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-.ugust 2005
Chief Editor: Anurag Mlo:ra Editor: Dr Sapna N. Singh Ass Editor: Madhu R. Sekhar Sub Editor: Manogyan R. Pal .Joint Director (Prod): N.C. Mazumder Cover Design: Deepayan Maitra e.mail: yojana@techpilgrim.com dpd@Sb.nic.ln; dpd@hub.nic.in Website: www.publicatlonsdlvision.nlc.in

About the issue

Let noble
restructuring of bureaucracy has been on every government's agenda and the latest in the series is UPA government under the leadership of the Prime Minister Dr Manmohan Singh. But, there is one difference. This time it is a man, who has been part of the official machinery in various capacities and therefore knows its working and is in a better position to attempt a course correction. It is an accepted fact that the existing machinery of governance has failed. The success of our efforts at economic growth, development, social justice has been limited because the iustruments of administration are ineffective, inefficient and not accountable. Many initiatives were und'ertaken to improve the system. Several committees and experts looked into it, but without much success. In the schemes relating to development, it is the delivery system at the grassroots which needs to be efficient, accountable and responsive. The lower bureaucracy represents the face of the government. When aU plaus are, finalized for unemployment, food. for. work programmes, housing and sanitation, it is the district rural development officer at the bottom who holds the key to implementation. The reforms in the present shape are applicable to just the top 10 per cent of the government. The critical question is what happens to the remaining 90 per cent? Several administrative reform commissions have overlooked this critical aspect of reforming the lower hureaucracy. This is the challenge before the UPA government. Here comes the role of Panchayats which need effective governance if important areas like health, education and employment schemes are to succeed. This calldor a major review of the organization structure of governance at all levels, To make the officials accountable, restructuring the institutions of governance comes cooperative so that responsiblities can be fIXed. Passing the buck between individuals and organizations must come to an end. Corruption in any form must be curbed. Those civil servants who indulge in corrupt practices must be punisbed. However, there is a word of caution. As the Prime Minister observed while speaking in Parliament on the introduction of Right to Information Bill, 2005, that there is a difference in decisions taken with malafide intentions and those that are bonafide errors. In the present system the career of an. officer gets jeopardized even if one of his decisions goes wrong. This is more so where commercial decisions are involved. A system should not be allowed to develop where officers become shy of taking qnick decisions on one pretext or the other. With changes in our economy in the past years, new areas which are specialized in nature have emerged. With globalization taking place, policymaking has become a complex task and issues on patents,_ WTO, IT, to name a few, require deeper knowledge. The moot question that emerges is - should top civil service be open to experts? Bureaucracy should have the best talent from specialized disciplines, Countries like the UK aiId New Zealand who have civil service system like the Indian system too have reformed by allowing lateral entry. It goes without saying that good governance needs to be at the top of the government's agenda. This alone can raise our economic growth while reducing poverty and improving social justice. 0

CONTENTS
J GOVERNANCE AND DEVELOPMENT Yoginder K. Alagh COMPETITION AND THE TOP CIVILSERVICE Arvind Panagariya 2 9
&

K WiNDOW
&

54 K 58

NEWS FROM J

f!~ove~N~~
E-GOVERNANCE REPORT CARD Sameer Kochhar, Gursharan Dhanjal DOES E-GOVERNANCE GOVERNANCE Yogesh Baweja MEAN GOOD .. 67 60

A QUARTET ON ADMINISTRATIVE REFORMS .... 15 Y. R. K. Reddy HOW NAZIR SAAB FOUGHT HIS MAJESTY'S COLLECTOR L. C. Jain CHANGING THE MINDSET Hasmukh Adhia SECRECY AND GOVERNANCE Moushumi Basu CORPORATE GOVERNANCE IN PSEs S. M Dewan INNOVATIVETHINKING IN GOVERNMENT Sanjay Kothari and Rajesh Bansal DEVELOPMENT GOVERNANCE Mahendra P. Srivastava REFORMING BUREAUCRACy R. L. Sudhir ASSESSING lAS OFFICERS REACHING THE POOR L. C. Jain NATIONALFLAG AND ITS ORIGIN S. V. Taneja 20 22 25 29
34

CITIZEN'S RIGHT TO CONVENIENCE AND COMFORT P. M. Kuriakose EMPOWERING PEOPLE Hari Shankar Singh
LOKVAN/:

70 72 75

CAUTIOUS APPROACH NEEDED Sreekumar Raghavan ,

SARITA: E.REGISTRATION IN MAHARASHTRA . 76

41 SHODH YATRA 44 46 47 49 STEEL GRAVES OF ALANG AnkurGupta GLOBALISATION CAN HAVE A HUMAN FACE TEA INDUSTRY AT CROSSROADS G. D. Bane~ee and Sarda Bane~ee NDC : TALKING DEVELOPMENT IN THE NEWS ~ 78 81 86 88 92 97

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Governance and Development

Yoginder K Alagh
HE COUNTRY seems to be in a questioning mode on governance structures. The notion that all our problems can be traced back to the political governance and the civil service mechanisms is incorrect. Change has been rapid, expectations are high, technological and economic compulsions are severe and system performance of an incremental kind seems unacceptable. The country used to the experience of the freedom movement and the post independence decades, with 'high commands', 'saintly idioms', 'satyagraha' modes and 'idealistic' goals, is not coming to grips with the operational and functioning aspects of coalition governments and decentralised institutions. There is an atmosphere of unease and unanswered questions. We attempt to lay down the borders within which governance systems are expected now to function. We try to be relevant in the immediate sense, but the economist and planner refuses to always oblige. Detailing the borders as we look ahead is relatively simple. The devil is in trying to work out the transitions to reach there from where you are. The Indian political system and civil service produced some extraordinary men and women. They have been persons of letters, of the arts and of history. They have conceived and implemented green revolutions, given extraordinary ideas in health, education and literacy. They hav~~protected the tribal and the dalit, fashioned her/his rights and fought for them. They have developed new concepts of finance, scrutiny and audit of public expenditure. They have given impetus to- scientific and agricultural research. They have fashioned and followed through the nation's global agenda. They have followed through its deepest dreams of a multi-religious, multi-ethnic society, inherited from its freedom struggle, by both creativel.y strengthening its democratic and reconciliatory edifice and fighting those who would destroy it by violence. They have been at the heart of the young democracy's struggle for fashioning the velvet glove and the mailed fist. There have been women and men in India at the highest echelons of its ruling classes, who have been scrupulous on the use of every paisa of public money, whose picture has never been published in newspapers at public

While the need for reform is universal, there is hardly any organised debate and action on the operationalisation of change. The
go vernflnce

debate is in a cui de ~ac of ideas

Mr Y. K. Alagh is former Union Minister and former Member Planning Commission. He was also Chairman of the Committee on Reforms in Higher Civ~l Services.

YOJANA August 2005

~
expense and some of them have died on account of neglect. They have, however, been the exception, not the rule. In every problem I am outlining, I can truthfully say I know the exceptional institution and person, who have worked out the solution. But they are the exception, not the rule. It is the turnaround which is difficult. In one's work dominating trends in relation to governance can be perceived. Somewhat tentatively as far as the borders are concerned I would propose that: As the State withdraws from direct delivery governance would need to establish a regulatory framework for the functioning of the economic and social sector; and also lay down the institutional framework, the incentive and disincentive mechanisms and fiscal structures for civil society institutions to function, like decentralised, local institutions of Government, Cooperatives, NGO's and newer 'mixed' forms of similar organisations, Non-renewable resource scarcities will be far more severe particularly of resources, like water, quality land, and energy and sustainability concerns will be acute. the Adivasis, the mentally physically challenged. and economic reform of the kind designed by the Brettenwoods institutions. The exchange rate on current account was left to market forces, import control on producer goods and intermediates was largely abolished, tariff rates were standardised and the average level brought down. Policies on sectoral and regional direction to industrial investment, MRTP control and controls on FERA companies were diluted or given up. The level of public investment in industrial and infrastructural sectors was drastically reduced. An earlier policy of restructuring and privatising selected public sector industry was changed to a general policy of disinvestments, with a initial emphasis on selling profitable public enterprises to the private sector, to overcome 'initial resistance to purchase of public sector equity'. However, the abandonment of a strategic role of the State is wrong. I believe that the trend to marketisation is correct. The process of liberalisation is now in its final phases with India imposing the WTO regime in full since 1998 and the Ninth Plan and Tenth Plan commited to financial deregulation and capital account convertibility in a phased manner. Governance issues are now different. It is interesting that when Stiglitz now talks of counterfactuals that have succeeded, and the theories that go with them he discusses Poland and China, while in the early nineties the references were also to India. In the second half of the nineties and the early part of this decade, Indian economists are well represented in global journals, but there is no perspective on India's experience from an analytical point of view. This is definitely unfortunate from a knowledge point of view and since knowledge we know isa source of growth and has practical consequences also. 3

On the flip side modern technology. will be see,n as providing cutting edge knowledge based solutions to emerging scarcities or problems, and therefore greater use of information technology, biotechnology, systems networking, the new materials and strategic management responses.

Thoughtful groups wili see security concerns becoming more acute, arising from socioeconomic political dichotomies and resultant tensions as also the more basic i"ssues of energy security, food and water security and institutional dimensions of addressing these.

Changing Role
The process of reform began in the mid-eighties in India. The first phase consisted of eliminating price controls and relaxing investment and foreign exchange controls. These were replaced by tariff and tax policies. The road map was outlined by Committee on Replacing Quantitative Controls by Fiscal Methods or the N arasimham Committee of which I was a member. The emphasis was on domestic reforms and preparing Indian industry for global competition, but there was discrimination between industries with a view to encouraging self-reliance, production of mass wage goods, was still an objective, as also that of creating a level playing field for efficient Indian industries as the economy was subjected to competition. Cement, aluminium, steel and a number of other industries were decontrolled and import licensing relaxed. Tariffs were however high and discriminatory and there was the so called 'savage' policy of taxation of luxuries. The nineties saw a more general

There will be much greater emphasis on the rights of individuals and groups, including participatory forms of decision making. This in tum will demand greater fairness and selfrestraint in the use of Government power. Related to it will be demands on transparency and right to information. There will be the demand for protecting vulnerable groups, either the historically underprivileged, or the victims of marketisation, concerns for human rights and particularly of specific groups such as women, children, the minorities,

YOJANA August 2005

,~

The

withdrawal

of the

direct

CERC

Act

introduced

by me in

economic role of the state in India was accompanied by a conscious policy of decentralisation designed. in the late Eighties of the last century, setting up of regulating bodies for the infrastructure and industrial sectors and a Constitutional third tier of government and tbe emergence of NGOs and cooperatives in fields of land and water, ru~al activities and social infrastructure.

Who will Guard the Guards?

As far as the regulating bodies are concerned, recently there has been a sharp attack by a group which was led by the Principal of the Administrative Staff College ofIndia. After the good professional studies released for public discussion by the Central Electricity Regulatory Commission under Dr. S. L. Rao, a professional economist, including a Discussion Paper on the principles of tariff fixation there has been little worthwhile work and in fact a number of state level Commissions have acted in a fairly non-transparent manner. The whole question of the structuring and manning of these bodies has been opened up for debate. In this context I may be permitted a brief personal intervention. As Minister of Power, the worst kind of pressures faced were in appointments. Together with my Secretary, who later took premature retirement from the lAS and became Principal of the ASCI, I appointed the Member Planning Commission M. N. Srinavasan, the no nonsense former Chairman Atomic Energy Commission, as the Chairman of an Advisory Committee to the Minister on senior appointments in the Power parastatals. The individuals appointed then implemented some of the largest expansions of capacity in power generation and transmission at lowest costs. This transparent appointing procedure was introduced after quite some introspection in the
4

Parliament in August 1997. However I am told that this provision has been removed in later legislation and the selection processes for such appointments are now again chaired by political persons with the unedifying spectacle in some cases of Secretaries to the Government openly lobbying for post retirement perks in this form. The management of regulation is obviously an issue of highest importance and needs to be discussed openly and transparently. More generally the Committee I chaired on examination and training reform for the Higher Civil services has also argued that apart from examination and training reform, the management of civil services is the crux of the issue. The issues in decentralisation are of another kind. It should remain a matter of priority for State Policy to help those who help themselves in the core areas of local and global concern. As preparations of Tenth Plan showed, in relation to targets, performance has been well behind in the interrelated areas of land and water. What are the civil management and organisation issuesliereaf the locar level in the case of problem which is at the heart of food security and employment and energy sufficiency? Problems partly arise because the existing legal and administrative systems and financial rules are structured for formal organisation in the public or private corporate sector. So are global financial institutions. Newer kinds of institutions with strategic mixtures of organisationl styles, cooperatives and corporates, NGO's and governments, NGO's and cooperatives do not have a level playing field for them. Recently a Bill had been passed in Parliament allowing cooperatives to register as companies,

based on the report of the High U:vel Committee on Legislation for Corporatisation of Cooperatives. (The Companies Second Amendment Bill, 2002). Such innovative approaches are rare and in any case become controversial. There are reform issues here also. For example a loss making subsidized electricity system can underprice a renewable group and drive it out of the market. The long-term problem is reform in the sense that subsidies and protection given to established groups have to be withdrawn. In the short run the protection given to each group must be the same. he structure or incentive and disincentive systems for this kind of growth, should begin with a taxonomy of complementarities of policy rules at different levels of policy making like no level can sperlJ more resources than they have access to. But resources, which are short or binding constraints at national or global level, are elastic at local levels. However, their mobilisation requires policy changes at higher level. For example, it is easy to buy a tax-fee bond of the New York civic bodies, but very little attention has beeIrpaid-to-market~ for local bodies bond paper in developing countries and the fiscal reform that has to precede them. An exceptional effort by the Ahmedabad Municipal Corporation of floating a large bond issue without sovereign guarantees is available as a case study. These issues are important because the State just does not have the money any more. We must emphasise that any debt rescheduling strategy will have to do this must be linked to restructuring Local Finance. The good schemes of support to local agencies for land, water and urban development in the last . budget and the Planning Commission's YOJANA August 2005

f1rm;a of using exchange reserves for

infrastructure investments as publicprivate partnerships must be linked to State and local governance structures and finance. Large sums of money are involved here. International agencies are now lending for local schemes. We must study recent global policies and link this with local finance. The last three problems essentially underscore that the reform process has to be fairly deep for widespread land and water based poverty reducing growth processes to take place. This has to be rooted in the administrative and legislative processes. The kind of growth discussed meshes well with higher output, income, employment and trade levels. Improved management of water to crop diversification. The typical sequence is a poor yielding mono inferior cereal economy, succeeded by a high yield cereal and a commercial crop, or tree, crop. In the Indian case, exchange rate reform led to higher growth of agricultural exports, before the East Asian crisis cut down demand in the fastest expanding markets and recent evidence is that the districts sourcing non-traditional exports have gone through a phase of land and water development sequences. But such policy complementarities have to be planned for. he issue here is the requirement of systems to be alert to field oriented developments. Such systems have to constantly assess organisational, legal and financial system requirements. It can be said this was always so. The pressing change now is that the requirements are to involve civil society in the process. This makes the networking knowledge requirements more intense. Abilities of communication and having the energy to follow more YOJANA August 2005

complex goal will be required in this phase. It is useful to begin with the kind of problemetiques the sustainable development framework studies bring out. The "Business As Usual Scenarios" bring out unsustainable outcomes.
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Urban Settlements
The Indian economy is growing rapidly and also diversifying. For example the share of agriculture in the labour force has now fallen to around 53 per cent. Again, urbanisation will need to be structured in a fairly decentralised manner. All of this lead to different challenges in transport, energy, waste disposal and urban planning issues. It has, however to be noted that the urbanisation pattern in India is decentralised. While very small urban settlements are not growing, the share of smaller towns in Class I towns is high, (100.000+). Urbanisation has been explained as the outcome of both centrifugal and centripetal forces. While the urban growth rate in the eighties went down from 3.8 per cent to 3.12 that of Class I towns went up (6.39 per cent to 8.39 per cent). It can be postulated that these trends will continue. The preferred model is consistent with the pattern of urbanisation with clusters of settlements around large conglomeration. Policies should not be concentrated only on rural output and employment. In fact in a dynamic economy of the Indian type the distinction between the village and the small urban settlement can be very counterproductive and lead to all kind of projectionist distortions. A more productive mindset would be to orient policy to concentric circles of prosperity around diversifying 5

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It has been argued that "The sharp breaks in many indicators and unmanageable problemetiques emerging in major environmental concern areas is self-evident. Solid waste disposal levels of more than 100 million tonnes, slum population of around 100 million persons, acute water shortages aild air and noise pollution of a severe kind, all manifest themselves. The serious environmental implications of

agricultural bases Jd growth centres. Such possibilities ire very real and I substantial in India. Transportation, land use, infrastructurel' and technology dispersal policies call be oriented to this objective. In fact lit will be more sustainable. Slum populations are 25 to 40 per c~,':lt lower in 'smaller Class I towns as compared to million plus cities. he public ma,nagement issues involved in rapid and decentralisedi urban growth are so obvious that they do not need elaboration. Awaren6ss of technology, system interrelatiohs, decentralised planning foci, self ~eliant institutions which can producti,vely borrow and build and run systeins have all been discussed and ye~ only a small beginning made. Th~se are going to be the great challenges bf the next phase. The ability to raise hnd use resources productively will bile at heart of the matter. Technological self-reliance' on I mission mode, as in the past, will probably also continhe as requirement I of the present of nat~onal security and other long-term objective. It has been shown for example, that the development of ttie Param Super Computer led to withdrawal of restrictions on I export of supercomputers to Inepa. Again recently the Chairman of th~ Atomic Energy Commission has Jointed out that sanctions on India ~ade it more selfreliant in nuclear tJchnology. Thus, some mission-oriented efforts are necessary in a wotId of restricted technology access. I Since India has limited reserves of uranium, but very I large reserves of thorium, a project like the Fast Breeder Reactor Nuclear I Power Station, became a very important part of its search fori long term energy solutions, since it takes a major step towards completing I the nuclear fuel

cycle, based on thorium, and therefore a relatively cheap and abundant source of power. It would be naively optimistic to say policies for' introducing new technologies, which reduce financial and real resource costs, introduce newer more consumer friendly and sustainable products and help competitiveness, are already established~ A beginning has been made but a lot more needs to be done. Temporary fiscal and monetary comfort which improves rates of return for cost reducing technologies and newer products, need more support. Standard setting, quality enforcement and organizational reform which makes all this possible, is also needed on a more larger plane, together with networks which hasten the process and fiscal sops to integrate these with the market.

applications cut across areas ~ biotechnology, communications and computerisation. If the preconditions are available it spreads very fast, both through space and sectors in economy and society. But if the infrastructure is not there, both physical and human, vast areas will be left out induding some in the developed world. There is also the need of quick response. As Ricardo Petrella of the EEC's FAST Group pointed out each generation of innovations is building on the corpses of earlier ones. State and parastatal agencies find it difficult to perform in this framework.

tHe

The point being made is that whether we discuss wide based rural development or growth centres, the nature of public policy skills required now will involve much greater reliance on technology at a decentralised level, networking and The scie.nce establishment must an ability to work with civil and seriously consider these issues. In the community groups. Thus the need information and software area, will be to champion reforms, successes are known: Growth rates in . facilitate community, private, focused exports of 60% annual, around 25% in NGO/cooperative groups and to help this depression year also. But to have the economy and society to integrate 18 of the 25 top technologically with the opportunities provided by certified companies in the world and to wider national mid global markets, provide over a third of the software through productive activities. needs of the Top 500 Fortune companies, as a recent Japanese study n rapid changes that will take the points out, is not to be scoffed at. In a place in the country and the world OECD-ADB meeting on Technology 'n the 21st century, the Higher Civil and Growth to which I was invited to Services will as is obvious, have to be speak, India was shown in Paris as the at the cutting edge of being the only exception to the global digital protectors of the poor, the oppressed, divide. (Seventh OECD-ADB Asia the vulnerable and the underprivileged. Forum, Paris, student June 2001). The democratic urges arid aspirations of

Applications
Serious research during the last decade and a half has shown fairly conclusively that the tremendous opportunities that are available with the new technology requires groups and systems which can manage its interdisciplinary nature, since

India, enshrined in its constitution and its legislation, will have to be met in a fair and transparent manner not only impartially, but in spirit, by protecting the rights of the poor, limiting the coercive power of the State. Safety nets w:ill need to be developed and implemented as the market economy expands. Poor YOJANA August 2005

~men, and the girls child, the minorities, the tribal and the Dalit, the handicapped and the destitute, will need special attention. The Constitutional and legal dimensions of public administration determine the powers, functions and accountability of the government. A major change in the evolution of civil services in India occurred with the adoption of democratic constitution incorporating the ideas of rule of law, guaranteed rights and Parliamentary government. The 73rd and 74th Constitutional amendments envisage a further change in the same direction. Services under the Union and the states find a prominent place in the constitution itself. An autonomous Commission with vast powers for recruitment to the services is another important aspect which emphasises its role in constitutional governance. ooked at in the above context. We need to understand the significance of rule of law and the concept of limited government under a written federal-type Constitution. The values of the Constitution written into Preamble, Fundamental Rights. Fundamental Duties and Directive Principles have to become part of the system. As an instrument of governance the provisions of the Constitution and its interpretation by courts constitute a point of reference to all government action. These are subject to judicial review which is the foundation of rule of law under a scheme of constitutional government.

constitution which proclaims secularism and social justic~ based on equal protection of the )laws puts a heavy burden on government, both at the central and state level. Hence the importance of constitutional perspective. Another dimensil~n which conditions the functioning of civil society in modem times is the profusion of laws, national and interniational relating to economy, ecology!, technology and international treat~i obligations. The change in the concept of property from something tangible to forms which are intellectual and intangible brought almost a revolution in the laws of trade and commerce. Intellectual property law and trade related intellectual property rights have become critical in economic governance globally. Added to this is the information aUld communication technology which threw up anew legal framework for doing business within and outside government. Globalisation is happening not only in relation to market but in respect of all conceivable aspects of organisi~d life to the fast changing legal climate in all these matters influencing both policy development and adiministration. Yet another legal dimension . f rmplllglllg publIc governance at all levels is the jurisprudence of sustainable development. TheI'e are today legal parameters in the use of administration has to be accommodated within sustainable limits. these are some of the significant legal perspectives which are critical for civil slDcietyin the future.

moving, including its very diverse cultural pulrality; An ability to appreciate some of the real scarcities that are emerging as also the strengths of civil society to cope with them; An ability to interface with modem technology, which provides the cutting edge to many solutions; At higher levels of the system an ability to network with local government institutions, nongovernmental org"anisations, cooperative and other professional and people's organisations; A sense of rugged professionalism, persistence and doggedness in pursuit' of objectives; urge to champion beneficial change; energy to pursue objectives; A sense of fair play, honesty, political and systemic support; Compassion for the underprivileged and above all; a commitment to India as envisioned by its founding fathers.

Change Parameters
The primary agency of the The purpose of this discussion has government to protect human rights, been to draw out of the attributes that more particularly of weaker sections of will be required from the system in the society is the bureaucracy because they forthcoming period. These would are the enforcers of the law. The Court . include amongst others: steps in only if the executive fails to implement the laws or implement it A sense of visi(~n and direction in contrary to law and selectively. A which the Indian socio-polity is YOJANA August 2005

wo encouraging reports were the statement of government intentions at the instance of PM that the age of entry to the higher central services will be twenty-six or twenty five and not thirty plus as at present and empanelment for the joint secretary will be earlier and on merit not just seniority. In the vernacular press in the city I live in, the lowering of age was reported as if the authorities were taking a benefit away. These proposals as the documents of the Administrative Reforms Department put on net shows, are a couple of years old. They were acted upon by the NDA government on account of the flak they wrongly in my opinion were not willing to face, although they are of high intrinsic merit. The argument used against the 7

l:

proposal to reduce the age of entry is that children from poor or scheduled I caste, Adivasi or OB[: background will be at a disadvantage ds compared to the westernized urban elite candidates. It is i factully wrong and it is important to recognize this as the debate starts or the reform will be a n09 starter inspite of its advantages to the country. This was the major issue whenl the committee on reform of the highrr civil services examination and training of the UPSC was working on the proposal. There is no question that t~e broad base of recruitment for the higher civil services like the lAS or the jpolice is a great advantage for India. Children coming from diverse social and economic backgrounds lend a truly national perspective and an empathy for the real problems of the [country which candidates from an affluent or elite background alone wquld never give.
i

are available at younger ages. As anyone who has conducted a large open competitive examination in this country knows it is such a richly endowed society with talent that at the top you get outstanding material and the difference between the highest ranks is very little. As a former. Vice Chancellor of JNU where tens of thousands of children apply I know that at each point there are a number of candidates and the difference between them is very marginal. So really by reducing the age you still get very good material and more important from the really backward areas and communities. hey are malleable, can be trained, imbued with a sense of mission, given technological skills and a sense of belonging to the super club, so that they perform collegially, the only reason we need an elite civil service. Entry has to be open but then have to be the best and together. It is wrong to say that we don't get the best for the job. We do and the challenge is to keep them that way. The civil service has to be honed into a force which supports India propelling itself into a global power house. They will have to be technologically savvy, but also sensitive to the rights of their compatriots and support civil society to solve its problems. They will have to network, stand up for the rights of those ravaged by the powerful and the bizarre and remain true to the ideals of those who freed this country and gave the poor, rights. Men with smaller visions want the civil service to serve their smaller interest. That is why the second proposal to pick out the :best and put them in a fast track need full support. This pattern is followed by corporate systems. Assessments every ten years some specialisation and the best training of the selected are followed elsewhere and should be implemented in the higher civil services.

Progress on some of the parameteIf stated above seems easy as the technical aspects have at least been outlined. The more complex questions are the institutional ones. There is general disquiet on governance and yet very little discussion of known bottlenecks to change and well known solutions to problems. It can be genuinely stated that while the need for reform is universal in acceptance, there is hardly any organised political debate and action on the operationalisation of change. The governance debate is in a cuI de sac of ideas. There has not been much popular pressure on the legislature to accept the Supreme Court's judgement on treatment of criminals in political activity. The proposal that while the political executive has the right to make executive appointment, if unusual decisions are taken, say a transfer in the less than three years, then a spoken order must be placed on the file as to the exact nature of public interest served in the decision. I can say from personal experience that the most venal pressures are exerted at the time of appointments. Also reform is easily subverted. Similair trends are known in other areas. The Navratnas have been decimated with party functionaries replacing experts. Security concerns have been openly flouted. Civil service and systemic reform is on the backbumer. One is almost led to the position that governance does not seem to matter. However in the long run" activism of the kind contained in a meeting of this kind which is primarily academic and not largely action oriented is perhaps the only answer. Detailing the right questions is terribly important in an area of great vested interest. 0 YOJANA August 2005

The plain fact of the matter was that candidates with collyge degrees from backward districtsl disadvantaged I communities and romen, in fact declining as a share of the total as the age limits for recruitnient kept on rising with the so called objective of ~elping them. The Zakir Hussian Center for . i EducatIOn at JNU conducted a study of the private cost of ~reparing for the exams. This was mote than a lakh of i rupees per year. A child from a poor family would simply not have the resources to keep on preparing for these exams year after year, in terms of staying in the city dnd not doing an alternate job. So tUe children who i largely benefit from this concession are those from the better off communities which benefit from reservations. In other words they are 'second generation' candida~es from well off families. Even thils would be an advantage, had it not! been for the fact that good candidates from the reserved communities from b.ackward area, in other words, the firs~ generation ones 8

Competition and the Top Civil Service

Arvind Panagariya
HE REFORMS during the past two decades have come a long way towards putting an end to the monopolies in India. For example, not only has the private-sector monopoly of the Ambassador and Fiat automobiles been dealt a decisive blow, the public-sector monopoly on telecommunications has also been stamped out. The results have been nothing short of spectacular. From the 1950s models, the automobiles produced in India have jumped into the 21st century, with more than 120,000 cars exported this past year. In the telecommunications sector, telephones used to be frequently without the dial tone or connected to a wrong number and yet the wait for a new line was several years long. Today, superefficient cell phones are available on demand and growing at the astounding rate of 20 million sets a year. Nevertheless, India is not fully free of monopolies. Foremost among the persisting monopolies is the Indian Administrative Service (lAS) that controls virtually all of the top civil service jobs in the central and state governments. The Service was created in the immediate post-independence era
and Bhagwati

as a part of the All India Services that additionally included the Indian Police Service (IPS) and Indian Forest Service. At the time, there was a good case for a highly independent civil service that would deploy the brightest young men and women in the building of uniform public institutions across India. But that objective having been largely fulfilled, policy formulation having become highly specialized, and the Service having turned into a lobby devoted to protecting its own narrowly defined interests, time is ripe for subjecting it to outside competition. Sardar Vallabhbhai Patel who championed the creation of the lAS famously described it as the steel frame that would hold the country together. His vision was thata significant fraction of the officers in the Service would move back and forth between serving the Centre and their respective states. In doing so, on the one hand these officers willieam about the needs of the people at the grassroots level and bring this knowledge to bear on the policies formulated at the Centre and on the other they will carry the broader vision acquired at the Centre to the states. Patel also thought that the officers of the
at Columbia University,

A wit might say, that the Service Sardar Patel had intended to be the 'Steel Frame of India', has turned into a steel armour for the protection of its own members
Mr Arvind Panagariya New York.

is Professor of Economics

Professor of' Indian Political Economy

YOJANA August 2005

Service should have full independence to speak their minds. A~ his urging, the Constitution and the I relevant legal framework were designed to give the officers maximum prdtection and job security. nder the curreht rules, Indians between ag~s 21 a~d 30 compete for lent~y/futo the Service in a countrywide' examination I conducted by the Union Public Service

the Centre but they too are guaranteed to become secretaries in their assigned states. The Service has managed to offer these guaranteed promotions by turning virtually all senior-level positions at the Centre and in the states for its member. Once this is done only an lAS officer can fill it. The original objective behind this provision was to empower the Service so that it could smoothly carry out its mandate to build uniform institutions nationally. But with the passage of time and the expansion of the number of lAS officers, guaranteed promotions and the maintenance of monopoly on the senior positions became the primary objectives of the Service. Even when a position is not a cadre position but requires empanelment, as is the case with most Secretary and Additional Secretary level positions at the Centre, the Service captures it by ensuring that only its members are empanelled. It is rare for individuals not belonging to the lAS to be empanelled for these positions. The expansion of the government into diverse activities has given the Service further opportunities to extend sway well beyond what is justified by the qualifications of its members. For example, it has gone on to capture many of the top management positions in the public enterprises, banks and other financial institutions at the central and state levels. Before I tum to the case for opening up the top jobs to outsiders, let me briefly mention two important recent developments. First, ironically, the indiscriminate expansion of the cadre positions at the state level has itself resulted in a decline of the Service. The conversion of meaningless positions such as the Director of Stationary and Stamps into cadre positions has led to a loss of the prestige of the Service.

.JiJ. Moreover, they have made it easier for . the politicians to remove an occasional "inconvenient" officer from more substantive positions to these 'equivalent' positions. Second, the original conception that a significant proportion of the lAS officers will alternately work at the local and central levels has largely been lost. At the Centre, the members of the more specialized Income Tax, Customs and Economic Services now fill the middle and junior-level positions, leaving mainly the top-level positions for the lAS officers. This means only a tiny fraction of the lAS officers actually get to work at the Centre. Thus, according to one estimate, there were only 25 Joint Secretary level vacancies for approximately 500 empanelled officers this past year. Correspondingly, the lAS officers who gained entry into the lAS through promotion from the state services or other channels and almost never get to serve at the Centre 'increasingly fillthe positions of the District Collector. The idea that the top officers at the Centre have a deep knowledge of the local conditions and the top officers in the states have a broad national vision acquired while serving at the Centre is now largely fictional.

Commission (UPSC)'I. The upper age limit is relaxed for the members of the Scheduled Castes, S9heduled Tribes and Other Backward Q:lasses (SC, ST I and OBC). Originally, i2 per cent of the positions were reserved for the applicants belonging tel the SC and ST. I In the mid-1990s, the (j)BC were added to the reserved catbgory and the proportion of reserved Iseats was raised to 50 per cent. Each successful, candidate is assigned to a state, which need not be I his home state. He first undergoes extensive training Withlother successful candidates of his 'batch' and is then posted in the assigned Istate. His career path is a reasonably l?redictable with one exception. Unless he is I successful in getting himself selected I as Joint Secretary at the right time, he spends much of hiJ career in the . I assigned state.
I

Open to competition
The lAS is inherently an -institution that promotes general rather than specialized skills. The system of entry at an early age through competitive examinations, coupled with no lateral entry, makes general intellectual achievement a key to success. But in addition, the internal culture is outright hostile to the acquisition of specialized skills. Youngsters within the Service who decide to go on leave to acquire specialized knowledge and skills are often told by their superiors upon return that they should not harbor any illusions that they can perform tasks that their YOJANA August 2005

The central govetmpent operates on a system of 'empanehhent' whereby it places the officers wiJ superior record on a panel from whicll it draws it~ top civil servants. Sepa~ate panels are drawn for the positions' of Deputy, Joint, Additional and full SFcretaries. With occasional exceptidns, an officer missing the Joint ~ecretary panel remains in his assigned state for the rest of his career. But efen so, he can minimally expect tb become full Secretary in the state ~efore retirement. Officers empanelled fbr Joint Secretary I need not all become full secretaries at 10

counterparts who did not take their specialized training cannot perform. ' The anti-specialization bias of the Service is also reflected in the short tenure of the officers in a post. According to one study, on the average, approximately half of the officers in the 1990s were moved from their positions in less than one year. Approximately another quarter were moved in less than two years. The reasons for such rapid turnover are undoubtedly many including the whims of the politicians but a primary factor is probably the underlying assumption that the jobs do not require specialized knowledge and that an intelligent officer with cornmon sense can rapidly switch among them. his emphasis on general skills made sense when the economy was relatively small and the task of administration simple. But today, with the economy grown manifold and globalization progressing at breakneck pace, the tasks of the governmentare far more complex, especially at the national level. For example, among other things, the Finance Ministry must determine a whole range of macroeconomic policies, oversee the working of the financial and capital markets, coordinate the center-state financial relations, formulate trade and foreign investment policies, and carry out the government's disinvestments policies. Each of these tasks constitutes a highly specialized activity and encompasses several sub-areas of research in economics. The same complexity also characterizesthe tasks performed by the Ministry of Commerce. It must represent India in the trade negotiations at the World Trade Organization and forge multilateral agreements that impact the economy for decades to come. It must design, negotiate and implement free trade area agreements with different trade partners. It must YOJANA August 2005

design and implement the rules relating to anti-dumping,safeguards,intellectual property rights and Special Economic Zones. It must also negotiate bilateral investmenttreaties. Again, each of these subjects is specialized. WTO alone -is a field that requires years of study and specialized knowledge. One may assert that the job of the bureaucrat is limited to the implementation of the policies for which the generalized skills are all that is required. But this assertion is in error for two reasons. First, in the Indian Parliamentary system, ministers are chosen from among the Members of Parliament.Therefore, they are typically career politicians and lack the deep knowledge and expertise required to efficiently administer their portfolios. This is unlike the U.S. Presidential system in which the President can select his Cabinet from among the entire citizenry and is therefore able to appoint individuals with vast knowledge of the portfolios they hold. Our ministers therefore, rely heavily on their secretaries for the formulation of policy. And when the secretaries themselves lack the specialized knowledge of the field, we run the risk of blind leading the blind. The second reason why the assertion is wrong is that the implementation of policies is not a merely administrative task. Policymakingeffectivelycontinues beyond the legislation passed by the Parliament. Ministries must design appropriate institutions to enforce and implement the legislation. For example, precisely how the anti-dumping directorate should function within the existing legal framework requires an understanding of the impact of antidumping on consumers, producers and overall national interest. Likewise, once a privatization policy has been adopted, its implementation requires an understanding of the benefits and costs of various modes of privatization. The

same goes for the regulatory agencies whose role is proliferating with the end of the government monopolies in a number of service sectors. Defenders of the service, who invariably come from within it also argue that these days the lAS officers can and do acquire specialized knowledge and skills. There is no doubt that this is beginning to happen and it is a healthy trend. The presence of specialized officers in the departments can provide useful necessary check on the policies being proposed and formulated at the top. Yet, this can hardly be the complete answer to the problem. For one thing, as I have noted before, among the ranks of the S~rvice there remains deep suspicion of the generally younger officers who acquire such knowledge. But more importantly, indepth knowledge required for the policy formulation at the top rungs of bureaucracy in many of the technical areas can simply not be acquired through short training programs extending to at most one or two years. ut specialized knowledge and expertise is only one reason why the lAS monopoly over top positions must be ended. There is a second and perhaps even more compelling reason for the change: competitive pressure is as much essential to promoting excellence in the top bureaucracy as elsewhere. For years now, I have argued that we must amend the Industrial Dispute Act to give employers the right to hire and fire workers upon the award of a reasonable -severance package. The total absence of such rights from firms with 100 or more workers has left the workers in these frrrnsno incentive to work productively. The firms have had to often resort to contract workers to perform the tasks that ought to be performed by the regular workforce.

The

guarantee

of

automatic
11

I promotions and strong protection from adverse actions un~er virtually any circumstances has haa a similar impact on the performance ~f the lAS officers. A wit might say that the Service that Sardar Patel had intended to be the steel frame of India has t~rned into a steel .' armour + t hi. prot~ctlOn 0f' Its own lor e members. Thy absence of any . competition, p\lnishment or accountability has made many officers I arrogant and self-indulgent.
I

and look for an officer who would jump knew how to jump the hurdles. Indeed, one important reason why the officers feel maligned by the political interference is the absence of competition. Competition is a two-way street. In a system in which at least some of those who fill the top positions come and go, the ability of politician to 'punish' them is curtailed. By acting arbitrarily, they risk losing their best officers. Part of the problem today is that when an lAS officer is wrongfully exiled to fill an inconsequential position, lacking any specialized skills, he is unable to threaten exit from the civil service altogether.

regulation responsibilities and executive agencies with service delivery under

When confronted with these criticisms, the reaction of many lAS officers is to blarrle politicians for continuous interference. While politicians have indeed indulged themselves, this defence fails to cut ice I for two reasons. Fjirst, the struggle between the politician and the bureaucrat is often about who will wield power. In a dem0cracy, it is the politician that is ultibately answerable to the people and ilierefore should be given greater latitude. He is after all the one subject to the ~ost draconian hire and fire policy: elJctions every five I years. In contrast, tlie lAS officers are accountable to no one.
I 1

conditions specified in the framework agreements they signed with the departments. The agency chief executives (and some other professionals) came to be appointed on fixed term contracts and could be from either the regular civil service or outside. Their salaries were de-linked from the regular civil service salaries at levels substantially higher than the latter. The departmental civil servants retained the traditional tenure-type contracts.

The way forward

Two countries with political systems and civil services very similar to those of India that have tried. civil service reforms are New Zealand and U.K. Traditionally, sacking and lateral entry were extremely difficult and unusual in both countries and the salary was unrelated to the performance. New Zealand carried out a wholesale reform in the late 1980s by breaking up its homogenous civil service into a set of separate departments and state-owned enterprises. It placed a chief executive, appointed on a fixed-term renewable contract, in charge of each of these corporate units. The chief executive was made the legal employer of all staff in his unit with responsibility for hiring, firing, salary and discipline. Symmetrically, he was required to enter a performance agreement with his minister for the output he was expected to produce. The U.K. reform has been less drastic in that it did not disband the career civil service. The key change introduced beginning 1989, was to break up the civil service into core departments and executive agencies. The departments were entrusted with policy setting, resource allocation and

. I . . econd, in the struggle for power, sometimes thJ bureaucrat himself plays tactically, tying the politician in the complex regulatory knots about which hb invariably knows more than the latterl Acutely aware of this fact, some polit~cians retaliate with the only weapon they have-transfer of the non-compliant 9fficer to a position that preserves his grade but otherwise renders him powerless. Harideo Joshi, perhaps the most dynamic Chief Minister to lead Rajasthan, used to I confide in his friends that the secret of his success in getting things done swiftly and efficien~ly was his formula of two Ws: knowing 'What' needed to be done and 'Who,1 could do it. If an officer tried to throw regulatory hurdles in his path, Joshi would pack him out

In India, it is unrealistic to expect a drastic, New Zealand style civil service reform. But experiment.ation with some changes at the top is highly desirable. One minimalist approach would be to convert all secretary and equivalent level positions (except perhaps those related to the mainteIl,mce of law and order and basic administration) at the Centre and states into fixed-term positions with negotiable salaries and explicit contractual obligations. The positions could then be opened to both insiders and outsiders based on a set of pre-specified criteria. Such a change will attract talented outsiders in the academic, business and financial fields to the top government positions. If properly administered, it will also allow the most talented offilcers within the Service to move to the top faster and thus infuse greater dynamism into policy making. Based on performance, contracts may be renewed. Those appointed from any of the civil services to these positions may be given the option to return to their regular civil service upon completion of the contract.
I have argued for some years now, my own preference is for more ambitious approach that . opens all positions at the Joint Secretary and higher levels at the Centre (and equivalently in the states) to competitive recruitment. The key additional YOJANA August 2005

12

~antage of such an approach is that it would encourage the most talented young men and women to move back and forth between the government and outside employment. Just as in Sardar Patel's time it was crucial for the officers to move back and forth between the Centre and states, today, it is important for them to have the inside knowledge of both governmental and non-governmental worlds. Currently, since there are no lateral entry points, the decision to enter the top civil service must be made at an early age. If lateral entry is available at the senior level, an individual can take up a position outside the government in the early part of his career and yet enter the government later. Alternatively, under the current system, once an individual has entered the Service, the cost of exit is prohibitive since he will not be able to return to a top position in the government again. It is important to understand in the area of civil service, the reform cannot be piecemeal in the sense that one entry here and one there to outsiders will produce no change whatsoever. On the contrary, it will give the reform a bad
?'

name. The Service functions like a monopoly and it is r~latively easy for it to isolate solitary outsiders sucp. that they are effectively reduced to spending their time reading the newspapers or writing their research papers. The entry of outsiders will have to be complemented by two additional steps. First, even when the positions are not opened to outsiders because the lAS officers have the right qualifications, it will be desirable to precisely and explicitly define the duties and qualifications of officers at the Joint Secretary and higher level at the centre and Secretary and higher level in the states and make this information public. This will make the senior officers more accountable to the public. Second, it is highly desirable to start pruning the service through a more rapid exit in the case of irresponsible officers and reduced entry at all levels. The pruning should also be accompanied by the phasing our of many superfluous positions. At the local level, there is no reason for the lAS or other civil servants to rule. For example, the collector, 'sho is an lAS officer, currently rules at the
~ ~~
o~ _'::"/

district level. The lAS officer is known to commonly complain that the local Members of the Legislative Assembly (MLAs) constantly interfere in the affairs of the district. On the one hand, one can be sympathetic to the view that the officer cannot run the administration smoothly if the local MLAs from different parties pull him in opposing directions. But on the other hand, 'the MLAs are the elected representatives of the people. The point is that in a democracy, the elected representatives should head the administration and it is time to consider making that transition at the district and block levels. The specific suggestions I have made are not panacea and the government will need to do a great deal of homework before it proceeds to undertake the reform. Yet, one thing is certain: some reform that subjects the Service to greater outside competition gives increased role to the specialized talent, is required. If you are not persuaded, I challenge you to go and look for the defenders of the Service. Chances are you will not find any. And when you do, they will likely be the members of the Service themselves! 0
,

_NE~J ~

;10

C~ange.CJ~erLa~sJo <~nsifreecre~~: PM. s ~ ~~ ~~ ~~

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n ili~ backdrb'pof'a stiong byqg~~rnmenf}'a,~a'industryr;'t,?'deal .' . ba,f@ash agairis.t.;ihe outsourc~g,wi '.. .ber c~im~in;HeSonven;e~;the Britain's The.Sun. newspaeer meeting':following .. he6ontrov~r~y.over i publishe<ia story alleging that aitIT., the;le~~geof pers9naijnfoim~tion'6f worker:ln Delhi sold its repm'ter UK c~st6rri~rs. .' confidential information on back Giving'details;'MediaAdvisor to accouIlts,credit ca~d d'etail; an'd PM,.MrSanjaya'13aru said the PM persoIlal' d'ata of"1000 Briti,sh askedtl'rDepartrn~~fand NASSCOM custorriefs f~r$ 5600.; .;.; ..' t06(HISUlt,all sta~e,~Oldl::rsan~ give Co~gerned ()ve~;jnstancesi.~f s~ggeS!~()ns for""h~es ill'th~n~~isting leakage (jfpersonal i~ormation intpe biws,:"Heasked'thern;toensureih~t.there .. datapr~cessing in~~stry, the Prime ". reach~:. ecrl::cy,k~legal Minister,:Dr,Manm~han.Singh caIied of"co~lne,rGial.ari' ther . for changes in cyber;lawst0n1<lkednforrrla11b"n and ather illegal~tanster ofdataapunispahle formlJer (1;to m em offence and also 'en~t1re data secre9Y'pu ". . . . ',' off~ri "riecd~ DrSingtireviewl::~th,e' stepsta1(eri I)t~:S:fl1ghY:srp the
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.... ,..

crl

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"A::'--'<X::"}_;'

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mai~tain highquaIity, confide.ntiali~y ar;:d reliability hI the data processin,g business. "Indianprofessiomtls have "built' theinsel ves:an enviable global:' reputation through hard:\Vorki'\ dedication and commitmentaIld the occasional misguided lots oJ some individuals should not be allowed to damage the high reputati6n- of all piofess~onals", h~ said. ."':";" ,The!' NASSGOM Presidentl\1t\" Kainik who attendedthe~eetiilgi; aloQg with Union ITSecr~tary~;: Brij~h Kumar, assured DrallII10h~";" Si~gh' that .the.'hl.dian . pr~~essing~ data. iIldustry was fullycorrimitted tBensl.1te ' the:~ghest standflrd of data~fiv~c,y.
0',_" C ,/ ,

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YOJANA August 2005

13

14

YOJANA August 2005

A Quartet on Administrative Reforms

YRK Reddy
IKE MANY other aspects
of life, administrative reform is a journey and not a destination. The journey had. begun from the time State was conceived and hastened, when Kautilya (Prime Minister of Chandragupta-32l B.C.-296B.C.) gave shape to the principles of administration many of which are still valid in spirit. However, the journey has been rather slow in the post-Independence era and in spurts at inflection points of political necessities. Even the content of the announced reforms have rarely been original in the post-Independence era. The British influence has not abated as is seen in the movement from public "administration" to public "management" assuming large scale corporatisation and acceptance of management principles that saw "citizens" as customers and had the indelible imprint of business process reengineering. The market-centric framework of the multilateral organisations has also become dominant in the agenda for reform as reflected in the suggestions for roll-back of the State, lean governments, outsourcing development of private sector, publicprivate partnerships, and civil society organisation to fill voids, and the like.
and Advisor to Commonwealth,

Economic reforms with a human face do not necessarily result in welfare. It is administrative reforms that need a human .. vIsIon
YOJANA August 2005

Thus administrative reforms are in dire straits, if not cesspools, caused by lack of vision and original thinking that matches the Indian people, their needs and their unique institutions; lack of sustained political will and lack of climate and competence to deal with entrenched interests. Consequently, inefficiency, red-tapism and large-scale corruption have become a pandemic. So much so, people have lost faith as well as respect for the polity and administration despite having no other option in a democratic society. The poor quality of governance and high degree of corruption have drawn adverse comments from all quarters including the Transparency International as well as several Competitiveness Reports among nations. Despite the depressing situation, there are several cases of marvellous reform that have drawn acclaim from the global community. These happened despite the daunting conditions common to any reform. They are not characterized by outstanding knowledge or skill alone but more by strong aspiration, achievement motivation, great sense of duty and strong public service values among the concerned administrator.
I.L.O., ADB and the World Banle.

Mr Y. R. K. Reddy is an expert in Corporate Governance

15

I Much churning on the political and administration fronts is required to be able to truly reinvent ai'govenment that meets our aspirations. ,As a pointer to the challenge confronting administrative reform,. the following are four articles that might appear dispJate but have the I same conclusion-hence the title "quartet". Quartet means, among others, four things that belong I to the same unit or four voices saying things in unison to give a special mean~ng.

Reform meant changing the policies and not necessarily the practices, or the pipes. The slew of economic reforms is like designs for the tank and the bore well. What has been lagging behind is the reform in administration, which is as clogged, rusted, long winded, crisscrossed, leaking and polluted as the old pipes. Reform in our country has been wrongly sequenced. It began with the economic reforms of the early 90s and opening up of markets without sufficient attention to the institutions, administrative processes and channels. In some countries like China, administrative reforms preceded the economic reforms and in some, they were almost in tandem. The efforts at administrative reforms, which began with the intuitive recommendations in the 60s, have made little progress. At the operating level, the organisation and methods (O&M) sections or departments in the government have been an apology to industrial engineering science, they were mute spectators to inefficient procedures that nurtured high transaction costs and reduced welfare. There is very little sign of the equivalent of whole scale business process re-engineering in administration. Reforms in administration are obviously not easy. Often, soft approaches of selling ch;mge do not work, as those currently enjoying power, prestige, and status will not want to risk them. This is also obvious from the corporate sector. Change and reform can be brought about by a'strong willed leadership, which must use the soft measures only for smoother and quicker acceptance than as main levers for reform. The levers for reform are indeed in the power of the leadership and its management. Intelligent leadership uses power tactically by first co-opting the elite forces for reforming the rest of the system. It may, in the very

end, leverage on the rest 'Ofthe systeJJ and the public to reform elements. Regrettably, our political leadership was complacent even when it had absolute majority in the Parliament or the assemblies. The entrenched bureaucratic system has a cybernetic character-it bends depending on the extent of power wielded by the leadership, which, in turn, sedates the latter till power is lost. Thus, we have huge number of people in defunct departments. There is little flexibility in transferring and utilizing manpower in activities, which result in revenue mobilization or useful service to target groups. We have business rules and procedures that beat all logic of management and engineering. The rules languish along with several schemes that are announced every year as part of competitive populism. Schemes, rules, procedures and forms survive even as the new ones add to the mindless labyrinth. evelopment and growth are no longer a function of public policy choices, programmes and resource allocations. They appear to be more dependent on how quickly and effectively the channels are redone and processes reengineered - with the. farmer, deprived and the poor in focus. Economic reforms with a human face do not necessarily result in welfare. It is administrative reforms that need a human vision an:d an aspiration to improve the situation where it matters most. While some states have governance projects with fancy names, these have remained in relatively unthreatening but highly visible areas. A few showcase studies and internationally saleable stories of computerised services will not change life for the majority of people. Total replumbing of administration is . warranted-keeping the delivery targets, the elitist

Reforms and the aJt of plumbing

I

Reform of administrative channels is more important th~n mere policy reform

The house is almost 57 years old. We have been drawing water from the ground but the overhe~d tank is getting empty sooner than it Jsed to.The pipes have rusted and there' are many leaks. At some places the leaks are at the same points as sewerage lekks. The residues and mud accumulated over the years have constricted the ~iameter greatly and the taps get only a trickle these days. The trees in the: compound have grown and the roots have made their way into the pi~es to take a stranglehold. .I We are using twic the energy and ground water these days and yet, the supply at the taps is nbw just a portion of what it used to be. We realise that there are newer pipes in the market that have smooth surface I for the water to flow with least resistance. Also, the lines we had made could have been straighter with le~ser bends and couplings. There is a rhajor job on hand if we want to live here. Econorruc reform ;and development strategies have been full of resource augmentation and allocation to new I programmes and projects. Their management, like plJmbing, has been unexciting and had to be dealt with by the executive at the lower levels. 16
I
I

YOJANA August 2005

~int's iand;Jhescofum-9n!Jfnan -in,:_ieW~ I()In;Jai1p~ f st:<lnJed ~9~ntry; LSQmej!>!IyiJi iQfl~~ngiI!g(Qth,er.~ \.7 ;;ey.y!lJthe'n:rinist~t;SI and,wQ~kihg'itiaGkw.atds: :JV ilWJ\'51'j 'to seryantslibetieiV~!tbilt lth.~ir IlQS_iti9D~ >aIil'tJ -ri!l.')'I1al9ng t!;lefright id~~i.~iSlIjl~ffllf[ (;:):\'1 , "J ' ' , '" 'pFQpert!y'qb.estQw~l1l:fb~ Jli1i'tin~; ~r!l<;e;!i "01 Vi)nrl ";-I[lOirr1J!)f'~ J,f"P:'j':).I;qj"[ '("l_~-.:=., _ _ 'Vhiis:tp.rQPf(tW)g-i~Sj p,0:Wt<l', ~W)iesJ~g~-i Jt~Ytfi;~t'j p.!l.J;j}~(fns.e tJliige gv,(4u,t;~; IJIAlfljJJQ,~f) ar.d s,0.ci!absta~l:!>s th~t;iIl~e,~leto 41:14J q~wp.~t~(;i~S!rl3fjf)fm,j(1 ,ffTI61:;)'I ~Iij~.y.~df:n A bflr; 2f11ourd Vj~fj grriih"r::>rbb

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first ARC (1966-70), whose critical recommendations have not been implemented. Apartl from the Pay Commissions, in which administrative reforms are also cov~red, directly or indirectly, we had five committees in the past four years, 106king at various "1 I. aspects 0 f CIVI serVIces re f orm. I Experience since the 50s tells us that some convenient recommendations are selectively accepted, without disturbing the power structures land entrenched interests in civil services. There is 'steel frame' that eventually cages every such .1 COmmISSIOn commIttee. or
1

leaders realize they are truly birds of passage, that must gather their worm and flyaway; it may even help the birds gather the worms effortlessly. It dashes any ambitions for reform, by dishevelling new brooms and reining-in enthusiastic leaders, one way or the other. It will reform only those processes that do not hurt its larger interests. The paradox is, the leaders have to rely on this very steel frame for any reform, while it refuses to shoot itself in the foot. The first ARC had given several recommendations to reform the generalist service to a specialist one. Except for the handful of officers who assiduously pursued specialisations and emerged as worldclass professionals in economics, IT, public enterprise management, energy, disaster and urban governance, the service remains supergeneralist. The stream of intake continues and the attempts of the 70's for lateral entry have been largely given up. Thus, it remains an exclusive order, that controls much of the economy. The steel frame could be exclusive in another sense. According to a 1985 study, the quotas for the SC and ST candidates were continuously unfilled and the data remains masked. While other minorities are over-represented in comparison to their population, Muslims are grossly underrepresented. Among the Hindus, upper castes accounted for 68%. Shudras were a mere 2%, with the largest contingent form AP. Women were under 8% of the total. With the concomitant urban bias, decisions may indeed be tilted towards the interests of the rich and powerful than the masses. The Alagh committee has reportedly commented on the "ruler mindset." This steel itself from Commission, titled 'The frame has also insulated the Central Vigilance as noted in a CVC study Indian Administrative

The Indian Admin~strative Service (lAS) was once described by Sardar Patel as the steel fdme. He fought vehemently for its I constitutional protection, for it to be able to exercise an independent voice for the benefit of the people and as a cMck on misuse of power by politicians. [ . his framework, comprising 4,200 servin~ officials, has become I cybernetically intelligent. As in the Terminator series of movies featriring Arnold Schwarzenegger, the metal can take any I shape intelligently and protect itself. It quickly occupies impohant slots, just as I liquid metal flows into any crevice, even those meant for the judiciary and the scientists. It fight~ all intellectuals, . I . specla l'IStS an d domam experts as I foreign bodies and meticulously subjugates all cadres,] by dynamically arranging the peckinlg order. It must come on top, each bme and every I time. Criticism is discohnted as acts of prejudice and env~. Jibes, darts, I recommendations don't hurt this intelligent frame. It iS a marvel and an I inspirational modell for the rest of bureaucracy. It sets tlie conditions and standards for accept~ng and resisting reform. It overwhelms inexperienced political leaders. It makes political 18

ServIce - A Study of the Current State' of Preventive and Punitive Vigilance Mechanisms.' We now need a superintelligent and mighty body for conceptualising and implementing reform. A permanent commission that knows meta-reform. It must be handson, to stop fresh recruitment and graduate strategically to a system of specialist streams and new cadres, with possibilities of lateral entry. This is the only way to bring in more relevant organisational designs, diversity, accountability, public service values and enthusiastic performance, -to SUPPOFl- the larger goals of development, equity and justice. But then, the steelframe would have factored this also by now!

':w..)

Re-orienting Diplomacy
In a highly competitive business scenario, it can provide special advantages Michael Porter had described the important role of the government in his seminal work on the competitive advantage of nations. In a later article, he had also drawn lessons from countries like New Zealand and geographical regions such as Central America and Middle East. The basic roles of the government, he envisaged, include achieving macroeconomic and political stability, improving the microeconomic inputs and institutions, creating incentives and rules that stimulate productivity innovation, fostering cluster formations and establishing a challenging economic vision and action programme which mobilizes government, business and citizens. Recent conclaves on globalization and governance also acknowledge the increasingly critical role of the government, in one form or the other. Porter called for the transformation of business and government interaction, from 'episodic lobbying' on specific YOJANA August 2005

~ues, to more sustainable mechanisms. The current approach of governments, which is adversarial and paternalistic, must give way to a consultative dialogue on competitiveness, he recommended. While much of his argument was to do with productivity-based competition arising from within a geographical region, there are other planks for govemments to support competitiveness in increasingly integrated markets of the world. This has been indirectly shown in the matter concerning Airbus and Boeing. The rivalry betwe~n the two is a case study in commercial diplomacy. ome believe that diplomats of the UK, the USA and France lobby better than the others to promote the interests of their industry. China may already be in the same league. This effort is different from the traditional commercial diplomacy, of lethargic and patronising answers, signing ceremonies, maintaining the exim directories, or holding the rules for PDI. It is strategic. I recall the fIrst secretary of an important High Commission in India meeting several people just to assess the pools of knowledge in the biotech sector that may be underutilised or half-done and forgotten. He was strategising for his country's efforts to take a lead in the

biotech space on behalf industry in his country.

of the

In a hyper competitive environment, business-government collaboration must extend to special advantages derived from the diplomatic channels and presence. The next round of competition may indeed be on how integrated, fast and strategic these channels are. The competencies required are a thorough understanding of the local markets and demand-supply dynamics; key competitors in important product-market segments in which Indian business has advantages; opportunities for strategic investments, joint ventures, acquisitions and large exports; way to capture the mindshare for Indian businesses on a competitive footing; abilities to promote Indiabrand; get information on industry threats and opportunities faster than competition and the like. Are the Embassies and High Commissions structured and manned competently to cater to these needs? The traditional roles and low importance given to the commercial function may not have changed despite liberalisation, especially after the removal of quantitative restrictions. Further, the Euro-US centrism in thinking may not have loosened, despite the phenomenal opportunities available elsewhere in the world. China appears

to have appreciated the importance of squeezing opportunities from wherever in the world. Further, undue attention to industry poster boys would not have given way to helping the medium sector and the small time exporter. Industry associations also may have contributed to this sclerosis by continuing to be Delhi-centric lobby houses rather than improving competitiveness. It's time the Ministry of External Affairs benchmarked the Embassy structures, staffing, competencies and deliveries with those who are aggressively promoting their industry. It must think of a delivery system that comprises an India-based strategic research/think-tank as back-office and an ace team at the delivery points, comprising specialists in business strategy, corporate advisory and financial advisory. This may need retraining the existing diplomats, as well as new staffing criteria. Carl von Clausewitz implied that war was a continuation of politics by other means. Now, diplomacy can indeed be promotion of business by other means! 0
(This article is a synthesis of four articles of Prof Reddy which appeared in the Financial Express. It has been reprinted with the permission of Indian Express Newspapers (Mumbai) Ltd. All rights reserved throughout the world.)

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YOJANA August 2005

Changing the Mindset

Hasmukh Adhia
AVING A government that works is one of the biggest challenges before all countries of the world. When it comes to finding the reasons for non performance, bureaucracy is by far the easiest target of politicians, press, and people. Just prior to the passage of the Civil Service Reforms Act of 1978 in USA, the National Journal (USA) began an article about bureaucratic reform this way: "Bureaucrats. If you are not one of them, you probably can't stand them. You figure that they are lazy and overpaid, that they arrive at work late and leave early and take long lunch hours. But you can't do anything about it, because it's impossible to fire a bureaucrat. " Government workers have often far more flexibility than they use. Government culture, however, discourages them from using it. There are few rewards for success beyond the intrinsic satisfaction of a job well done. There are, however, large risks in failure, ranging from attack in the media to criticism in the parliament or assembly. The culture therefore discourages government employees from attempting anything not specifically required, instead of encouraging them to experiment with anything not specifically forbidden. These conditions make the government painfully slow and too rigid in dealing with rapidly changing problems of governance. The government employees are known to be control-freaks, negative, objective and procedural. They have imbibed a culture in which there is a strong belief that nothiJIlg can be done to improve the governance and that it is safe not to be too pro-active. Most employees would like to do only as much as he is required for retaining his position and not being affected adversely for promotion. This is truer of people in the lower rank of bureaucracy, particularly the Class-HI and Class-IV people who are at the cutting edge level of delivery of services by the government. Everyone in the country nowadays is talking of good governance and administrative reforms but, very few people realize that the key to good governance lies in changing the mindset of employees. In the background of the fact that such a negative mindset of government employees is the result of complex work culture in the government, there does not seem to be an easy solution to this problem. It

Everyon~ in the country n~wadays is talking 1of good

governance and administrative reforms, but, very few peoplf! realize that the I key to good governance lies in changing the minUset of
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Mr Hasmukh Adhia, MS, is Secretary to Chief Minister of Gujarat.

22

YOJANA August 2005

(~ctually becomes a chicken and egg story- which should be changed fIrst-the mindset or work culture. But the answer here is easier than the chicken and egg question. Obviously, the employees themselves are going to be instrumental in changing the work culture and therefore change of mindset has to be attempted first before any administrative reform takes place. is something unbelievable but it is . a fact that about more than 70 per ent of the present stock of employees (excluding teachers) in the government have not been trained even for an hour in their entire career. As against the salary expenditure of almost 1,00,000 crore rupees by the central and the state governments, not even 0.1 per cent is spent on the training. Even where there have been training interventions, the same has been in the area of domain knowledge such as rules, regulations and procedures and that too mainly for Class I and Class II officers. Certain categories of staff like drivers and peons are not covered by any training whatsoever. The need for changing the attitude of government servants was felt in the past also, but very little has been done so far in the country to address this issue. In such a background, the Government of Gujarat decided to address this issue in a big way and undertake a massive training of all its 5,00,000 employees for change of mindset. This training programme, which is the largest capacity building exercise in the entire country, is called V -Governance (Vibrant Governance) Training programme. In Gujarat, it is popularly called Karmayogi training, since this programme is a part of fIve-fold HRD initiative of Gujarat call1ed 'Karmayogi Maha Abhiyan'. This programme was originally conceived in June-2003 by the state government. A professional agency was YOJANA August 2005

hired to undertake trallllllg needs analysis for employees at all levels within sachivalaya as well as in .the districts. Focus groups meetings were also organized to discuss the training needs. At the end of this,' the professional agency was engaged for preparation of course design and training manual. The objectives of this trallllllg programme were stated as follows: To expose government employees to be responsive to changes and adopt them. Paradigm shift from process orientation to result orientation. To redefIne perspective and context in order to adopt positive and proactive approach. Attitudinal/behavioural change .... as a professional and as an individual. Based on these objectives a twenty hour course module of training was designed by the professional agency in close consultation with the state government having the following components: Role effectiveness Citizen orientation Effective communication Personal and interpersonal effectiveness Self motivation

2,100 government trainers were trained from among government officers and employees who volunteered for this. Each one of these government trainers delivered up to six batches of training to other employees. By end of March2005, 1.25 lakh employees have already been covered under this training programme, which includes even peons, drivers, stenographers, clerks etc. This figure also includes 25,000 police constables. The rest of the employees are going to be covered by December2005. A seperate training programme of training was prescribed for teachers which was delivered to them as part of their annual training. Two lakh teachers were therefore, covered simultaneously, raising this fIgure of trained employees to 3.25 lakh. The rest of the employees would be covered under this training program by December 2005. So by end of 2005 all 5,00,000 employees would have been covered by this training. The Sardar Patel Institute of Public Administration (SPIPA), the apex training institution of the state government was the nodal agency coordinating this programme with the professional agency which was also engaged in certain logistics management. All the classrooms and equipments such as overhead projectors were given by the government while all the teaching aids were provided by the professional agency. The total expenditure on this worked out to be less than Rs 250 per employee, including the cost of training manual and logistic management.

Improved work processes This training module was to be delivered to all government employees over a period of four days with the help of one trainer from government and one from the agency. The training module is highly interactive in nature and allows people to give vent to their feelings which itself results into melting of emotions and thereby change of mindset. A massive exercise of training of trainers was undertaken. A total of

Results
At the end of this programme when we analyze the results of the written feedback received from these people, we fInd that 49 per cent of employees termed it as 'Excellent' and 35 per cent termed it as 'Very Good', 14 per cent termed it as 'Good' and only 2 per cent termed it as 'Average'. But more than .23

:~DMINISTRATIVE REFORMS
J

ANALYSIS

Secrecy and Governance

Moushumi Basu
HE PRACTICE of official secrecy that justifies the withholding of information by the State in the name of strange public interest, presents a paradox. For nothing is so 'reason' and 'politics', the point at which disclosure ends and secrecy begins? Let us take a look at some of these aspects, examining the inherent contradictions that exist between the practice of secrecy and the objective of democratic organization, greater public involvement, transparency and accountability in governance. Official secrecy as a part of State practice has a long history that goes back to the ancient period. Secrecy was more or less identified with the personal intrigues of royals and in case of oligarchies to affairs between smaller groups of men. The onset of democracy however saw a more refined justification for secrecy in the name of wider national security. Institutionalisation of secrecy became somewhat of a political necessity given the compulsions of increasing popular representation that challenged the existing modus operandi of a closed system of governance. In Britain institutionalisation of secrecy for example made it easier for the Parliament to regulate the release of government documents including those related to the affairs of the Empire. In fact the practice of secrecy in India is a direct fallout of the colonial legacy. Archival records of the East India

fanatically clefended by the bureaucracy as the practice of official secrecy. The recent rejection of an application seeking information on the number of persons executed at Tihar, the central prison in Delhi, since 1947 by a private organisation, is indicative of the general reluctance to part with official information. In this particular case, information was refused on the grounds that the disclosure of such information could have a 'prejudicial effect on the sovereignty and integrity of India and security of NCT of Delhi. This sort of blanket refusal, notwithstanding the amendments made in the Right to Information Bill (2005), raises important questions related to the highly problematic relationship between secrecy and governance. Namely, who benefits from secrecy or whom does secrecy protect? Where do governments draw the line between what information should be kept secret and what information should be made freely available to the demos? What determines the boundary between

It is in challenging the barriers that exist in the name of secrecy that one can truly hope to build a more . progressIve system of governance
YOJANA August 2005

Ms Moushumi Basu is a visiting Fellow, University of Sussex, U.K.

25

Company link the insti~tionalisation secrecy with the I growth

of and

Secrets Act 1911 passed by the British parliament following the Agadir crisis in Morocco, became operational in India. Between 1911 and 1923 there

also empowers the State to prosecu~ persons on grounds of mere suspicion. ,Additionally it also gives courts the in power to conduct its proceedings

consolidation of the British Empire in India. It is another matter however that while the Official Secr~ts Act (OSA) in Britain has undergone ~everal important amendments, the OSA in India has I remained fundamentally unaltered. Historically, while references to secrecy may be found in the writings of Kautilya (3 B.C);

were thus two separate laws on official secrecy simultaneously in force in India. While sedition and espionage constituted definite bases, the practice of secrecy brought in specific economic benefits. Two related examples may be cited at this point to illustrate the strategic importance of secrecy in the consolidation and perpetuation of colonial rule. The first concerns the expropriation of resources from India by the colonial state in the name of 'public expenditures'; where classification of financial documents such as those related to Home Charges as State secrets helped the government manipulate its accounts in such a way as to hide the wasteful expenditure incurred under 'borrowed' heads. The second, concerned the regulation of information on an event of strategic importance - the Bengal famine (1943) and official responses to it, that included diversion of food crops from other parts of India to troops abroad, leading to severe food shortages and the death of nearly three million people. Keeping this historical aspect in mind the Official Secrets Act as it exists in India today is largely a replica of the colonial law. In that sense it is indeed ironical that a practice that in part supported the project of colonialism was adopted without questioning its rationale in post independent India. The Official Secrets Act 1923 prescribes elaborate penalties for unlawfully possessing and transferring a range of classified documents, sketches, models, plans and so-called sensitive information onto third parties. The Act

private if need be, depriving the accused the relative advantage of a pu\>lic trial. The following paper examines some of the consequences between accountability of official secrecy contradictions and in secrecy such as the growing and

transparency

foi

our analysis, a

governance to illustrate the dilemmas posed by the code in practice.

more appropriate reference point would be the year 1683. For it was in that year follQwing a brief ~nsurrection in , I Bombay, that the East India Company I formally established a. Secret Committee to oversed its commercial I ventures .. Entrusted with the specific responsibility of issuing and tr~smitting secret instructions between the Company's offices in London and colonies elsewhert the Secret Committee functioned as the I Company's War Cabinet till the final days of the mutiny of 1857, that formally ended t~e Company's presidency in India. While previously secrecy had been IJrgely a private I matter, with the 'resumption of administrative responsibilities by the British Crown, secreby became truly 'official' and its practice an associated prerogative of the colbnial state. tis important ~o note that the mutiny of 1857 was massively responsible for th6 establishment of I defensive mechanisms whereby the interests of the Empi~e could be easily protected. In the late 1880s when the question of 'seditioni acquired a new gravity, the British government reacted by introducing specific legislation on secrecy - the IndiaJ Official Secrets Act, 1889. By virtue of the fact that legislations passed id the name of the British Crown becaxhe automatically applicable to the colclnies, the Official
I
I

economic policy in India, especially negotiations relating to structural relevant adjustment illustration. serves Secrecy as a in the

he overwhelming secrecy and mystification with respect to

realm of economic policy is recognised as a legitimate exception to the law pertaining to disclosure of information. Section 8 of the Right to Information Bill (2005), exempts the State from disclosing trade and commercial secrets, the disclosure o.f which would prejudicially affect the sovereignty and integrity of India ... strategic, scientific or economic interest of the State. This effectively means that the State has the powers to effectively curtail discussion on important aspects by exercising control over the release of all information related to official policy. The absence of readily available documentation in connection with structural adjustment constitutes a relevant example. Structural Adjustment in 1991 it may be recalled, was introduced practically without a major public debate on the subject. The same was the case of the Social Safety Net (SSN) operation financed in December 1992. In both cases because the loan agreements were treated as state secrets protected under the OS A, YOJANA August 2005

26

f.e was no binding

of the negotiated

obligation on the settlement. The

State to disclose the terms of reference Supreme Court of India has in effect by excluding economic policies from the purview ofJjudicial review upheld the legality, foreclosing all future possibilities of public litigation on the subject of economic reforms. e peculiar case of restrictions on topographical maps provides another relevant illustration of the same. The sale, publication and distribution of topographical maps used extensively for development planning the world over are legally 'restricted' in India. While such restrictions were once reasonable, imposed by the British with the sole motive of consolidation and preservation of the Empire; the availability of satellite imagery today, on sale in shops abroad, makes -restrictions on the sale and publication of topographical sheets in India totally redundant. Data collected through remote sensing, for every country in the world is marketed on a commercial basis across the globe. Thus while topographical sheets of the Himalayan region maybe 'restricted' information in India, the same is freely available for public consumption in the United States of America. Similar examples exist in other spheres of social life. In 2004, the Supreme Court of India for example turned down a petition that sought disclosure of information on the purported safety violations and defects in various nuclear installations and power plants across the country. The demand for information on the subject was made after a report prepared by the Atomic Energy Regulatory Board that documented about 130 safety related cases including serious accidents in certain nuclear plants in India, was leaked. In its judgement, the Court YOJANA August 2005

while acknowledging that citizens had the right to know, justified the restrictions placed: 'a matter, as sensitive as the above, could not be made the subject matter of a right to information.' It upheld the fact secrecy executed in the interest of public security constituted a justifiable and a legitimate exception to the general rule of disclosure. Which leads us to the important question as to what constitutes a 'reasonable' restriction. While legally. the right to information is a fundamental right under Article 19( 1) of the Constitution, Clause (2) of the same article gives the State the power to impose 'reasonable restrictions' in public interest. In other words, legally the right to information is not an absolute one. The State has the legal prerogative of imposing restrictions 'in the interests of sovereignty and integrity of India', without necessarily qualifying the threat that justifies such action. The choice madeis largely a subjective one, as there exists no objective criteria for determining what constitutes 'reasonable.' Section 8 of the Right to Information Bill 2005 for example provides for restrictions on the general policy of disclosure which includes among others : information, the disclosure of which would, prejudicially affect the sovereignty and integrity of India, security, strategic, scientific or economic interest of the State, relation with foreign State ...

information received in confidence from a foreign government... the Cabinet papers, including deliberations of the Council of Ministers, Secretaries and other officers.

While the 2005 Bill marks a distinct improvement over the Freedom of Information Act 2002, yet one cannot but ignore the similarities that exist between the old text and the new. For example, clause 8 of the Bill contains almost similar restrictions to clause 8 of the previous act. As a result, notwithstanding the changes that have been made, many aspects of daily life continue to be governed by the code of official secrecy. While globally there has been a distinct move to revoke restrictions placed on the disclosure of information in the name of secrecy, unfortunately in India, the progress on ground has been slow. The discussion on secrecy today is not simply about the need for increased public involvement, but rather the case for greater public engagement in areas itraditionally falling within the legal bounds of secrecy. hat is peculiar about the Indian case is the fact that while the law in Britain has undergone several amendments, there have been very few changes made in the original law pertaining to secrecy in India. The release of the official files by the British government on the famous Black Wednesday' (September 16, 1992) episode, that saw the exit of the pound from the European Exchange Rate Mechanism (ERM), under the recently amended Freedom of Information Act, illustrates changing sensitivities towards secrecy in Britain. The d'ocuments reveal significant

information, the disclosure of which may result in a breach of privileges of Parliament or the Legislature of a State ...

information, including commercial confidence, trade secrets or intellectual property, the disclosure of disag~ee'!llents between Margaret which would harm the competitive Thatcher and the Chancellor of the "I position of a third party ... , ~xchequer Nigel Lawson, over Britain's

27

I decision to join the ERM; the failure of

I

day. These include among others Cabinet files related to important policy decisions such as the rejection of the Bhore Committee report, advocating a national programme of comprehensive primary health care. In a society as economically and socially stratified as ours, the right to information has the potential to be a catalyst for social change. At present where control over information assumes the dynamics of a distinct power relation involving the abuse of position, money, muscle power; a right to information can serve as an instrument of real power especially for those who suffer its constant denial, on a daily basis. The view that access to information is a right is predicated upon the requirement of accountability, which it is argued, will be meaningless unless exists a legal right for people to access

information. Disclosure of informa* in such a framework is identified as a social good, creating the conditions and the space for more making. works informed in the as an In other participation process words, control being by the collective

the succeeding government to make a realistic assessmeni of the potential impact of German Jnification on the British economy; laek of contingency plans to deal with thelcrisis over interest rates (recession at home required lower interest rates while tJe need to keep the I pound within the ERM band required higher interest ratJs); the Bank of England's ill-advisJd move to spend around $ 39 billion (ilpproximately 20 billion) in purchasiJg pounds and the record loss of 3.3, billion in a single day of Treasury m9ney. A case for similar disclosure of negotiations leading to specific policy frameworks exists infIndia too. Many of the important ~iles concerning development in the early years of Independence remmA undisclosed to this
I

of policy disclosure over

empowering

tool for people to have the direction about of the or

development process, rather than simply consulted projects policies decided elsewhere. The issue concerning secrecy and governance today has more to do with the area or information the governments choose to open up for wider public deliberation and scrutiny. And it is in challenging such barriers existing in the name of secrecy that one can truly hope to build a more progressive governance. system of 0

28

YOJANA August 2005

Corporate Governance in PSEs

SM Dewan
ORPORAlE GOVERNANCE has fast emerged as a benchmark for judging corporate excellence in the context of national and international business practices. From guidelines and desirable code of conduct some decades ago, corporate governance is now recognized as a paradigm for improving competitiveness and enhancing efficiency and thus for improving investors' confidence and accessing capital, both domestic as well as foreign. What is important is that corporate governance has become a dynamic concept and not static one. That is, countries and various development agencies are striving to make continuous improvements in the corporate governance,.p,ractices to suit changing business environment as well as adapting it to individual business atmosphere. No one doubts the importance of good corporate governanc~ .. It has assumed even greater iinporttffice after the recent collapses of Enrdn':. in the USA, HIH and Onelel in AustHilia and has stimulated considerabl~.' debate about the importance of effective corporate governance in the private sector. Following from 'these experiences, good corporate governance practices are being increasingly adopted for public sector enterprises. As recent as last week, the OEeD . has adopted corporate governance guidelines for state-owned enterprises that are basedon its general guidelines of corporate governance, but specifically designed keeping in view issues and concerns of state owned enterprises. While the term 'corporate governance' has no single accepted definition, it is generally understood to encompass how an organization is managed, its corporate and other structures, its culture, its policies and strategies, and the ways in which it deals with its various stakeholders. Good governance requires a holistic, integrated approach to implementing these components. The real challenge for any country or an organization is not simply to define the various elements of effective corporate governance but to ensure that they are holistically integrated into a coherent corporate approach by individual organizations and well understood and applied throughout those organizations. If implemented effectively, corporate governance should provide the integrated strategic management framework necessary to achieve the output and outcome performance standards required to fulfill organizational goals and objectives. It .

Corporate governance has emerged from obscurity into being a central issue in the corporate world
YOJANA August 2005

.'

Dr S. M. Dewan is Director General, Standing Conference

of Public Enterprises

(SCOPE).

29

I is viewed as a mechanism of inbuilt cross and checks that ensure I dtransparency, competitiveness and efficiency in the dontext of global I economy. OECD defmes coborate govemance as "the system by which business corporations an! directed' and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participant~ in the corporation, such as, the bpard, managers, shareholders and other stakeholders, and spells out the rules and procedures I for making decisions on corporate affairs. By doing tills, it also provides the structure through which the company Objectiv~s are set, and the means of attaining those objectives and monitoring perfomiance".
I .

Should ensure that timely and accurate disclosure is made on all material'matters regarding the corporation, including the financial situation, performance, ownership and governance of the company.

The Corporate Governance framework should ensure the strategic guidance of the company, effective monitoring of management by the board, and the board's accountability to the company and the shareholders.

governance codes in order to faci~ strict implementation of the set guidelines and thus avoid Enron kind of cases in future. Accordingly, in India too DCA appointed Naresh Chandra Committee, the report of which became basis of the Company's (Amendment) Bill 2003. Keeping in view the dynamic nature of business development, the SEBI Committee on corporate governance chaired by Mr N.R. Narayana Murthy drew up a series of recommendations to make corporate governance practices stricter in India. Preamble of Narayana Murthy Committee Report says, "corporate governance is the acceptance by management of the inalienable rights of shareholders as the true owners of the corporation and of their own role as trustees on behalf of the shareholders. It is about commitment to values, about ethical business conduct and about making a distinction between personal and corporate funds in the management of a company". Subsequently, in October 2004, SEBI came out with the revised Clause 49 of the listing agreement for companies in stock exchanges, giving importance to independent directors and revamping the existing reporting practices .

he concept of corporate governance initially emanated from the Cadbury Committee Report. In India, opening up of the economy in early 90s and increasing business alliances called for adhering to international best practices. The Confederation of Indian Industry (CII), OECD has laid down following an apex industry body, took upon itself basic principleJ of Corporate to establish a set of desirable codes Governance: early in 1997. Later, recognizing its i growing importance, Securities and The Corporate Governance Exchange Board of India (SEBI) framework ~hould promote appointed Kumar Mangalam Birla transparent and efficient markets, be to work on official consistent with the rule of law and Committee guidelines on corporate governance in clearly articulate the division of Indian context. Based on the Report of responsibility I among different this Committee, SEBI issued guidelines supervisory, I regulatory and . on corporate governance which covered enforcement authorities. Regardless of which framework is issues like composition of Board of The Corpor~te Governance used, good corporate governance in Directors, Audit Committee and its framework should protect and both the public and private sectors functions, remuneration of Directors, facilitate th~ exercise of Board procedure, etc. The Department requires: shareholder's rights. of Company Affairs (DCA) appointed a clear identification and articulation task force for establishing a Center for It should ensurd equitable treatment of the definitions of responsibility; Corporate Excellence to develop a of all shareh1olders, includ~ng a real understanding of relationships theoretical background of corporate minority and foreign shareholders. between the organization's All shareholders should have the governance. stakeholders and those entrusted to opportunity t6 obtain effective manage it resources and deliver its Meanwhile the Enron debacle in US redress for violation of their right. outcome;s and I raised questions about corporate ethics Should recog?ize the rights of in the private sector. The Sarbanes support from management, stakeholders, eStablished by law or Oxley Bill (SOX) was passed in the US particularly from the top of an through mutual agreement and Congress following the Enron debacle organization. I . . encourage aqtI ve cooperatIOn which brought with it fundamental between corporation and changes in virtually every area of Corporate Governance in PSEs stakeholders in breating wealth, jobs corporate governance. Most of the Initially, no one gave a thought to and sustainability of financially countries the world over sought to move having corporate governance guidelines sound enterpri~e. towards consolidating the corporate for the public sector enterprises (PSEs), 30 YOJANA August 2005

~mply because they were earlier virtually run like departmental concems. However, globalization and liberalization of the economic policy that led to opening up of the economy and increased competition vis-a-vis private sector, both domestic as well as foreign, emphasized the importance of corporate governance for the PSEs. Further, the listing of shares of public enterprises in stock exchanges required them to adhere to the SEBI's corporate governance requirements mandatory for the listed companies. owever, hen we talk of PSEs, w we are talking of enterprises which are very different in character from the private sector, simply because PSEs have dual responsibility of generating profits as well as meeting social objectives. In this context, it is of utmost importance that the principles of corporate governance as developed for the private sector are not blindly applied to the public sector as well. There is a need to appropriately define corporate governance and adapt them to suit public sector character not just in terms of returns on investment to the investors but also all stakeholders namely employees, customers and society as a whole.

authorities or boards have been setup in various se.ctors to impart required transparency to the functioning of various industries. Policy decisions by these authorities are binding on companies operating under those sectors. In addition to the guidelines that the private sector is required to follow, there are some more systems and mechanisms of compliance, which are applicable to PSEs only. These are: MOU System, Review by Administrative Ministry; Review of Annual accounts by CAG; Concurrent transaction .audit by CAG; and, Vigilance Administration by CVe. These mechanisms have served the objective of ensuring accountability and governance. In fact these have contributed to greater credibility and investors' confidence enjoyed by the PSEs. As long as these additional control mechanisms have ensured accountability and transparency, they are fine. But, it is experienced that several features of the existing controls and governance applicable to PSEs are inhibitive in terms of risk taking and decision making and obstructs their speed of response to the business environment. Multiple audits and control mechanisms have been identified as obstructions in PSEs' efforts to take on their competitors. The Comptroller & Auditor General (C&AG) conducts annual audit of all the PSEs. In addition to supplementary/ test audit, C&AG also conducts transaction/proprietary audit. Under such audit, the proprietary of the transaction is subjected to scrutiny. The authority of such audit is not specified as far as Companies Act, 1956 is concerned. The basic purpose of audit is to aid the management in adding value to the organization by providing the stakeholders and the management the benefits of an independent evaluation. Audit should enable PSE managers to develop a new culture of

taking complex business decisions with speed but without diluting accountability. However, it is seen that multiple and extensive audits not only cause delays but also hangs like a 'sword' on the head of the CEO and deters him from taking business risks. In this context, there is a need to review the audit by CAG in terms of its scope and periodicity. Similarly, the role of vigilance administration in PSEs to check deliberate irregularities and financial imprudence is beyond doubt, especially when substantial national resources are involved. However, its scope and functioning needs modifications so as to allow for quick decision making and to discourage mala fid complaints. Strict punitive action is must against all those who try to misguide and misuse vigilance commission to serve their personal ends. ntoday's challenging world of competition, PSEs need to be suitably enabled to take bona fide risks and timely decisions with the confidence that they will be judged in the overall context of the business environment and the situation facing the organization and not singularly by their failure in one or two decisions. Unfortunately, the PSEs today find themselves in a cultural paradigm where the existing control mechanisms put a premium on not taking decisions rather than on making decisions whereas increasing competition requires them to take calculated business risks. In this context, the recommendations of the 'Committee on Strengthening Vigilance Administration' set up by the CVC under the chairmanship of Shri Arvind Pande suggesting streamlining of the vigilance system for CPSEs need to be implemented.

It is a matter of great pride and personal satisfaction that India, over the years, has developed a system that ensures good governance in both public and private enterprises. Necessary changes have been brought into from time to time to bring our corporate governance practices in line with the internationally acclaimed practices to make Indian industry emerge competitive and efficient. Listed companies fulfill all requirements such as compliance of SEBI Regulations on Corporate Governance. They are required to adhere to new accounting standards, statutory audit-by-audit firms, internal audit, other mechanisms required in Companies Act and guidelines of Company Law Board. Besides these, independent regulatory YOJANA August 2005

It is evident that the many existing systems and procedures are incompatible with the efficient and successful operation of the PSEs in an increasingly competitive economy, which requires them to continuously 31

rearient themselves!. In' the new ecanamic regime, they he being judged far their cammercial subcess ~d an the returns they generate Ion the massive investments in them, A strang and effective public secto.r requires devalutian af full Janagerial and 'al Co.mmerCI autano.my.,I Public secto.r entitie~ must adhere to. '> six main principle~ in arder to. effectively apply t~e elements o.f co.rpo.rate gavernance ~o.achieve better governance practices. j . Three o.fthese elem~nts-lead~rshiP, integrity and co.mmitment-relate to. perso.nal qualities df those in the arganizatian. The o.th~r three elements acco.untability, integratio.n and transparency-are mainly a product af j strategies, sy~tems; p:olicies and processes in place, I "

the Ministries and Departments they fall under even far routine day-ta-day functio.ning af the co.mpany. Government appraval, amang athers, is geqerally required far barrawings revisio.n af wages and benefits to. emplo.yees, investment, distributian o.f pro.fits, plans af develapment, capital budget, farming a subsidiary campany, el).tering i~ta fo.reign callabaratians and raising equity fram the market. What the PSEs need to. successfully meet the challenges af co.mpetitio.n are prafessianal baards that are autano.maus and capable o.f providing dynamic leadership. ~eing an par with the campetitars in bOth the damestic and glabal eco.namy demands ~,o.mplete auto.no.my in decisio.n making with regard to. business administrat~an like investment in jo.int ventures aI;ld alliances, and deciding emplo.yeeco.mpensatio.n packages including incentives far gaad perfo.rmance. That is, the bo.ards' af PSEs shauld be enabled and empo.wered with co.rfJ.plete functio.nal and financial autanamy to. facilitate fulfilling business abjectives as per the 6nvisaged visian and speedy praject implementatio.n.

mechanisms' that are being used ~ pressurizing the PSEs. The co.ntrals can be dane away with witho.ut diluting the true rale and functian o.f the administrative ministries. In fact, a ratianalized and effective system af o.wnership and administrative cantro.l sho.uld enhance efficiency and campetitiveness af the PSEs and make them cantinue to. play a bigger role in India's ecanamic pragress. Accarding to. the Internatio.nal Federatian af Acco.untants: "Openness is more than structures and processes. It is also an attitude and belief amongst key players, politicians, public servants and otherstakeholders .that information is to be shared and is not owned by any particular entity-it is a public resource, just like public money or assets". bnef gavern.ance ha.s a very broad reach-go.ing well beyo.nd anagement. Managing invalves administrative, supervisary and facilitating tasks associated with angaing organizatiana.l aperatians. Thus, management is but lane part af go.vernance. The Netherlands, Ministry af Finance o.bserves that 'government governance comprises managementcontrol-supe rvision-accountability'. That is, effective gavernance makes management accauntable to. its many stakehalders, thraugh apprapriate management structures, repo.rting requi\ements, cantral structures and the many ather elements af carparate gavernance. The' Canadian Jaint Co.mmittee an Carporate Go.vernanc,e argued that transparency (o.r disclasure) is a much better appraach than attempting to. regulate behavio.ur, if ane is seeking to. build a healthy gavernance culture. Stand~ng Canference af PubJic Enterprises (SCOPE), the apex bady af the PSEs in India, taak upo.n itself the task af facilitating them unshackle from the unnecessary informal cantral mechanisms. It recagnized the need to. exaflline the carparate gavernance
.~

The care issue cancerning .:. carpo.rate I gavernance o.f. PSEs fS empawerment o.f Baard. The Baard !'s the tap management o.rgan respo.nsible far i~plementatio.n the Ibbjective af an enterprise. It has to. as~ure itself that the campany (i) is being r?anaged properly at the technacratic Ilevel. to. secure efficient resa~ce use ,and prafitability, (ii) co.nfo.rms to. the saciety's o.bjectives Same af the impartant issues in expectatio.ns and valu~s, and (iii) wauld '.empawerment af PSE baards include achieve a proper balan~e amo.ng various pawer to. acquire and ho.ld shares in any stakeho.lders and inte~est grpups. co.mpany, in India and abraad to. facilitate ~usiness pramatian. This he princiP.1 S af carparate. gavernance wauld require the' cal}ld be subject to. the limits specified Baard af Directo.rs af the for JVs and subsidiaries. Navratna and . i co.mpany to. exercise the full autharity profit !Uaking PSEs sho.uld be allawed , I in th~ go.vernance 0,( the camyany to. qecide the salary and benefits o.f the subject o.nly to. the dili-ection; appro.val empl~yees ..' They sho.uld also. be I '. and general cantro.l aflthe shareho.lders. allowed to. have incentive schemes like As nated by OECD (1999) "Gaad pro.fit sharing or ESOBs. They shauld carparate go.verml~c6 shauld pravide also. be alia wed to. ratio.nalize the praper incentives the B.oard and m~pawer and design suitable VRS in management to. pursrte abjectives that arder to. sustain their campetitiveness are in theinte~est af the campany anq ~d profitability: sharehalders". i . Once implemented, these

T
I

far

The pawer af PSE Baards to. take basic palicy decibio.ns is mare thearetical than real. The baards af PSEs are required to. tke , approval fro.m 32

suggestians wauld imply a true e~pawerment af PSEs. Hawever, the entire exercise. wauld bear fruit anly with dismantling af the 'co.ntral

I :
.1

YOJANA August 2005

'tMues as early as in 1996. It has, in a limited way, sensitized government and the people in power, various stakeholders like Members of Parliament, leaders of various parties etc., about the onerous tasks that the PSEs have to undertake and the need to bestow their managements with full empowerment. In 1997, SCOPE cornmissioned Prof Y.R.K. Reddy to prepare a perspective paper on Corporate Governance and PSEs, which was submitted, to the Government. In May 2002, the then Vice President of India Shri Krishan Kant released Charter of SCOPE Centre for Excellence in Corporate Governance. SCOPE has been organizing programmes on various issues of Corporate Governance and need for empowerment in PSEs from time to time. This year, it chose Corporate Governance in Public Enterprises as the theme of the Annual Conference of Chief Executives of PSEs which was addressed by Hon'ble Prime Minister of India Dr Manmohan Singh. Dr Manmohan Singh reiterated his government's commitment to a strong and effective public sector. He advised PSEs to adopt good corporate governance practices which has emerged as a major managerial and shareholders concern worldwide in order to enhance competitiveness and performance. SCOPE is now planning to conduct a five day Certification Programme for Directors to sensitize them of their role as Independent Directors on the Board of PSEs. Over the years, the government has taken various measures to improve accountability and autonomy of public enterprises. The MOD system, cancellation of a large number of government guidelines, delegation of enhanced powers under the Navratna and Miniratna schemes are some of these measures. The professionalization of boards of directors was made a precondition to ensure that the enhanced powers are used prudently. YOJANA August 2005

Professionals were inducted on the boards of these PSEs and audit committees were also set up. The issues of corporate governance practices are seriously looked in by the UPA government for overall efficiency, productivity and competitiveness of our economy. It has announced several measures of granting empowerment to PSEs. Setting up of Ad hoc Group of Experts on Empowerment of PSEs and Board for Reconstruction of Public Sector Enterprises are another two major steps taken by the government. However, much more needs to be done, especially since corporate governance guidelines are continuously updated all over the world.

iii) Equitable treatment of shareholders; The state and state owned enterprises should recognize the rights of all shareholders and in accordance with the OECD. Principles of corporate governance ensure their equitable treatment and equal access to corporate information. iv) Relations within stakeholders: The state ownership policy should fully recognize the state owned enterprises' responsibilities towards stakeholders and request that they report on their relations with stakeholders. v) Transparency and disclosure:

ast week OECD announced adoption of corporate governance guidelines for the state-owned enterprises. India will have to lake note of these guidelines and make suitable modification in its own set of practices in order to put its PSEs on par with state owned enterprises in other countries. The OECD guidelines, recommended by its Council on Corporate governance in state-owned enterprises include: i) Ensuring an effective regulatory framework owned enterprises: legal and for state

State owned enterprises should have high standards of transparency in accordance with the OECD Principles of Corporate Governance. vi) The responsibilities of the board of state owned enterprises: The boards of state owned enterprises should have the necessary authority competencies and objectivity to carry out their function of strategic guidance and monitoring of management. They should act with integrity and be held accountable for their actions. In essence, these guidelines also recognize the need to grant full autonomy to the boards of PSEs. That is, in keeping with the national and international trends, the rules of games relating to corporate governance for public sector in India need to change. The board reforms or the empowerment of the boards of PSEs should be seriously considered and expedited in order to help a large number of PSEs become global corporations., ..Many PSEs like IndianOil, ONGC, GAIL, NTPC, BHEL etc have shown exemplary performance despite existing obstructions. What can these and many more such PSEs can do for the country with devolution of full autonomy can easily be imagined. 0

The legal and regulatory framework for state owned enterprises should ensure a level playing field in markets where stateowned enterprises and private sector companies compete in order to avoid market distortions. ii) The state acting as an owner: The state should act as an informed and active owner and establish a clear and consistent ownership policy, ensuring that the governance of state owned enterprises is carried out in a transparent and accountable manner, with the necessary degree of professionalism and effecti veness.

33

I I

Inno'1ative Thinking Government

I

In
Saniay Kothari Rajesh Bansal

i
HY thinking there is INNOVATIVE and if at all a need of Technology European

(NUT) indicated countries,

that by

2020, advanced economies like U.S.A., Japan and even China would be short by millions in trained manpower but the developing countries like India, Pakistan and Bangladesh would have a huge surplus of trained population. The estimate shows that this figure for India would be more than 46 million. Population, considered a liability in the past will now be an asset provided the people are well trained. Thus as globalization perpetuates, jobs will move to the people of developing countries from the developed physical countries either through movement or through

innovating thinking, then why especially in Government? The development pattern in the world in the nineteen eighties can be called as the industrial era. In this era five Ms had to be managed i.e. Man, Money, Material, Machines and Methods. In India, Maruti Udyog Limited was established during this period bringing in a new work culture, wherein all the managers/workers used the same uniform and shared their meals in a common canteen. Today's era is the knowledge era and the biggest change has been the declining importance of machines and the growing focus on man and mind and the raw material is information. In the new economy, the real capital would be talent. Information technology (LT.) growth in India is more talent led and not export led. As in the early nineties lot of talent was created, which was then found handy in the later years of growth. A study done by National Institute of Information

The sqcioeconomic I matrix is quite complex I and the~e is a need to have lateral thfnking. In keepiftg with I this reality, the Government of Haryanp, has taken a number I of policy initiatives
I
J

communication channels like satellite, fiber-optics etc. The mindset in the government has to change from the role of a direct provider to that of facilitator. In India, till the mid nineties gOovernment was perceived as a model employer but now the government may have to function as an efficient centre fOordelivery of services which may have to be comparable with the private sector. The Haryana Government has more

Mr Sanjay Kothari, IA~, is Financial Commissioner and Principal Secretary, Tourism and Public Relations, Govt. of Haryana and Mr Rajesh Bansal is Management Consultant, Haryana Bureau of Public Enterprises.

34

YOJANA August 2005

~n

three

lakh

state

government the persons public sector Planning

before

independence.

A section

of

The Government December, for issuing certificates. 2003 issues and streamlined

of Haryana addressed types

in

employees employed undertakings.

excluding in state As

society is of the view that these Acts were specifically framed from the pointof view of a foreign ruler. To further substantiate their arguments, they emphasized that the first fifteen sections of most of the Acts give the basic objects, the rationale and purpose of framing the Act and the subsequent sections from fifteen onwards mention about the penalty/punishment in case the provisions of the Act are violated and the authorities who could hear the appeal/revision etc. This gives the impression that the government treats everyone as a thief unless proved otherwise.

these of

the procedure

per

various

Commission of India figures, this comes to 16 employees per thousand population and is the highest in the country. At present, the Government of Haryana is in the process of restructuring/rightsizing its departments as well as public enterprises to achieve the larger public interest of providing services at efficient cost. The field staff at the cutting edge level need enhancement of skill-sets but there is also the need to bring changes in the rnindsets of the people at the decision making level. In the year 2002, Government of Haryana took the decision that one week training will be compulsory for every official of Haryana Civil Secretariat atleast once in two years. In addition, one week training in HIPA will be compulsory for each officer/ official of Haryana Civil Secretariat on initial recruitment/promotion to higher post within three months of recruitment/ promotion. The training is organized at Divisional Training Centre of Haryana Institute of Public Administration at Panchkula and also at the main complex at Gurgaon. The emphasis on training is bound to increase the efficiency of staff and rejuvenate them for countering the new challenges in their job. By the end of 2003, almost all the staff of Haryana Civil Secretariat has been imparted training. It is now being planned to give specialized training in legal matters, policies and accounting procedures of the government.

The significant decisions taken are : Powers to issue castel residence certificates has been delegated to Circle Revenue Officer-cum Executive Magistrate. The Heads of Departments have been delegated powers to issue castel residence certificates for government employees as well as their wards posted at Chandigarh/ Panchkula. The Scheduled Caste certificate has been made valid for life and Backward Class certificate has been made valid for three years. To further simplify this procedure a scheme has been launched to issue the residency and caste certificate to a student while he/ she is studying in Class-VIII. The procedure for issue of income certificate has been simplified. The self attested mark sheets, caste and residency certificate can be submitted at the time of applying for admission in various educational institutions as well as offices. The school headmaster/ head teacher can issue certificates for claiming benefits of government schemes to students in village schools up to class IX. These are radical decisions and will go a long way in making the life of a common man easier and simpler.

prevalent practices in the government, even after more than fifty years of independence. The government asks for an affidavit for every simple thing like date of birth etc. from the citizen. This means incurring expenditure ranging from a minimum of Rs 50 to Rs 100 for getting this affidavit. In addition to this, the citizen has to waste a lot of time and energy on this and in case of an incorrect affidavit, it is seen that no substantial punishment is given to the defaulter. Similarly, the procedure for admission to any educational institution is quite complicated/cumbersome. Even, for claiming benefit of various government schemes lengthy forms are required to be filled alongwith affidavits and castel residence certificates. They have to take assistance for filling up this form and this at times can lead to petty corruption. All these instances show that the government officials/ officers/ policy makers do not trust the citizens. It is time for the government to dispense with such requirements so that it is more people-friendly and the common man does not face this type of harassment.

his is further reinforced by the

Simplification Procedures

of Laws!

Changing Role
11M Ahmedabad and lIT Delhi have conducted a study and brought 35

In India the major Acts like Indian . Penal Code etc. have been framed YOJANA August 2005

out the India Infras~ructure

Report

HUDCO and toll has been levied on these roads. Haryana can today boast a large network of wide and well constructed roads. The mindset of the travelling changed public has also gradually and they no longer mind

has not been resorted to and as sd resource crunch has been caused in most of the states. State borrowing governments have been

2002. The primary finding of the report . . I IS t h at an ommpresent government attempting to do ererything from maintaining law and order to providing
I

goods and services to people, is not feasible. The business of the government is to I provide good governance at least cost. These findings are fully supported bt the present day position in Kashmir and the position
I

to meet the day to day

paying toll as now better roads enable them safer, faster and fatigue free travel.

demand and undertake the development activities for quite sometime. Recently, Reserve Bank of India in a meeting of the State Finance the state governments. Secretaries has by fixed a ceiling on the borrowings

Need for Reform

At present, governments recommendations Commission crisis. most have of the adopted state the

that prevailed in P~njab during the militancy in late eighties or early nineties. resources
.

In view of the financial crisis, the

Government of Haryana decided to restructure/ rightsize its departments laying points: Remodelling, winding up and merger emphasis on the following

There

is Ino shortage
I

of

of the 5th Pay by the

in Kashbtir

but due to

and are facing financial

dIsturbed law and order problem governance has been adversely affected. Here it can be added that in addition to good governance,! the government should provide basic, infrastructure education and health facilities in at

In a paper presented

of the departments. Indepth examination of all the nonplan and plan schemes. Restructuring and re-.engineering of the government departments/ organizations. As a consequence or "tl1e restructuring exercise of government departments, the optimal strength of staff in different categories of posts in each ,jepartment has been finalized keeping Planning Commission it has been stated the state finances are under severe pressure due to substantial increase in salaries, pension and interest payments. Pension liability of 14 major states has increased by two hundred times from Rs 100 crore in 1975-76 to Rs 20,000/ -crore in 1998-99. After paying for salaries and interest on previous loans, states have no money left today for planned development or capital investment. One of the reason for this financial crisis is that as per recommendation of the 5th Pay Commissions the staff strength has also to be reduced which in view the present day requirements. As a result there may be employees in some departments who are under utilized and in excess of the requirement on the one hand and on the other there may be a requirement of employees in other departments. The state government has formulated a policy to enable absorption of surplus employees in departments vacancies exist. where

subsidized cost. If w, study the pattern followed in most of the developed countries and some 6f the developing countries, it can be clearly seen that these countries rtndertake road construction projects! on a large scale and levy toll to recorer the cost from the users/ common citizens. In tune with the international trend, the Government of India started levying toll on national highways and in retJrn has upgraded! modernized these I highways. The government has also imposed cess on petrol! diesel and' the money so collected is used tOifund the golden quadrilateral project and other road projects in the couhtry. The choice before most of the g~vernments today is either to construct roads by taking loans or not to construct any roads. Majority of the goverhments have either already resorted to bption one or are planning to adoptl option one. In Haryana the state highways and other connected roads have been constructed! I upgraded by raising loans from 36

With the gradual integration of the world economies, the developed as well as developing countries have started undergoing vast economic changes. These changes have led to a decline in the role of State in commercial activities YOJANA August 2005

~li

privatization of State owned enterprises. In India, till twenty years Government! state government was in a position to undertake any activity. For instance, when the Cotton Mills in Gujarat went sic~, the Government of India took over the management of these mills Corporation and National was formed. Textiles With the

found that there are a large number of unskilled jobs which could be easily out sourced/ contracted out without compromising the efficiency, at much lesser costs as compared to regular employment. The state government, therefore, decided that the departments should contract out functions such as house keeping, gardening, cleaning etc. and resort to rationalization of posts available for discharging such functions. The existing employees handling such jobs may be phased out over a period of time and such activities/ jobs be contracted out in future.

This policy is likely to benefit all sections of the society.

back it was presumed that the Central

Education and Health Sector

The State is supposed basic education to proyide The to its citizens.

basic education means education upto class X and if we extend it further, it can mean class XII but under no stretch of imagination it can include graduate studies. It has been observed that the fee in the degree colleges have not been increased in the last more than 20 years. With the result most of the degree colleges are not in a position to provide proper sitting , lab and library facilities. Due to the subsidized fee structure all those students who do not get admission in professional colleges and are not gainfully employed, take admission in Degree Colleges and pursue graduate/ post graduate courses. In this process, they can not be employed in the service sector and are also not suitable for agricultural or industrial vocations disenchanted. If we compare it with the West, it can be seen that these developed countries provide basic education to all the citizens. The fee structure in the Universities runs into few lakh rupees per year as compared to about Rs 1000 per year in India. The general impression is that in the West there are usually three categories of students who enroll themselves in the Universities. Those students who are very intelligent! bright and get scholarship from the Stat'e/ different agencies. and become totally

passage of time it was observed that running these mills was not possible and they continued to incur losses. In early nineties steps were taken for opening up the Indian Economy by allowing private investments. It was realized that the public sector either has to perform! financially well or continue to serve the public purpose for which it was set up in order to justify its existence. Restructuring/ reforming of the state public enterprises thus became necessary. The Haryana Government

Ex-gratia Policy
The ban on filling posts up of vacant has been

in the government

imposed for more than three years but this ban is not applicable to 'ex-gratia employment' i.e. employment given to the wards of deceased employees. This has created problems as fresh college pass outs are not getting job

opportunities and in departments like accordingly resorted to disinvestment from state owned public enterprises e.g. transport, the number of ex-gratia is so large that the Haryana Breweries Ltd, Haryana . employees efficiency has been adversely Concast limited. Rightsizing in public affected. The Government of Haryana enterprises which were overstaffed e.g. in 2003 has come out with the new Haryana State Federation of Consumer ex-gratia policy and the main features Cooperative Stores and also completely closed down those public enterprises which were unviable and had no possibility of revival e.g. Haryana State Handloom and Handicrafts Corporation, Haryana State Minor Irrigation and Tubewells Corporation. However, keeping in view the interest of the employees affected as a result of these measures, the state government made reservation in direct recruitment of Group 'C' and 'D' posts for retrenched employees. are: Only 5% of direct posts can be given to ex-gratia employment. In case the dependants do not get the job, they are entitled to Rs 2.50 lakh as lump sum amount so that the family can subsist. Employees in the age group of 55 to 58 years will only be entitled for Rs 2.50 lakh. The wards of disabled employees will not get any employment and these employees will be allowed to superannuate.

Contract Policy
While considering the restructuring proposals of the departments, it was YOJANA August 2005

Those who undergo studies in day time and do part time work in the evening.
37

In some cases after marriage one of the partner studies and the other supports him! her. There has been a change in the mind

diagnostic techniques are available, the treatment is done on the basis of the result of various test! x-ray ultrasound. consequently, government prescribing laboratories the doctors hospitals in the started

Directorate

wing

is incompeti;m1)

whereas the Directorate wing thinks that the Secretariat staff only passes orders but does not guide taken them properly. Two major steps have been taken to remove this mistrust are: Adoption of single file system and The Administrative Secretaries have been asked to make monthly fIeld visits so as to bridge the gap between the field! directorate government. In addition to offices and

set in this direction in India also. In all those courses, where job opportunities are better, like Bachelor of Computer Application or Bachelor of Business Administration the fee charged by the

these tests from private which resulted in a and the staff of notwithstanding caused to the was

unhealthy nexus between the doctors of these hospitals these laboratories, the inconvenience patients.

degree colleges is substantially higher than the fee charged for plain degree course. This fee structure is comparable to the fees charged also allowed for engineering to get courses. The Government of India has the colleges themselves accredited from a committee appointed by them and after this is done the college is at liberty to fIx their own fees. In this way the emphasis has shifted to quality education linked with job opportunity. Previously, in India, the fee structure in the professional colleges like the IITs and medical colleges was also highly subsidized but in the last decade the fees in these institutes have been raised substantially. It does not mean that the poor students cannot undertake these courses but because the bank loans are easily available in the professional colleges and the loan amount can be returned after the student gets the job. Similarly, in the health sector, about ten years back the medical treatment in government hospitals used to be free. In government hospitals only 50 paise ticket was required to be purchased for getting a personal registration card! ticket and subsequently the x-ray, ultrasound and other tests were free. Though everything was free, the patients could not avail these facilities as the x-ray, ultrasound machiries were either out of order or were not working due to shortage of films or other essential items. Today, when modem

Though the treatment

free the result was that the number of patients visiting these reduced drastically. hospitals

this

each

Seeing this no win situation, awareness arose amongst the policy makers in the mid nineties that some minimum charges should be levied for all the tests. The charges included mainly the cost of the fIlms! chemicals and some token maintenance charges and this amount is one fourth or one fIfth of the market rate for these tests! examinations. For instance, in Chandigarh, PGI (Post Graduate Institute of Medical Education and Research) was levying the minimum test charges previously but now Chandigarh Medical College and Government Hospital, Sector-16 have also started levying charges for all clinical examinations. Now in these hospitals the tests are carried out at subsidized charges and as a result the utility of these hospitals has improved. It is learnt that an advanced model of public participation and proper running of hospital is the Gwalior Hospital.

Administrative Secretary has been assigned a district in which he reviews the development schemes of the state on a periodic basis. The focus of this exercise is on creation! maintenance and proper upkeep of the government infrastructure. In the Heallh Department the maintenance and upkeep of building work has been delegated to the field functionaries as a pilot project. It has been observed that iIi most of the departments bulk of the work relates to disciplinary action. It has been found that in the large number of employees are chargesheeted for major penalty, either the draft charge sheet is not received from the concerned quarters or proper enquiry as provided under rules is not conducted for years together. This causes embarrassment to the government and also demotivates the employees. The government issued instructions in 2002 to the effect that as far as possible action should be taken under minor penalty and case be fInalized within three months for quick disposal of such disciplinary cases. This step would not only speed up the disciplinary cases but reduce the office work and ensure discipline in the department. It has further been decided that the officer! official who proposes disciplinary action should also enclose YOJANA August 2005

Good Governance Initiatives

The Government of Haryana has taken number of steps for good governance. There is mistrust between the wings of the Government. The impression of the Secretariat wing is that the

38

("llre draft charge sheet against the guilty empl.oyee al.ongwith the pr.op.osal far disciplinar)l acti.on. This step sh.ould av.oid the delay caused due t.o n.onfmalisati.on .of charge sheet.

magnetic data st.orage discs and every third tube in the w.orld is pr.oduced by Essel Pr.opack .of India. In the last decade the market size .of washing(

think .of alternative

ways .of raising

res.ources sa as t.ofully .orpartially meet .out the planl nan plan expenditure. The

Devi Rupak Scheme

I

With the dawn .of this millennium India has already cr.ossed the 100 billi.on mark in p.opulati.on. The gr.owing p.opulati.onhas a maj.or challenge far the c.ountry and as if this was nat en.ough the c.ountry als.o has the problem .of adverse sex rati.o with the number .of female pppulati.on decreasing as c.ompared t.o male p.opulati.on. Taking the specific case .of Haryana, there are I 8 6 I females t.o 1000 males and m the age gr.oup 0 t.o6 years it has came dawn t.o 820. Haryana has introduced the Devi Rupak Scheme and this scheme envisages 'a m.onetary benefit .ofRs 500 per m.onth .on sterilizati.on after the birth .of a daughter and Rs 200 per m.onth if sterilization is dane after a san or twa daughtersl far durati.on .of twenty years.

Forest Department far example, has large chunk .of land and if they machines have increased 228 times, . undertake c.ommercial plantati.on in a Pers.onal C.omputer 13.5 times, cars 8 times and TVs 5.4 times. It is nat that very small area they can meet .out part .of,the planl nan plan expenditure fr.om the picture is t.otally r.osy. The Central and state g.overnment deficit are at an all time high and this restricts ability t.o make investments. The ref.orm process sh.ould c.ontinue but the impending electi.ons may h.old! delay the critical ref.orms. timber/ fuel w.o.od. If we further think laterally, at present in a state like Haryana where land is expensive, the pris.ons in same cases are l.ocated in the heart .of the city and if a pris.on is c.onstructed .on the .outskirts .of the city the .old buildings can be c.ommercially used. This w.ould nat .only fund the c.onstructi.on .of the new pris.on but w.ould als.o raise same am.ount far the exchequer. G.overnment is kn.own t.o be slaw t.o

Prison Administration
In the Pris.on Administrati.on privatizati.on can be dane in three wings. The h.ousekeeping w.ork can be

:Br"-:rr-~;_s:-'~e~l
%x

.... 1
.~~:.

GO

Impact

tt~1~t~~nr~ .Rr~ufe~i:o~ '~~er~w~r~g

~.

ent i kno~~. I td .;~e;sl~~r~olr~cfi t~t~e+

i

react t.o the process .of change. This is .on the I due t.o divergent pressures ! w.orking .of g.overnments. The p.olicy , makers have t.o keep the aspirati.ons .of pe.ople in mind .on the .one hand and .on the .other hand the ec.on.omic viability/ is t.o be als.o studied. In additi.on t.o the ec.on.omic aspect, the g.overnment has t.o keep in mind a number .of s.ocial fact.ors.

With the liberalizati.on .of ec.on.omy and p.o.orfinancial health .ofthe state the jab market in the private and g.overnm~nt sect.or has shrunk. As per India T.oday .of August 11, 2003 the percentage annual gr.owth as per f.orecasts .of the B.oard .of India T.oday ec.on.omists far 2003-04 sh.ows a 6.7 % gr.owth in Grass D.omestic Pr.oduct, 6.75% in agriculture 5.6 % in industry and 7.4 % in services which is substantially higher as c.ompared t.o previ.ous years. As far as exp.orts are c.oncer~ed in the year 2003-04, the textile industry, the aut.om.obile, pharm~ceuticals and the aut.oparts sect.or is d.oing exceedingly well. (India T.oday I December, 2003). T.o add t.o this Maser Baer is the w.orld's third largest manufacturer .of .optical and YOJANA August 2005

c.omplex and there is a need t.o have lateral thinking. In keeping with this ~i:i ~tJf' 5:0 '-n:: ,i~ reality, the g.overnment.of Haryana has taken a number .of p.olicy initiatives. It privatized and if it works .out, the is said that due t.o the ab.ove menti.oned Transp.ort Wing can als.o be privatized. reas.ons and the hirge size .of the Further, the training .ofthe pris.oners can g.overnment, pessimism sets in the mind be privatized by engaging either the set .of the G.overnment empl.oyees. Ms v.oluntary .organizati.ons far training the Karina C.onstantin David fr.om pris.oners or engaging master craftsmen Philippines in EROPA C.onference fr.om different field t.o train the stated that every .one has t.o be pris.oners. Thirdly, the juvenile h.omes .optimistic, .otherwise there will be n.o can be privatized by engaging the change. Hence the need far inn.ovative v.oluntary .organizati.ons instead .of thinking. Inn.ovative thinking is recruiting regular staff. This can be .on h.owever a dynamic process and it needs lines .of the pr.oject that has been t.o be sustained far all times t.o came in successfully undertaken in Nepal. the interest .of the present as well as future g.overnments and the public at T.o meet the growing financial requirements, the departments can n.ow large. 0
i~} ~::'

~c~_

:~;o~gpvirDm~niS .;;' .. "x I

l The s.oci.o ec.on.omic matrix is quite

39

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40

YOJANA

August 2005

"ADMINISTRATIVE REFORMS..

PERSPECTIVE

Development
I

Governance
Mahendra P Srivastava
the issue of gove.rnance, whether'itis restricted to "economic, political and civil governance or to look at the system in it~ entirety". If is also supposed to view 'the' process of intermediation as' involvin'g ~ continuous interplay of the above mentioned three elements, each representing a specific set of deliberate arrangements. Such opinion is backed by project 2020: a U.S. Intelligence report, which has pr~dictedthatJndia and China will emerge as new global players in reshaping global trends. "India is likely to outperfomithe rest of Asia due to its inherent advantages, aiid . for accelerating those advantages, an effective and efficient governance is a sine-qua-non. It is, therefore, feasible that with economic, political and civil governance and also with an effective and efficient work culture, within the institutions, the economy will be able to ' grow and develop. ,Fora nation struggling and swinging between A and 8 per cent GDP growth the achiev~ment of an effective work culture and governance would be a challenge and an opportunity for the development of the civil society.
I
<

HEREHAS always been stress _on~ the issue of governance. The -present go~ernance drive, however, . . has given a new, direction to the system of ecoIlomic, political. and civil governance and has paved its way towards accountability, transparency aIld credible legal ,and judicial system. It. is a known fact that the governance relates to the 'tmanagement of all ~uch processes in all spheres, be it the individual, the household, the village, . the region or even the nation as a . whole".

II

The stress is on the development of the civil society and the institution, each of whichis ,critical' for sustaining development at area and sector level and also for building individual capabilities (manpower groups) and encouragiJ?g private initi~tives. It is here that the governance plays an ilnportant role, as' it is the foundation of developing a civil society. Today the focus is on integrated"governance. The scenario has been looking for achievements; co~cen:s and challenges within each (economic, political and civil) type of governance. The focus, therefore, is to analyse
I

The

World

Bank

has

d~fined;

Mr M. P. ~rivastava is former Manpower Management Advisor, U.N. (LL.O) and was also Consultant to Institute of Applied Manpower Research, New Delhi.

YOJANA August 2005

41

governance

as the manner in which

power is exercised in the management of country'~ economic and social resources. The Bank has identified three distinct aspects of governance: (l) the form of political regime (2) the process by which authority is exercised in the management of a country's economic and social resources for development and (3) the capacity of governments to design, formulate and implement policies and discharge functions. Similarly, United Nations Development Programme (UNDP) has suggested that governance among others comprises mechanisms, processes and institutions . through which citizens and groups articulate their interests, exercise their legal rights, meet their obligations, and mediate their differences. Mahbub ul Haq, Human Development Centre has emphasized that governance requires effective participation of people in State, civil society and private sector activities that are conducive to human development. PA government is committed for economic, political and ci vii governance that are conducive to human development, i.e., the poor, backward, women, among others.

the development of: (1) institution (2) delivery mechanism and (3) the frame of legislation. rules procedure and

State governments with similar arrangements, but with varying level of governance have shown striking different development ranks in the process of development as revealed by India Today's second annual report on ranking of states. The study shows, "the states of north and the south provide better quality of life and business environment than states from other regions". This is further evident from report which provides score, rank and change into various infrastructural development between 2003 and 2004. Reasons for change, either way makes access to available basic services, such as hospitals, roads, schools either with ease or difficulty. This information matters a lot since the above figures place equal importance on "adequacy and availability of amenities". The above ranking provides an indicator of effective management and performance of institutions, delivery mechanism and supportive frame of rules, procedures, among others. In the north, it is a different kind of political governance that gives them a 'head start' in economic development. "The other surprising revelation of.the study is the deglamorisation of west" as they are effected by 'diminishing returns'. The study reiterates 2004 trend that "small is not only beautiful but also productive". States from the north and south provide better governance and defy the cliche that good economies is in conflict with good politics, said Prabhu Chawla in his essay on "Act Local Think National". UPA government has several challenges. The issue of governance is

one among them. The governank:: empowerment is based on the lessons of the past. The present action plan of governance, however, is dependent on the contingent instruments that have to be taken up on priority. These include the need to undertake: Institutional arrangement for planning and development of economic, political and civil governance.

III'"
.

he process of institutional , governance and work culture . management has three interrelated issues. First the identification of skills, knowledge, work attitude and efficiency in managing the social, economic or political transactions in the society. Secondly, the management of the "delivery mechanisms", Thirdly, to coordinate, the interrelated functions of planning, development and execution of the "supportive and subordinate framework of rules, procedures and legislation".

The present requirement is to diagnose: (1) what would be the ideal mechanism and (2) institutional arrangement for addressing the specific concern of governance. In order to meet the necessary requirements, it would be appropriate to study and analyse, the changing governance standards, outline the "area of emphasis" and "relevant instruments", The outcome of the study, need to be pursued for improving governance both at the macro and micro level of development. The macro-economic management of the central and state governments, and of the "public expenditure", also highlights the arrangements required for
42

These aspects are of primary concern for an effective governance within the context of set policies and national development objectives. It also requires pursuing strategies to implement programmes in such a way so as to meet the aspirations of the people engaged in different development activities, for example, work strategies at area and sector level and for different manpower groups. Area Specific Approach (Local, State and National level institutions): This approach is aimed at obtaining a synoptic view of "poor management of economies, persisting fiscal imbalances, disparities in the pace and development across national, state, district, local bodies and villages". More specifically, the objectives of the approach to area specific governance: would examine YOJANA August 2005

l\ (trsecurity la,w and order problem, (2) social, religious, caste or even gender affiliations, (3) sensitivity, transparency, accountability at national, state, local bodies, among others, (4) lack of credibility, incentives/disincentives for workers, (5) dilution of rules and procedures, (6) decentralization of processes through lodl bodies institutions (panchayati raj), and (7) environment degradation in urban area. Sector Specific Approach: The objective of I this approach would examine the issues of governance in different economic sectors (primary, secondary andl services) and also of the organizational aspects, both at the national, state and local level: through several sub-approaches, for example, (1) The target setting approach is an important condition for the sectorI specific governance. It would be a vehicle for progress rather than a burden on con;ununities that are already poor (2) Skill requirements with due regard to manpower problems (shortage and surplus) d>fthe sectors (3) Targets should guide the provision of facilities for skill formation for the short, medium and long 'term, if effectively implemented. Group Specific Approach (deveLopment of available human resources): It would involve: (1) The governance bf system of education, which need to be fully geared to meet the demand of various types of skills for development (2) The governance of labour mobility (rural-urban movement), inter-regional movement, seasonal movement and immigration and emigration (3) movement between employment, unemployment and underemployment and finally (4) uneven access to job opportunities. Efficient governance I requires efficient institutional arrangements at area, sector and manpower group levels. YOJANA August 2005

Elements of Governance Plan: The plans, vary from situation to situation but the nature and content, should contain at least six different items: Planning of programme activities, and their anticipated products and problems; Organisation programmes; and management of

Implementation major activities;

schedule

for the

Development and operating budget for the programmes; The roles and responsibilities of the participating agencies, institutions and interest group and the arrangements for coordination and communication; and Procedures and indices to be used for evaluation and monitoring.

for the country to achieve eight per cent growth rate. "Two thirds of India's GDP comes from services and industry put together with services alone accounting for little more than half. The huge drop in farm sector growth to a meagre 1.1% this fiscal from the last fiscal 9.6 per cent did not dent the GDP". If agriculture, can grow at seven per cent or higher, the manufacturing and services and all other sub-sectors will accordingly grow. The economy will certainly make it to eight per cent as some of the reform measures are geared towards the pursuit of governance mechanism (budget) and support for productive activities through diversification (economic sector). The UPA government continued implementation programme of its various reform measures; will eventually take the country to the promised land. The positive. imp~ct of these reforms, if reinforced alongwith the secondary reforms, (decentralization, and decongestion of administrati ve functions and restructuring of judicial and legal framework), will improve the work culture and productivity of human resources, among others. All these reforms, (primary and secondary) will foster governance-friendly environment, thereby, maintaining the proposed economic growth trend which the country is set to attain. To this end, the UPA government has proposed a Common Minimum Programme to create a governancefriendly envirohment. To implement the programme, all the threads of governance have to be woven together, just the right way, for the process to work. Strategies need to be built for implementation. The value of defining tasks and their accountability cannot be overemphasized. The challenge is not only to sustain this but to see that the governance benefits exceed the drawbacks. 43

overnance Plan is a comprehensive home grown programme. Governance reforms can be implemented primarily into three key priority areas for example:

rfJ
-

Public Expenditure Management Reform. This has to be linked with . the reforms in the budget process, involving fiscal discipline and all that goes with it, improving the revenue profile, tax and custom reforms, among others. The Public Sector Reform, which involves redefining the role of government. This has to go with accelerated privatization and liberalization, while government concentrate on business of governance. The Economic Reform in the context of suitable macroeconomic framework.

By the time these reforms, among others, become the engine of growth, it would create an enabling environment

ADMINISTRATIVE REFORMS IBOOK~ Reforming Bureaucracy

R L Sudhir

',amS'oiflry.
Indian Bureaucracy at Crossroads

Review article by Mr R.L. Sudhir, lAS (Retd).

44

YOJANA August 2005

filtJk. The travefogue of bureauc;acy through various:' stages of political development in the country makes an interesting reading. Bureaucracy trod on the delineated path during the first

they were expected to render honest. advice freely/and fearlessly. The. three !llain'organs that comprised the Indian State were the legislature, the executive and the Judiciary. The executive in turn comprised the elected executive and the permanent bureaucracy. With powers and responsibilities clearly demarcated no conflict was anticipated between the different organs of the State. Things were hunky-dory during theJirst two decades when each,organ performed well. Thereafter the boundaries began to blur, .the conflicts arose and decline started. The politicalmasters felt tempted to usurp the functions of bureaucracy which meekly surrendered instead of trying to counter such tendencies for fear of transfers and delayed promotions etc. The judiciary became proactive and assumed .the, role of bureaucracy in some cases. There are instances where courts have given verdicts to win mass popularity. Such actions have" further demoralized the bureaucracy and rendered.it more indecisive and inactive.

Bureaufr~cy, ~oday,js nowller~ near Weber's

ethical standards. Such is the sorry spectacle before us: All these aspects have been dealt with in the book. The article on "All India Services : Decline, Debasement and Devastation", vividly outlines the fall and failings .of bureaucracy with the help of a case study and facts and figures taken from a particular' state during a particular period. The despondency and despair' resulting from the foregoing developments notwithsta~ding. there. is still a strong case for retaining [he civil services as a unifying force in the country. There are various ways suggested in the book to revive and restore the lost prestige and image of bureaucracy and to rejuvenate it into an effective instrument to promote the welfare of the people and to

Hdeaf type'

no~does it

'conform to tile 'Steel Frame' as .conceiveqby

Sardat VaUabllbllai"Patel.

two decades of.independence and won laurels for the achievements recorded during this period. Thereafter, it went astray and the Journey downhill started. Because of its .own actions and inactions the . bureaucracy lost its aura and importance andear~ed the stigma of ';;being corrupt, inefficient, ineffective and self-cen tered.B ureaucr.acy, today, is nowhere near Weber's 'ideal type' nor does it conform to the ;Steel Frame' as conceived by Sardar Vallabhbhai Patel. Pa~el had strongly ~r:jee:~s a~a~: pleaded for creation of All India . i. ~ to be implemented which "Services with c'onstitutional gave boost to the burgeoning ~f safeguards, so as to provide an bureaucracy in its wake. Over the effective centripetal force to counter years it has become an unmanageable ,"the centrifugal forces arising from the and uncontrollable leviathan. With maintain the unity ofthe country. As : "' ,. 'staggering diversity otour country in lack of controls, delayed disposal of a first stl?P,let the like-minded people respect of religions, languages, cases and. ultimate acquittals for want meet and discuss the problem to ; ethnicity, and geographical locations of evidence, corruption became more evolve a strategy to remedy the "etc. The civil services were envisaged and more rampant. Nexus between prevailing situation. It will be: to. act as a bhlwark against the politicians and bureaucrats and worthwhile jnitiating a dialogue at the Ibreakaway forcesand to keep the criminalization of politics further highest level with a view to c,ountry unit~ed.;Patel had conceived worsened the situation, The tragedy.is convincing the people and the ,,"the civil services as., a strong, that all the three organs of the State politicians about the need for :.independen{ and neutral' force that are afflicted with corruption and comprehensive administrative, "would faithfully implement the inefficiency today. Even in the . judicial and electoral reforms and for ; policies laid down by the elected society in general there appears to be restoring the falling ethical standards Jhepresentativesbut atthesame time no respect for the old values and arid loss of values in the society. [] ~'.. _ . ..

ti~ :e~;:::~T::.

'i

~~

.;~

YOJANA August 2005

45

T univerSal,lY aCknOW,ledg,ed IS that a poorly implemented performance appraisal system can often become part of the problem. The present system of Annual Confidential Reports (ACRs) for Indian Civil Servants is a case in point. Unlike the private sector, performance appraisal for upstream government jobs is often subjective. All the talk of ACRs being used as "a tool to assist officers in improving their performance" is just that. It seldom forms the basis of postings/transfers to key positions.

if considerable noticed.

inter-state

variations
I

are

mode of apraisal. Participative appraisal: International practices in Performance appraisal require to be participative. The officer and his superior in setting goals at the begining of the rating period and in appraising results. Under the ACR system, the goals are not set at all or set unilaterally by the superior. Further, the superior's comments and the overall grading are kept confidential unless there are certain adverse remarks, in which case, they are comm1.!nicated to the officer and he is given a chance to represent against them. This is bad practice because giving feedback, positive or negative, is critical to motivating officers to improve their performance. Omission of the word 'Confidential' from the nomenclature of the proposed PAR system seems to suggest that it will be an open and transparent system. It would -be a big disappointment things were otherwise. if

Assessment by an Eminent Persons Group: There is often a wide gulf between the 'public reputation' of an officer and the ratings given by his superiors in the ACR. The new system proposes to bridge this gap through an Eminent Persons Group (EPG) that will ascertain the officers' reputation in terms of integrity, competence and personal qualities by seeking confidential inputs from their peers, juniors, and intelligence agencies. But safeguards'-need to be incorporated to keep this system intact. The EPG should comprise unbiased persons who are of impeccable integrity. The confidential inputs should not be sought in an unscientific and haphazard manner. The EPG should not form its opinions behind an officer's back nor be influenced by orchestrated petitions or campaigns against him. Each officer should be given an opportunity to make a 3D-minute presentation before the EPG. indicating his accomplishments in the past five years. This should be followed by another' 30 minutes of structured interview during which the EPG can clarify with the officer any complaints received about his competence, integrity or temperament. " The members of the EPG are to be selected by a committee including the Prime Minister and the Leader of the Opposition. But this responsibility is best entrusted to an independent Constitutional authority such as the UPSC. Over the years, the UPSC has been doing a commendable job and is already being consulted in all disciplinary matters relating to civil servants. It is only proper that its role be expanded to include the appointment of Central State EPGs.
I

New method of grading: Recently, the Prime Minister approved of a new annual scheme for assessing lAS officers. Called, 'Performance Appraisal Report' (PAR), it will soon replace the ACR in other public services. The appraisal will be done on a I to 10 scale (the higher the better) against 15-20 indIcators the overall grade will be the median of the scores for the various indicators. Will this reduce the degree of subjectivity in performance appraisal? The scoring can still be arbitrary, bearing little relation officer's actual accomplishments. Never the less, the new system may be an improvement the ACR in two respects. First, the superiors are now required to rate an officer on each of about 15-20 indicators. This is likely to involve relatively greater application of mind than the single final grading (OutstandinglVery Good/ Good! Satisfactory/ Poor) given under the present system.Second, the new system gives scope for normalisation of PAR scope facross states ( in the same way as the UPSC normalises the marks scored by candidates appearing in different subjects in the Civil Services Examination) This normalisation is necessary because performance assessments are often culturespecific. In some states, the 'Outstanding' grade is given liberally while in some others, it is given rather grudgingly. This places officers from the 'conservative' states at a disadvantage during the process of empanelment for the posts of Joint Secretary and above in the government. By comparing the scaled up or down suitably

Further, the new system promises to involve the officer examined in goal setting, though it remains to be seen if this will be put to practice. It is not clear under what circumstances an officer would be allowed to represent against the grading he has received. In my opinion, representations. against scores of 7 of less out of 10 may be allowed. The Prime Minister deserves kudos for attempting to reform this difficult area of human resource management. Although the proposed system does not address all the deficiencies of the current one, of is definitely a step forward. It is important to realise that the reform will work only if officers have stable work tenures. If an officer goes to two or three posts in a year, and if he has an equal number of superiors in this period, then no meaningful performance appraisal is possible. A minimum tenure of two years, and an average of three in a post is the precondition fo delivering best performance.

The tenure of an EPG is stated to be five years, This is fine if the EPG is constituted by the UPSc. But if it is to be constituted by a committee involving politicians, then if may be desirable to make the EPG's tenure co-terminus with the tenure of the government that appointed it. If the results of the annual PAR and the EPG's assessment vary equal weightage should be given to score secured under each

46

YOJANA August 2005

Reaching the Poor

I

AI
.. .

L C Jain

flER FIVE dec,d" ilie government, with its vast rural development

exten,;nn 'gende, In,ded

with thousands of crores of rupees, is still clueless about how to reach the 'Poor. But in one fell swoop the Orissa Gram Vikas has found the answer, which I gathered during my four-day visit to Ganjam, Orissa's most poverty stricken area. I was even more amazed at the simplicity of their approach. "Why do you have to reach the poor", asks Gram Vikas Director Joe Madiath. "Start with them," he said, "it is as simple as that." The first village I visited was a small-adivasi village with 80 households. The village committee explained proudly that the entire village had been rebuilt, "every house is new". They explained that to start with, gram vikas had got them to just build toilets, one for each household. "We found that the toilets looked better than our hut. We decided to rebuild our houses. We approached gram vikas to help. They, however, put one that new houses will have to be built for all the households, rich and poor. All must come together, raise a common fund, each household contributing an average of Rs 1000, the better off paying relatively more." "On the strength of the common fund

and common undertaking for ensuring repayment, Hudco gave us the needed housing loan. To keep the cost of the houses low, gram vikas helped us to learn to make bricks locally, employing our own labour." Soon the entire village was reconstructed, the roads in-between were widened with drains alongside. Kitchen drains were taken to a patch for vegetables and fruit around each house. Drains from toilets connected to a soakage pit. As we walked, the place smelled so good, one could have a national seminar. As part of the rehousing plan, a community hall was built and above that a modern guest house. "Why it guest house? We want to invite doctors, engineers, teachers to stay in the village on weekends to impart knowledge." In a corner, was built a grain bank. Why a grain bank? "To assist families in dire need we have revived the old village tradition. Gram vikas insisted that the kitchen should have a running water tap. To ensure that we had to build an overhead tank and a pipeline connecting all the 80 households." To fill the tank they impounded water from the adjoining catchment area. Good luck gave them sufficient water not only for the overhead tank, but also surplus for irrigating the fields.

Mr L. C. Jain is former Member Planning Commission and an authority on Panchayats. The write up is based on the author's first hand . experience during his visit to Ganjam Distt., Orissa.

YOJANA August 2005

47

Water in the fields gave a shot in the ann to village production. Water in the kitchen and a toilet next to the house liberated women from much of the chronic daily tyranny experienced by women across the country. Sanitary conditions assured by clean roads, clean drainage and clean water from the overhead tank made an impact on health. But toilets attached to each house posed a problem. If the toilet was not kept clean even by a few, the village would stink. The village committee impressed on the householders, the need to keep the toilet clean. Simultaneously, it mobilised the children to visit each toilet when they returned after school for 100 per cent inspection. If any toilet was not clean they could collect a fine from the guilty household and the money went into the children's fund for sports equipment. Then came a stunning social development. The committee told me that the girls from their village were refusing to get married in villages which did not have individual toilets. Neighbouring villages are not left unaffected by this example. Soon a village of 160 Dalit households started to follow suit. They also raised the common fund and assisted every single household with a new house, repeating the facilities of a kitchen supplied with water, a toilet, clean streets and drains and a grain bank.

When 1 visited that village 1 sighted some old huts and said, "Ah, so some people are still living in the old huts." They showed me the huts, which were empty. They chuckled and said, "We have kept some of the old huts only to remind ourselves of the conditions in which we were living before we rebuilt the village." 1 walked into one of the new houses and was greeted by an old woman, who was the sole occupant of the house, resting on a mat on the floor, "Ma, how are you?" 1 asked, "I am happy." "What makes you happy?" She pointed towards the ceiling fan: "That makes me happy, 1 can sleep so much better." We then drove miles away to the coast at Gopalpur at sea, to a village of 350 fisherfolk households. Enormous ~ctivity was in evidence. All the 350 houses were being rebuilt. There were two large brick kilns. The village being a large one, the overhead tank was quite high. Standing under it the village committee suddenly got an idea and looked very excited. 1 asked why? They said they are thinking of putting a searchlight on top of the water tank. "When we go out in the middle of the night for fishing we often lose sight of the location of our village due to darkness or storms. As the searchlights guide ships, so will our searchlight get us back to our shore and our families." No end to their dreams. This is what gram vikas has set in motion. It is not

VER BEFORE was alcohol sour in Amthaguda, an adivasi village in Thuamul Rampur block of Kalahandi district, until a group of women decided that they needed an end to this menace. Mukta Devi, 35, the leader of the movement against alcohol says, "Now we've got the power, the power of togetherness of women." Together, the women talked to men-folk of the disadvantages of drinking, and then broke all the local alcohol making apparatus in the village. Men who continued to get drunk were caught, tied to a tree and made to give a public apology along with a fine of Rs 51. Almost 80 per cent of the villagers have left drinking.
(Gram Vikas, Annual Report, 2004)

N;

so much development goods which can be seen aplenty, but a dynamic process of development which can only take them far into the future. Not just the few villages 1 visited. Gram Vikas's reach is impressive: districts 14, villages 363, households total 23, 120 of which are adivasi (40%), 9,232 and Dalits (18%), 4,132. 1 would gift gram vikas a drum that it can beat loudly and proudly. Ell
(Courtesy: Asian Age)

48

YOJANA August 2005

National Flag and Its Origin

S V Taneja
'O~-=>i'<~;c~_
~~?""~""--'",:,,~~'~I;j"'~""'-:O;f"-'~'~-"S'_' --",,',~-:

:""':~~,--_-_:",_,{"_~..--;;;:' -__

;;:;S-0 ..""",-_o.<',-',-~_~:~.-"T,_"~_y

~""'':''''''~''''}:'''',i'l''''{r'~.-_.-, """'''1~--:-:'

'''''<

o_~

, ,.
~i.

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,(,(:c7t~ubt~:d';;~iA~,of:id~Xqt!-y~hi~bi{':1v~~tdrl:/e'''i1 '~J~9 d~st41y,It /

'/;:0'
}v~ll. ,he,

"'n~fesfarE!o,~'usYn~~ci'J~" (afl;.s@m~u,llltiefl t~rw4om;ln~ia .is... thPirihome ..

LF' :'if~;;r~f~iJfiei'~ c~'}l'fE.~l!!;~!L~~~.y~:~,,:a~:;~t:!!~r:i:.:Ga'~dhi ..,f'1~~(ltma

HERE IS a little history about the evolution of the flag in India. In medieval times the rulers always had distincitive flags, and we are indebted to Abul Fazal for a description of the Royal Flags under Akbar. We read of Shivaji having asopted Bhagava Jhanda as his flag. After the Maratha power the British brought their own flag which remained in vogue for about two centuries. Flag is piece of cloth, bunting or similar material displaying the insignia of a community, an armed force, an office or an individual. A flag is usually, but not always, oblong and is attached by one edge to a staff or halyard. The part nearest to the staff is called the hoist, the outer part is called the fly. The flags of various forms and purpose are known as colours, standards, banners, ensigns, pendants (or pennants). Originally used in warfare, flags were and to soule extent remain insignia of leadersip serving for the identification of friend or foe and as rallying points. They are now also

extensively empolyed, for signaling, for decoration and for display. Because, the usefulness of a flag for purpose of identification depends on its blowing out freely in the wind. Flag had equal importance in ancient India being carried on chariots or elephants. The flag was the first object of attack in battle, and its fall would mean confustion if not defeat. Indian flags were often triangular is shape and scarlet or green in colour, with a figure embroidered in gold or a gold fringe. Mughal royal insignia included, however, other things besideds the flag, more especially the yaks' tails and the state umbrella. Flags seen also to have been used in India as in China for signaling. The flag is universally used as a flag of truce. The evolution of the Indian National Flag reflects the political devlopments in the country during the 20th century. The various political trends, waves of enthusiasm can all be seen in the

The evolution of the Indian National Flag reflects the political developments in the country during the 20th century
YOJANA August 2005

Mr S.V. Taneja is poet and writer. He has written a number of poems on the beauty of Kashmir.

49

people's attitude to the flag. The first national flag in India is said to have been hoisted on August 7, 1906 in the Parsee Bagan Square (Green Park) in Kolkata. The flag was composed of horizontal strips of red, yellow and green. The red strip at the top had eight white lotuses embossed on it in a row. On the yellow strip the words Vande Mataram were inscribed in' deep blue in Devanagari characters. The green strip had a white sun on the left and a white crescent and star on the right. e second flag was hoisted in Paris by Madame Cama (most of the books mention Madame Cama unfurling the flag at Stuttgart in Germany) and her band of exiled revolutionaries in 1907. This was very similar to the first flag except that the top strip had only one lotus but seven stars denoting the Saptarishi. This flag was also exhibited at a socialist conference in Berlin. By the time our third flag went up in 1917, our political struggle had taken a definite turn. Dr. Anmie Besant and Lokmanya Tilak hoisted it during the Home Rule movement. This flag had five red and four green horizontal strips arranged alternately, with seven stars in the saptarishi configuration super-imposed on them. In the left hand top corner (the pole end) was the Union Jack. There was also a white crescent and star in one corner. This indicated the aspirations of the time. The inclusion of the Union Jack symbolized the goal of Dominion Status. The presence of the Union Jack, however, made the flag generally unacceptable. The political compromise that it implied was not pupular. The call for new leadership brought Mohandas Karamchand Gandhi to the fore in 1921 and, 50

through him, the first tricolur. During the session of the All India Congress Committee which met at Bezwada (now Vijayawada) about this time, an Andhra youth Pingali Venkayya prepared a flag and took it to Gandhiji. It was made up of two colours. Gandhiji suggested the addition of a white strip and the charkha to symbolize progress. Thus was the tricolour born, but it had not yet been officially accepted by the All India Congress Committee. Ghandhiji's approval, however, made it sufficiently popular to be hoisted on all Congress occasions. In 1931, when the AICC met at Karachi, a resolution was passed stressing the need for a flag which would be officially acceptable to the Congress. A committee of seven was appointed to elicit opinion on the choice of a flag. And the year 1931 was a landmark in the history of the flag. A resolution was passed adopting a tricolour flag as our national flag. This flag, the forbearer of the present one, was saffron, white and green. Saffron for courage and sacrifice White for truth and peace Green for faith and chivalry It also carried a charkha in blue on the white band. The size was three breadths by two breadths. This resolution for the first time conferred official Congress recognition on the tricolour as the National Flag. Henceforward it became our Flag and the symbol of our determination to be free. On July 22, 1947, the Constituent Assembly adopted it as Free India's National Flag. After the advent of Independence, the colours and their significance remained the same. Only 'the Dharma Chakra, that is wheel of Emperor Asoka, was adopted in place

of the charkha as the emblem on t~~ flag.

Adoption of the National Flag

The President , of the Constituent Assembly Dr. Rajendra Prasad appointed on June 23,1947, under his chairmanship an ad hoc committee to determine the National Flag of independent India. Besides the Chairman, the committee consisted of Abul Kalam Azad, C Rajagopalachari, Shrimati Sarojini Naidu, K.M. Panikkar, K.M. Munshi, B.R. Ambedhar, Frank Anthony, B. Pattabhi Sitaramayya, Hiralal Shastri, Satyanarayan Singh, Baldev Singh, and S.N. Gupta. Since the Presi.dent felt that there was a strong feeling in the country in favour of the National Flag adopted by the Congress in 1931, it was adiopted. The designe of the flag prepared in accordance with the directi.ons given at the meeting of the committee was approved. It was decided that the Hon'ble Pandit Jawaharlat Nehru should move a resoultion in the Constituent Assembly.

T:

Partition Plan
As per the partition plan, freedom was to dawn- splitting country into two dominions i.e. India and Pakistan with effect from June 1948, but in view of the communal heat and frenzy which had no signs towards immediate halt and was spreading to more and more areas, British government at the advice of Viceroy, Mountbatten acceded to advance the date ahead of the Partition Plan. This aspect however, had approval of major political parties. The decision of British Govt. of July 18,1947 was conveyed to 1he political parties in India towards transfer to power from June 1948 to 15th August 1947. Text of the Resolution moved by Pandit Jawaharlal Nehru about the YOJANA August 2005

~ .. ,1ional Flag and ~ passed by the Constituent Assembly of India on 22nd July, 1947. "Resol ved that the National Flag of India shall be a horizontal triolour of deep saffron (Kesari), white and dark green in equal proportion. In the centre of the white band, there shall be a wheel in navy blue to represent the Chakra. The design of the wheel shall be that of the wheel (Chakra) which appears on the Sarnath Lion pilar of Asoka." "The diameter of the wheel shall approximate to the width of the white band. The ratio of the width to the lenght of the Flag shall ordinarily be 2:3"

and in many other places. That wheel is a symbol of India's ancient culture; it is a symbol of the many things that India had stood for through the ages. So we thought that this chakra emblem should be there and that wheel appears. For my part I am exceedingly happy that in this sense indirectly we have associated with this flag of ours not only this emblem but in a sense the name of Asoka, one of the most magnificent names not only in India's history but in world history. It is well that at this moment of strife confllict and intolerance, our minds should go back towards what Pandit Jawaharlal Nehru showing the National Flag to the Constituent Assembly on 2200 July, 1947 India stood for, I hope and believe, to others to hold it aloft. so, in this While moving the Resolution, Pandit essentially throughout the ages, in spite simple form of words, there is much Nehru said " ... So, when I move this of mistakes and errors and degradations more than will be clear on the surface. resolution, I think of this concentrated from time to time. Sir, if India had not There is the struggle of the people for stood for something very great, I do not history through which all of us have passed during the last quarter of a fredom with all its ups and downs and think that India could have survived and century. Memories crowd in upon me. trials and disasters, and there is finally carried on its cultural traditions in a today as I move this Resolution, a more or less continuous manner through I remember, and many in this House will remember how we looked up to this certain triumph about it - a measure of these vast ages. I carried on its cultural triumph in the conclusion of that Flag not only with pride and enthusisam tradition, not unchanging, not rigid, but struggle. but with a. tingling in our veins; also always keeping its essence, always . how, when we were sometimes down adapting itself to new developments, to ...But what type of wheel should we new influences ... and out, then again the sight of this flag have? Our minds went back to many gave us courage to go on. Then, many Therefore, this flag that I have the who are not present here today, many of wheels but notably one famous wheel, our comrades who have passed, held on which had appeared in many places and honour to present to you is not, I hope which all of us have seen, the one at the and trust, a flag of empire, a flag of to flag, some amongst them even unto imperialism, a flag of domination over top of the capital ofthe Asokan column death, and handed it over as they sank, YOJANA August 2005 51

anybody,

but a flag of freedom

not

only for ourselves,

but a symbol of

transparent simplicity which illustrated by th colour of white.

is

freedom for all peole who may see it. And wherever it may go-not only where Indians dwell as our ambassadors and ministers but across the far seas where it may be carried by Indian ships, wherever it may go, it will bring a message of comradeship, a message that India wants to be friend with every country of the world and India wants to help any people who seek freedom. That hope will the message of this Flag, everywhere ... We thought of a flag which was beautiful to look at. We thought of a flag which would in its combination and in its separate parts would somehow represent the spirit of the Nation, the tradition of the Nation, that mixed spirit and tradition which has grown up through thousands of years in India. So we devised this flag. Perhaps I am partial but I do think it is a very beautiful flag to look at purely from the point of view of artistry, and it has come to symbolize many other beautiful things, things of the spirit, things of the mind, that give value to the individual's life and to the Nation's life, for a nation does not live merely by material thngs, although they are highly important." upporting the resolution Dr S Radhakishnan said, "The flag links up the past and the present. It is the legacy bequeathed to us by the architects of our liberty. Those who fought under this Flag are mainly reponsible for the arrival of this great day of Independence for India. In, these difficult days it depends on us under what banner we fight. Here we are putting in the very centre the white, the white of the Sun's rays. The white means the path of light and control our conduct by the ideal light, the light of truth, of 52

Truth can be gained only by the pursuitf the path of Dharma, by the practice of virtue. Truth-Satya, DhannaVirtue, these ought to be the controlling principles of all those who work under this Flag. It also tells us that the Dhanna is something which is perpetually moving ....This wheel which is a rotating thing, which is a perpetually revolving thing, indicates to us that there is death in stagnation. There is life in movement. So even with regard to our social conditions it is essential for us to move forward. The red, the orange, the Bhagwa colour represents the spirit of renunciation it is said: "Sarve tyage rajadhannesu drsta" All forms of renunciation are to be embodied III Raja Dharma. Philosophers must be Kings. Our leaders must be disinterested. They must be dedicated spirits.They must be people who are imbued with the spirit of renunciation which that saffron colour has transmitted to us from the beginning of our history. That stands for the fact that the world belongs not to the wealthy, not to the prosperous but to the meek and the humble, the dedicated and the detached. That spirit of detachment, that spirit of renunciation is represented by the orange or the safforn colour and Mahatma Gandhi has embodied it for us in his life and the Congress has worked under his guidane and with his message. If we are not imbued with that spirit of renunciation in these difficult days, we will again go under. The green is there--our relation to the soil, our relation to the plant life here on which all other life depends. We must build our Paradise here on this green earth. If we are to succeed in this enterprise, we must be guided by truth (white), practice virtue (wheel), adopt

the method of self-control ~; renunciation (saffron). This Flag tells us 'Be ever alert, be ever on the move, go forward, work for a free, flexible compassionate, decent, democratic, society in which Christians, Sikhs, Moslems, Hindus, Buddhists will all find a safe shelter'." inding up the debate in the Constituent Assembly, Mrs Sarojini Naidu spoke. "I thought that the speech of Jawaharlal Nehru-so epic in its quality of beauty, dignity and appropriateness-was sufficient to express the aspirations, emotions and the ideals of ths House .. I therefore speak on behalf of that ancient reborn Mother with her undivided heart and indivisible spirit, whose love is equal for her children, no matter what comer they come from in what temples or mosques they worship, what language they speak or what culture they profess ... Today I ask one and all to honour this Flag. Chakra of Asoka, the Magnificent who sent this message of modem ideal of fellowship and brotherhood and cooperation? Does not that wheel stand as a symbol for every national interest and national activity? Does it not represent the Chakra of my illustrious and beloved leader, Mahatama Gandhi and the wheel of time that marches and marches and without hesitation and without halt? Does it not represent the rays of the Sun? Does it not represent eternity? Does it not represent the human mind? Who shall live under that Flag without thinking of the common India? who shall limit its functions? Who shall limit its inheritance? To whom does it belong? It belongs to India. It belongs to all India. Pandit Jawaharlal Nehru told us that India has never "been excluisve. I wish he had added: 'India welcomes all knowledge from friend and foe alike'. Did she not? Have not all the cultures of the world contributed YOJANA August 2005

August 15, 1947, and that this message be conveyed forthwith to Lord Mountbatten by the President and Pandit Nehru."

,,194j:befOre' a,'gathering 'bf one million' ;p'eo~~; . " .,;;\~,,;.

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'~'his~tic ~9m~nt

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iff

~n 'I-!ono~r'ofth~\F~,g'\.',,>

The House approved it amidst '4; p~ ,Ja~aha;lal ~~.ehr~ at_~e(tFo~~ acclamation. In presenting the Flag to .unfuJlmg.theNatlOnaIFlag on'16th' Dr Rajendra Prasad, Mrs Hansa Mehta '7\ug~st f947'~aid.;\\ \~\1,,\, said: "It is in the fitness of things that '~e h~ve g\thei~d h~re orl'.a historit~ the first flag that is flying over this " wcca~ion at thi~arictent~()rt to wini;,bac~," august House should be the gift from rwhafwas ours. This flag does not the women of India." ;1sy~60Ii~g thetnu~ph of inclivid~aIs 0'1:,,< Dr Prasad showed the Flag around. :~~efongress'Jfbut .;the.t!iuII!ph '()f th~ Proceedings came to a close with the .whole' country. The free of India is the' .'-. ,,~ ::;;, ,-{ .~.. ',>:' J. '. singing of "Hindustan Hamara", a poem symbol of fredom'~and democ:;racy not by Iqbal and "Ianaganamana 'onlYior J~dia\butf?r thf w~ole ~orldi" Adhinayaka" by Rabindranath. Mrs ;',India, Asia, and the world must rejoice ;"',i';;,. ':i ,:: L~ .,;"~ ; ,.~. ".1, Sucheta Kripalani conducted the .bn rnlsgreatday:, ... You kn9w,.\yhat chorus. ,haPl1fned du~g thf las127~ears~whe~.
ill:..

Dawn of Freedom

',we struggled and made sacrifices undef' .{this'flag':'.. What is worth "recalling is

"0 lovely dawn of freedom that that,we had taken a pledge that we shall :'f '""", "?j. "', -,c,. .:~.:. .~ breaks in gold and and purple over the lay down our lives for the honour ana ancient capital of 'Prithvir~j', 0 tdig~ity 'Of ths flag and would'nev6r. ~t ~ " splendid flag of a new born India to be allow it to be lowered whatever might ,....l"...t. unfurled on the morrow over the Red be the consequences. That pledge has Fort of Shajehan. We pay you the .beenfulfl1led.The'country has achiev~d homage of our dedicated heart and freedom under the brilliant leadership hands and pledge ourselves to translate "and~guid~c~; of Mahatma Gancthiji. ..t. '((, ';~L. -~,. 't;M 1: ~ :}ij. ~'<\. into glorious deeds, the dreams that On this day we must remember those' were our share and inspiration in the wh~ have rdade sacrifices and siiffer~d long darkness of our bondage." for%.thecause of,.-.~~.~.v,~ independnce. . It is . ~ .If. 1.: Mrs Sarojini Naidu needless for me to name "allof them, but August 14-15, 1947 I cannot help mentioning Subhas Chandra ~. Bose who formed the 'iF, .'';,', ,Indian 1 Joy Lit Up Gandhiji's Face NationaL Army abroad and fought The only place that celebrated the bravelylor tiie freedom of the cO,untry. He,hoisted this flag inforeign co~ntri~s 15th of August with a sincerely felt joy and' when the day came for hoisting it and abandoment was Calcutta where on'the Red Fort, he was not to 'see his Gandhiji had decided to pass the dream fulfilled .... historic night. When the news was
-.v '. ~., '-''C.

conveyed to Gandhiji, a smile of joy lit up his face. The hoisting ceremony of National Flag at Shajehan's historic Red Fort was to take place on early hours of 16th August 1947 by the first Prime Minister of India. Pt. Iawaharlal Nehru. Pt. Nehru unfurled the flag on 16th Agust YOJANA August 2005

,All who owe allegiance to the flag will enjoy equalhght olcitiz~nship, irrespective of caste or creed ... Our Armed. '. Forces are a source.~. of Rride to :7 '-~:' .~: t ~ ,.~.: the nation. They now belongffito the nation. ;1,twould be their dllty to guard and protect the honourof the nation and iti'flag:" '"., .i', 'Q
. __ ~.. -v. ~~

53

resources and a large pool of entrepren~urial and educated labour force, but has suffered from the consequences of of misdirected economic policies, strained Indo-Pak relations, political turmoil and armed insurgency. An approximately 4 mn increase in population from 1981-2001 had brought a subsequent 39% increase in the number of workers which could not be absorbed fully by the state primarily due to low levels of employment generation and minimal industrial and economic development.

III'
m

AMMU AND KASHMIR h"

,kh

natma!

Given its political and economic background, the level of industrialization in Jammu and Kashmir has been low with agriculture and allied activities being the predominant economic sector. It supports almost 80 per cent of the population, employs 70 per cent of the workforce and contributes 60 per cent to the state economy. However the average land holding is low at about 0.83 hectares and the sector suffers from low productivity. The chief crops are Jammu and Kashmir: Area (sq krn) Sex Ratio (2001 Census) Regions Divisions Districts Towns Civil Airports Railhead Literacy (2001) Facts and Figures 222236 900

rice, maize, wheat, barley, pulses, oilseeds and tobacco. The state has large area under horticulture production and a variety of fruits like apple, cherry, guava, plum, apricots, walnuts and almonds are grown all over the state. It also has suitable agro-climatic. conditions for floriculture and rare species of aromatic and medicinal plants. In terms of industrialization, most enterprises set up in Jammu and Kashmir are small and medium-scale with primary focus on the traditional sectors. The handloom and handicraft industry is one of the state's oldest cottage industries with all the three regions of JallmU, Kashmir and Ladakh specializing in some particular form. The traditional occupation is silk, but it is difficult to sell Kashmir silk internationally due to competition from China. However, the sericulture and silk industry has been defined by the YOJANA August 2005

2
14 75 Srinagar,Jammuand 54.46% Leh

JarnmulUdhampur City

54

government as one of the potential areas for investment. The Government is also exploring some new areas like food processing, agro-based units, and metallic and non-metallic products. There are about 20 public sector units (PSU) in the state. Electrification has been undertaken in all the principal towns, including Leh, and a majority of the villages. The necessity of power generation for industrial development and the abundant water resources has led to power for this purpose being provided by hydroelectric and thermal generating plants based on available local raw materials. Given the significance of the tourism industry as one of the main drivers of economic and sustainable development for Jammu and Kashmir, tourism infrastructure and connectivity has also gained considerable importance in recent times. Within the railways system, the Northern Railway of India terminates at Udhampur. The government has made considerable investments related to the extension of the rail lines to accelerate socio-econo~ic development of the state and promote national integration. Efforts have also been made to improve air transport to the state with investments being made in the extension and upgradation of the Srinagar airport, which has already been declared an international airport. Furthermore, a number of initiatives

have been undertaken to develop a system of roadways and telecommunications. But given the rugged and mountainous terrain, developing roadways to the interior areas continues to be problematic. There are two major road links connecting Leh to Manali and Srinagar respectively. Politically, driven by a history of conflict, the region has witnessed continuous fighting since 1989. It came close to a war with more than a million troops deployed along the border after an attack on the Indian Parliament in January 2002. However, a culmination of continued international pressures and the realized economic costs of such a crisis led to both India and Pakistan taking steps to negotiate peace. The first state assembly elections since 1987 were held in Jammu and Kashmir in the fall of 2002. November 2003 saw the enforcement of a total ceasefire along the LaC whereas transportation lines were reopened by January 2004. January 2004 also saw the government initiating talks with the All Parties Hurriyat Conference. In February 2004 both countries held their first formal talks. in three years with Kashmir high on the agenda. After the decision to launch a landmark bus service across the ceasefire line dividing Kashmir, April 2005 saw the first passenger bus from both sides of the Lac.

Restarting the Bus Service

The resumption of the bus service in April 2005 between Srinagar and Muzaffarabad has given civilians from both sides of the LoC a chance to meet for the first time since YOJANA August 2005

55

G~
the Partition of India in 1947. It has been seen as the fIrst step towards the peace process in Kashmir and the latest among the measures undertaken to ease tensions between the two countries. After the commencement of the bus service, it is proposed that trucks could be allowed to ply on both sides of the LOC. This is likely to start the process of ""', trade and economic activity between both sides of Kashmir. Specifically, an integrated development of projects using Public-Private Partnerships, as has been described in this document, would require backward synergetic linkages for supply of raw materials and partial/fully processing of goods that may be required for projects. This could create enhanced trade linkages between Kashmir across the LoC. There is also scope for the exchange of technology and skills. FurtherInore, the opening up of borders of northern states of India, particularly Jammu and Kashmir, could gain greater access to Central Asian markets. Joint Ventures could also be set up in the infrastructure and information technology sectors which could prove to be benefIcial for both countries. The climatic conditions of the state coupled with the knowledge-based characteristic of the IT and IT based industry make it a potential investment area in the context of Jammu and Kashmir. Moreover, making use of the abundant water resources in the region, both sides of Kashmir could also harness and distribute hydropower jointly thereby addressing their energy requirements. Furthermore, joint tourism undertaken by the two in the Himalayan region would also provide substantial benefIts , and a boost for the tourism industry in Jammu and Kashmir. Healing Touch Philosophy the government has addressed issues related to improving the power situation, expediting development and economic activity and building development infrastructure, all of which would also aid in the flow of investments by wooing investors. Major issues with regard to the same have been addressed in the Industrial Policy 2004 whiCh will provide the necessary stimuli for industrial growth and be reviewed in 2015. BI"

,'Wl

I,

'J~:

ot~nt~al and attract~ve investment oppo~tunit~es eXIst III many areas III Jammu and Kashmrr whIch have been identified based on their sectoral

contributions to GDP and employment absorption capacity. The tourism sector has been one of the oldest and most successful sectors of the state of Jammu and Kashmir with a number of business interests linked to its development and growth. In the last 14 years this industry has suffered severely in the face of armed insurgency and it is only with recent developments that the situation has improved. The state is now witnessing some of its highest tourist arrivals in almost 15 years. Recognizing the revenue potential of this sector the government has given it industry status and undertaken various initiatives for its revival. Given that the characteristics of ecotourism make it a perfect case for Jammu & Kashmir to apply in its tourism developmental plan, the state would need to move towards sustainable ecotourism. Along with addressing the issues of security and development, substantial attention also needs to be focused on the associated infrastructure required for promoting this segment. In view of this Public-Private Partnership have been suggested for the development and upgradation of infrastructure and other related projects. To make the current thrust on economic recovery and industrialization a reality, one of the main issues that need to be addressed is that of power generation. Jammu and Kashmir 'has abundant water resources and great potential for hydro power estimated at 20000 MW. Of this. less than 10% has been exploited and efforts are being made to effectively tap and harness the untapped hydropower potential of the state. In order to bring greater private sector participation a new policy has been announced in execution of mini and small projects and 12 projects with 68 MW installed capacity have already been recognized. Furthermore the Jammu and Kashmir State Power Development Corporation has undertaken the execution of 9 micro hydroelectric projects with installed capacity of 11.22 MW. Furthermore development of infrast~uture for improved transmission and distribution is also being undertaken. Tremendous potential exists in this sector which can be effectively harnessed through suitable investments. YOJANA August 2005

Investments Key to Sustainable Growth

Sustainable growth and economic recovery to a large extent depend on a rise in investments without which employment creation, higher productivity and greater, incomes can not be achieved. In the case of Jammu and Kashmir the need for investments also becomes essential to catalyse and sustain the process of economic recovery that has already begun. A number of recent efforts have been made by the government to create an environment for stimulating growth and socio economic development through attracting investments from both within and outside. Within the 56

Agriculture in Jammu and Kashmir is the principal sector of the economy. Agriculture and allied activities supports .. almost 80 per cent of the population, employs. 70 per cent of the workforce and contributes 60 per cent to the state economy. Within this sector, horticulture occupies an .. important position in the farming syst~m as it earns annual revenue of approximately Rs 50 crores and is a source of employment to thousands of people directly and indirectly. Therefore it is safe to say thai economic development would depend to a large extent on the progress cif this sector. In line with this, the government has gi~en the horticulture sector the highest priority. 'However, value addition in agriculture related primary produce through development of integrated Agribusiness projects is required and should be given a priority status. These projects can be developed in the spirit of Public Private Partnerships.

Information Technology is another area where there can be substantial investments. Identified as one of the sunrise sectors, there exists substantial potential for the development and growth of this industry. In terms of location and geo climatic conditions the state of Jammu and Kashmir proves to be ideal. Furthermore the industry is primarily knowledge based and to this extent, can absorb the unemployed and educated youth of the state. The costs associated with setting up a software unit are also relatively low. However the growth of this sector would require uninterrupted electric p~wer, High speed internet broadband and IT connectivity, facilities for the training and development of local youth and an environment conducive for the future growth of this industry. Some of these issues .have already been addressed in the Information Technology Policy of 2004. A number of incentives are being offered for investments in this sector. Furthermore efforts have been undertaken for huma~ resource development and setting up of IT infrastructure in terms of Software Technology Parks and private sector participants. This is the first article in the series "Investment Opportunities in Jammu and Kashmir". It is based on the document brought out by Yes Bank for PHD' Chamber of Commerce and Industry (PHDCCI) for its Centenary Partnership. Summit with the Government of Jammu and Kashmir. The document was released by the State Chief Minister, Mr Mufti Mohammed Sayeed recently in the Partnership Summit held in Srinagar.

YOJANA August 2005

57

...----------N-.,'i
Amarnath Yatra begins

-ii,-r--J-&K---""'----.,-j-I' ... --, , . 1' . , ',.',' .. , ,1.' ews2 rom".',!!,

' !,
to J&K with the exception of Ladakh via Manali or by air to Leh. Mr Singh told reporters that Mr Straw had promised to take a 'sympathetic' look at the matter. He pointed out that major attraction such as Sri nagar, Gulmarg and Pahalgam were quite safe .

The J&K Government is to provide electric power to each domestic unit by 2007. Under the Government's new policy for achieving self-reliance in power generation, 10 mini hydel power projects are being ~ -,:,"constructed in Baramulla district, with a total generation " ,~ capacity of 32.50 Mv. Two grid stations, one each at -.: ~' Chandak and Draba would be se' up in Poonch at an estimated cost of over Rs 84 crore to provide 132 Kv line to the border district. The State Power Minister, Di/votees pray at the Amariiathca~eshrine.;ffTIi'e ann' Mr Mohammad Sharief Miraz said during last year, --,:-i.,~ )' :,;',~,t",' '.: ; "jj/!!'!' '",,' -~, _',~:: :.' ~pilgrimaie to'thecave(shrine, a(I12,800 feeiin ihe seven new sub-stations were opened, small transformers ':fr.' , :t:";"i':_ 'J ':,'f.,~installed and nine additional snow-affected villages were im alayas in.YJ -,.' a.nd I'"ashm,'r..'"b,e ,,',o ;.,.+--. .,.2., .... ..ammu 'if,,:" ... ",~ ....an.... ,.',.n,,'.,',,',','.1. , .. ... g .. ,u,'.ne '.. . ,,_. ,,' ""'",,<., provided electricity. ~Th~llsandsiofdevoteef.,are e~lec{ed to~r}~~~ th~ ')i shrine' within. aItwo~in01irhperi~i$f!!~i~i' >_"'~-~~, The annual plan outlay for Jammu district for 2005-06 has been fixed at Rs 84.61 crore. The two month long annual pilgrimage to the holy cave It Under the PM's Reconstruction Plan, the State of Amarnath began from Baltal on 21st June. Government has formulated a comprehensive project to Elaborate security arrangements have been made for strengthen the basic infrastructure and streamline the the yatra. Army, para-military forces and local people distribution system of power supply in border district are patrolling the area to maintain tight security. ofKupwara. New Receiving and Grid station would be Nearly 5 lakh pilgrims are expected to visit the cave constructed besides installation of transformers and Rs this year. 240 crore will be utilized to improve the power supply in the areas. The British Government is expected to take a fresh look at its travel advice on Jammu and Kashmir after The Jammu & Kashmir Government has formulated a the External Affairs Minister Mr Natwar Singh raised comprehensive plan for the cultivation of medicinal the issue with his British counterpart Mr Jack Straw in plants across the state in a large scale. In the first phase, London during Mr Singh's recent visit. Currently, the a Rs 5.56 crore "Vanaspati Van" project has been taken British Foreign Office advises its citizen against travel up for the cultivation of medicinal plants at Ganderbal,

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Shikaras participate in a 500-metre race on the Dal Lake at th~ Aquatic Sports Meet 2005 organised by t e Jaml,!u and Kashmir police in Srillagar, i: ;, ;;:<~ 58

YOJANA August 2005

30 kms from Srinagar. The Centre has released Rs 1.50 crore for the purpose . The Centre is to set up 14 more colleges across J&K under the PM's Reconstruction Package. Two of these would be exclusively for girls. The Human Resources Development Minister, Mr Arjun Singh said this in Srinagar after the Northern Zone review meeting of centre-sponsored schemes in elementary and adult education . The Cable Car Corporation Ltd. (CCCL) of Jammu and Kashmir has decided to begin work on the Rs 20 crore Mubarak-Mandi Bagh-e-Bahu cable car project in Jammu. Mubarak Mandi (Durbar-e-Aam) is a heritage complex while Bagh-e-Bahu is a garden. The Corporation has also decided to acquire land for the job from the Shankaracharya (Kashmir), Patnitop (Jammu) and Baisern-Pahalgam (Kashmir) Cable Car Projects . The J&K Government has used over Rs 111 crore for development works under the MP local area scheme out of a total sanction of Rs 141.50 crore between December 1993 and May 2008. Out of a total fund utilization of Rs 111.81 crore, under the Centrally sponsored Member of Parliament local area development programme, Rs 76.21 crore was used by Lok Sabha Members and Rs 35.6 crore by Rajya Sabha MPs.

Waheeda's Guide to Kashmir

,:~r~:':_.,'",:~~~;:,_ ,,:'N~;'oneWan orp';;~>cThe prime or basic thing it
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f~~asuccess.fj11 li/e/s to getg~?de1lfcation SO\f:~ :"asto land d plum"job": ..Wah~eda Rehman:;Z:~, ,Y'/:~~"""_" r\.~:, '., ,. '?';,i';;, <,,/~~-'. ):, l%~_~: '~_,::,_~'~'::lfi>

After former:~1iss Um~erse Stishmit( S~n, itwas i~e turn '''Sf legendary~;, "Bollyw~'6d actre~~",Waheeda Rel1man to :~\ , .. '~pend so~etime with orphans in Snnagar? .
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.,...:#~he Was on a~~hvate,~{~it t~:Kashnni;~~: .'i1ndmei,j~round30 children of::;Raha6

'iat~;uri~tion"?rg~niz~d;?y f
,c~':,~",_ ' '~-'/-Rf~----'<".?,~~,-fF' , _:

.. g~ar" , a~h~lter'f~r orph:ilis and~idow~;~;: the 1CentralS'~} R~seive1'Police Forcel(CRPF). Ms, >, ,RelJman$~aid?rphan s!~dents ne~dedto.~~ :'?e encouraged,and ev~ryone"shoulg{' c'ontributefo/iheir welfare. She said~' \.'.'The b~St9 or priiri~ thing [6r a ~h~cessful'~'t, e is to get good ~ducation so asto land ."; Wakeda Rd[;,an ;:;;er;;cti~gwith omhan .rpluni'job". I . U:. asked.film.~kerstoshootin Kashmir
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[;~ She told the.studentsi!hat they'sho\l11.:i~: ~gt...fee!.",. nely:'.'.'D on't fe that. you art(orphans::: in ..o l ... , .el ~lof us~e thepr?genyof God',;, shesmd. ,', ':";;icNostalgic ~bou; Ka:hmir, Waheeda:Rehmari.recali~d
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hciw she visited the Valley.26 years bacl~ to shoot a film. .... . Ka:shmiri~a wonderful place. She/said that now\Vith peace process injull swing and return of nOrmalcy, Bollywood producers would make a beeline to the Valley for shooting.

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YOJANA August 2005

59

E-Governance Report Card

Samea Kochhar Gursharan Dhanjal
T[IAS been several years .since the first e':'governance project the number of processing stages have been cut froIll18 t06 for papenyorkfor

began in the country, ~ndthere "imports and'from 15 to:,5 inthecase of exp?rts. Digital signatures, an.~being are 6'vera jh~ndr~d such worked on, and a payments gateway projects today, thOl{gh only ,about h~I(6f these.,w~?ld7qualify,as e~ alre~dy exists. The 6ustoms website gets 100;000 hits a day, with:exporters/ 'governance p~ojects i~. the senseJhey j ha~e adir~ct ~nte~ace,'with citize~s or. importers filing th~ir d~)cuments Jthis
"".,,,'" . ._. ~ ,j.

other consumers of such services. The 1 rest, though 106selYclassified ~nd~; the : s~"metItle;'(lfereally ISproj.~cts~'like . the computerisation 0t policerecords. Spending on e-go~~martce;'acc&rdil1g to ; ou r re........ . searchha s. g o ne .. u.p by an ;impressive~25~er;;~enf or soann~ally, from around I,500'crore ir12002.to an.estimat~d Rs i,200 crore'~xpectecl
) ~.~ "F'

'way,andthen checking the status as': well::.fo[ querie~ like "have thegoods.1 been cl~area on a'.without-inspection basis, or'do they n~ed to b'e inspected; physically?:: . A~d'the success of proviqing like birth/death'

Rs

titizens, alL services

~thi.sye(1f' .' Anecdotal

. ...." evidence .suggests:that

~ertificates and payment of taxes: . through a citiz~h facilitation c~ntre at: theKalya~ .Dombi~ili Municipal ~orpor'ation (KDMC) has goLthe government to ~omlTIit itself to'l rolling out a similar'sedup ,in 240, more mtil1icipalities across the state:
-".,) e'<-

.even if elected governrrlenis don't work, "e-g'ove~nments certainly~do.From a . situation where, railway tickets sold in 'black,coII1puteri~ed .reservation:'.has
.

t Similarly, ~hile

~meant this :is not ai all possible today. thecustomsdepartrtenf "was khown for both itscornJptioI1 as we'll a,s d~lays,pnline Jilingand . clearances 'have'resulted in a situation , where, in 23 customs offices allover the lfcountry, over 95 per. cent. o;L all

In the case of the N atipnal Securities: Depositor{Limited (NSDL),one of'

.;i'~," " 'C --:~

the first pim-Indian e-'governance' solutions, the cost of Selling shares ~enfrom,2,5 p~Tcent .of' each.' transaction's v'alue.to a mere 0.2peri~ 2~nt; an,d the. dail y"~ohlIne .of, shares

,i

ipaperwork relating!O ipp~rts:tand ex~orts is now filed in !his fashiontand

Mr Sameer Kochhar is CEO, SKOCH Consultancy

has gone up from'Rs 400 crore ill"' 1991 to~:a rriind bogglingR~ 50,600crore today!

Services and Mr Gursharan Dhanjal is also from the same firm.

60

YOJANA August 2005

'---" And, after 'Bhoomi' became such a big success (over 10 million Karnataka farmers have got copies of their title deeds from this), it was replicated in Maharashtra, Haryana and Gujarat followed suit with 'Bhu-Lekh' and 'Bhu-Lekh Soft' (96 lakh record of rights and 51 lakh land accounts have been entered into the system in Gujarat), and Rajasthan has its 'Apna Khata'. In other words, e-governance projects are no longer just a fancy or cool idea for those who want to show off, nor are they merely a source of big orders for hardware/software vendors; they're now an integral part of any serious governance effort.

today (when's the last time you heard of Madhya Pradesh's 'Gyandoot' that was hailed by one and all when it started?). There are several assessment projects in various stages of planning/ implementation for e-governance projects and to suggest strategies for scaling them up. Over a period of the last two years, while conducting various round-tables and conferences on e-governance,' certain project names have kept coming up again and again as examples of successful projects - these include projects like 'Bhoomi', 'Sarita', and more lately, 'KDMC' and Uttaranchal's computer-aided education programme called 'Aarohi'. Though just a little over two years old, 'Aarohi' has already covered 1,420 schools in the state benefiting over 5 lakh students and p~ss percentages in the state have gone up significantly, from 35 to 50 per cent in the case of high school students. Before we set up doing our evaluation, we asked our panel of experts

to prequalify the best projects, and then list out various parameters on which they should be judged. They came up with a list of 21 projects; each of which we ev'aluated by getting user responses. To keep. it simple, we asked users to rank each project on a score of 1 through 10 for each of the 14 parameters. A word of caution before we describe the stupendous results got from our survey. The 21 projects we chose were the best -executed according to our panel, and so the sample is already upwardly biased. Though it must be pointed out that if our panel came up with a list of 21 out of around 40-50 citizen-oriented genuine e-governance projects, this itself points to one kind of story. We should also add that just because a project is not here doesn't mean it isn't good, it may just be that one of our panel wasn't aware of. This needs to be stressed because, some months ago, a trade magazine earned the ire of one serious practitioner of egovernance when his project was

Assessing e-governance
For every project that's working well, however, there are likely to be as many, perhaps even more that have simply failed to take off. According to inputs received from our earlier SKOCH round-tables, at least 30-35 rural ICT projects are in the doldrums

YOJANA ,August 2005

61

ranked lower than some other project! We didn't poll users of the 'Bhoomi' project as the Public Affairs Centre in Bangalore has done a good job of this, and we've findings on 'Bhoomi'.

System' (TIMS) project that does tax management through computerized check-posts has a score of 7 when it comes to 'ease of use' but a 'user-ship' score of just 4. Yet, the CIC in the same state has a 'usership' score of 8. A possible explanation of the low 'usership' of TIMS, of course, could be the fact that it is new and not all the modules have been implemented at all . Sales Tax gates besides the fact that 'staff competence' and 'staff behavior' also have a score of 4 as compared to 7 or 8 in the other projects in the state pointing towards a need for better training. In a country that has large tracts without electricity, and even larger ones without regular electricity supplies, and pretty bad infrastructure like roads, what's especially encouraging is the quality of most e-governance projects. Most projects rate the adherence to Service Level Agreements (declared time in which a service is supposed to be delivered or the contracts signed with the vendors on 'uptime' of facilities, and so on) as very good - so, if a machine is supposed to be operational for 20 hours a day or the services are being delivered in a promised time frame, it will be pretty close to that. The SLA score for the 21 projects is 8.3, and it is 10 on 10 for projects like the railways ticketing, 'Aarohi' and the 'Craun' in Uttaranchal. It is not clear if this is only a reflection of the good work being put in, or if the SLA obligations are lenient to begin with. Another cause for optimism is the fact that consumer satisfaction is very high. The overall score for satisfaction, or 'alignment with user expectations', is 7.5 and goes as high as 9.5 on the count of affordability. It is this factor of affordability, in fact, that has ensured panchayats and other bodies that have

installed e-governance

projects h~;

actually benefited in.monetary terms. In Maharashtra, after 'Sarita' made registering of property much easier, property registrations rose 27 per cent in 2002, and in the case of the Tamil Nilam land records programme, while it cost Rs 2.5 crore Ito set up, the authorities have already collected Rs 3.7 crore in payments from private users. While all the projects are scoring higher than 5 which is a very good score for any user feedback based methodology, the score for some central projects like Kisan CaJll Centres and Agmarknet have the potential to score fare higher. Call Centers are supposed to help farmers tackle technical problems by giving phone-in advice and Agmarknet is supposed to provide farmers all information on prices, weather and so on. Agmarknet already covers 735 mandis and is supposed to have detailed information of prices, arrivals of crops in the 'Mandis' or the wholesale markets, and so on. This in the case of the Kissan Call Centers can be explained due to the fact that it isa relatively new project and the promotional activity on it has not yet started, therefore the usership is relatively low. For Agmarknet, one possiblity is that the 'Mandis' still don't display the information well enough for obvious reasons-in one case, we saw the Agmarknet terminal hidden behind a pile of oranges. Another is that, unlike the case of lTC's e-choillpal, farmers can't actually sell their produce on Agmarknet as yet. Therefore generating more awareness and adding more functionality to these projects can help build on the good base ah"eady created.

corruption

O
.

just

drawn

upon

their

n an average, 10) for the

our sample decline in

reported a score of 8.1 (out of as a result of the 21 e-

governance projects. While the score was 10 on 10, or one hundred per cent, in the case of projects like the Citizens Information Centre (CIC) in Assam that allows citizens to file their requests to the government online and get decentralized delivery nearer their homes, or even in the case of 'Aarohi', it needs to be kept in mind that such projects are not the type where hefty bribe demands are made anyway. What's heartening is that for various land record projects, where bribes are rampant, the scores on the decline in corruption were pretty good as well. Uttaranchal's land records project called 'Croun' scored 7 out of 10 in this regard, Andhra's 'LRMIS' (another egovernance project for land records) did even better with a score of 8, and Karnataka's 'Bhoomi' (going by the PAC survey) would have got over 9. The impact of railway computerisation in lowering corruption got a score of 9, 'Sarita' got a score of 7, and 'KDMC' scored 8. For all the concerns that a large illiterate population, which has hardly any familiarity with computers, the country appears to have taken to egovernance remarkably well. For our 21 projects, the parameter 'ease of use' was given a score of 7.8 out of 10, and 8.3 for 'user-ship'. An area that needs to be worked upon, though, is the somewhat large variation between projects within a state itself. In Assam, the 'Tax Information Management

Project findings
This year's winner is Uttaranchal's computer-aided education program 'Aarohi' which has resulted in a sharp YOJANA August 2005

62

~e

in the government school results. According to a government official we interviewed, at the intermediate level, the pass percentage has risen from 45 per cent to 64 for the intermediate, and from 35 per cent to 50. at the high school level. 'Aarohi' scored 8.9 marks out of 10 in our 14 parameters, and here too, it could have scored more as it got a mere two marks under the heading 'single window access to many services' -but the fact is that it is not meant to be a single-window clearance anyway. Due to the need to keep the basic examination criterion similar across all e-governance projects, however, we had to retain this criterion for 'Aarohi' as well. Once you adjust for this, however, this would put Aarohi's user-satisfaction at around the same for 'Bhoomi' (based on the PAC results). The number two slot, which means a score of 8.7 on all the parameters is shared by many projects together. The

instance),

and so on. Also on a pilot

mediocre and a third felt it was bad). While 78 per cent of 'Bhoomi' respondents did not meet any government officials (except the 'Bhoomi' staff), the figure was zero for the non-Bhoomi lot, and 61 per cent of them met between 2 to 4 officers to get their work done. While the benefits of e-governance projects are obvious, a host of states are quickly trying to crank up such projects. Since most are talking of huge amounts running into thousands of crore rupees, detailed cost-benefit analysis is called for. What's been attempted is an initial assessment.

stage is a rural ATM that costs Rs 50,000 as opposed to around Rs 10 lakh for the imported machine, as well as a diagnostic kit that allows remote users sitting in the kiosk to be examined by a doctor through various instruments the kiosk has like the blood pressure machine, the stethoscope, thermometer and so on. the

While the results differ from one project to another, broadly speaking, projects that concentrate on delivery of government services like 'Sarita' and KDMC score between 8 and 9 out of 10. In other words, e-governance is definitely the next wave as far as delivery systems are concernedcontrast this with a 10-15 per cent success in reaching the target group in public distribution programmes like the PDS, and the giant stride forward is obvious. Such projects also score in a similar manner when reducing corruption. it comes to

Recommendations
Built in e-governance schemes: To be built into all projects that have clear deliverables for citizens. Make third-party six-monthly monitoring of such projects mandatory and publicize the results. Evaluation to be against pre-set criterion, fixed before the project takes off. Design projects to suit citizen needs: Over half the e-governance projects are not adequately focused on the needs of citizens. One reason why projects like Bhoomi have done well is that they are easily accessible by users at various places unlike the passport or driving license one where users still have to go to the government offices. Stress on staff training: With a largely illiterate population, certainly computer illiterate, in rural areas and small towns, it is critical that staffers manning the kiosks know how to use them. Insist on business process reengineering: If the old systems of providing services or clearances for citizens are merely replicated in the computerized system, this is not going to help. Any e-governance 63

Railways computerisation of ticketing project scores this, as does Bangalore's online bill payment facility 'Kaver-ecom' and Maharashtra's KDMC. The railways project scored a perfect lOon 'user-ship', 'simplicity of procedure' and 'affordable cost of service'. KDMC got the same score on 'ease of use' , 'user-ship', 'alignment with user expectations' as well as for 'affordable cost of service'. amil Nadu's land record system Tamil Nilam as well as its Rural Delivery System are close on their.heels with a score of 8.6 out of 10. The Rural Delivery System designed by Professor Ashok Jhunjhunwala of llTMadras, comprises of rural kiosks (costsRs 50,000 a piece) that allow villagers to use the internet, do videoconferencing (usually with technical ;. experts in the towns on their .agriculture-related questions, for YOJANA August 2005

Other innovative delivery systems are TIMS in Assam as well as the TIN at the central level. Curiously, both score around 6.8 marks. This is perhaps to do with the fact that both projects are aimed at reducing tax evasion and so are not so popular with the users. Both score very high on the 'time savings' area. While the SKOCH survey didn't poll non-users at all, the Public Affairs Centre's study on 'Bhoomi' did precisely this, and found the differences between the two groups of users and non-users was quite stark. So, for instance, two thirds of 'non-Bhoomi' respondents said they had paid a bribe to get their land record as opposed to a mere three per cent in the case of 'Bhoomi' holders. 85 per cent of 'Bhoomi' users said they found the staff courteous, a figure that was zero in the case of the 'non-Bhoomi' respondents (two-thirds felt the service was

r./

~1!!fjJmN

<=>

00:iiJ] SilliililflliSY
TIme Savings Compared to Manual 10 9 9 10 8 3 9 9 9 9

4\i'i9'$;IitQIO ~
Speed of Rectilica. tion of Errors 3 2 1 7 1 4 1 2 2 7 3 4 6 3 3 7 8 8 8 8 8 96

am ~
Alignment Witb User Expectations 9 9 9 10 9 2 6 1 5 9 7 5 8 8 8 9 8 9 8 9 10 158

~
Affordable Cost of Service 10 9 7 10 10 10 10 10 7 10 10 10 10 10 9 10 10 10 7 10 10 199 Reduction in Corruption 8 8 10 10 7 5 6 10 9 9 3 10 8 8 8 10 8 8 10 7 8 170 Stafl; Bebaviour 4 7 7 9 7 4 4 6 8 6 3 6 7 7 7 8 Competence 4 8 8 9 8 7 7 8 9 9 7 8 8 8 8 9 8 8 8 8 8 165
'.

State Assam Assam Assam Vttarancbal Uttarancbal Delhi Delhi Centre Centre " celltre' Centre
"
',"

Project TIMS Aamar Sewa CIC Aarohi Land Records Passport"

, ,"

Ease of Use 7 9 8 10 7 4 3 4 7 9 7 7 8 8 9 9 9 9 9 10 16 163

Usership 4 8 8 10 6 10 10 2 8 10 10 2 10 10 10 10 10 8 9 10 16 175

Speed of Delivery 9 7

SLAs 9 9 9 10 9 7 9 7 8 9 7 3 9 9 9 9 8 9 9 8 8 174

Simplicity of Procedure 8 9 9 10 10 2 5 7 7 10 6 9 9 9 9
')
"

Single Wmdow Access to Many

Services

Low
Incidence

of Errors 3 6 6 8 8 5 9 8 8 9 6

Tolal 95 108 106 125 101 71 87 79 97 122 90 91 114 110 111 122 114 120 120 116 122 2221 I

7 8 8 2 2 3 2 3 2 7 7 5 6 5 6 5 4 8 8 5
'I

68 77 76 89 72 51 62 56 69 87 64 65 81 79 79 87 81 66 86 83 87 76

7
10 9 5 6 2 8 9 7 6 9 9 9 9 9 9 9 8 8 164

Driving Licence Agmarknet

TIN
Railways Customs. .... Centers" CARD e-Pancbayat LR;MIS Kaver-e-com Koveri Tamil Nadn Rnral Delivery System Sarita '''- KDMC

7 9 9 9 9
')

Centre Andbra Pradesb Andhra Pradesh Andbra Pradesh Bangalore Bangalore Tamil Nadn Tamil Nadu Mabarasbtra ~1abarasbt[ii Total

7
7 7 7 9 7 9 8 8 8 153

9 9 9 9 9 173

9 9 10 9 9 183

7 8 7 7 136 '"

112

713

(j)

'U3

!OO

CiJ

lE)'

.ID

CD

Gi ...

"W.

User Ratin~:S of e-Governance Projects

'100

project has to re-work the existing system fIrst. Private delivery agents: Projects that have fared the best are those that move closer to citizens, as opposed to those who expect the citizen to continue to approach the government as they did in the past. In Assam, citizens can file their requests from mandal-level offices and this then goes in e-mode to the collector's office, and the clearances get mailed back to the mandaI office, and then onwards to the citizen. In cases like Rural Delivery Systems in Tamil Nadu, a pilot project has - kits for medical diagnostics in kiosks, and citizens will be able to get examined by qualifIed doctors in the city while remaining in their villages. Private operators will run the kiosks more efficiently than the government and will even come up with new projects, as ICICI Bank did with Prof Jhunjhunwala's rural ATM. YOJANA August 2005

Publicity is critical: Publicity would go a long way in increasing usership. Since projects like Agmarknet and even Kisan Call Centres have low awareness amongst users. In one mandi SKOCH visited, the terminal displaying prices was hidden behind the vegetables-something that would never happen if users were more aware of the project and how it would benefit them. Affordability: The highest scores are on the parameter of affordability. The primary reason is that in most projects nothing extra is being charged from the citizen for the edelivery of services. To keep these projects viable the following measures would go a long way: a) Keep the choice of technologies affordable while ensuring that the infrastructure does not follow a two year obsolescence cycle and remains relvant at least for five years at a time.

b) Reduce replication of infrastructure by clubbing the same infrastructure for multiple services. Ditto for applications. If an application is already doing well in one area there is no need to reinvent the wheel. Penetration: The penetration of such delivery systems has to be as ubiquit'ous as that of STD booths for the citizens to be able to access services anytime anywhere. Yet, the only possible solution to make this viable as a business proposition i~ to have a wide array of services available from a single window. Increase spending: While the spending on e-governance is posting a 23% increase year on year, the overall fIgure is still very low and the number of sites still far and few. Given the fact that these projects are delivering so well, there is a need to substantially hike this spending. 0 65

66

YOJANA August 2005

Does E-Governance mean Good Governance ?

Yogesh Baweja
-GOVERNANCE IS the use of information and communication technology to promote more efficient and effective government, facilitate more accessible government services, allow greater public access to information and make government more accountable to citizens. It involves new styles of leadership, new ways of debating and deciding policy and investment, new ways of accessing education, new ways of listening to citizens and new ways of organizing and delivering information and service. The primary condition of implementing the e-Governance is that the government should be of democratic or partially democratic nature as the dictators or totalitarian systems neither need inputs from the masses nor do they have to justify/explain their decisions to make them acceptable. On the other hand, in a democracy, the government cannot be divorced from the will and aspirations of the people. The other important requirement is that the economy should be of free nature or the mixed one as it gives opportunity to the individuals to think big and 'out-of-the box' and show their enterprising nature. The system of bureaucracy, which works on the principles of rationality, neutrality and anonymity, helps in delivering the goods. The system should
Service.

be guided by the principles of transparency, efficiency, accountability and welfare of the society. Though these principles may appear to be utopian, yet e-Governance can help more in approaching and attaining them more than the conventional system of governance. Due to growing awareness, people's expectations in India, have increased. They expect the public sector and public services to be at par with, if not better than, the private sector. The comparisons with standards and norms of the developed countries are increasing. The government must, therefore, be seen performing and -delivering results. IT is certainly among .the better tools for this purpose. This can lead to competitiveness, to innovations that are so essential for reforms. Moreover, the information systems become the interface between the government and the citizens, thereby ruling out face-to-face interactions and providing a standard level of service. The interface tends to become non-discretionary and available anytime, anywhere and to anyone. Various functions and aspects of the government in the country are being converted into electronic or networked forms. But general standards and practices are still evolving.

E-Governance is not synonymous with good governance but is a tool for the latter
YOJANA August 2005

Mr Yogesh Baweja is from the Indian Information

67

E-Governance aims to put information and communication technologies to the service of good governance - that is transparent, fair, effective, accountable and receptive to the aspirations of the citizens. Its efforts should aim to achieve a Simple, Moral, Accountable, Responsive and Transparent (SMART) government. It utilizes the ICT tools and the worldwide web for delivering Government information and services to citizen and business. It involves transformation of public sector, internal and external relationships through webenabled operations, IT and communication technology to optimize government service deli very, constituency participation and governance.

that the citizens aspiring to contact a government office and wishing to get a service from it will have to undertake minimal physical visits. These visits can be at one's convenience. The time taken from the start of an activity to its end gets reduced as there is no scope of relegation of duties, jumping of the queues or any excuse of not gettin'g the things done. The service this way is hassle free and without any botheration. All the in~ractions between the business and the government can be processed by using IT. Adequate redress mechanisms- The e-Governance projects have an inbuilt grievance redressal mechanism. So, one does not have to locate or wait for the grievance redressal official, as is the practice in the conventional set-up. Reduction in transaction costs- If time is money, then e-Governance is the surest way of laughing all the way to bank. The people not only save journey and waiting time but also most of the services through the e-Governance are provided at affordable charges.

to. The e-Governance system wo~.'-: in an egalitarian manner, where individuals are treated at par with each other, with not much scope of favouritism, corruption, nepotism or high handedness. Removal of the middlemanEGovernance cuts off the role of middleman or broker. It purges the intermediaries who thrive on redtapism, complex web of rules and laws, and networking, but of different type. Liaisoning between the service providers and the beneficiaries, which has developed into an art and a necessary evil in the country, has no role in the system when ICT takes over. No scope of discretionEGovernance cuts off discretionary powers, as all the decisions are transparent an~ accessible to one and all, all the time. The e-Governance strengthens and facilitates, at the same time, the right to information of the people as envisaged in the recently passed bill by Parliament. No need to be a master of the government proceduresEGovernance shields the citizens from trying to understand the labyrinth of bureaucratic hierarchy. Greater participation in national efforts- E-Governance tends .to produce greater democratic engagement where it is able to accept the creativity and initiative of citizens. People can freely and fully participate in providing feedback and suggestions for the improvement of the system. Easy to follow up- E-Governance projects provide citizens with documents which can be used for subsequent follow ups and correlating various data of the individuals. Bringing the have-nots into the mainstream- For bridging the rural divide, such technology can be applied that makes rural access YOJANA August}005

Benefits to Citizens
Access to all requisite information E-Governance projects provide 24 hours, 7 days a week online access to government services to all the citizens; i.e. a 24 hours 'one stop shop' for all government information services comes into effect.

Blurring of the boundaries of government departments - EGovernance projects ensure that the boundaries of Government Transparent processThe edepartments become blurred and to Governance projects ensure clarity a large extent invisible. The and transparency in all transactions. Government offices are presently . They leave a trail of each spread out, geographically as well as transaction. So there is not mudl functionally. This causes a lot of scope of fiddling with the system or hardships to the common man. For its undermining. example, if a man has to go abroad for employment, he may have to Restoration of citizens' faith- It involves participation of every interact with the Police, the Ministry citizen in the governance, thereby of External Affairs, the Ministry of giving impetus to the democratic Overseas Indian affairs and the values and strengthening the belief Ministry of Human Resource of the people in the system. Development etc. But if eGovernance were to be applied and Equality of Access and Facilitiesthe applicant were to go through a The e-Governance is all the more website, he would not have to run beneficial to the disadvantaged from pillar to post or understand the sections of the society who due to hierarchies and business transaction educational, economic or social processes in various departments. inabilities and inequalities cannot Reduction in end to end time - The aspire and attain the accessibility and e-Governance projects can ensure facilities to which they are entitled

68

j b '~nexpensive and ro ust. Th~re are e-Governance applications that draw a large clientele that pays for the service, ensuring the projects' economic viability. If NGOs and private organizations are involved, they can catalyze & manage the community building process. The content of such projects should empower rural citizens and enable formation of communities.

Adaptability- E-Governance offers flexibility and situation customizability to the government. The government processes can be modified and made adaptable to the changing organizations, policies and external environment. It can help in reengineering and optimization of work processes.

of the culture, environment and time can be adopted. No loss of important data- EGovernance projects, the world over, qre being designed with stringent security features. The data is not only well protected but also its backup is maintained at various locations, so that in case of any eventuality of fire, flood, earthquake or attack etc, the data can be retrieved and the function of the organization does not come to a standstill. Aesthetic working environment- The image of a government office can undergo drastic change after adoption of e-Governance. There can be paperless workflows and advanced multimedia communication tools. The ambience will also change and so will the work culture Better office managementEGovernance can help in better management of the office and interoffice interactions. There can be shared pool of data and information. Standardized documentation can lead to effective supervision. There will be fewer needs for consultations & personal follow up. Change in orientation - EGovernance can lead to improved quality and customer orientation of government services. Ever.y individual, at some stage or the other, has to come in contact with the government. A change in orientation leads to overall increase in the productivity of the nation.

Benefits to the Government

Improved productivity and services. Decisions and follow up action can be traced and tracked, leading to mpre accountability. Since, the success can be gauged objectively, it will curb the heart burning or procrastinating habits among the officials. All these can lead to highly motivated group of officials. EGovernance can lead to better utilization of time for productive work. The quality of services being delivered by the Government can see a quantum jump, thereby enabling the Government to take head-on the competition from the private organizations. Improving Finances. It can help in cost cutting, by curtailing the growth of excess manpower, deleting certain steps, simplifying the procedures and putting an end to duplication of efforts. There will be less establishment tasks, less file work and less decision taking steps

Better decisions- E-Governance facilitates the prompt feedback from the people and field staff, which can be collated and analyzed quickly, and decisions can be accordingly taken. The promptness and responsiveness of the government to the ground realities and people's aspirations can go a long way in making our nation a developed one and meet the economic, social and political goals, as cherished by our founding fathers. There can be better identification of priorities and better audit and analysis of data. There can be accelerated and transparent government decision process Weapon against the corruption- EGovernance leads to increased transparency, accountability and predictability. Transparency in date, decisions/ actions, rules, procedures and performance of government agencies can be introduced. Automation of processes takes away discretions, leaving little scope of corruption. E-Governance can become a weapon against corruption though it may not guarantee the end of corruption. Re-engineering of processes- EGovernance involves process reengineering which can lead to radical alteration and redesigning of government processes and help in achieving dramatic improvements in critical measures of performance like quality, speed, service and cost. It enables the organization to break away from conventional wisdom and organizational boundaries and use the information technology to introduce new processes. The best practices prevalent in the framework

Cutting the Flab- E-Governance can help the Government in synergising the functions of its various departments, thereby affecting economy and reducing the wasteful expenditure. Government agencies can benefit by interconnected infrastructure by sharing and using common databases. There can be electronic registration, electronic delivery of services and electronic way of connecting to the people, thereby reducing the requirements of space, manpower and infrastructure for the government. YOJANA August 2005

E-Governance can use IT as a vehicle to create a knowledge society leading to the improvement in life of a common man. It can enhance the citizen service delivery, improve the internal efficiencies of governance/ administrative units, and make government operations more transparent. The internal efficiency of the government can go up substantially, by enhanced workflow, better
(Contd. on page 79)

69

Citizen's Right to Convenience and Comfort

P M Kuriakose
LECTRONICALLY networking etc. The e-Seva centres DELIVERABLE services provide online transactions from 8 AM (e-Seva - e-Govetnance) is to 8 PM on all working days and a Commissionerate created holidays which has an automatic for effective use of electronic queuing system reducing the Information Technology to improve the waiting time for the customer. The system of governance and providing citizen can pay all the bills listed below more efficient, transparent, respective from any of the e-Seva centres. Thus he services to the citizens taking IT to the need not go round several offices and common public. It is a one stop shop for can save valuable time. a wide range of citizen friendly services Some of the Services available at through the State-of-the-Art technology. the e-Seva centres are: The objectives of e-Seva are to provide Electricity Bills quality, cost effective services with an Water Bills innovative accessibility of information BSNL Telephone Bills to citizens. E-Seva is an e-Governance initiative Property Tax payment of Government of Andhra Pradesh Filing CST & GST Returns offering different services to the citizens Collection of examination fee at one counter. This project renders Filing of IT returns services to the citizen through integrated Issue of Birth and Death Citizen Service Centres and internet. Certificates and Registration of There are 46 e-Seva centres and 33 RTC Births and Deaths centres across twin cities of Hyderabad Reservation of bus tickets and issue and Secunderabad serving the of bus passes population of over 10 millions. The e-Seva project has been Sale and filing of passport implemented based upon the success of applications the Pilot Project named TWINS Sale of non-judicial stamp papers launched in December, 1999. Thirty Trade license applications one service centres were set up as joint National game tickets venture between Government and Sale of EAM-CET, DIET-CET, Private Partner also known as Public B.Ed, Law-CET and I-CET etc. Private Partnership (PPP) model. While Collection of Reliance and Tata the former provides premises with telephone bills. furniture and counter operators the latter provides software and all hardware Western Union Money Transfer

E-Seva is an initiative of the government of Andhra Pradesh which involves offering different services to the citizens at one counter
70

Mr P.M. Kuriakose is from the lAS (Andhra Pradesh Cadre).

YOJANA August 2005

tlil'~evancls placed at tile e-Sevacentresi~ as inen~oned below; $.tatement ~,+: showing. -',O',O~_ status\& written 'grievan~s the 0; - .',,,_< _":>~~

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Sale of digital movie tickets

certificates

and

Service of Labour Department HUDA, Police and APHB.

The Government also expanded eSeva centres in all municipalities with 249 centres covering 116 municipalities in the state keeping them in the administrative control of the concerned District Joint Collector of the 21 districts. Presently the e-Seva centres are providing 150 services of Central, state and private sector in the state. All the departments should make e-Seva. The participating departments should prepare their database servers and internal networking modules. The department should provide one router port for leased line module and another port for ISDN module for e-Seva of each district level server. e-Seva Centres There will be two managers working in two shifts each who ensure efficient and prompt services having overall management and maintenance of centre. The accountant collects cash from the operators at each counter in the interval of every one hour and handsover the total cash/cheques collected from all the operators to the pick-up agency of the end of the day. The operator keeps the system ready for rendering service to the customers handling cash and cheques with a decent customer friendly relationship. e-Seva has come up with the project of Rajiv Internet Village by setting up kiosks known as Rajiv Internet Centres in the villages. The idea is to bring government to the doorstep of the citizens residing in rural and semi-urban YOJANA August 2005

areas. Each kiosk is linked to APONLINE through a dial up connection. Most of the web services on APONLINE can be availed through the kiosks. The services vary from information, download of forms, telemedicine to payments of utility bills etc. Pa rishka ram E-Seva has provided a call centre totally wherein a citizen can dial a toll free 4-digit No 'UOO' through BSNL fixed lines for schemes, education related news e.g. admissions, fees, dates of reopening, counselling, results, etc can be accessed. Citizens can also register grievances pertaining to municipal services, welfare departments etc. The highlight of the call centre is the presence of agriculture scientists to advise farmers on seeds, fertilizers, pesticides, cropping pattern, rainfall, water level in the reservoirs, etc. The call centre also provides medical advice through governmental doctors who have been specially deputed to call centre for this purpose.

As per the figures shown above 91 per cent of the cases have been solved by the concerned departments (including Agriculture department) and a remaining of 9 per cent of the cases are pending as on date. c) Education, results, etc
Name of the Department Agnculture (02.07-2003 to 20-05-2005)

elections,

info calls/

.,
55,245

Other Dep3{tJ11ent Education /' Recruitment Miscellaneous Total Calls' /

27,~~5
4,55;558

Benefits
The e-Seva is a unique experiment of the government. It provides easier customer access increasing service volume, getting better information on operation, reducing employee complaints, and reducing time spend on non-customer activites. The e-Seva services ultimately eliminate face to face interaction between the government and citizen to the extent possible by increasing the value of citizen self-service and two-way flow of information, so the citizens will come to enjoy interconnection with government. The citizens can conduct their transaction from any of the 46 eSeva centres in the twin cities of Hyderabad and Secunderabad irrespective of their residence. Transparency in service provision has been the major benefit wherein the citizens are spared of the hassles usually associated in dealing with multiple administrative departments each with its own plethora of rules and regulations, and thereby saving a lot of their time, effort and money. 0 71

Results of Call Centre

aJ Agriculture As on 05-01-2005 the Agriculture wing had answered. ;.. Total calls answered (02-072003 to 20-05-2005) - 55245 ;.. Aggregate average calls per month - 2511 (approximately) ;.. Overall average calls per day-

84
b) All Departments (Grievances) The details are enclosed to this report. However, the abstract of performance is as follows:

Lokvani: Empowering People

Bari Shankar Singh
E ARE said to be living in the age of information revolution. E-govemance represents the strategic and systematic use of modem information and communication technology by a government to improve the efficiency, transparency and accountability in its functioning and interface with the people. Over the last several years, governments have increasingly been using technology to redesign and restructure departments and programmes, and change the way they plan and manage their affairs, deliver services and interact with various stakeholders. Governments are deploying the technology to become increasingly responsive to the people. officers was constituted to study similar initiative of e-governance and empowerment of rural people through self sustainable use of information and communication technology in the district Jhalawar (Rajasthan) and Dhar (Madhya Pradesh). What lhe study team experienced at Dhar and Jhalawar was as follows: Transparency in system Accountability Public grievances redressal system foolproof Effective MIS Public services at the door step of villagers Single window system of public utilization The weakness in this system was that network was not available and data was updated through emails. Electric supply was erratic so strong UPS backup was needed. The kiosks at Aklehara sub di vision of district Jhalawar was performing the same task of land revenue and mutation which was performed by the sub division government Computer Center itself. After the transfer of dedicated officers, the system of e-governance was not performing with same accuracy and accountability. The visionary District Magistrate of Sitapur, Amod Kumar deliberated on the strength and weaknesses of these efforts and a more effective co-

'Lokvani' is a system of not just better ways of doing old things, but radically new ways of doing previously unimagined things
72

In August 2002 the Government of India announced that it would implement a comprehensive programme to accelerate e-govemance at all levels of the government to improve efficiency, transparency and accountability at the government people interface. The government of India subsequently approved the National e-governance Action plan for implementation during 2003-2007. The plan seeks to lay the foundation and provide the impetus for long term growth of e-govemance within the country. In consonance with the purpose, intent and spirit underlying National egovernance action plan, a team of three

Mr Hari Shankar Singh is presently working as B.D.O. in Rural Development

Department, Government of D.P.

YOJANA August 2005

(~inated and in consonance with the aspirations of the poeple "Lokvani" egovernance project was launched in November 2004. A society by the name of "Lokvani" was constituted to implement the egovernance project under the chairmanship of District Magistrate, Sitapur to reduce the bureaucratic hassles and for proper co-ordination with district administration and effective use of system. District Sitapur, a place of religious importance is situated on LucknowDelhi National Highway No. 24 and is 89 kms. from the state capital. The total population of the district is 36.19 lakh (2001 census) and area 5743 sq.km. District Sitapur is backward in respect of social development indicators like literacy, infant and child mortality, life expectancy. Even at the low level of development considerable difference in social development indicators are observable among blocks social classes as well as success. Remote rural areas, schedule castes and women are suffering to a great extent from the pervasive social underdevelopment. The prevailing levels of social development not only cause great deprivation to large masses but also constrict their human capabilities to benefit from the opportunities available to them. "Lokvani" to a limited extent is improving the human capability of the people.

information Act, and also creating sustainable employment opportunities for the educated unemployed youth of district Sitapur. Reducing the cost of service delivery through reduced duplication of efforts by individuals an departments.

Resource Mobilization
Once the vision of delivering egovernance "Lokvani" services was decided for Sitapur the project needed resources for implementing it. At present 21 "Lokvani Kiosk" centers are running at subdivision and block level. The sum of rupees 75 lakh have been proposed for kiosk establishment at Nyaya Panchayat level on 50-50 basis by public private partnership under the scheme of Rastriya Shram Vikas Yojana. It is worth mentioning here that the entire expenditure for the "Lokvani". network was managed without any special budget provision from the government. It is the conjunction of the technologies of the computer, telecommunication and the internet that have propelled the information revolution. National Informatics Center Sitapur (V.P. India) with the help of State Informatics Center, Lucknow obtained the software and designed it according to local needs. The information related to various departments was made available to "Lokvani Kiosks" via central NIC server. The kiosks were given login! password to enable them to dial up to NIC server. Technology is a mirror of society, and reflects its priorities and value system. As these values are enshrined in the politics and culture of a society, its technology will be naturally shaped by these factors. The internet technology has tremendous potentials to promote a well informed citizen and democratic culture. It is notable here that Hindi software is so informative and accurate that it is being praised by aU who have used it. Democracy empowers the people to actively participate in the decision making process of the state in respect

t~ matters of general interest to them. At the operational level, this is achieved indirectly through their elected representatives. The pre-condition for its success in the existence of a well informed citizenry which can make intelligent choices between various alternatives. And what better means could there be to ensure this than to make oceans of information available to people at .their doorstep through Lokvani network. Instead of coming all way to the district office, the citizens can now avail so many information at the tehsil and Block level. Services like land records, arms license application status, GPF Accounts of teachers are available online now. The most popular service is the online submission, monitoring and disposal of public grievances/ complaints. The popularity of this grievance redressal system can be gauged by the fact that within four months of its working, 7000 complaints were received till February 28 of which 3600 have been disposed. The efficient system of Lokvani not only gives people an avenue to track the progress of their grievances but also provides the D.M. an effective tool to monitor the performance of various departments. Lokvani also provides the information on various government schemes, government prescribed forms, details of development work in the district, old age pensions, list of scholarships beneficiaries, allotment of foodgrains to Kotedar, allotment of funds to Gram Panchayats. "Lokvani" has been a system of fundamental leaps in innovation. Not just better ways of doing old things but radically new ways of doing previously unimagined things. The fusion of computing and communications specially through the internet has broken the bounds of cost, time and distance. Communications change economic competition, empowerment and culture. The real wealth of a nation is its people and the purpose of development is to create an enabling environment for the people to enjoy
73

Objectives
The main objectives to achieve the e-governance vision "Lokvani" are: It was made clear from the beginning that this project must be financially viable if it has to survive. So a unique public-private partnership was started. Kiosk were established by private persons. Establish single window system (computer kiosks) to access various government services and information at the doorstep of villagers. Increase the transparency and accountability of departments and reform governance of citizens relief. Giving practical shape to right to YOJANA August 2005

local officials. It is suggested ttht-J complaints without much substance and less gravity should be discarded. o Complaints against government Most state governments have started officers should be on affidavit. This using it to improve efficiency and is necessary in case enquiry against make administration more citizen complaints is found to be baseless centric. It is, therefore necessary that suit case/FIR can be lodged against the complainant. not only e-governance plans are prepared and funds allocated to Many complaints are lodged by implement them, but it is also proxy names due to enmity within imperative that progress is always rival groups of villages. The practice monitored and the direction of should be stopped by directing the change tracked so as to apply midkiosk owners to lodge complaint course corrections. In fact only after verifying the identity of management of change offers greater the complainant. challenges than its initiation. Corruption is rampant in the Government of Andhra Pradesh has prevailing bureaucratic system. It is done a marvellous job for this. It is suggested that Lokvani complaint suggested that two boards of enquiry about graft should be distinguished professionals from the conducted by impartial officers. private sector in addition to two top Many officers take undue advantage Emerging Scenario government functionaries be of as enquiring officer arLdthemselves The emerging themes of the Lokvani established at district and state level. are involved in corruption. project which attract attention are as Social activists and eminent persons The experience of e-governance in follows: of repute should be made members Kamataka, Andhra Pradesh, Tamil of the board. Lokvani use has been more akin to Nadu, Maharashtra should be Amartya Sen's Capability assimilated in "Lokvani" to make it It also suggested that Lokvani Enhancement Approach. Sen takes network should be initiated in all 150 more effective, people friendly and a human and people centric view of harbinger of pace of development. backward districts of India. It will the goals of development by looking accelerate the pace of development It is also suggested that private at degree of deprived sections of and information revolution in partners should be invited to make society as a result of application of backwards districts. investment for opening the ethis technology. The services governance system on the basis of Uttar Pradesh is very different from provided by Lokvani not only to user charges. Two models which are much of India and district Sitapur simplify things for villagers and operative in system are-BOO (Build where "Lokvani" is functioning is spread e-governance awareness own operate) and BOOT (Build own backward as indicators of human among them, they are also promoting operate and transfer) they should be development are concerned. The economic activity and creating new adopted. social failures that have hindered the jobs. Economic self sufficiency is a development of Uttar Pradesh (e.g. e success of "Lokvani" network must for a system like Lokvani. So widespread illiteracy, pervasive cannot be judged by irnmediate every kiosk should be developed in inequality, endemic corruption and ~ results. It raises social awareness such a way that its functioning the suppression of women's agency regarding matters of development, generates additional income to kiosk in society) are very much prevalent Government Schemes, public utilities owner. It is also suggested that a in district Sitapur. Lokvani should and other problems which are deeply fund of atleast 20 lakh should be be used to usher and deal with all related to the democratic rights of the provided at the district level for these problems in a better way with people such as information about proper functioning of Lokvani. the support of state and Central government's financial system. The Governments. If state government intends to value of technology can not be divorced implement the Lokvani project in Redressal of grievances is gaining from value of its application. The mindevery district of U.P. then it should popularity in Lokvani. It.is seen that set of the government officers/servants prepare a monitoring detail of this many complaints without genuine needs to change. Then only "Lokvani" project in each district at the state reasons are lodged to "Lokvani" due can instruments like be harbinger of level. This will reduce the to political enmity of Pradhans and development. 0 dependence of the system on one officer. It will also enhance better co-ordination and effectiveness of the Lokvani.

long, healthy and creative lives. Human development is a process of enlarging people choices. Information kiosks of "Lokvani" and its connectivity can effect significant changes in behavioural patterns of a population. Many forms of information relating to education, health, development schemes, land records, do significantly influence the rural population. As it is to be expected an increase in awareness level of villagers enables them to recognise their status as citizens, their rights and also duties towards the community and the State. Such an enlightened approach supported by both family and society can be catalytic factor in improving actual delivering public goods and services. This also results in transparency and accountability iIi public discourse among the rural people.

74

YOJANA August 2005

Cautious Approach Needed

Sreekumar Raghavan
HE CENTRAL and state governments are spending crore of rupees every year on e-governance with the objective of ensuring efficiency, transparency and better citizen-friendly interface. In certain cases, such as land registration, motor vehicles department, railways and utility bills payment centres, there has been a marked improvement in the quality of service offered to the citizens. of the departments identified on a priority basis to have interoperability implemented are Treasury, Hospital, Employment Exchange, Registration and Land records. Many government departments in their eagerness to catch the IT bandwagon installed PCs and their own legacy software applications without any vision regarding its future scalability and interoperability. The result is a set of independent databases that are not compatible with each other. In many large organisations it has become a practice to have a high-profile chief information officer or chief technology officer who holds the responsibility of sourcing the best possible hardware, software and applications suited for the company. Sometimes, these officers also find a place in the board of directors. Kerala State Electricity Board.

National Vision
In IT implementation in the government it is the department heads concerned or private solution providers who decide what technology or solution is to be adopted for each project. Every government needs to have a CIO who will hold the responsibility for implementing C2G and G2C projects adopting the best practices and at the same time not bleeding the scarce government resources. This will ensure that department heads do not undertake IT implementation in a haphazard way and fail to pass on the benefits to the common man. Considering the complexity of the information technology sector, in terms of technology, applications and solutions available, it would not be wise to entrust. e-governance projects to a small group of people.

Interoperability
But if e-governance were to be truly effective, then individual application program of one department should be able to 'talk to' another application program installed in another department. Interoperability of egovernance projects is thus of vital importance if the citizens are to feel the benefit bf IT in day -to day life. In other words, every IT project should have a clear government to government (G2G) interface before a meaningful government to citizen (G3C) solution can be implemented. The National Informatics Centre (NIC) has already started work on the interoperability framework for the Central and State governments as the realisation has now come that databases of one department should be compatible with another all over the country. Some YOJANA August 2005

Critics argue that crore of rupees ~ There should be an empowered have already been spent of e- panel consisting of a cross-section of governance projects and the citizen has major stake holders-government not gained any major benefit. There is officials, solution providers in the still no consensus about the deployment private and public sectors, hardware of open source and proprietary vendors, people's representatives, software. Complaints regarding IT scientists and others. This panel should implementation are surfacing one by evolve a national vision for eone. The most recent example being the governance and continuously advise, problems in the billing software assist and coordinate the e-governance implemented on Microsoft developed activities in the country. 0 by PriceWaierHouse Coopers for the (Courtesy: The Hindu) 75

E-GOVERNANCE .. ...:..
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Sarita : E-Registration Maharashtra

ALK OF evolution takes on a serious turn, whenever serious topics take centrestage. In other words, evolution of individuals is one thing but that of an institution is quite a different matter. This goes for the role of the 'state' as well. Over the years, the 'state' must have grown many times from they, say, 'City State'. But apart from the size, very little has changed or evolved. As far as 'governance' is concerned 'state' has very little to offer. In the Indian context, specially, very few expectations are there from the 'state', perhaps that is why more and more emphasis is being laid on administrative reforms focusing on governance. One such attempt was done in Maharashtra, namely, "Public Private Participation: An Experiment in e Registration". Good governance aided with technology results in 'e' governance. At a different plane e governance is about the vision and the scope of the entire gamut of relationships between citizens and government. The IT policy of the government of Maharashtra aims at augmenting computer literacy among its staff. The second phase is to use new technologies to provide the people with a more convenient access to government services, goods and information. The IT policy puts the focus on departments at cutting edge, interaction with citizens apart from being high revenue earners. These are-Revenue Department, Registration Department, Sales Tax, Transport, Excise, etc.

In

To begin with, the Registration and Stamps Department, for instance, is the highest revenue-generatilng department for the state government - contributing nearly 15% of the states' tax revenues. From another perspective the large public interface of the department leaves it always in the critical public eye. And the poor image of the department had been due to very poor client satisfaction. For example, according to a review of July 2000, more than one million documents were pending for registration for various reasons, some for more than five years and more than 15 million registered documents had not been returned to the parties form 1985 onwards. The system bred inordinate delays, harassment and corruption leaving a very bad aftertaste for all those who queued up at its window. When the problems are identified it gets simpler to tackle them. The objectives were simple. Popular among them were as follows: Develop a simple, speedy and reliable registration process and build consistency and uniformity in the process; Provide transparency and automate all the back office functions in the valuation of the properties; An easy, reliable and cost effective archival system and effective search, along with facility for search of the previous 12 year transactions and set quality and time standards; Provide backward and forward linkages with the land records and

Governance, simply speaking, does not need adjectives like 'good or 'e' or any other. The only touchstone should be satisfied smiling faces
76

YOJANA August 2005

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l~geland\~?ldings'iI1the~~31{gre~~~r; than two hectares and gomgup to 501 ;,1\:,"'::'; i' ,.'+0' '"" "", ...,"'.' '.'"j,'.'. """ ..;\Y' ',.", I .~ectareS)and tHe,re is.~need~t,: ',Apart froIT}the grouridgl!~\;~iggin~\ Ii ';cgmplet~l1.g the~~rves(~~fasf.;isllmasgine,hJ~\~as ma~~;som~ ... ~9difi~~J \j ,PossibleinQctobt?r,sothat,s()w1flg can' ;plb~~hs an~,Jrendi,~ggingIT}achiIl~S:~' b,e'comvleted fo~:~he ne*j.seas~rl ~Hi~.trench"~~gging"1rtaChine.;i~mOrr.1 ~hiCh s~imm~9}atelY'J'!l~mac~~ llfle~~ble, c~s!ceff@~.t~ve an~canb~~ )levelop~.~byYu~~f addre~~es all tp~l a~cped to,~ytract~& The ~f~akdowJl;1 ~ove pr~"lems. It;isan e)(~ellent)"~yl ,rat~andfuel~~onsuillgtionisl~wer tli~~~ tbimproveproduB~vity, c':l;tcosts~dl hha~'iof tl1e~~.9ther.~~ailabl~ tren{;;~l address~e lab01it~hortag~.Some~?fj d~gers'l-!eh~s~l,sodey~.i~ped~~' the farm~t~ who ~~ve bo~g~tthiS~t I; n{~fP~sm.f?r incre~sing the,;speed ',6tJ aiso IO~5it;out t~;~thersatjllie ratel~f Itr~~~h digif~g~m~siiines. ~arli~f'~

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one who has solved a local technological problem in a creative manner or know of someone who has very rich traditional knowledge in any field of survival, they may please send the details or even the contact information to NC (8 and D), NIF, Post Box 15051, Ambavadi, Ahmedabad - 380 015 or by email at info@nifindia.org".

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Does E-Governance Mean Good Governance

make people happy. The only handicap in the eGovernance system is that in India, there are a large number of illiterates and even a larger number of computerilliterates. Thus, e-Governance applications have to be designed and operated in such a way that they are easily and equally accessible to the literacy-challenged users. Further, the applications should be preferably in languages and use as much as possible intuitive graphical and conversational interfaces. E-Governance is not a short cut to economic development, budget savings or clean, efficient government. It is not the "Big Bang', a single event that immediately and forever alters the universe of government. It is a reform process of transferring governance to be more citizen-centered. Technology is a tool in this effort. E-Governance cannot solely be a strategy for reducing the cost of government though there can be one valuable results. In short term, eGovernance applications will not lower costs for the government itself though the reduced costs and increased convenience may take place for citizens and business. E-Governance is not about technology and investment in Information Technology alone. It basically leads to re-engineering of the processes behind the screen that actually deliver the services. Thus eGovernance is not synonymous with good governance but is a tool for th~ latter. While fmalizing an e-Governance project; one has to keep in mind as what kind of good governance will be achieved through it. 0

documentation management, more knowledge based policy formulation and collaborative inter-departmental real time information sharing. In USA, 23 % leT Projects were total failures, 28 % were successes and the balance were in between. In India, the e-Governance started late and with initial birth pangs, but now, it has gained direction and momentum and the process is becoming seamless. The people have tasted the success of some of these projects like e-seva and Arohi and are yearning for more. There is unanimity among the policy makers, officials and the people about the benefits of these projects. There is a strong belief that these projects, if implemented well, have a great potential to take India on to the path of success and glory and YOJANA August 2005

79

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protective eye wear. Apart from the blatant infraction of labor safety rules, the activities at Alang are in complete breach of Environmental Laws and regulations, national and international. The Problem of ship-breaking can be seen from many angles. There is a clear human rights angle, that too can be divided into human rights of labour i.e. their safety versus the broader human right to safe and clean environment. There is a clear environmental angle to the problem. This includes the concerns of safety of marine and aquatic ecosystems in the vicinity of the shipbreaking yards and also adjoining lands. Then there is the trade and safety standards angle. The developed world has passed the buck to the developing world and at the same time saving their skin from being burnt by the hazards of ship-breaking. The focus of this paper will be the environmental concern that pertain to ship-breaking.

Almost all ocean-going ships, while owned or operated by companies in developed countries, are being scrapped in the Asian countries of India, Pakistan, Bangladesh, Philippines and China. At Alang, as in other Asian shipbreaking locations, ships are simply driven onto the beach during full moon high tides. Then, without dry-docks or heavy lifting equipments, the massive vessels are cut up by a cheap labour force of thousands of impoverished workers using nothing more than hand held cutting torches, hammers, saws and chisels. Half of the world's ocean going fleet ends up in Alang-about one vessel arrives here each day. Most of the rest go to similar ship breaking sites in Pakistan, Bangladesh, China and the Philippines. Around 700 ships are scrapped each year. Depending on their size, and the current prices of steel, the ships are sold for up to several millions of dollars each. The 40,000 workers in Alang, mostly migrants from the poorest segments of Indian society, eam around New Zealand $3 worth of rupees per day. Protected only by their scarves and light shoes, the workers' conditions in Alang are very poor. Only a few wear hard hats, rubber boots and gloves. Not only is the job one of the most hazardous in the world, but life in the fIlthy shanty city is plagued by frequent and often fatal diseases as well as the continual risk of serious accidents and injuries. Explosions from cutting torches in contact with residual fuels and lubricants are common, as are accidents from falling steel beams and plates. Nobody has kept records of the toxic exposures and deaths in Alang. Pulitzer Prize winning journalists from the Baltimore Sun say there is about one funeral per day in Alang. Official figures indicate that one particular

incident, a fire onboard a vessel thlm-) was being scrapped claimed 16 lives. in April 1997,

Hazardous Waste
Hazardous waste disposal and waste management are governed by stringent laws and international conventions in majority of the world's nations. The issue however is the manner in which they are implemented. But before reaching any conclusions on whether it is a problem of implementation or whether there are flaws in the substance of the law itself we will give an overview of the legal framework that exists in India. The problems associated with hazardous wastes start at the conceptual 'level itself. So far, there is no uniformly accepted international definition for what constitutes hazardous wastes. Different substances are hazardous at different concentrations, at different time scales. Article 2 of the Basel Convention on Trans-boundary Movement of Hazardous Wastes and their disposal defines wastes as follows: "Wastes" are substances or objects which are disposed of or are intended to be disposed of or are required to be disposed of by the provisions of national law. So the onus of defining the ambit of 'waste' falls upon the National Law.

Environmental

Risks

At the end of their life-span oceangoing ships are scrapped, primarily for their recyclable steel content. There are about 45,000 such vessels in the world, each year about 700 of them are sold to brokers for scrapping in Asia. Ship scrapping, or ship breaking, is a dirty and dangerous business. Not only is the cutting and removal of the steel structure extremely hazardous work, but almost all of the vessels now slated for breaking contain hazardous substances such as asbestos, paints containing lead, other heavy metals like cadmium and arsenic, biocides, as well as electrical and other materials containing polychlorinated biphenyls (PCBs). While asbestos, lead, cadmium, arsenic and dioxins contaminate the ground, living area and agricultural areas adjacent to the scrapping beach, a considerable portion of the toxic substances end up in the sea, in the sensitive inter-tidal zone. 82

In India, the Hazardous Waste (management and handling) Rules, 1989, as amended in 2000, classify various categories of wastes in the schedules. In order to classify any waste as hazardous, it is usually subject to evaluations based on its attributes such as nature, composition and inherent characteristics. Thus, parameters such as flammability, ignitability, toxicity, corrosivity, re~ctivity, infectiousness, radioactivity, etc. have been proposed'
YOJANA August 2005

('<t!luL use d to deSlgnate speci'fiIC wastes .

as hazardous. This may create a conflict between the national and the international law in respect of hazardous wastes. Till recently, neither the States nor their SPCBs had any scientifically acceptable plan of action for dealing with wastes containing such substances or chemicals, by reducing their production, rendering them innocuous or containing them safely in facilities like engineered landfills (burial). Hazardous industrial wastes, in fact, have been disposed of in low lying areas in the name of land filling, or simply illegally dumped on public or abandoned lands, in rivers or oceans. n addition to such hazardous wastes generated as a result. of industrial rocesses within the country, there are the further dangers of imports of hazardous wastes brought from other countries for purposes of either genuine recycling-where even authorized industries do not observe the necessary precautions-or sometimes for dumping, i.e. for final disposal. High costs of treatment of disposal of such wastes in industrialized countries; scarcity of land there; and arguments that it is better economics to export pollution to developing countries have been responsible for such dumping. There is an increasing syndrome referred to as "NIMBY", i.e. "Not In My Backyard", in the developed countries. After several instances of such dumping of hazardous wastes in the developing countries were reported, the international community began negotiations to prohibit such practices in the form of the Basel Convention for Transboundary Movement of Hazardous Wastes. Before negotiations were concluded on the Basel Convention, the Hazardous Waste (Management and Handling) Rules, 1989, were notified under the YOJANA August 2005

Environment (Protection) Act, 1986, to regulate both the indigenously generated and imported hazardous wastes. The HW Rules, 1989, and the Basel Convention together aim to deal adequately with the problem of hazardous wastes and their responsible and environmentally safe handling in the country. However, neither of these was effectively implemented. In most parts of the country, authorities appeared to be ignorant or poorly informed concerning the deals of the HW Rules, 1989, or the provisions of the Convention. An international organization, Greenpeace, first drew attention to the import of hazardous wastes into India in violation of the Basel Convention. Later, the Research Foundation for Science, Technology and Natural Research Policy filed its public interest petition alleging that such illegal imports of hazardous wastes were continuing. It is only after the intervention of the Supreme Court that a High Powered Committee was set up in late 1997. The Hazardous Waste (Management and Handling) Rules, 1989 were enacted pursuant to the rule making power vested upon the Central Government under Sections 6, 8 and 25 of the Environment Protection Act, 1986. The HW Rules provide for control of generation, collection, transport, import and storage and disposal of wastes listed in the schedule annexed to the rules. The Central Pollution Control Board started work on preparing an inventory of Hazardous Wastes in 1993. It also pinpointed the major sources from which hazardous waste emanates. Three broad classifications of hazardous wastes were made, wastes which was re-cylible, incinerable and disposable. All in all, over 7 million tonnes of hazardous waste is generated in India

(MoEF, 2000), out of which 5.2 million tonnes is destined for disposal on land. There exist certain knowledge and information gaps. The hazardous waste inventory exercise carried one by the state is proving to be a one time effort. The industrial sector is constantly growing and there needs to be incessant up gradation of such an inventory so that waste management plans can be framed accordingly. Conducting environmental impact assessment becomes an exercise in futility in the absence of a comprehensive waste inventory. In December, 1997 the CPCB prepared guidelines for regulating shipbreaking activities. The objective with which these guidelines were prepared was to minimize the pollution that emanates from ship-breaking activities by putting the onus on authorities to implement and ':Environment Management Plan" and a "Disaster Management Plan". Some of the authorities that were entrusted with various duties were: Gujarat State Pollution Control Board, Maritime Board/Port Authority, Customs Authorities, Ship-Breakers' Association and the Ship Breaking Industry.

Government Policy
Central Pollution Control Board has taken up a project during the year 19992000 for quarterly monitoring of sea water at Alang Coast, to assess the water pollution load due to the ship breaking activities. The parameters like pH, SS, O&G and COD are analyzed in the laboratory. The Gujarat Pollution control board, as per the CPCB guidelines, is entrusted with the following takes, inter alia: Issue of Consent under the relevant sections of the Water Act and Air Act. Issue of Hazardous 1989. Authorization waste (M&H) under Rules,

83

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C--k.ather the way out must be to enforce environment protection measures, have well trained and sensiti ve officials of the State governments, pollution control boards and maritime boards to perform their duties well. Proper hazardous waste disposal should be incentivized and not just enforced thorough pecuniary and punitive coercion. There should be incentives for ship breakers to dispose off hazardous wastes properly. Certain policy gaps can be pointed out in this regard. The emendment rules promulgated by the Ministry of Environment and Forests in the years 2000 and 2002 dealing with hazardous waste management fail to provide any

incentive waste reduction or minimization effort. Industries have shown reluctance to adopt such measures. Maybe incentives such as providing financial and technical support to ship-breakers to set up incinerators and other apparatus for safe disposal of hazardous solids, liquids and gases. ertain knowledge and date gaps can also be detected. Apart from a reliable and up to date inventory of hazardous wastes, India in general lacks the proper infrastructure for proper disposal of hazardous wastes. This also includes inadequate staff at state PCBs assigned for supervising hazardous waste management.

So it is not really a tale of jade<;l laws, but not even ineffective implementation that has lead to rising concerns over handling and management of hazardous wastes. What is needed is institutional strengthening and training of various officials. Waste reduction and mitigation should be given fillip as this would lead to relative ease in waste management. After all prevention is always better than cure. So a combination of strict guidelines, which are already in place as regards the ship-breaking industry and effective implementation-which could mean proper allocation of funds for guidelines enforcement agencies-must be worked upon. Comprehensive approaches such as EIA should be adopted too. 0 .

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composition of.theSehsex"has b!~n reyisedl~times, ofwbichs~venha~e , Stbck selectiorifor"~he S~~sexf~ ~en plate sin~e20g2.' if:: signifies that.the in~exhaScross~d a driven by.Imp. ove. ent.. ............ :;trans Paren.c.,.y......... the Sen~~~r~flect;the tot~I: r .. ~ .. , D~es new tm,eshold; The rise al.s,.O the .... ' fuels .... . '. ',. ",' ',." :.., \' ,and simplicity. TIle key qualification market trend?: ",' .anticipationthat the indeican move ,'criteria are:'..' ..... "up still frirther.Th~rise iIldicatesan ".."TheS.ense,r. d()~~ pr()vide,.clll iflcrease in rllarketcapitalization and TIle stocg sho~dhave1een~~ted,~~ mdicationof market direction but itis ,the wealthforstockmark~t inveStors. B~E [or:.6 mQ~.thsan.aits?-,lll0n* not a'fullmark~~'.indicf.ltor.Its LI-rowever,it does not me~n th~t all averag~" fre~.t fl~at :"'rI1ark7:~' di~erg~n~e)Vi~;,t~~I~roa~~r:Il}atk:t '~vestors gain'Nhenthe Sensex moves'; capitali~von~~ould~e atleastq~' naSb~n'~vid~nt'0~'ill~y ~?ccasi~h ,yp antllose~money whe~ it comes,; of:l~~~psex"';~: .':~:': ....rl:;;;' iIltther~~nt~s~:<e~~is~seactivity :,~own.'The'Sensex "is a,'complex:: e' ~ecoiripany~hould;be a. ~a erliil' in.:mid.:'sap.lst~5ksi~srea;ed. This'is barometer of stockmarket sentiments... '. its:industiygr~~p.r:,~' ....~~:"... r~t1ected.in,th~;(:lh-:e.~gen9~.{)f'SeIl$,eX ....... .t., Th'est&k sh0U!dranl('amonftfiet()p;' anHBS~2~WC~;;i~dex;1' .. ..!l ,What is Sensex ? 100 listed companie;onothetiasis~f;The .tiroader.ilidices'lBS71 . d 00 ~ The Stock Exchange Mumbai 6 month.:aver'~ge:nmarket BOSE-500 are more' ref1ectiveof '(BSE) launched a 30 stock index in capitalization 0(75 per cenLweight) overallinark~~treIld.Thii:said, .the 1986 comprising large and a~d 6 month average daily turnover Sensexcoiitinues to tie a key indicator representative companies whose and impact cost (25 per cent weight). .of market sentiment and direction asa 'stocks were actively traded. ThisBSE e The stock should ha.vebeen traded, large '.proportion of' marJcet Sensitive Index of 30 stocks is barring exceptional tircum~tanc~s; c~pitalii<itionandsectorrepfl::sentation 'popularly~alled Sensex. The'base 0tl,each:tradiri'g.day:in thejiast ~ix isaccounted fo~inindexcoIllpanies ..A . .year for the index is 1978079and the months:!' .. ';'." :'" 0 large p~ of'Illar~et'a~tivfry is also basevaluet:l00.'In othe~ words,leTIle4Ind~x Co'mmitteesh~uld',be' concen1nl.ted in.thes~cOunters;, .Rs 100 invested in the inaex in f?78s~tisfieti~with{the cJmpan~:s tnltk::The,storyofthe~ense~makesi~ ,:79 isRs 7,000 now. Thus, the index ,: record.,;.;;,":' agood:,b~nchmai~"'forevaluating provid~s a j)enchill~k representationje, . T~e. I~.~exCom~ittee,.''''of t~'e long-term 'ret~r?sf~()mt~eI~dian li'of gi()wth stocks",; exc~~ngem~ets ~yery q~kt~r~?revi~,w m~ket..;Theinaex.,.w'as,thefirst. ofit~ '~vertifue: :;::~,the;,comp(;siti6n. TiJl dat'e; 'y~;_",;-,. the~p:dip:ttiecb~~~.; ,:;:,.0 <;~ .,
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YOJANA August 2005

85

Globalisation Can Have a Human Face

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liIManu:rN[.K(ijj{a:m;::l You have

latest book

been

a great champion of globalisation and. your Defending Globalisation is a testimony to that. But many civil society groups are opposing it. What are the virtues and vices of globalisation? How much human is the human face in it? on can have a human face and there are many cultural and social dimensions of it apart from economic dimensions which are often depicted in harmful terms. Many NGOs feel that because of globalisation child labour has increased. ILO has estimated that nearly 200 million children under 15 are' at work. Child labour is historically inherited and has been long standing and should not be attributed only to globalisation. Child labour is rooted in poverty and wherever globalisation translated into general prosperity and reduces poverty, it accelerates reduction of child labour and enhances primary schooling and literacy which in turn-enables rapid growth. So we have here a virtuous circle. Often globalisation is blamed for this wicked child. is like exploitation. the human Globalisation

body-of course it has a face, a body and legs. The globalisation shape. There face will smile players in

only if the legs and the body are in good are many making the face of globalisation smile. The body consists groups, the State, of !the corporate the market, groups. the and

Ifl~~~aisfi'ifBh5!li~!!ill G10balisati

scientists/innovators/technologists the civil society through its instruments

The State of good

governance form the legs and if they are weak, globalisation is also weak. Bodies like the WTOare standard sellers but at best

the ultimate

decision-makers are the governments of the developed and developing countries. There is no use blaming global players and we have governments. to blame sovereign

There is no use blaming global players/or-the weaknesses 0/ globalisation. We have to blame . sovereign governments

Wealthy charities have now turned to agitating about trade issues with much energy but little understanding. When Oxfam agitators at the WTO meeting in Cancun in 2002 paraded about wearing the masks of G-8 leaders, this proposed the witticism that here were a bunch of dummies dummies! Oxfam's masquerading annual spending as other is over

An interview with Prof Jagdish Bhagwati of Columbia University, USA, by Manu N Kulkarni. Prof Bhagwati was in Bangalore recently to deliver the Krishna Raj. memorial lecture.

86

YOJANA August 2005

(,--,;.$350 million and that of Action Aid is $140 million. Like

corporations they are under pressure to diversify into new areas of public policy regardless of expertise as they pursue fund raising opportunities. But they are dangerous if they speak from incompetence corporations do .not. since they wear halos that the

The power to excel

Does your $on have it?

m!~~lml1T~There

are also some NGOs who oppose globalisation because of its impact on environment. that the best' policy is to combine free trade (or a freer trade!) with an appropriate environment policy. There are "money valu~" and safety issues like the hormone-fed beef and genetically modified products. Then there are moral values like tuna caught with nets that kill dolphins or shrimp caught without the use of turtleexcluding device. In both greens feel that trade rules put environmental regulators at a disadvantage. GM foods in the US are treated as safe based on scientific evidence but Europe and its NGOs feel they are unsafe based on their sentiments. science. Sentiments cannot and should not replace
He thinks differently. He aims high. And he acts with a self-assurance that never ceases to amaze you. You rightly believe he'll make his mark in any field he chooses. But remember: today, the choicest of careers are the toughest to enter. And the finest of institutions mean the keenest of competition. Does he have the power to outperform the brightest of contestants? The power to excel? Make sure he does, with Brilliant Tutorials - a pioneer whose correspondence courses have brought success to thousands of young aspirants like your son, for nearly 35 years now.
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Itlr~n1!!!r~!!!js always believed I have

gB'~~lEl

Recently you have been honoured by the Indian government as an outstanding NRI and how useful is the dual citizenship Government of India? for NRls granted by the

1lii"~J1BiiII!mrgCitizenship is just a piece of paper and NRis have no voting rights in India. I believe in what I call "Bhagwati Tax" for the NRIs if they hold Indian and the other country's citizenship, and they should pay income tax to the Indian government as is done by the US citizens. There is no citizenship without responsibility and by paying tax in India NRIs contribute to the nation building in India.

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.iW;~'1(~w.!!1!l have always been quoted You

are your childhood memories of Gujarat?

as a potential Nobel Laureate, how do you feel about it? What

IlIf~mU!DlilllIt is all matter

of luck and God's will. I have always felt that if I miss it I will be the second Gujarati after Mahatma Gandhi not to get it! My father was a school teacher in Baroda and he was a God-fearing man and used to sing bhajans and was therefore called Bhagwati. That is how I have become a Bhagwati!

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iiiiilliiiiliilllliiiiiiiiiil!!llllllll!l_.lID

.G;:fNlK~~.:'

IJjt'!:>~~",df~~_~"-,"'~~~,tI Thank you Prof Bhagwati for your

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YOJANA August 2005

87

Tea Industry at Crossroads

GD Banerjee Sardtl Banerjee
HE INDIAN tea industry is in many ways at crossroads and faced with a number of critical problems basically the low price realization and high cost of production. Towards the end of 20th century, domestic consumption reached a plateau, leading to a marked fall in the prices, down to uneconomic levels. This has resulted in Indian tea industry pass through a critical phase. There are many factors responsible for the present crisis. The most important factor has been the failure of tea to keep pace with the cha'nging times. Traditionally, coffee was the being produced is not price competitive. This has resulted into plainer variety forming the bulk of exports, thereby damaging India's reputation as a source of quality tea. One of the important reasons why Iridia is not costcompetitive is the nature of plantations. Some 70 per cent of plantations in our country are over 30 years old and 45 per cent over 50 years old. The old plantation gives poor yields not only because they are old but also they are planted with low yielding planting materials and their resistance to pests and diseases is poor. The reason for recession in tea industry is surplus production (especially of common tea) the world over. The plateau off of

Better price realisation for tea, critically depends on increasing of market share and also creating a niche in the value added segment to product innovation
88

major competitor of tea, but now tea domestic consumption and comparatively faces major threat from the soft drinks. higher production costs, only speaks of Another major factor is the lack of a multipronged approach that is knowledge about the health related benefits of tea. Besides launching the urgently needed. National Tea Campaign "Pi yo More Chai", private companies should also make efforts to promote not only their brand but also tea as a whole. Faced with stiff challenges from other tea producing nations like Kenya, Sri La~a, Vietnam, etc., India needs to be price competitive. But quality of tea In order to attain long-term viability of tea industry, targets should no longer be production oriented, but shall aim at reducing cost of production, improving productivity, value addition, product diversification and marketability. It further states that one must concentrate

Mr G.D. BaneJjee is Deputy General Manager, NABARD, Mumbai and Ms Sarda Banerjee is Research Associate, Mumbai University.

YOJANA August 2005

II ~

on increasing the productivity of existing gardens rather than establishing new plantations with huge investments. There should be continued efforts towards further increasing the profitability of tea gardens through repLanting/ rejuvenation operations. The main thrust should be on quality so as to make our teas competitive in the light of opening up of the economy under theWTO agreement on agriculture. Thrust is to be given on improving marketing capabilities as well as substantially improving packaging and value addition. Conversion to organic methods of tea growing is to be encouraged. Information technology needs to be given due consideration for making available ready information to the tea industry and for promotion of our produce in other markets. We should also explore new markets for tea exports rather than depending on a few markets. and mechanization of

encourage product diversification and creation of facilities for dual manufacture CTC), encourage value addition and production of instant, ready-to-drink. tea, decaffeinated tea and speciality teas, ensure adherence to the prescribed international and domestic SPS (Sanitary and Phyto-sanitary) standards for tea, make higher investment on R&D and transfer of technology, reach technological advances to smaller estates where potential for improvement is the best, reduce packaging costs and use alternative and inexpensive packaging materials, explore the possibility of setting up of modem packaging and blending units within India with foreign collaboration, support for promotion of value added teas in overseas market by exporters, importers to take advantage of IT tools for vigorous promotion, of tea (orthodox and

reduce the cost of production

by

improving productivity and minimizing wasteful expenditure to increase profits from the existing plantation. The competitive advantage of tea industry depends primarily on quality of manpower and quality of Indian tea. Long-term prices depend on supply and demand for tea available in markets. Thus one must identify markets based on global predictions on demand and ability to pay premium demand by different types of Indian teas and develop specific strategies for focused markets and allocate funds in these markets. There is need to build on value perceptions around Indian tea with Darjeeling as flagship and launch promotional campaign in major markets and provide legislative protection for teas of Indian origin along with Indian geographical indications such as Darjeeling, Assam and Nilgiris. Further attempts may be made to launch Indian tea logo as a mark of quality and speciality tea together with extensive promotion of speciality teas by way of using website as a marketing tool to hasten the buying process. Emphasis may be shifted from product to quality based on appearance, cuppage, ecology, and sensitivity to bio chemicals, health benefits and lifestyle.

Strategies
The strategies are to enhance production through vertical development measures such as replantation, rejuvenation, pruning, filling of vacancies with better varieties, etc. improve the productivity of small tea gardens, emphasize on irrigation and drainage augment tea processing facilities by construction of new tea factories modernize the existing tea factories for ensuring production of clean teas without any trace of foreign material in end products, YOJANA August 2005

encourage organic tea cultivation and production of green teas, InItIate special promotional programmes in thrust countries, need to continue an intensive generic promotion campaign within the country so as to increase the per capita consumption and to arrest the declining trend in domestic demand. A strong and vibrant internal market will create the necessary synergies for expanding the export market,

Long Term Health

Long-term health of tea gardens depends on infrastructure for value addition, provision for duty free facility to exporters, support for purchase of foreign brands/distribution arrangements/ warehouses in foreign markets by Indian companies.

89

L)
Further traditional markets for organized. This is a highly primarily bulk tea must be retained. . technological area and an edgein this A drive to locate large growing' field would open up sophisticated segment of consumer markets across markets in future. the globe has to be further launched Research to be further strengthened and strengthened. We must promote on: our own global brands and secure a long term markets for Indian tea in integrated nutrient management, origin. forecastingmodel for pest incidence, Government may further consider energy conservation, duty free imports of capital equipments/machinery for packaging product diversification and value addition, of tea bags, instant tea, ready to drink tea and canned tea machinery and tea and human health, duty free imports of filter papers for tea bags and remove infrastructure transfer of technology, bottle necks and improve infrastructure establishment of chain of quality facilities (ports, customs, banking, laboratories in the important tea insurance, etc.) growing regions, Provision of incentives for value added teas, launching promotional campaigns for Indian teas in thrust markets, conducting market service to assist Indian exporters in their marketing efforts and deputation of delegations to prospective countries to enhance contract for exports as well as to study strategies followed by competing producer countries are some of the other areas to be strengthened. In order to increase India's export potential,the option of importing tea for re-export will have to be kept open, as world blends will require teas from other growing areas. separate focus on tea bags is essential. One of the highest . value added emerging markets is instant tea and ready to drink beverage. With a view to making India a global competitor in value added teas, there is need for setting up of the blending, packaging and processing facilities at internationally competitive levels. Globally competitive canning lines, processing equipment and branded/privatelevel option needs to be irrigation and drainage, biochemical analysis and quality improvement, soil management cultivation of tea, and organic setting up of demonslration plots, organizing study tours, workshops, seminars etc. and institutionof productivity and quality awards. he issue relating to cost reduction and improvement in quality of tea has to be addressed properly. Although 80 per cent of the total production is nearly consumed within the country, India is one of the five major exporters of this universal beverage. South India accounted for nearly 601 per cent in quantity terms and 40 per cent in value. terms. Unfortunately our share in the world trade has suffered a decline from. around 1/3 in 1970 to 18 per cent in 2004-05. The export performance during the year has been somewhat unsatisfactory. There was decline in export by 12 per cent compared to the previous year. Though dc~clerationin export in quantity terms is only a moderate 3 per cent, decline in price realisation has been over 9 per cent. It is also a matter of concern to the government that the share of value added tea exports to total exports has been registering an increase. In international front there has been a tremendous pressure on commodity prices particularly for tea, coffee and spices. This has been despite the opening of markets and the liberalisation process set in motion in all the countries particularly in the developing ones. There seems to be a global oversupply. Better price realisation for tea, critically depends on increasing of market share and also creating a niche in the value added segment to product innovation. There is a growing need for value addition to tea at the post harvesting stage. Keeping in view the new markets and YOJANA August 2005

packaging, eco-preservation and other related areas, biotechnological aspects and pesiticide residues, metals, mycotoxic and connected research work. Development areas include: setting up of a training center and advisory centers for the benefit of small tea growers in NE region, opening of new development offices of Tea Board for closer interface with the small growers in the nontraditional areas, strengthening the eXlstmg field offices of the Board, setting up of nurseries for supply of planting materials to the small growers,

90

l .
emerging preferences of the consumers all over the world, there is a need for urging upon the tea community to lay emphasis on productivity with definite focus on package of measures rather than mere increase in production. The effort should therefore be on R&D institutions working in tandem with the market leaders and consumer groups who have become extremely quality as well as cost conscious. The message conveyed by them is loud and clear-innovative or stagnant. One should evolve dual strategy and should improve competitiveness through productivity increases to improve our market share in traditional tea segment and create a market for value added tea products. _ It is against this background the Gol has worked out the price stabilisation scheme which is deal with the emerging situations. While the research efforts leading to sustainability in production, enhancement of productivity and improvement in overall quality of tea in terms of biochemical parameters are in progress. It is imperative that a greater thrust is given to the frontier area of biotechnology. Currently, this research is being done on micro propagation, somatic embryogenesis and protoplast isolation and fusion. Attempts are now being made to start multi-institutional projects on in vitro breeding and genetic transformation, molecular characterisation of tea cultivators, development of protocol for transgenic production of tea plants, characertisation of clones for the enzymes of flavoured path way for cateching synthesis. 0 expected to benefit a good number of producers of important cash crops. Hopefully, the implementation of such schemes would arrest violent fluctuations in the market prices of these products and lend overall support to the growers. It requires cooperative partnership of government and business and farmers. Then only such arrangements will succeed. At the same time one is also aware of the fact-going by the experience of countries like Brazil, Ghana and others-such interventions do not necessarily guarantee stabilisation of prices or adequate return to the farmers. It is essential that in this free market economy the farmer should also get to organise themselves on moreprofessional and viable lines to

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invest~fni~subsidy" "nfrastfuct~~7iICOS tgPI projeci~:A'Ildhra pi~aeSh, Punjal,l,.iuppersj;e

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and Hi~~ch!ll praae~~ilarethe Othe.i~l[' 'infra;t~ three ,l~t~~t beneficiar~es underthe~il" agepcie~: Central's7ctor scheme known~s,"f; th e "S treng,',tneninglDe;yelopment o,l~',',TTi.'ii l 't'i. . ," '. ' " ... capt a , AgricuHuraliil.,inarketingiil" !i.f . ,....... , .. In." mar Jnfrastr~.cture Gr~ding an infras T Standardisation". d I ',KetaIi'':Tamil Naau,ii:ked 't Pra~ei~'and Uniori'lTtmitory 'Agriia~ ,Andama.~land Ni~ob@.Isands we CommIt notified"earlier, for assistance una direct the sCllem~, it was ()fficially stated' .. lcomJll~ : here. Ti." .' "11.. ."l"compeli
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,~'~otificati?ritll~:i ptiva infrastr~~.iure project;;in all. tli~seil .. states will now bt' eligible f(;)r investrh~ntsubsidy of25 per cent 6(. . the'capit!ll cost up tdil~s 50 lakh ori:~
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YOJANA August 2005

91

NATIONAL DEVELOPMENreOUNCIL',. ",,'

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Talking Development
HE PRIME MINISTER has told the National Development Council (NDC) that the 8.1 % growth target of the 10th Plan cannot be achieved. Inaugurating the two day 51 st meeting of the NDC in New Delhi on 27th June, Dr Manmohan Singh said, "we can, and should aim to, achieve higher growth. Our Government set a target of taking growth to somewhere between 7-8% and this is what we should aim for the last two years of the 10th Plan. However, even if we achieve this acceleration, we cannot achieve the original 10th Plan target of 8% growth over the plan period as a whole." The Mid-Term Appraisal (MTA) showed that the performance of the economy was well below the target, averaging 6.5% in the last three years. The two day meeting was convened to approve the MTA of the 10th plan. It provided an occasion for Chief Ministers, Governors and Cabinet Ministers to take stock of the state of the economy. Dr Singh expressed concern on deceleration in agricultural growth rate after mid 1990s. "Agriculture had grown at 3.2% from 1980 to 1996. It decelerated to 2.1 % during the 9th Plan. The' cornerstone of the 10th Plan strategy was a reversal of the declining trend in agriculture and with a target of agriculture growth. at 4%.
92

Unfortunately, actual performance of agriculture appears to have deteriorated even further and will possibly not exceed 1.5% per annum during the fIrst three years of the Plan. In these circumstances, it is hardly surprising that a perception has grown that the benefits of growth have bypassed a substantial section of our people, particularly those living in rural areas" said the Prime Minister. Outlining the policy direction towards doubling the agriculture production in ten years, Dr Manmohan Singh mooted the idea of creating a NDC sub-committee to work out the necessary steps. Pointing to deeper problem in agriculture strategy, Dr Singh promised to plough investment in the farm sector, including inputs supply, credit, diversification of corps, better production practices and improved post-harvest management. Cooperative credit, according to Prime Minister, will be the mainstay of financing the farming sector. He sind, funds would be pumped to complete irrigation projects, take up new ventures, manage water in rainfed areas and adopt watershed programmes in drought prone and wasteland areas. Turning to infrastructure, Dr Singh picked up two specific areas. One was the dire need to overcome power shortage and the other the need to create an environment to attract both public

and private funds in the sector. "For this, the financial health of the electricity agencies in states has to be restored, which can not be accomplished without a reduction of AT&C (Average Transmission & Commercial) losses 10 percentage points in two years and focus on providing quality power at appropriate prices" he said.

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O;erome;<electrid~ shorql~~ b'Y',attracting <jpublica:n,~l: 'p,p~atese~~9~ inv,e~.nent ",,~:.< FInancial" heaUh: of the el~ctricity agenci~;igthe siat~< has to be ,restoredLj,i
Emphasizing the need to improve governance at district levels, the Prime Minister said it was necessary that civil servants should be entitled to a minimum tenure security.

Deputy Chairman
Asks Government policies

at NDC
to correct farm

Power sector weakest The Planning Commission has advised the Centre to correct the farm YOJANA August 2005

U policies

to arrest the decline in growth in the sector. In his presentation at the National Development Council meeting, the Deputy Chairman Mr Montek Singh Ahluwalia projected a grim picture of the farm sector and outlined the corrective steps required for higher growth while detailing the massive investments that were required to improve the country's infrastructure for achieving a higher overall growth rate. Dr Ahluwalia said while urging the Government to have a re-Iook at the efficacy of the existing strategies for both irrigated and dryland areas. In particular, he made out a case for imposing user charges on water as the current levy was only a fIfth of the operation and maintenance costs and the rural poor had not benefIted from it. He said some states had taken to raise water charges and are undertaking institutional reforms such as the establishment of regulatory authorities to determine water tariffs and participatory irrigation management. Dr Ahluwalia said "The policy of free and very cheap power obviously contributes to the problem by encouraging exces~ive withdrawal of ground water. The Mid Term Appraisal calls for a move towards more rational electricity pricing". He also suggested that electricity for agriculture should be priced differently in areas where ground water has been severely depleted. Turning to the "massive" infrastructure investments required in sectors such as power, roads, ports, airports and railways, Dr Ahluwalia said "success would lie in innovative YOJANA August 2005

action by both the Centre and the states. Public investment in infrastructure must be increased, but the total investment need of these sectors in the years ahead are so large that they cannot be met by relying on public resources alone." The inadequacies in infrastructure in the rural and urban areas, he said, affected the country's ability to compete with cheaper imports as also in penetrating export markets.

Advocating a need to take intensive reforms in the power sector, Deputy Chairman said "Power sector is the weakest part of the country's infrastructure". He said that unrealistic low tariffs which are partly responsible for fInancial unviability in distribution segment, apart from leakage and theft and deliberate under billing, have to be taken care of. He outlined the positive aspects of the economy while giving an overview of the corrective action required to bring the economy back on track in line with the targets of 10th Plan.

He asked the Chief Ministers to go ahead with reform in the pension scheme as otherwise, the liabilities of the Centre and states would soon be unbearable burden. By 2009-10, the joint liabilities on this account alone was likely to be over Rs 100,000 crore. Mr Chidambaram told newspersons after making his presentation at NDC that the Pension Fund Regulatory and Authority (PFRA) Bill has already been referred to a Parliamentary Standing Committee and nine states apart from the centre have implemented the new defined contribution pension scheme. These nine states are Andhra Pradesh, Chhatisgarh, Gujarat, Himachal Pradesh" Jharkhand, Madhya Pradesh, Manipur, Rajasthan and Tamil Nadu. Four other states namely Assam, Orissa, Kerala and Punjab are also considering introduction of the new pension scheme. In his presentation before the Chief Ministers at NDC, Mr Chidambaram informed that existing pension system covered only 12% of labour force. As much as 88% were uncovered due to lack of individual choice, portability and multiple fund managers and coverage. The Employees Provident Fund (EPF) covered only 3.70 crore people or about 9% of the work .force, while the government scheme, GPF, covered 120 lakh people (2.8%) along with Special Provident Fund covering 21 lakh or 0.5% ofthe labour force. The PFRDA Bill, now before the Parliamentary Committee, is for setting up a statutory regulator to promote oldage income security by establishing, 93

FM at NDe
The Financial Minister Mr P. Chidambaram has asked state government to intensify their efforts to find investible resources that spur growth. He also urged then to fIrmly. establish link between expenditure and measurable outcomes to avoid wasteful expenditure.

developing and regulating pension funds said Mr Chidambaram. The Finance Minister said a regulatory umbrella was necessary to protect the interests of workers and a statutory regulating body with penal powers was a necessity to sustain member confidence.

have to bring about changes to ease procedural rigidities and the excessive security oriented lending system of the banks, that create entry barriers for access to formal credit. He said the government remained committed to further step up credit flow by more than 30% during 2005-06. Mr Pawar in his presentation to states, pointed out that agriculture growth could be accelerated through increased investment by public and private sectors, increased productivity of crop, livestock and fisheries, diversification of agriculture, promotion of horticulture and allied activities, reduction of post-harvest losses, development of markets by promoting contract farming and direct marketing and increasing agricultural exports. He added that on-going irrigation projects should be speeded p, water use efficiencies through dip and sprinklers should be encouraged, water-shed development on large scale should be undertaken and rural credit cooperative system should be revitalized.

performing states and comes out with a proper mix of borrowing programmes. The Tamil Nadu Chief Minister Ms J. Jayalalitha observed that the 12th Finance Commission has already given substantial amounts as grants to certain states which have not done well. She said if a state could move faster with a high growth rate, it should be allowed at higher level of debt. Saying that the 12th Finance Commission's recommendations to shift towards market borrowings would cause repayment problems in the long term for state, the Rajasthan Chief Minister Ms Vasundhara Raje said a mix of various form of borrowings should be worked out. The Maharashtra Finance Mr Jayant Patil said the Centre to ensure that the average borrowing is equal across the Minister required cost of country.

L)

Monitor agri credit flow: Pawar

The Agriculture Minister Mr Sharad Pawar has called for close monitoring of credit flow to the farm sector by state chief ministers to ensure expansion of credit cover for farmers. Speaking at. the National Development Council (NDC)meet, Mr Pa war 'said that the government has decided to reschedule agriculture loans worth Rs 10,000 crore to benefit farmers in distress. He said that CMs should personally monitor credit to the farm sector to avoid such distress situations. "Despite the significant step-up of credit flow, it remanis unfortunate that a significant number of farmers continue to depend to a large extent on non-institutional sources at exploitative rates of interest ranging between 24% and 36%", the Minister said. Continued interest by CMs in a systematic review of credit flows to the farm sector can vastly improve things, Mr Pawar said. Mr Pawar said the Centre too will

States Speak at NDe

States want the Centre not to discriminate against performing states in fund devolution. Pointing at.anomalies in the existing pattern of fund devolution, the states on the first day of NDC meeting asked the Centre not to discriminate against

Exhorting confidence over an upbeat investment climate and resurgent tourism industry, the Jammu & Kashmir Chief Minister Mr Mufti. Mohammed Sayeed sought fiscal incentives to speed up economic growth and greater central assistance to boost agriculture, irrigation and small scale units. Demanding continuatiolll of Central incentives to sustain investors' interest, he sought support for industrial development and specific funds to set up industrial areas. The states also demanded corrective action to reverse the slow down trend in agriculture. The Andhra Pradesh Chief Minister Mr Y.S.R. Reddy warned that critical weakness in agriculture has reached a crisis. He said the employment situation in the state was challenging. The Uttaranchal Chief Minister Mr N.D. Tiwari said its science centres for farmers would be reoriented to stress on new methods of agricultun~.

94

YOJANA August 2005

NDC endorses corrective reform steps

The National Development Council (NDC) has endorsed the corrective reform steps and social sector initiatives contained in Mid-Term Appraisal (MTA) of the 10th Plan. It has identified poor agricultural performance and weak state finances as the major problem areas hindering economic growth. Accordingly, at the instance of the Prime Minister Dr Manmohan Singh, NDC has decided to set up two sub committees, one on agriculture and the other on finance to look into debt relief to States. The Prime Minister also directed the Planning Commission to prepare the

"Approach Paper" for the 11th Plan and place it before the NDC later this year. The Sub-committee on agriculture will be headed by Mr Sharad Pawar, Agriculture Minister and will draw implementable action plans with the objective of accelerating performance of the farm sector which has been growing at a rate less then half of the targeted 4%. In his closing remarks at NDC on 28th June, the Prime Minister said the Sub-committee will be given six months to submit its report and its recommendation will be used while framing the 11th Plan. The second sub-committee, which is on restructuring of goveniment debts to states, will be chaired by the Finance Minister, Mr P Chidambaram. -It will look into relevant issues, especially regarding the debt arising from the National Small Savings Funds (NSSF). Explaining the need to set up the sub-committee on finance, the Planning Commission Deputy Chairman, Mr Montek Singh Ahluwalia told newsmen that while the Twelfth Finance Commission (TFL) has recommendation on restructuring of debt, there are no recommendations on cumulative debt of states arising dut to borrowing from the NSSF. This is an important aspect of the financial problem faced by states heavily dependent on the NSSF and has to be

addressed. Dr Manmohan Singh also proposed setting up of an expert group to develop concrete proposals for restructuring the centrally sponsored schemes (CSS). Dr Singh pointed out that many Chief Ministers had either demanded transfer of CSS or their amalgamation into four or five broad heads with freedom to develop locally relevant programmes. Dr Singh added that agriculture and irrigation have been a common priority in all Chief Ministers' interventions.

Consensus on 318 Initiatives

Briefing news persons after the conclusion two day NDC meeting, the Deputy Chairman Mr Montek Singh Ahluwalia said, "there was a broad consensus on the 318 policy initiatives outlined in the MTA". While 59 of them were the priority items of the government to be taken up during the remaining two years of the Plan Period, the rest were meant for implementation in the medium and long terms. While some Chief Minister voiced reservations about "certain specific issues" such as subsidy rationalization, there was "near unaminity" in the MTA's assessment of the economy and its direction in future.

CMs' suggestions accepted

The Prime Minister accepted many suggestions made by Chief Ministers 95

YOJANA August 2005

especially on the revival of the farm sector. He emphasized the need to focus on outcomes while strengthening the mechanism for monitoring and evaluation of develoPIllent programmes.

rate of agricultural

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upto a maximum of 2..3 per cent. Madhya Pradesh Jammu

& Kashmir

Key Messages
According to Dr Ahluwalia, MTA has three key messages: Doubling agriculture the growth rate the

MPs should also get concessions: Gaur Industrial concessions available to Uttaranchal and Himachal Pradesh should also be allowed to backward states like Madhya Pradesh. The banking network in this state is poor resulting in cash payment of salaries. Therefore, transaction tax on cash withdrawals by the government agencies should be stopped. Chhattisgarh

Everything is normal in Kashmir Sayeed Private sector will invest Rs 5,000 crore in the Valley this year. Number of tourists will also touch 10 lakh this year. This conveys the message that everything is normal in Kashmir. Bihar Poor conditions Singh in Bihar - Buta

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Increasing outlays for social sectors such as education and health Building infrastructure through Public-Private Partnership to step up industrial growth.

eM's Reservations.
Give Special Status : Raman Dr Ahluwalia said some Chief Minister had reservation about rationalization of user charges for water supply and power and on reducing subsidy. The MTA recommendation on the need for a regulatory mechanism on water pricing was not well received. It was clarified that the Planning Commission was not for complete recovery of costs but only what was spent on operation and maintenance. I want to develop Chhattisgarh as the fruit basket of the country. This state should be given special status. Inclusion of only eight districts of the state under National Equidevelopment Scheme (Rastriya San Vikas Yojana) is not correct. This should include Koraba and Koria also. Uttaranchal Allocation should be made in the beginning of the year: Tiwari Agricultural, hOlticultural and hydro power projects top the priority list in Uttaranchal. Considering the requirements of the hill states, road construction standards in Bharat Nirman Yojana should be reconsidered. Allocation under Food for .Work scheme should be done in the beginning of the year. Uttar Pradesh Agro loan should be available at 23 per cent: Yadav In view of the conditions of the farmers of Uttar Pradesh, interest

Most of the mineral and forest resources as well as major industries fall in Jharkhand. This made the condition pathetic in Bihar. Even after five years of their division, properties of both the sltates have not been separated. Tripura Lack of infrastructure is the biggest hurdle : Manik Sarkar The National Railway Project which includes extension of railway lines to Agartala should be completed by March, 2007. Eventually, it should be extended to southern tip of Tripura. Vast reservoirs of natural gas in Tripura need to be utilized. Constitutional provisions may be made to ensure that larger funds are made available by the Centre for employment programmes. The state and the North East will be benefitted if Bangladesh is persuaded to allow transit facility to Indian goods. In addition, border haats may be established along TripuraBangladesh border to meet the local commercial needs. 0 Special Reports on NDC: Compiled by Editorial Team (Yojana) YOJANA August 2005

Food Subsidy
On Food subsidy, some Chief Ministers also expressed reservations. Clarifying the position, Dr Ahluwalia said "what we are looking for is that subsidy should be better targeted and only deserving people should benefit from the subsidy regime. The Chief Ministers agreed on the assessment of the economy as project in the MTA. They also agreed on the direction outlined in the document for correcting the shortfalls. All Chief Ministers appreciated and welcomed the stress on agriculture, infrastructure, education and health.

96

In the News

lndia andSingaporehave taken a giant~tep in eXPanding trade relation by signing ,a comprehens~ve Ecdnomic Cooperation Agr~ement (CECA). Signing the,accord, ((the Prime Minist~r Dr lVlanmohanSingh a~d his Singap?recounterpart, MfLee Hsieu>Loongsaid it would boost ties' between the nations. CECAis integrated package comprising trad~ in goOds and 'services, agreemenron inveStments, rrlutual recdgnition agreement in services and ~cooperation agreements in ,customs, science and te~hnologYr educatipn, ecommerce, intellectual pro~rty and llledia. ', "India, U~A ink defence ~~ct>::, Upgradirigtheir defence ties,Indiaand~tbe UnitJt:States ! of America have signed a' ten-year agreemerit thad '.,envisages stepped'up military cooperation in';variousl fields indluding joint weapd~ _' produdtion, tectinology ~ ", _ .'.' _t;P-o:::?" transfer and collaboration on missile defence: The! ': agreemellt calls fOf' mainta$ing secijIity and' '~tability,l , defeating"terrorisn'i~' preventing the sptead of weapons of mass destruction and {Jrotectingihe free flow ofl .commer(fe via Land, air ansI sea. " ,>' " '\, ,i;;"'. ,! The government has hiked petrol and Qiesel by,Rs 2.50, and Rs2.00 a litrerespectiv.~ly. The ()t1compaqieswereJ " allowed to effect;the increase from1lrid nigh~!of 20th 1 :'June aft~r a gap of more thanseveW month&duoog which the'Indian basket of crude oiL reached ,'$52.831 ,lmark. The prices!pf kerosene and have hot beenl . changed:!: " ';i~!j I " "'7' ~ i The ow~ership ro~ on the l'lakhcror~Reliance'efupirel Cwas res~lved on:18th June, after .~tnbani8~thers,1 eMukesh and Anil, reached "amicalJi~ settlelllent" onl dividing the assets. As per the announcemehiCwaae by;.! ; their mother Mrs. Kokilaben Ambani kesh Wi~retainl Reliance';IndustriesLirnitedand !PC hereas &il wilvl get Relinace Infocom, Reliance Energ5,.'Lirnit~'(REL)1 and Reliance Capital.. ';'!~~ ," . . settlement in theRs 100,000 crore Atnbaniempire. The sense~cwas not~able to s(IStain atthat level.for a long time. IVended tl1~. ay at aC~ewall-iline high o~.6984.55.~\ d gaining78.03p6ints fro~' its previous close.'iBut not' befon~..the sensex hit a n.ew all-time high o~ 7001.15~ in intra~day trades. Shares of Rellnace indbstries th.~: ,Sensex'ssecondhiggest c()nstituent,jumped7;5% to ai record;Rs 645:70 and Indian Pterochemicals Co. Ltd ' rose '7;% to R~;.167.60. '$oththe 'c;ompanid&;are no~. controlled by Mukesh Ambani. The share. price of AniI> Amban,i, contrpl!ed frrmsnoticedeven higher growth. Relina:ce Ener~surged l~% to Rs705.90 anD,.Relina~. -CapitaI;rose 30% to Rs 308. " ';
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A,.proposal'::for mergt'fr of public sector:Jn.dian ITOI) an~i,Steel Cdlllpany and Steel Anthority of India hait ~ll approved, ~~gove~ent has ~~cided to restore aw.easureof c.fUri~tional and financial autonomy to prestigiou~. 'itiJ6tutioris"o{higher learning. such as IITs and lIMs wi1;hUnion'Qabinet approving a ,modified block grant sclj~ine forflIndingtIiese institittions. ' '2,
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The 130 years old Bombay 'StockEichange'!:~reatedl history :on 20th June. The<benchmarK Sense~:hit the!: magicai'7,OOO level for the fi:rst timeiti'intra~da~;tradingl as bulls scrumbledto buy. Reliance stotks aft~rIS~ June! YOJANA August 2005

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the coun"try become a republic. The proposed amendment will allow the Qenefit to all person of Indian origin and their children who migrated to other countries - baring Pakistan and Bangladesh- after 26th January 1950. This applies only to countries' which allow dual citizenship in someform or other. To help the production of contamination free cotton, the government has approved an increase in the overall target under mini missions III and IV of the Cotton Technology Mission, for development of 250 market yards, modernization of 1000 ginning an~ pressing factories and installation of 200 grading laboratories. Fulfilling a long demand of overseas Indians, the government announced on 29th June promulgation of an ordinance to grant citizenship to persons of Indian origins other than those who had ever been nations of Pakistan and BangIa Desh. Earlier the Cabinet approved a number of measures in the health sector. This includes a Rs 184 crore plan for upgrading facilities at the Jawahar1al Institute of Post graduate Medical Education Research (JIPMER), Pondicherry. A world class drug research institute in Lucknow will be set up at a cost of Rs 190 crore. A grant of Rs 504 crore has been approved. from the Global Fund for HIV/AIDs, TB and Malaria for providing anti-retrovival druges ofHIVI Aids patients in Tamil Nadu, Andhra Pradesh, Karnataka, Delhi, Maharashtra, Manipur and Meghalaya, Another grant of Rs 317 crore has been cleared for anti-malaria activities in West Bengal, Orissa,- Jharkhand, Assam, Tripura, Arunachal Pradesh, Meghalaya and Manipur.

French firm Succma Moteurs to manufacture spares and part of civilian aircraft engines. Jute Cess for North East . The Government has decided to exempt the jute assets of the North-Eastern region/States from cess for a specified period in a bid to boost their business and help increase the economic growth in the region. For "the purpose Jute Manufactures Cess Act 1983 will be amended. Railway Staff will continue to get free passes for travel. The Cabinet has rejected a railway panel's proposal to discontinue this facility. Global Development Network

The Cabinet has approved the establishment ~f Global Development Network which would address the problems of national and rural development. The government has approved Indian Me:dicine and Homeopathy Pharmacy Bill 2005 seeking to set up a central pharma-cy council to regulate education and practice of pharmacists of ayurveda, siddha, unani and homeopathy. The government has fully exempted construction of port and processing of gems and jewellery from service tax. Service tax relief has also been given to the shipping industry and for infrastructure projects. Individuals enjoying taxable service abroad too have been spared. Nine new services have come into the net from JUlie 16. A 10.2% Service tax will be imposed on services such as club membership, construction of residential complexes, transportation of goods through pipeline and site formation among other. With the latest notification, the tax net are dredging .of rivers, ports, harbour and " backwater, survey and map making other than those by government departments, cleaning services other than for agriculture and allied sectors, packaging, and emailing list compilation and mailing. The Haryana government has enhanced the unemployment allowance for orthopaedically, visually, hearing and speech impaired as well as the mentally challenged and blind educated youth of the state. It has been increased to Rs 600 per month from Rs 300 per month. . The Karnataka government has cleared proposals for .establishing 13 new heavy industries in the state and a five star hotel in Bangalore. The proposals envisage an investment of Rs 13,942 crores. The new industries will create over 1.90 lakh jobs. A majority of the

New Law to Shield Women The Union Cabinet has cleared a major Bill which will give all women in household legal protection act just against domestic violence but even the threat of abuse. It will also give them rights to stay in their matrimonial homes. The shelter provided by the Protection of women from Domestic Violence Bill not be limited to spouses. It will cover women who are, or have been in a relationship with the abuser where both parties have lived together in a shared household and are related by consanguinity, marriage or adoption. It will cover " members of a joint family, even "sisters, widows, mother, single women or women living with the abuser". The Cabinet has decided to constitute a Group of Ministers (GOM) to draft a new Act to replace the existing Foreign Contribution (Regulation). Act. The Centre has approved the creation of a joint venture between the Hindustan Aeronauatics Limited (HAL) and

98

YOJANA August 2005

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\iIldustri~haveb~nprop~~ed in rural areas with a focus >on nortH'Karnataka. ~~.

The ilniform, allowance for girlshasl:leen doubled up from RsJOO to ~200 p~month. Bicy~les wiril~be giVe~free of cost to girls stu&ents belonging, toweakerLsection 'of class VI, VII and VIII",who d6. notha~e a middle school intheir villages.

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An~a Pra.~esh g()i~~rnmenthas deCided a five ,. percenereserv~tion for,~kuslilPsin edlJcation~nd ! !employment. Itis'based()n the recommendations of the Backward Class~s Conumssion. ~ ~ ~~ ~ ~., ~

iOiI and NaturaLGas Corporation (ONGC)'has chaiRed ; .J''Haryanllgovemrpent has decided to waive off pel1ding at plan to set upt\vonewgrassroot refineries of 5 milJion j'~electridty billsof farmers of Rs 1600 crore. ~. reserves In IndIa ~ ~;,GujaratState PetroleumCorporatipn Ltd. (GSPCL) has The AiidhraPradesh govetftmenthas sanctionedincrease made thy country's biggest gas discovery 20 billioncubic ..in dearness relief to pensioners and an ad~hochike of feet (bC;f),wortt.l$50 billion in the Krishna Godabari Rs 25.per month to parHime aSsistants and village (KG) basin in Andhra Pradesh. The Gujaratgoverrnnent ...servants w.e.f. January 1, 2005. TheDAhiketo has named the project asi"Dean Dayal" (Saviour of the govenuri~nt staff, those of the local bodies and allied {poor). The commercial production of gas is expected to institution,including universities, who are drawing 1999 I ~~beginrrom end'2007. (. pay-scale, will be'at 2.424% of tpe pay working outto . cumulative 36.81%. It will be at3% cumulative 67%) ~ The Madhya Pridesh Cabinet has endorsed the Madhya in casepf teache~s of affiliated degree colleges. ;~,PradeshjPanchayat.Raj nd Gram Swaraj (amendment) a ordinance 2005.With this amendment,the State Election Describihg it an~'making history", the Clllef Minister : ,Commi.~sion wotlld conduct the elections ofup-sarpanch of Andbra Prade~h, Mr Y.S. Raja. Sekhara..Reddysaid 'pf GraI1lPanchayats and the Chairman and Vice the foundation f6r the Country's first Mega FaD, a . Chairrn~ of Janpad andZila Panchayats. massive semi-conductor unit in Hyderabad on 28th June. The project is promoted by Nano-Tech Silicon I[ldia . .In an effort to accelerate personal computer (PC) Pvt. Limited. The first Mega Fabis being'taken up at penetration in the country, Department of Information a costof$600 nlillion andis expeCtedto 1Jecompleted ~~~ Technology has launched a CD, which includes basic >software tools and fonts in Hindi. ,The Hindi CD would .in 15 months. I1'1s likely to generate' 20,000 jobs." be dis~ributed free of cost to the public. on The Centre has again imP9sed Deenon the sale of non- . ,www.ildc.govjn Fonts for 24 Indian langUages would iodisedsalt. 'be ready. within six months for public distribution. ~ tonne per annuIll.capadtyeach atBarmerin Rajasthan and Kakinanda in Andhra Pradesh. ~GSPCfinds biggest

gas

Promising a growth rate of 6.25%, thi;;Jharkhand I. The wi~ild Ban:k will release soon $250 million governrpent has'presented a budget ofR.,s12,42~.33 ! ';(Rs l,i~5crores)10an to!Karnatakaas part of the second .c;roreforthe current fiscal: Though no ~~~have -been,~:instalm.ent of me $1.1 billion loan for states economic proposed, the target of reaJ.1zation:Of coIll.iIletCialtes . : JtrestrucIDring plan; has been pegged at Rs 2:300 croie. ,. ~ "1, ."The Centre has launched a commodity Soochana Kendra 'The Haryana gov;emmenthas annO~nCedjJ~yntive~'for ,,:;at Vasht, Murnbai It is a common market place for .the empowerment of women. TheSe arefonowing~,;:participallts from.mandies across the country for price ,.----,-{,.;, and krlowledge.dissemination. It is a joint venture of A rebate of 10 paise per unit'in electritity bills in "Multi C;pmmodityExchange of India Ltd (MCX)and case,the domestic connection in the name of a '!Nation~i' Spot Exchange for Agriculture Produce worri~n. ./ / ~:i(NSEA:r). A women cooperativeb<lllkwil1,,1Je setup)nd it w6rild . 1~0The Ori~$agoveIDD1ent the Sou,thKorean steel major and be run by wOmenthemselves: ... !' . fPohangSteelCompany (POSCO) have signed a Children wouid be provided health cards andth~ir \" .imemonindum of understanding to set up a 12 million health check up would be conduct{ldat reg~lar ",tonne steel plant in the part .of town of Paradip. interVals. Project to be completed in two phases 33% of the post of teachers will bettserveqfor women. Plantto reach full capacity by20l6
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99

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The European Space Agency (ESA) will partner with the Indian Space Research Organisation (ISRO) for Centre to earn Rs 89,000 crores over 30 years. India's unmanned mission to the Moon planned for launch by 2007-08. The ISRO Chairman Mr G Estimated cost is $12 billion (Rs 52,000 crores). Madhavan Nair and the ESA Director General Mr Jean This is the single largest foreign direct investment in Jacques Dordion signed on agreement to Ibis effect in the country so far. j Banglore. The project is likely to general direct employment for 13,000 people and indirect emploYtnent for The government has constituted an Inter-State Trade Council, to boost international trade. It has decided to 35,000 people. constitute the council to ensure a continuous dialogue Ms Punita Arora has become the first woman Vicewith state governments and Uni:on Territories on Admiral in the Navy. She has taken over as Director international trade. The Commerce Ministe~r Mr Kamal General of Medical Services in the rank of Surgeon Nath is the Chairman of the Council. Vice-Admiral. She was earlier the commandant of the The Central government has decided to set up a decided Armed Forces Medical College (AFMC), Pune. task force for the conservation of tiger and wild life Doordarshan to offer two new music channels - one sanctuaries in the country. It will also recommend the devoted to Carnatic and the other to Hindustani - on its strengthening of laws against poaching. free to air Direct-To-Home platform. AIR has release "Akashvani Sangeet" CDs and Cassettes of M S The Panchayati Raj Ministry has initiated an action plan to establish rural business hubs. The thrust areas Subbulakshmi, Ariyalcundi Ramanaya Iyenger and identified fro development are based on utilization of Atathur Brothers. / local resources and needs of locals. The states identified The decks have beeh cleared for the second phase of , ,/for a rural business hubs of locals. The states identified ,:tFM broadcasting in the private sector with Union for a rural business ,hubs are Pujnab, Uttaranchal, Kerala, Cabinet approving a revenue sharing model, in which Karnataka, Jammu and Kashmir, Rajasthan, West the emphasis is more on the growth of services then on Bengal, Uttar Pradesh and Chhatisgarh. The core areas generating reverse. The cabinet also decided to allow include processing of agricultural produce, development foreign radio stations to pick up states in private FM of handicrafts and handlooms, establishment of small stiltions within the existing ceiling of 20% of foreign power planats based on biomass and promotion of bio capital. But the ban on news continues. The government fuels etc. will offer 330 new FM licences in 90 cities. The recons6tuted Board of Trade in its first meeting Per Capita Income up by 5.2 % : CSO has decided to set up fme working groups to address important trade issue, namely expert promotion schemes, The latest. figures released by the Central Statistical ' trade facilitation, sectoral initiatives, manufacturing Organisation (CSO) point out that the economy's growth bottlenecks and special economic zones. In the meeting, rate was 6.9% during 2004-05',(fiscal year) as against Prime Minister set a trade target of $500 billion by 8.5% in the previous financial year. Interestingly, per 2010. capita income rose by 5.2 % to Rs 12,416 during 200405 as against Rs 11,799 in 2002-03. Bhagidari Gets UN Award '. 'Orissato provide 600 million tones of iron toPOSCO F~growth in crucial as it generates a fifth of our . GDP and supports more than 600 million people. Agriculture proves to cause of concerns with a growth ' rate of 1.1% during 2004-05 as against 9.6% in 200304.
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Trade and services continued thetifarai' witli 11.4%. Financing, insurance, real estates and business service growth continued at 7.1% during 2004-05. Manufacturing grew by 8.6% through the January - ; , March quarter, starting from 10.5% in 0ftober - , December. Slowing from 10.5% in October-December. j

Delhi government has been awarded pre~;tigious UN Public Service award for its "Bhagidari" programmes for partnership with the citizens. It has won the aWard for 2005 out of 215 nominations for'itl1P'[oving transparency, accountabiling and responsiveness in public serviCe. Centre announces Gujarat package Terming the flood,situation in Gujarat as, a "concern for the nation", the Centre has announced aid of Rs '500 crore for the State and pledged more, assistance. YOJANA August 2005

100

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the Kennedys and Nixons) will be reCkoned as elder statesmen. And some at least can do without 'experience'. James Thurber, i afterhis eyesight failed, claimed he could draw better without thi'handicap of vision.' ! Sometimes experienc~ can be a handicap, , Will the World of;Younger better place? Men'be a

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And will an India where younger men are in control be a bettter place? The average age of the Council of Ministers at the Centre may be going up. But in Delhi as in the States there are several young men who have already earned their spurs (even if we needn't name them.) But~hy should the age of only politicians be thought of when',talking of youth and age? Our engineers-like the lads of Rourkela or elsewhere-are mostly a young lot. The I collectors in the districts, the executive engineers, the superintendents of police and, I at the other end, the economic and policy advisers, are much younger these days then they used to be. The average age of the ; bright men in our atomic energy establishment must be very low. Then why do young men fancy a grouse? truth about youth and age is that .." vitamin pills and the growing branch of medical science called geriatrics ~ .. have demolished the functional difference , between the two. The question should now be not how old a man is but how well can he function. Charlie'Chaplin is still going , strong while there is a very old man of 28 in my office. A Canadian physician hasjust assured us that men in their mid-sixties can learn and adjust as much and as fast as yoUriger people. ' A heartening thought -and not a very , surprising one-with' the yougest elder of . ourland due to step into his seventy-second year tomorrow. e

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ALL NO man able until he is half dead." The man who '. uttered this was not one of , I..' those whose sayings, wise and otherwise, are printed in dictionaries of quotations, but a young bus philosopher.
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I looked over the turban and shoulders of a hefty Sikh in front of me to see what sort of man this four-wheel epigrammatist ! was. Was he thin or was he stout? He was thin all right, and young and

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thirty. He had burriing eyes-which is The most powerful country of the world somewhat unusual in Delhi where people has just chosen a young man as its generally have well-fed, underworked, lazy,. president. It w<is no battle between youth : gray eyes. But the eyes, though burning. '.;.'.andage. Both'candidates were young, and I burned with'll small fire. 'There was no fear '. 'they could not claim any 'experience' of of our man turning a BernardShaw or doing public life dating back beyond the end of : the Joseph to himself. It was comforting. World War II,What is the measure of
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"Call no man able until he is half-dead." The further words of' our young' , philosopher-I couldn't help overhearing : them although I am noeavesdropper-'one . abridged rather than expanded the sweep of , the statemt:nt. He was only railing against the seniority system ingovermrtent offices;

experience in such a situation-what one has done actually and where one has been, or what one has made out of all the chances has had? Some of the leading international journals have been speaking or:the World of Young men. The world of the 1960's,

Printed and Published by Director, Publications Division, Prof. Umakant Mishra and Printed at Tara Art Press, B.4, Hans Bhawan, B.S. Zafar Marg, New Delhi.110 002, and Published at Patiala House, New Delhi-110 001.

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