Administrative reforms: The elephant in

the room
The real competitive advantage of a nation lies in its ability to execute programmes properly.
Prajapati Trivedi

Business Today - Edition: January 4, 2015

(Illustration: Raj Verma)

Prajapati Trivedi

ABOUT: Early in 2009, when the Union

government was appointing its first Chief
Performance Officer, a secretary-level post, with a
remit to manage government performance, it
turned to Prajapati Trivedi. A former IIMCalcutta
professor, economic adviser to the government, and
a senior economist at the World Bank, Trivedi led development of a Results
Framework Management System to evaluate government workers.

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I am convinced that development is all about the ability of a country to

implement agreed policies, programmes and projects. The government's
ability to implement is the most powerful predictor of future development.
Experts agree that in the long run, the race among nations will be won or lost
not on the basis of comparative advantage arising from resource endowment,
but by the competitive advantage created by effective governments. Thus
creating administrative machinery that delivers what it promises remains our
main development challenge.
Management experts tell us that success in any institution depends on doing
the 'right thing' and also 'doing it right.' Unfortunately, development experts
spend all their energies debating what the 'right things to do' are. They do not
seem to worry enough about how to 'do them right.' There seems to be a
presumption that good policies, programmes and projects will self-implement.
Nothing exemplifies this better than the non-implementation of a
recommendation of three successive Central Pay Commissions: the
performance-related incentive scheme for central government employees. The
Fourth Central Pay Commission had recommended variable increments to
reward better performance as far back as 1987. The Fifth and Sixth Pay
Commissions reiterated this recommendation in 1997 and 2008, respectively.
All three times, the recommendation was duly accepted by the government.
Yet this was never implemented.
A similar picture emerges in the case of other administrative reforms. Since
Independence, a large number of reports have been prepared by all sorts of
expert committees and commissions. In 2005, then-prime minister
Manmohan Singh set up the Second Administrative Reforms Commission
(ARC), headed by Veerappa Moily. The panel submitted its 15th Report on
April 2009, and continued to work well into Singh's second term. Even though
Singh returned with a larger majority, he was soon distracted by various crises
and it became clear that administrative reform was the last thing on his mind.
With the change in government in 2014, the implementation of the Second
ARC appears to have been relegated even deeper into the abyss.
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Arguably, the lowest point in this journey of disappointment with

administrative reforms was reached when a group of around 80 eminent civil
servants led by the former cabinet secretary, T.S.R. Subramanian, filed a
petition in the Supreme Court in 2011 against the government for not
implementing administrative reforms. The Supreme Court accepted two
crucial suggestionsof the petitioners - a ban on oral instructions from political
bosses and superiors and fixed tenure in postings. But even this judgment has
not been implemented.
Alas, India seems to be caught in a vicious cycle. Because the government's
capacity for implementation is weak, it is not able to implement
administrative reforms to improve its capacity to implement policies and
programmes, including administrative reforms.
But before we examine options for breaking out of this vicious cycle, let us
look at some success stories. There are indeed lessons to be learnt from both
successes and failures in this area.
Chapter 11 of the 10th Report of the Second Administrative Reforms
Commission says: "Performance agreement is the most common
accountability mechanism in most countries that have reformed their public
administration systems." In June 2009, the then president of India, Pratibha
Patil, announced in her speech in Parliament that the government would
"establish mechanisms for performance monitoring and performance
evaluation in government on a regular basis." Sure enough within 100 days,
the prime minister announced the adoption of a Performance Monitoring and
Evaluation System (PMES) for government departments.
At the heart of PMES is a performance agreement, referred to as a ResultsFramework Document (RFD), between a minister and the secretary of a
government department. The RFD is an agreement about the vision, mission
objectives and priorities of the department, corresponding actions required to
achieve them and success indicators and targets to measure the progress in
achieving them. The RFD is finalised at the beginning of the year and the
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department's performance is measured at the end of the year. These results

are included in the departments' annual reports and tabled before Parliament
each year.

How they fared

RFD scores have created benchmark competition among departments and a

Ph.D. thesis at the Indian Institute of Technology, Delhi, has found this reform
to have had an overall beneficial effect. Today, some 80 departments of the
central government and 800 Responsibility Centres under them are covered
by the RFD. In addition, 17 states, their governments cutting across the
political spectrum, are at various stages of adopting PMES.
The resultant accountability and benchmark competition has also had a
dramatic impact on many administrative reforms that had been neglected for
years. For example, in a meeting with the then prime minister in 1997, all chief
minsters agreed to achieve a citizen-centric government by adopting the policy
of 'Sevottam' - a Hindi word meaning 'excellence in service'. It had three
principal components: (a) a Citizens'/Clients' Charter outlining services and
transactions of a government department and corresponding service
standards to which the department is committed; (b) a Grievance Redress
Mechanism to record, track and dispose of grievances; and (c) the certification
of a management system of the department to deliver results.
Till 2010, there was virtually no progress in implementing these three
components of Sevottam. In response, the then cabinet secretary decided to
include these three components in the RFDs of all departments with
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measurable and verifiable key performance indicators. Data show that there
has been significant progress on all three fronts since then. For example, the
disposal rate of grievance redress went up from 50 per cent in 2010 to almost
100 per cent in 2013.

Impact of RFDs

Similarly, the implementation of other reforms brought under the

accountability regime of the RFD improved dramatically. After a Standing
Committee of Parliament made some scathing remarks about the nonchalant
attitude of departments towards observations of the Comptroller and Auditor
General (paras), the cabinet secretary decided to include this too as a
performance indicator in RFDs. Data show a dramatic reduction in the
concerned paras. Truly, what gets measured gets done.
Memorandums of Understanding (MoUs) represent another success story.
Like the RFD, the MoU is also a performance agreement between public
enterprise CEOs and the secretary of the administrative ministry. It was
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recommended by the Arjun Sengupta Committee in 1984 and was formally

made part of the Industrial Policy in 1991. It had two main elements. One, 50
per cent of weight in performance evaluation of public sector enterprises
should be given to financial performance. Second, the bonuses of public
enterprise staff, including that of CEOs, should be tied to profitability. This lit
the fire in the belly of public enterprise managers and the improvement in
performance of the public sector as a whole, barring select exceptions, has
been phenomenal.

Improving profitability

The following are the lessons to be learnt:

First, implementation of administrative reforms requires not only political will
but also bureaucratic skill. Even when there is overwhelming political will,
often the bureaucracy fails to deliver the right design and implementation
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strategy. Today's administrative reforms have become complex and require

specialised knowledge.
Second, it is difficult for patients to heal themselves. Thus, politicians must
make use of vast talent pool available outside government. Ideally, they should
utilise the talents and experiences of civil servants who have taken leave of
absence for long periods to serve in international organisations and
specialised in a particular area of reform. They are likely to be much more
effective than either rank insiders or rank outsiders. Fortunately, the available
supply is large enough to satisfy any foreseeable demand.
Third, international experience with reforms suggests that the most difficult
reforms have to be implemented at the beginning of the term of any
government. Given that the second ARC had made close to 1,200
recommendations and 1,005 have been already accepted after rigorous
scrutiny, one would have expected the new government to hit the ground
running rather than reopen closed debates.
Fourth, administrative reforms should be implemented as part of a larger
framework for performance management. Implementing administrative
reforms should have consequences - efforts in this area should be rewarded
and failure to implement should be punished. No one likes change and the
bureaucracy is no different. I discovered that no one in the government was
accountable for the implementation of administrative reforms. Ironically, this
was particularly true of the Department of Administrative Reforms, long
considered a punishment posting.
Fifth, the government must define what 'successful' implementation of
administrative reforms means. We must know when to declare victory or
defeat. In the absence of such a yardstick, I have seen departments claiming to
have implemented some administrative reform merely on the basis of a memo
issued asking others to take appropriate steps.

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Finally, administrative reforms have to be undertaken in mission mode. We

must have evangelising missionaries leading them. Successful reforms have
been implemented by people who are passionate about them and believe in
them.

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