Bureaucrats: Too many or too few?

For years, many people have urged the pruning of government staff. The last Pay Commission spoke of pruning the civil service by 30%. So many will be surprised to learn that India has an exceptionally small bureaucracy by international standards. The latest World Bank report on India hit the headlines for making some rather repetitive comments on India’s fiscal deficit. But to me the real eye-opener was the report’s section on delivery of public services. This estimates that central and state government staff (around 13.4 million employees) represent just 1.4 civil servants per 100 of population. The average for Asia in the 1990s was 2.6 per 100, and for the OECD was 7.7 per 100.

If that amazes you, hear some more. Around 93% of our civil service comprises clerks and chaprasis (class III and IV employees). They represent gross overstaffing, especially after computerisation of government services and the universality of e-mail. The Bank says that one south Indian state made 48% of staff in the stamps and registration section redundant through computerisation, yet could not retire any of them. If we eliminate half our Class III and IV employees, our civil service will have to expand 14-fold to reach OECD standards.

Does that sound insane? It isn’t. India’s problem is not too many civil servants, but too many in the wrong place and not enough in the right place. Rural areas have always suffered from a chronic shortage of teachers, health staff and agricultural extension workers. In towns, you find long queues at ration offices, motor licence offices, passport offices, and sundry payment windows.

Clearly staff are woefully insufficient in many areas. Nowhere is the shortage more chronic than in the courts, where cases drag on for decades. A major omission of the World Bank report is its failure to include justice as an essential public service that is woefully understaffed and under-delivered.

OECD countries typically have 14 Cabinet ministers. The Indian government has 31, most states have 35-40, and Uttar Pradesh has over 70. A proliferation of ministers means a proliferation of support staff too. Besides, the civil service is divided into dozens of cadres with their own terms and service conditions. This makes it difficult to transfer people from overstaffed sections to understaffed ones.

Most IAS officers are underpaid compared with private sector managers. But the Bank report says that, overall, governments servants get 2.33 times the pay of comparable staff in the private sector. The ratio ranges from 1.27 times for engineering technicians to 2.45 times for service workers (see table)

Somebody should check these estimates. If true, it means the last Pay Commission did a terrible job. I would love to hear the comments of Suresh Tendulkar.

The Pay Commission award has bankrupted many state governments, which failed to follow its prescriptions for downsizing. During the 1990s, Orissa’s salary and pension obligations rose 4.7 times while revenue increased only threefold. So, by 1999-00, over 180% of Orissa’s own-source revenue disappeared in salaries and pensions alone. No wonder development has taken a back seat.

Figures like this are often interpreted to mean that we have too many civil servants. In fact, we have far too few in the right place. Unfortunately, the few who are supposed to serve in rural areas simply do not attend work, with impunity. A World Bank survey found that primary school absenteeism ranged from 14% in Orissa to 31% in Assam and Andhra Pradesh. It was even higher among primary health staff. In the states surveyed this was nowhere less than 35% (in Orissa), and went up to 58% in Bihar and Assam.

Many people urge larger spending on health and education to benefit the poor. In fact that would simply mean more money wasted on absentee staff. If the poor are to benefit, the very first reform must be to empower panchayats to hire and fire teachers. That will make them accountable. Today strong teacher trade unions squash any disciplinary attempt by state capitals. We need administrative reform to make service providers accountable to the communities they serve, not to distant state capitals.

The Bank report says that more than half of all medical visits by poor people are to the private sector. The richest two quintiles account for 65% of inpatient services in government hospitals, the two poorest quintiles for only 19%. The ratios for outpatient services are 48% and 31% respectively.

Above all, we need a vastly expanded judicial system. Today poor people cannot afford to travel long distances to existing courts. Endless legal delays make it impossible to enforce the most basic rights.

One solution suggests itself. We need to retrain millions of Class III and IV employees for a vastly expanded judicial system. This is not impossible: a huge number of processes in the courts also need clerks. Judges will have to be hired afresh. But it makes sense to devolve legal powers to panchayat courts to settle local disputes, and clerks can be retrained to assist with this. Many more can be retrained to deliver services that are in short supply in rural areas: teaching, primary health care and agricultural extension.

This will work only if we have laws making it mandatory for state governments to devolve a portion of state revenue to panchayats for this purpose. Existing staff in these areas must become panchayat employees, and panchayats must automatically get a share of state revenue to pay them (apart from powers to discipline them where required).

This will be a revolutionary administrative reform. But let’s admit that panchayati raj has in practice been a flop. It can work only if panchayats are empowered with revenues and powers to hire and discipline staff delivering local services. This will need an unambiguous new law on fiscal and administrative decentralisation. Only then will ordinary folk be able to demand services from civil servants, instead of being helpless supplicants.

What do you think?