one block of a district where internet facilities exist. The Official Secrets Act should be repealed and replaced with a less restrictive law. Property and tax returns of all senior and modernisation. First and foremost, technologies have advanced rapidly and cost effectively in recent years to bring egovernance applications within the reach of governments. Second, these applications are easier to implement today than many other types of administrative reforms. Third, they can make the citizen-state interface much easier, reducing transaction costs and public dissatisfaction. Finally, egovernance is less threatening to those in authority in contrast to some of the complex administrative reforms that have remained dormant in official reports. An egovernance application may look simple and limited in scope, yet it may have far reaching implications for the operating culture and performance of governments.

We need not, therefore, wait till complex administrative reforms are accomplished to tap the potential that technology has to offer. E-governance applications are a good example of how the discipline of information and communication technologies could be used to compensate for the inherent difficulties in implementing organisation intensive administrative reforms. There is need to shift from input controls to monitoring of outcomes.

Officials at all levels spend a great deal of time in collecting and submitting information, but these are not used for taking corrective and remedial action or for analysis. Often data on performance reaches late, or is not available districtwise, with the result that accountability cannot be fixed. As data is often not verified or collected through independent sources, no action is taken against officers indulging in bogus reporting. For instance, in UP, the number of fully immunised children that was being reported by the state government a few years back was almost cent percent, though the evaluated figure is less than 30 per cent. It is not enough that the central government departments and the state governments use professional and academic organisations to undertake impact studies from time to time. Their findings must be publicised and discussed with key stakeholders so that improvements in design and delivery can be effected at the earliest.

The role of private sector in social sector is not sufficiently recognised in India. For instance, most health care is now given in the private sector and, for the poor, by very poorly or untrained practitioners. Rather than trying to replace private services, the Government should try to improve the private market, with the carrot of training and the stick of public information. Governments must distinguish between public funded and public provided health care.

In many cases, it is more efficient to have the government purchase health care from the private sector. India has several successful examples of contracting out primary health centres (PHCs) in Andhra Pradesh and to a lesser extent in Karnataka. Both the models illustrate what can be achieved through the contracting model even as both the pilot projects have great room for improvement and potential scale-up.

Though providing a framework for decentralised development, trends so far suggest that the panchayati raj and the municipal system have not been able to enhance participation and empowerment. Despite the fact that some village level panchayat leaders have done commendable work, on the whole the panchayati raj institutions (PRIs) have not benefited the people to the extent of funds provided by government. The control which is exercised by the Block level officials over the village panchayats and gram sabhas (which rarely meet) has not only buttressed corruption and diluted accountability, but it has also led to pessimism that villagers at their own level cannot change and improve performance. Today, PRIs are not yet the third tier of the government, but an extension of the second tier. They are not functioning as institutions of selfgovernance, but only as agencies for executing a few programmes of government.

However, it does not mean that panchayats or other peoples’ organisations have no potential. In fact their capability for achieving transparency, participation, inclusion and ownership can be enhanced by introducing some important reforms like allowing them the right to levy and collect taxes on their own in order to reduce their dependence on state and central governments. Also, States need to increase the share of transfers to PRIs from state governments as untied grants. The formula of transfer should no doubt give weightage to population and poverty, but also to efficiency.

The concept of good governance needs to be translated into a quantifiable annual index on the basis of certain agreed indicators such as infant mortality rate, extent of immunisation, literacy rate for women, child sex ratio, feeding programmes for children, availability of safe drinking water supply, electrification of rural households, rural and urban unemployment, percentage of girls married below 18 years, percentage of villages not connected by all weather roads, number of class I government officials prosecuted and convicted for corruption, and so on. Some universally accepted criteria for good budgetary practices may also be included in the index. Once these figures are publicised, states may get into a competitive mode towards improving their score.

Development is an outcome of efficient institutions rather than the other way around. Focus therefore must be shifted from maximising the quantity of development funding to maximising of development outcomes and effectiveness of public service delivery. Concerted policy action is needed to lift the 250 million poor, and must be increasingly concentrated in the poorer states, out of poverty. This requires not so much additional resources, as better participation of stakeholders and sound delivery mechanisms. This requires improving the environment in which the three agencies of delivery — civil service, panchayats and NGOs – function.