IPCS Discussion

Engaging the World: Reforming India's Public Institutions

12 Aug, 2016    ·   5101

Derek Verbakel reports on the proceedings of the discussion held on 21 July 2016

Prof Varun Sahni
Professor in International Politics, Jawaharlal Nehru University and Member, IPCS Governing Council

In thinking about questions of India’s public institutions, questions of design as well as questions of capacity must be grappled with. Also crucial to consider are questions of culture. 

Prof Devesh Kapur
Madan Lal Sobti Professor for the Study of Contemporary India, and Director, Center for the Advanced Study of India, University of Pennsylvania

In terms of administrative reforms in the last 25 years, little change has occurred despite massive changes in the economy. Even more, changes in India society mean that systems of order in India which were rooted in its hierarchical social institutions are fraying – which is good news – but a commensurate improvement in the quality of India’s public institutions has not been occurring and this will pose a growing challenge. 

India has historically lacked a sense of ‘stateness’ found elsewhere, such as in China. Rather than state institutions, social order in India came from social institutions. Systems of social stratification – above all caste – structured society along hierarchical lines. Large, patriarchal family structures were also systems of social control and order. These social hierarchies in India are not yet crumbling, but certainly weakening. 

The societal changes in India may appear glacial but these are massive if we look at a larger historical time frame. Yet there does not appear to be a commensurate shift in systems of order coming from broader state institutions. This will be pose challenges internally as well as externally, as India’s economy and international engagements and integration grow. 

In today’s global economy, international systems of standards affect how national economies integrate with the world. If Indian regulators – the principal interlocutors of the country in global standard setting bodies – are poorly prepared, there are implications for particular sectors of the economy and how they relate to the outside world.

How has state capacity in India changed in the last quarter century? Since the onset of economic liberalisation public sector employment has declined in absolute numbers and even more relative to the growing population. Despite myths about its bloated public sector, India has one of the smallest public sector bureaucracies per million people in the world. 

In the last few years the size of government has begun to increase, driven primarily by recruitment in the paramilitary forces. Increasing budgetary expenditure on internal security relative to defence, point to the changing perceptions of risks to national security.

The size of government institutions may be an issue but the skill-sets of personnel relative to the changes in the world is an even more important issue. As such, recruitment processes need major reform to attract in-demand skills.

The system is also flawed in its lack of 1) necessary exit points in the civil services and 2) internal assessment and promotion systems to ensure that the best officers are climbing the ladder. Currently the system of promotion is so beholden to age that in the context of rapid technological change where skills obsolescence is rapid, in fields such as cybersecurity, the system has become a major liability to attracting cutting-edge skills. 

Limited talent in government makes it difficult to effectively engage in international negotiations. While the government is necessarily the key interlocutor in major international discussions, private rule-making also plays a substantial role. The government has demonstrated weak capabilities in knowing, adapting to, and shaping standards which leaves India a rule ‘taker’ rather than shaper or maker. 

There is a tension between specialists and generalists in all bureaucracies, but in India generalists have been hugely favoured even when specialists are most needed. Consider India’s trade negotiations (for instance, bilateral investment treaties) in which the bureaucracy not only lacks capacity to produce cutting edge analysis, but is also uninterested in engaging people who do have the requisite abilities. As major trading powers move increasingly towards large regional free trade agreements – in all of which India is outside – this will be strategically expensive for India. Framing positions in nationalist terms that play well in the short-term to nationalist media but entail long-term negative consequences for India is unhelpful for the country’s long-term interests.  

The Indian system has an aversion to bringing in outside talent including global Indian talent. It could be due to cultural factors, such as the highly age and status-conscious society in which higher-ups in a bureaucracy are insecure about being outshined by younger colleagues. India can learn from the US (where there are about 100,000 PhD holders born in India), which seeks the world’s top talent to develop the best technological capabilities the government believes it needs. Better global engagement, especially related to science and technology, is crucial for India to become a great power. 

Existing highly selective procedures should bring in the most talented people to India's public institutions, but this seems not to be the case, and the reason is a much deeper failure of the Indian higher education system. Between 2000-2014, India opened an average nearly six new colleges every day. This massive expansion of higher education has been complicated by two factors: 1) many colleges are aligned toor directly owned by politicians, and 2) the taxpayer is indirectly finding them through public sector banks loan on a massive scale, much of which will not be repaid but go to pay the colleges that are commercial enterprises owned by politicians. 

Yet even where such interferences do not exist, good quality education tends to be unattainable. The proposed India National Defence University (INDU), for instance, has no place for civilian faculty which means that it is likely to end up being a sinecure for retiring senior officers. As such, it effectively serves to forestall new ways of training and educating senior officers and stifles fresh thinking about security in an era where threats are changing rapidly. 

These rigid and narrow ways of thinking are deeply entrenched, not only in the civil service or among politicians, but as broader societal cultural trait that affects thinking about learning and higher education. A lack of openness to the world of ideas and being challenged by outsiders reflects fundamental, deep-seated insecurities. 

Prof Devesh Kapur:

• A fundamental question is how to develop and cultivate talent in India. It is ironic that this was done better in the decades after independence even though the country is now much wealthier. A fundamental obstacle to addressing this is that no political party in India seems to have serious interest in higher education and elites have exited by sending their children abroad for education. 

• There is also very little support today by philanthropists for public policy or research institutions in India. Even just a fifth of the money sent by wealthy Indian industrialists to prominent US universities would go much further in India. 

• There is good evidence that early childhood development has the maximum payoff for a country seeking to nourish its human capital. As the pool of students has increased hugely and schools have proliferated, scaling up has diminished quality. The pace of change is slow, but higher education can be significantly improved. Resources are much more plentiful than in the past and are therefore not the binding constraint. 

• All bureaucracies struggle with where to draw the line between rules and discretion. There is endemic corruption in India and rules have proliferated, but it is unclear how even more rules might lead to less corruption. Bureaucrats that are both effective and non-corrupt are surprisingly small in number, so the risks of corruption must be seen relative to the costs of inaction. In defence procurement, for instance, under the UPA, in order to ensure there was no corruption, there was little procurement – the cost was a weakened national security.

• Systems set up to stop corruption have negative impacts on the ability of larger systems to function. In thinking through this, it is worth contrasting the Indian emphasis on procedures with the Chinese model, which has fewer rules but produces accountability through outcomes rather than rules. Enforcement of the one-child policy by officials or managing social unrest are examples. 

• It should be emphasised that there is a positive rate of change in many indicators in India. It is important to look at institutions from a global and comparative perspective, which suggests India’s problems may not be exceptional. Higher education is in trouble in many parts of the world as governments struggle with spiraling costs while maintaining quality and access.

• India’s defense reforms have been stymied not just by civilians but also by the armed forces, whose separate branches do not work together as closely as they should. The sahayak system was a relic of the colonial era and it is only now – seventy years after independence – that the army is considering phasing it out. One could argue that to maintain such a manpower-heavy army is an anachronism given the nature of 21st century warfare. 

• In the context of democracy, despite weak demand voiced by the citizenry for better public health or primary education, changes in Indian society are nonetheless creating demand-side pressures absent decades ago. Poor quality education in government-run primary schools is affecting fertility rates. In an effort to provide expensive private education, people want fewer children. Here, a negative has led to a positive consequence, although ideal would be two positives independent of each other: a decline in fertility alongside access for all to good low-cost public education. 

• An institution that is cause for deep concern is the police. It is perhaps the most corrupt Indian state institution, and the absence of reforms is deliberate, as the police are used by political parties seeking to use them for their own purposes. The police is the Achilles' heel of the law and order system and police responses often make matters worse, not better, such as in Kashmir. 

• Politicians will do whatever is necessary to get re-elected. To prevent them in the short-term from undermining public institutions, the question is how to reorient them towards longer-term thinking. Political parties in many ways resemble family-owned businesses, and threads of patronage are deeply interlaced through India’s public institutions.  

• An indication of change is violence, which manifests when the system is not stagnant but changing. Ironically, violence can be a positive signal that old hierarchies are breaking and desperately trying to retain a sense of control. Rapid changes and mobilisations of attitudes and energies of young people will continue to feed this dynamic. 

• Democracy is commonly thought to privilege processes over outcomes. Again, contrasting India and China, India has procedural legitimacy where politicians are conferred legitimacy though electoral processes, whereas in China’s outcome-based system the Communist Party has to deliver in order to claim legitimacy. It could be argued that less public goods are delivered in India because politicians believe they have legitimacy in any case. Policy in India should focus more on outcomes than obsess over procedures.

Prof Varun Sahni

Urdu and Hindi words such ashukumat and sarkar are deeply value-laden cultural terms and give insight into popular attitudes towards governance. Reverting to prasashan is unhelpful because 'administration' is just one aspect of governance and other dimensions such as culture require sustained and thoughtful engagement.  

Consider why India has had such successful nuclea rand space programmes but an unsuccessful defence production programme. Have technology denial regimes made possible the emergence of Indian institutions with Indians working together to produce Indian solutions to Indian problems? 

Distance and friction between public institutions should be mitigated so that more insular and myopic institutional perspectivesdo not warp what a national perspective should be.

Rapporteured by Derek Verbakel, Research Intern, IPCS