Reforming The Bureaucracy

When Manmohan Singh first became Prime Minister he declared that the topmost priority of his government was to reform the bureaucracy. Narendra Modi said exactly the same thing when he became Prime Minister. We are still waiting. India pays the price for their inability or unwillingness to seize the bull by its horns.

The total annual outlay of the Central and various State governments in 2014-15 was Rs.38,15,095 crores. The sum of the direct and indirect taxes collected by the Centre and the States was Rs.23, 20,624 crores. In 1950-51 this was a mere Rs.627 crores. Today’s district outlays by far outstrip provincial budgets of the past. The scope of government too has expanded and it encompasses many more specialist areas. In 2014-15 0f a revenue of Rs. 28,54,700 crores , land revenues accounted for a mere Rs.2669 crores making the title of District Collector somewhat misleading. On the other hand land rather than yielding revenues now draws huge expenditures in the form of subsidies to the farm sector. This is estimated to be in the vicinity of Rs.170, 000 crores each year.

The district officer is no longer a mere collector of revenues, preserver of order and projection of imperial authority, but the prime change agent of government and the administrative pivot of all developmental activity. But yet the old steel frame of the Raj, now largely rusted, rundown and rapacious endures. A typical district officer is usually still in his twenties or early thirties. But unlike his ICS predecessor the IAS District Collector or deputy Commissioner has neither the unquestionable authority conferred either by racial exclusivity or superb education or social class or all three to dominate and control the lower bureaucracy.

As required in a democracy the executive is subservient to a government by elected politicians. According to a study by SK Das, IAS, the average tenure of a district officer is now about seven months. He or she invariably falls victim to the constantly changing and treacherous currents of an intensely competitive political system. The lower and permanent bureaucracy has adjusted well to this essential change and has become a tool in the hands of the politicians. In fact the lower bureaucracy has increasingly become the nursery for the new political class.

For instance the former Prime Minister, HD Deve Gowda earned his spurs, as an overseer in the Karnataka PWD while former Communications Minister, Pandit Sukhram, was a clerk in the Manali municipality. Interestingly the last contest for Vice-President was between two former policemen. BS Shekhawat was a constable in the Rajasthan Police while SK Shinde was a sub-inspector in the Maharashtra special branch. Little wonder no one gives a fig for our district officers anymore. That may not even be so bad considering the kind of stuff that makes it into the IAS nowadays.

But quite clearly the common people are paying a heavy price for this.

India still ranks among the bottom ten of the international human development index.Clearly we need to restructure government and administration in each of India’s 568 districts. The District Collector/Deputy Commissioner, like his ICS predecessor must become the executive head of the district with all branches of government subject to his/her authority and power. This must particularly include the police.


The district officer must be re-designated as the Commissioner and should be an officer with over 16 years of service, a mature and seasoned individual with the seniority and clout to exercise complete authority over the administrative apparatus. This seniority will also give him/her the experience and guile needed to deal with the political system. Above all the Commissioner must have a fixed tenure of at least five years and a board consisting of elected representatives of the district as well as administrative superiors must make his/her selection to the position.

In the late 1980’s the then Prime Minister, Rajiv Gandhi, was reportedly contemplating such a restructure of government. No sooner the word got around, the traditional politicians opposed it, as it would deprive them of much of their clout. The former Deputy Prime Minister, Devi Lal, jeered it as a PM to DM system which would by-pass all other political structures.

A sum of Rs.1, 74,081 crores has been provisioned in the current budget to pay central government employees - about 10.45 per cent of its overall expenditure. The estimated wage bill of government at all tiers is around Rs.10.42 lakh crores or about 10% of the estimated 2013-14 GDP of about Rs.120.00 lakh crores.

The three levels of government together employ about 185 lakh persons. The central government employs 34 lakhs, all the state governments together employ another 72.18 lakhs, quasi-government agencies account for a further 58.14 lakhs, and at the local government level, a tier with the most interface with the common citizens, we have only 20.53 lakhs employees. In other words it simply means we have five persons telling us to do this or do that, for every one supposedly serving us. And whom even these one out of six persons are answerable to is still a big question?

Do we then have a big government bearing down on us? Not really. Consider this: India has 1,622.8 government servants for every 100,000 citizens. In stark contrast, the U.S. has 7,681. The central government, with 3.1 million employees, thus has 257 serving every 100,000 population, against the U.S. federal government's 840. Now look at the next tier at the state level. Bihar has just 457.60 per 100,000, Madhya Pradesh 826.47, Uttar Pradesh has 801.67, Orissa 1,191.97 and Chhattisgarh 1,174.62.

This is not to suggest there is a causal link between poverty and low levels of public servants: Gujarat has just 826.47 per 100,000 and Punjab 1,263.34. The troubled states or really speaking the troublesome states actually fare far better on this score. Thus, Mizoram has 3,950.27 public servants per the 100,000 population, Nagaland 3,920.62 and Jammu and Kashmir 3,585.96. Bar Sikkim, with 6,394.89 public servants per 100,000, no state comes close to international levels.

Very clearly for the most part, India's relatively backward states have low numbers of public servants. This means staff is not available for the provision of education, health and social services needed to address poverty.

We are not done with this as yet. In addition to this huge army of babu’s the Central and State Governments employ a further 6.3 million persons in PSU’s and departmental undertakings like the Indian Railways. Local bodies like Municipalities, Zilla Parishads and Panchayats employ another 2.3 million. This entire cohort of about 20 million belongs to the 27.2% who make up our middle and upper income groups.

Now lets take a look at the combined receipts and disbursements of the Central and State Governments. Last year (2014-15) out of the Rs. 21,89,752 crores optimistically deployed as Development Expenditure, Rs. 16,99,721 crores were for Revenue Expenditure; and of the Rs. Rs.15,71,518 crores spent on what is honestly admitted as Non-Development Expenditure, Rs.14,46,017 crores was incurred on Revenue Expenditure. The Capital Expenditure on account of “development” was just Rs.4,46,152 crores. Thus is costs the Central and State Governments about Rs.10 to give us a benefit of Rs.1.5!

Revenue expenditure very simply means wages, utilities, fuel, repairs and maintenance, and chai-pani aur dawa-daru kharcha. So the effective cost of government is Rs. 31,45,700 crores out of the cumulative receipts of Rs. 38,15,000 crores which the Central and State Governments collect as taxes from us and/or beg, borrow and steal for us. This is about a good third of our GNP and growing!

But the real slap in the face is that “Public Administration” is categorized as a part of the Services sector for national income accounting, and the 14% annual growth in the cost of government is what mainly accounts for the growth of this sector.


The growth of the Industrial sector has been marginal and that of the Agricultural sector has too has been sluggish. No wonder the Government and the RBI can still claim that the national economy is bounding along at nearly 7%?

The burgeoning cost of government is our single major public policy issue, yet it is not debated at all. All parties go into a funk when confronted with these facts. Politicians want an easy ride and want to pad themselves suitably when in the saddle. Reforming the Public Administration system means making tough calls and hence best left to the next lot.

Interested in Economics Policy and World Affairs. Worked in Ministry of Finance, GOI. Widely travelled and author of six books.

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