The Missing Base

The Missing Base
By Narendra Luther

A group of citizens rampaged the office of the Electricity Board in Maharashtra protesting against prolonged power cuts in rural areas.

Irate residents of a government colony came out in the capital of India for non-supply of water for five days.

A man was killed in Hyderabad over a dispute over filling his pot with water.

Women in Rajasthan trudge for miles for getting a bucket of water.

You pay for a tanker of water and it takes five days of chase to get it.

A TV image shows you a part of a stretch of 30 miles of the national highway in Bihar. It takes four hours to cover the distance because the road is in an utter state of disrepair.

In Bangalore the industries go on a one- day token strike to underline the state of disrepair of a road leading to an industrial estate

A young engineer in Bihar is killed because he complains to the Prime Minister about corruption in the implementation of the scheme for the national highway project.

Early in June 2005, the special train of the Railway Minister, Lalu Prasad was stopped by hundreds of people of Brauni and adjoining areas agitating against acute shortage of power and water.

Three persons died in Tonk in Rajasthan in mid-June when the Police fired on farmers agitating for water.

The traffic police boss in a metro explains that our roads are not able to take the increased number of vehicles. Hence the traffic jams.

Infrastructure

I could fill up pages with such authentic news items but that is not necessary to bring home the point that there is an acute lack of infrastructure in our country. Infrastructure or ‘social overhead outlay’ covers roads, railways, transport and communication system electricity, water supply and other public services. It is also generally widened to include the health, skills, education and other qualities of the population – resources necessary for any development to take place. Let us forget about the second category of the list above and talk about the hard part of infrastructure.

As ordinary individual consumers of utilities you and I know this - and to retain our sanity, have reconciled ourselves to the situation. We utter the serenity prayer: ‘God grant us the serenity to accept the things we cannot change; courage to change the things we can, and wisdom to know the difference’. Only the philosophy of acceptance and retreat flourishes in such an atmosphere.

The importance of building infrastructure was fully appreciated by our early leaders. Considerable accretions to it were made under the leadership of Nehru in that respect. It entailed sacrifices on the consumption front and we have lived through a regime of restrictive imports for building a better future. But after him, in the hands of smaller netas, investment on infrastructure became a casualty of populistic politics. Short-term sops to people took precedence over long-term investments. Communal and casteist politics too had an adverse impact on the building of infrastructure. Subsidies were given, in some cases with justification. But it became difficult to withdraw them later. They became part of the system and every attempt to remove or even reduce them has been vigorously opposed by the Left parties.

Dog in the manger

They impact adversely on the building of infrastructure. That, in turn, affects the entry of foreign capital and enterprise. Today we are not in a position to undertake investments of the magnitude required for improving our infrastructure. Yet there are people and parties that oppose the entry of foreign capital to enable us to do that. They invoke the ghost of the East India Company and they warn us that history will repeat itself. They ignore the fact that we are living not in the 17th but in the 21st century. In an era of globalization they want us to remain wrapped up in the slip of isolationism. We have seen the advantages of globalization accruing to us through BPO and increased immigration. Yet many amongst us oppose it.

Our present situation is such that we should welcome direct foreign investment in many fields like road building, power generation, surface transportation, airports and civil aviation. They will trigger growth of ancillary industries and small business. Exposure to competition will also improve the quality of our products and services as has been witnessed in certain fields like telephony and the automobiles. Phone calls are becoming cheaper every day. The prices of electronic gadgets and white goods are also falling instead of increasing. But poor infrastructure is the main hurdle to growth. We don’t have road lengths to drive on; we don’t have enough planes to fly people. We don’t have adequate capacity at airport lounges and tarmacs to bring in tourists. Our services at all levels are poor by international standards. And it is the service sector that has played a crucial role in the growth of all advanced economies.

At your Service!

Our service sector is marked by inefficiency and corruption. Corruption is of course the all-pervasive factor in our life. The late India expert, Prof. Hanson once invited me to speak to his class on Indian administration. In his introductory remarks, he said that in India it was either influence or money which made things happen. I felt hurt at that observation but on return to India, I have seen time and again how perceptive his observation was. In corruption the tone is set by the politicians and is eagerly adopted by the bureaucracy at all levels. That however is a subject by itself. We saw how corruption affected the Dhabol Power Project in Maharashtra. When the Congress Government sanctioned it, the Shiv Sena cried ‘corruption’. However, when the Shiv Sena came to power, it sanctioned the self-same project. It was then the turn of the Congress Party in the opposition to cry ‘corruption’. As was shown by what happened to the Enron Company later back home, we found that both were right in their accusation.

Attention: Election Commission

We are deficit in power. Yet party after party in politics has won election on the basis of a promise to give free power to farmers. After winning the elections, some of them had to scrap or modify the scheme. The latest is the Congress Party in Andhra Pradesh. It is now trying to refine the scheme of free power to the farmers by applying some sort of means test. The point is why is such a promise is allowed to be made by any political party. The Prime Minister, a distinguished practising economist himself, has spoken against it. The Union Power Minister has expressed himself against it. Yet their Party made this promise in its election campaign and formed government in two states. The Election Commission should prohibit the inclusion of such inducements in the election manifestoes of political party by making it a corrupt practice. Let the election manifestoes be realistic and not promise moon to the voter. The fraud has to be stopped.

***

Archived by www.mygoldencopy.com

The Flavour of Salt

The Flavour of Salt
By Narendra Luther

Public servants in India have often come in for criticism, amongst other things, for their lack of integrity. There was a time when members of IAS were considered exempt from this censure. They were also jealous about their reputation. Thirty years ago if some one even so much as hinted that anyone in IAS was corrupt, I would fly at his throat. He was uttering a heresy, committing a sacrilege.

My defence became milder two decades ago. A decade later, I stopped putting up any defence. Now I am grateful if they spare me personally from the reproach. Every day you get a shock. CBI or ACB of some state or the other raids houses of some officer and finds unaccounted for assets. Some are arrested; some abscond till they are able to secure an anticipatory bail or fail in their attempt and have no option left but to surrender to a court. When they are taken to court they cover their faces to avoid being photographed by the media so as to avoid recognition by the viewers. The dramatic public part over, they go into protracted trials and some time come out on technical grounds , procedural lapses or defective investigation. But the damage is done all around -- to the individual, the system and the public confidence. The gods’ feet of clay are revealed to the public and those who were considered incorruptible are seen as just ordinary mortals subject to the temptation of greed.


Falling standards

I remember the time when I headed the Municipal Corporation of Hyderabad four decades ago. Many parties used to approach me for a personal inspection to see the injustice done to them. Some time I had too many of them and said that I would depute one of my senior deputies to do that. The instant reaction of the party generally was that that would not do since they were the selfsame people who were involved in the foul play. By and large, there was implicit faith and trust in the integrity of an IAS officer. Touched by that faith, I asked the government to give me one IAS officer of whatever seniority as a deputy so that I could have my burden shared. I did not get any and so had to carry on all by myself. The same was the case in many of the other departments that I handled. That belief that the party could expect justice and fair play was enough compensation and the pride it gave made one try harder to rise to the expectations of the people -- and even beyond.

IAS was the successor service of the ICS which enjoyed a very high degree of reputation for honesty, personal integrity and fair play during the British rule. Not that there were no dishonest or corrupt ICS officers But if anyone was found to be so, he was confidentially advised to put in his papers and go home. No scandal thus came to light and the reputation of the ‘heaven-born service ‘ was kept in tact. The same was expected of the IAS and for a time it did hold good. But with the passage of time it got diluted. There are many reasons for that. One is the diversity of sources which supplied the recruits. There was no commonality of traditions amongst them. The other is the comparatively low salaries in a world of higher cost of living. Yet another is the character of the latter generation of politicians. They are not the people who made sacrifices for freedom. They came to politics not for any ideal of social service, but in pursuit of power and what power brings to its holder. In our system supreme power belongs to the elected masters. The civil service is required to offer its considered advice on issues of public policy. The pros and cons of a proposed course of action and its likely fallout in the public are highlighted by the civil servants. The new breed of politicians did not like frank and independent advice. They wanted compliance. Those officers who toed the line prospered; those who stuck their neck out got into trouble. Officers were often put in the loop line for daring to advice while remaining within their bounds. The message went round and soon in places, a nexus came to be established between the politician and the elite IAS corps. Officers saw the advantages, albeit short-term of aligning themselves with the politicians in power. The permanent and neutral civil service pattern of the British model yielded place to the ‘spoils system’ of the United States. The old form remained, but the essence changed.


The Spoils System

Young officers still having a spark of idealism did not relish that and we have seen that for years in Uttar Pradesh the IAS Association has been preparing a list of most corrupt officers. Many of them land plum postings and make the lives of honest officers difficult. How long will the young people hold out?

I have given the example of UP, but this is happening all over. In the neighbouring Bihar the Fodder Scam is old history. Recently a young officer having earned international praise for his dynamism, had to go into hiding to escape arrest. In Andhra Pradesh recently two scandals have emerged in quick succession . The house of an IAS officer was raided and reportedly assets beyond the known sources of income were found.

I have dwelt upon IAS because that is supposed to be the elite service and so is expected to exhibit the highest standards of probity. There are numerous cases of top officers of other services having been trapped and their houses raided revealing unaccounted for assets. The rot is therefore wide spread.

What can we do to remedy the situation? When the salt itself loses its flavour, with what shall it be salted is an old conundrum.

It is difficult to stay clean in a sea of muck. A saint does so by withdrawing from the world of action. A public servant has to be a crusader. That role is enervating. Ours is a society which glorifies favouritism. Concentric and enlarging circles around the holders of office are expected to benefit from him. How does one break that chakravyuh? Most importantly, how does one reconcile the demands of political master for partisan action against objective criteria? When ministers alternate their time between courts and jails on the one side and cabinet seats on the other, what is the bureaucrat to do? He can ensure probity on his part, try to enforce it on his subordinates, but he is not his master’s keeper. So, the rot has to be stemmed there. That leads us to the issue of electoral reforms. Also the delinquent official must be dealt with speedily and handed condign punishment. I know, it is easier said than done. So is the case with every problem that matters.

***

Archived by www.mygoldencopy.com

Of Human Need and Greed

Of Human Need and Greed
By Narendra Luther

The recent Tsunami disaster highlighted two contrasting aspects of human nature – sympathy and charity on the one hand, and greed and perversity on the other.

As soon as the impact of the disaster came to be known, human beings of all persuasions and in all parts of the country and the world rose to provide succour and relief in whatever way they could. There was a spontaneous gush of good will and many persons and groups rushed to relieve the misery of the people affected by the tragedy. Sympathy and pity are ever present in the human heart. We have had ample evidence of it during the Chinese attack on India in 1962 when women in the far south gave their ornaments for supplementing the funds for the defence of the country. During the cyclone of 1979 in the coastal Andhra, voluntary relief agencies descended in the area from all parts of the country with money and material. Again when an earthquake devastated Latur, the response of the agencies and individuals was overwhelming. In the case of Tsunami, thanks to the scale of the havoc and the revolution in communication, the response of the common man all over exceeded all expectations. From every segment of society persons of all ages came forward to contribute their mite to mitigate the human tragedy. Children gave from their pocket money and pensioners contributed from their pensions, not to speak of the rich and the corporates who made liberal contributions to different funds started by various organizations. These examples reveal the benevolent side of human nature.

The other side

Sadly, simultaneously, we also saw the perverse side of human nature too. Since some of the images to corroborate that appeared on some channels of TV, they can’t be denied or brushed under the carpet by the authorities. We saw some unaffected parties repeatedly collecting the chits which entitled the victims to relief materials. Vultures in the shape of human beings descended on the sites and drove away with truck-fulls of materials to the markets. The officials when questioned had nothing to say in defence. They went off the cameras. Some of the relief materials did not reach the affected parties. If it was due to the difficulties of reaching the inaccessible places, one could understand. In many cases, they were siphoned off to other destinations. Stories of connivance by officials with some unscrupulous elements to filch the relief money and material are current. Unfortunately, all public servants are not imbued with the sense of dedication that is required in such situations. And there is no way in which it can be injected suddenly amongst officials. It has to be instilled in them earlier in their homes and later during their training. Thy can no doubt draw inspiration from the conduct of their seniors if they set a good example to emulate. But at that level too we often see the same vicious circle. No code can be a substitute for the spirit that determines the type of response that is required in emergencies. In many cases, the code has to be defied because it does not meat the situation. For example, I had once to draw money from the treasury in excess of my powers to meet the demand of the situation. My justification lay in what I called the ‘doctrine of implied powers’. It was my duty to make sure that no one died an unnatural death in my jurisdiction. In order to ensure that, I had the implicit authority to do every thing lawful. My action was not only upheld but also lauded.

Callousness and Perversion

I may be forgiven for citing my own experience of the two contrasting aspects of human nature. Long back at the very start of my first posting in Gudur (Nellore district of AP) there was incessant rain lasting four days. I received a wireless message from the government past mid-night that two trains were stranded in my jurisdiction near Nayudupeta and Sulurpeta respectively and that I should arrange to provide necessary relief to the passengers.

As soon as we moved out of town we encountered waist deep water on the road. My officials said we could not go further. That was the first time I realized that a leader has to sometime overrule seemingly wise counsel. As I pushed into the chest- deep water, others were compelled to follow suit. We felt happy when with great difficulty we were finally able to reach the first train with adequate succour. But our elation was dampened by some passengers spurning the meager fare, and asking for a la carte menu – including pudding!

We set up refugee camps for the hordes of people pouring in from the affected villages to the small town of Sulurpeta. I asked the tahsildar to buy rice and other essential commodities needed by the refugees. Some of the refugees particularly women also needed some clothes.

When the Tahsildar went to buy rice in the market the merchants increased the price. I was furious and instructed the tahsildar to seize all the stocks with the shopkeepers without payment and give them only acknowledgment. We also bought sarees and dhotis from the market and had them distributed to the needy. Imagine my frustration and rage when I was told that the beneficiaries had sold those sarees and dhotis back to the shopkeepers at half the price!

The government sanctioned some grant and loans to the cultivators. Complaints reached me that the Special Tahsildar appointed for their disbursement was taking a percentage of cut. After gathering adequate evidence against him, I suspended him. I did not know that was beyond my authority. The Collector annulled my action, but he himself suspended him immediately.

Let me quote another incident of the ingratitude of the beneficiaries. This occurred two decades later. We had put all the leprosy – patients in the city in a special colony equipped with all civic facilities on par with a lower middle class colony. They wee to get free board, lodging, water and electricity. They were given training and produced good like wire gauze and candles which were sold in the market to supplement the funds required for their maintenance. When they were asked to offload a truck of rice bags, they asked for wages. We had planned to run the colony on the principle of ‘to each according to need and from each according to capacity’. If they wanted wages for their work, they would have to pay for their keep. Thereupon they went on an agitation. I was pained to find that they were being instigated by a politician. Later, they were brought round and the colony is now running successfully, the politician in question having died meanwhile!

Looking at Tsunami images now and my own experiences, I find that human nature has not changed at all. How naïve of me to imagine that it would!

***
Archived by www.mygoldencopy.com

Weddings and all that

Weddings and all that
By Narendra Luther

I was pleasantly surprised to read in the papers that a Pakistani court rejected a plea that some snacks may be allowed to be served at wedding reception apart from the beverages. So presumably there is a ban on the service of eats at such receptions. Frankly, I did not expect that such a progressive and strict measure would be applied in a country like Pakistan. It gave me cheer and hope. If they can do it, surely we too can.

I have attended weddings of all sorts from the poorest to the richest. I have attended weddings where no more than 20 persons came from the side of the groom. Incidentally that was the wedding of the son of the late Krishen Kant in Hyderabad. He was then the governor of AP, and later became the Vice President of India. When the party was about to leave, a relation came unexpectedly and had to be accommodated as a member of the wedding party. That would have made it 21. So Mrs. Kant stayed back! I know it since I was from the bride’s side and asked the groom’s father for the reason of the groom’s mother’s absence.

The fare was very simple and after lunch the party drove back to the Raj Bhavan.


Lavish Weddings

I have attended weddings where the guest list was 10,000. Yes, ten thousand if not more. Separate enclosures were made for important invitees. Fortunately, I happened to be one of those who were taken to the special enclosure. The explanation given was that the host, a politician, could not afford to ignore his political supporters. I do not who bore the expenses.

I have attended weddings of business men in which some of the items of the menu, especially fruit are imported especially from Singapore or Hong Kong. We counted twenty items of pudding and fruit at more than one parties. Business must be very profitable to be able to have such parties. I felt sorry that I had only one stomach and one day to savour only some of the items on offer at such parties.

I have attended wedding parties of the sons and daughters of officials where a thousand or more guests were invited. The spread was indeed lavish though not on the same scale as that of the politicians and businessmen. Still, the expenditure must be enormous. One can’t help asking oneself how they could manage to spend so much.

I have only read about the weddings in the family of the richest Indian in England - and one of the richest in India. One was celebrated in Paris and the other in Kolkota. Every name that mattered in any field was there. I cannot bring myself even to guess the expenditure at those weddings.

The Demonstration Effect

I have attended weddings of children of attenders and class four employees who at some time worked in my office. That is part of the noblesse oblige, we were taught. Miss a wedding of big man, but not of your subordinates. It is a matter of prestige for them. And there too I am surprised how they manage to spend so much.

When our maid’s son was to be married, we gave her 5000 rupees by way of help. She invited us to a reception where 500 guests were invited. My wife asked her why and how she could afford that. He replied coolly that the parents of the bride were meeting the expenditure. My wife reminded her that she had two daughters and how would she cope with the expenses on their marriages. I regretted why we had given her the financial help if it was to form only a fraction of her extravagance. Many people fall into the debt trap because of the marriage of their children. The poor wish to do as the rich people do. That is what is called the ‘demonstration effect’. It is for that reason that it is important for the big people to behave modestly because then the smaller people will emulate their example.

I always return form such weddings with a bad conscience. The expenditure on some weddings would be enough to feed the inhabitants of an average slum for one year. I admit I make for an ungrateful guest at most weddings. Even in writing this I feel I am betraying those who invite me.

It is not only the expenditure but the guest list too which surprises and scandalizes me. Important persons are invited whether they are friends or not. One Chief Minister held a special reception to which he invited only IAS officers to introduce his new son-in-law to them.

‘Conspicuous Consumption

Some friends tell me why I get worried about that. So long as they pay their taxes, they are entitled to enjoy themselves. That is not all. It was perhaps with such cases in mind that the Economist, Nicholas Kaldor, suggested the imposition of ’Expenditure Tax’. In India, my friend, the late Professor Gautam Mathur was a strong supporter of this concept. According to the proposal, for example, if some one spent ten lakhs on a wedding, he would have to pay a tax of three lakhs on that. Nehru entertained Kaldor and had his proposal examined. Due, however to the complexities involved, it was not implemented and the conventional Income Tax stayed on. Would that have curbed what Thorstein Veblen in his classic treatise, ’Theory of the Leisure Class’ called ‘conspicuous consumption’?

I can see the point of persons who have earned the money by sheer hard work to spend the way they like. To ascribe insensitivity to such person to the teeming poor also is not entirely fair. The poor have always been there. They will always be there. Some of them are poor because of their own fault. In any case they are not poor always because of the rich. So why should they cast their shadow on every celebration? Some of the poor who take to begging, accost me when I come out of a restaurant after a modest meal, or out of a shop after buying some fruit. They are shrewd in their own way trying to catch their quarry in its most vulnerable moments.

Many persons have big celebration also because of social pressure. During the Second World War, and in the period of our food deficit, there used to be a Guest Control Order. It was good in some ways. It reduced the social pressure to have big parties

But all said and done, I can’t stomach these lavish weddings. Sorry, I do stomach some of them if invited, but feel some revulsion after that. By all means enjoy on festive occasions, but moderate them.

Now that we are having some contacts with Pakistan, let us pay them a compliment by adopting one of their good pieces of practice. There is no border check for ideas.

***

Archived by www.mygoldencopy.com

Where we stand

Where we stand
By Narendra Luther

Robert Orme was a civil servant of the East India Company in India in the 18th century. He wrote a history of India called ‘Historical Fragments’ which was first published in 1782. In that he observed that two English sawyers did the work of 32 Indians. For his calculation he made allowances ‘for the difference of dexterity and the advantage of European instruments’. He went on to say that had the Indians been given the instruments used by the Europeans they would have scarcely been able to wield them.’ In modern terminology he was saying that the productivity of an Indian was less than seven percent of a European.

This may sound preposterous today when we notice the great demand for Indians abroad particularly in the field of IT. Only the other day a friend of mine, who is a well - known consultant told me that he attended campus recruitment in the Cornell University in the United States. He found that the American companies gave first preference to Indian students, second to the Chinese, and the last to Americans. But we have to compare the productivity of Indian in India with that of the European or American in his own country. According to my observation, the Indian productivity is very low. It is due largely to the lack of availability of tools which impart greater efficiency to the hand than that wields them. Most of our workers are still in the ‘craft’ stage. In other words, they depend upon their individual skills and the use of hand without supplementing them adequately with tools. Our labour is cheap because it is poorer in quality.

The Craft System

Some time ago when we were having our house painted, the workers covered their hands and faces with rags. In Europe and America their counterparts would use overalls for the body and gloves for their hands. The latter are imported from India and under prevalent regulations, they have to be discarded within a fortnight. Again, to paint the outside walls the contractor made a sort of platform and hung it with ropes from the top. The workers stood, sat or lay on that depending on the demands of the task and painted the walls. Four or five workers standing on the roof manipulated the platform. I looked at that spectacle and prayed for the safety of the workers. I also wondered how that sort of work would have been done in Europe or America. There, they would have had power- operated ladders or crane and workers would have been fully clad with paint-proof clothing and gloves for their hands. The painting would have been done mechanically and the whole job would have taken half a day for two men, compared to half a dozen men working for five days here.

Currently, I am getting more insights from watching the construction of a neighbour’s house. The steel rods for making pillars are cut by a chisel and hammer. Then two workers jump with their bums on the rods to bend them. Some of them are children not yet in their teens. It can be dangerous and can hurt them – and passers –by.

For the construction, the existing parapet wall about three feet height has to be demolished. Two young boys do that with hammers hardly bigger than what I have for driving nails in the walls. From the last ten days they are breaking the mortar. I have seen that sort of thing being done mechanically with giant hammers in two or three hours. We discussed this and it was argued that it was cheaper for the contractor to do the way he was doing it than to use some machinery of equipment to demolish it quickly. My calculation showed that it could be cheaper for him to do it mechanically.

Productivity & Capital-intensity

He can improve his productivity by improving the quality of the tools given to his workers. With improved productivity he can utilize his employees better. He can thus earn more and do the jobs faster. Productivity entails capital-intensity to begin with. But in the long run it pays its way. A recent study by McKenzie showed that the productivity of a Chinese worker is three to five times that of an Indian. It is worthwhile studying how they were able to achieve that standard since today we are in competition with China.

In the first half of the last century, the American genius Buckminster Fuller said about the American house building industry that it was like ‘manufacturing’ your own car in your garage by assembling different parts bought from different shops. He suggested the concept of pre- fabricated housing. According to that, main parts of the house including walls and windows and floors etc., are prefabricated according to a standard design. They are then brought to the site and the house gets ready in no time. He also suggested the concept of what he called a ‘dymaxion’ car and a ‘dymaxion’ house. His concept of the geodesic dome is well known. It can cut off the sun and rain and provide a hall without pillars. The concept has been used on a limited scale to house exhibitions. He said that he could cover the whole Sahara under a geodesic dome and make it more habitable and productive.

BPO ‘Islands’

We have however to see how productivity can be increased in small items of work and in small pieces. Productivity is not only better time-management, but also use of better implements. If that is done the inglorious equation of Robert Orme quoted above can be annulled if not reversed. If our Indians have shown better productivity abroad it is largely due to their ability to use the same tools which their counterparts do. Even in India we have islands of BPO where young men and women are performing better because they are cheaper in real terms than their counterparts abroad. Such island need to be multiplied and replicated in other fields and integrated with the ‘mainland’ so that our overall productivity increases. In our BPOs the same people are working who earlier did not appreciate the virtues of punctuality, value of time and the importance of self-confidence. In the new islands they are trained to appreciate the elementary virtues. The new names given to them are symbolic in more than one way. They virtually change their identity and set in motion a new ‘’virtuous cycle’.

Such attitudes need to percolate down to our contractors, labourers and lowest level workers who live in their own time capsule and cling to their orthodoxies. For example, they observe long period of mourning and celebrations because that is their inherited and prevalent culture. They can improve only if they know that the cost of such luxuries is loss of job. Those who are better placed and can set an example can provide a ‘demonstration’ effect.

***
Archived by www.mygoldencopy.com

Let them do it

Let them do it
by Narendra Luther

In administrative and managerial jargon the term ‘delegation’ occurs very frequently. It is recommended for good management in all textbooks. A good leader is one who delegates responsibility. That makes his burden lighter and helps the mangers under him grow. Every CEO makes it a point to stress in public statements and endowment lectures that delegation has been a key to his success. In a good organization the top man does not waste his time on small decisions. He concentrates on policy formulation -- that is, determining the direction and speed of the march of his forces.

What is Policy?

In the field of public administration, policy is concerned with issues. For example, it means deciding, whether we should have controlled economy, or adopt the free market approach. It may grapple with the issue of laying down the limits of foreign direct investment in various sectors, and whether we should accept the provisions of W.T.O.

Similarly, in the corporate world policy may decide whether a company should go in for diversification or stay rooted in its ‘core competence’. It would determine whether a company would concentrate on domestic market or venture into the world for exports. It may also mean deciding whether it should go alone, merge with a rival, or acquire it.

In public administration, the theory is that man on the spot knows the situation best. So he should be allowed to take appropriate decisions. He will learn by that. No doubt he will make a mistake here and there, but that is part of the process of acquiring experience and maturity. The government and corporate manuals lay down the authority of various functionaries in a hierarchy. The top people should deal with broad issues, not with the nitty gritty.

What is Power?
But in real life, power lies in small decisions. Policy is an abstract, amorphous concept. The examples of issues mentioned above don’t constitute raw power. That power lies in recruiting people for jobs, in transferring employees from one place to another. It lies in allotting work to a particular person or party – in deciding who will do what. Within the frame work of the Pubic Distribution System policy, for example, power lies in selecting beneficiaries, in choosing areas where to start the implementation of the scheme.

In the corporate world power lies in choosing a franchisee, in releasing or withholding quotas, in making purchases from particular suppliers. Negatively, it also lies in being selective in attending to service calls.
In theory, these functions are delegated to lower functionaries. But in actual practice top people poke their nose into them. I haven’t seen one person who practises delegation. If you have, let me know.

The Boss’ Wife

Once I was a deputy secretary in a Union ministry. My boss, a Joint Secretary asked me to appoint a particular person as a driver in a temporary vacancy on ad hoc basis. A fortnight later the Minister sent someone for the same job. My boss coolly asked me to sack the earlier appointee and employ the minister’s man. I suggested he should might tell the minister that the job had already been filled up. He gave me a piece of advice which I never forgot. ‘The minister is not supposed to get interested in small jobs but most probably this man has approached his wife. Now if he is not accommodated, he will go back to the Minister’s wife. She will then taunt her husband who was the boss? - He or the deputy secretary? That will hurt his ego and he will have it out with me - or you. The boss is always right. Don’t antagonize him’. So, the minister’s replaced our man.

Strictly speaking, it was within my jurisdiction to fill up the job. First my boss broke the boundary, and then the Minister.

CM’s Son-in-law

We hear ministers quite often say: ‘What is the use of becoming a minister if I can’t appoint an attender?’ They are generally not interested in policy matters which should be their preserve. Policy initiatives thus come largely from civil servants and go to the credit of ministers!

As managing director of a public undertaking, I had set up committees, amongst others, for recruitment at various levels in accordance with prescribed rules. So the cases of recruitment to lower were decided by a committee without reference to me.

Once a son-in-law of the chief minister rang me up to find out whether a particular person had been selected for a lowly job. I said I would not know. The result of the selection would be put up on the notice board after the concerned committee had made the selection. He asked me threateningly whether he should ask the chief minister. I replied that he could do as he pleased.

I was transferred after a weak of this incident. Only a few days earlier the chief minister had specially rung me up to say that he was very happy with my work.

Coming to decentralization in administration, once the late President, Sanjeeva Reddy, when he was the chief minister of Andhra Pradesh, said in an address to senior officials that he was surprised at a situation in which he could be trusted with a budget of 1000 crore rupees, while his younger brother who was a sarpanch, could not be trusted to handle 50,000 rupees!

While the state governments complain against centralizations of functions by the union government, they are loath to empower local bodies. It took four decades to devolve some functions on local bodies under the Constitution through 73rd and 74th amendments in 1993. Yet the state governments have dragged their feet to vitiate the spirit of the amendments.

The Calibre of Panchayats

The local bodies don’t seem to be morally equipped yet to exercise power. Orthodoxy, casteism, and corruption seem to be entrenched in those bodies. I don’t say that they are not there in our higher legislatures. But there is a better chance of exposure there. We have seen recently the case of a panchayat members participating in an honour killing because a young woman had married a man from another community. In another case, the Panchayat let off a rapist with a small fine. More recently, a village Panchayat in Haryana ordered the annulment of a marriage of a couple because they belonged to the same ‘gotra’. It asked the husband and wife to live as brother and sister and to abort the fetus that the woman was carrying. The High Court, on the basis of a PIL had to intervene to stop the implement of the decision. Would these cases have come to our notice but for the exposure by the electronic media? The local tyranny is the worst.

I am a strong votary of delegation and decentralization. I believed in the old saying, ‘Panch mein Parmeshwar’ (In Panchs, there is God’). But the cases mentioned above have made me wonder whether I am right

***
Archived by www.mygoldencopy.com

Peacock and the Dragon

Peacock and the Dragon
By Narendra Luther

India became independent in 1947. Two years later, the Peoples Republic of China came into being ending decades of foreign domination and exploitation.

Comparisons between the two great Asian neighbours were inevitable. While India was a democracy, China was a totalitarian society. China had a centralized state economy; India had a mixed economy. Whereas there was an established system of data collection for economic planning and the publication of its results in India, China was closed to the rest of the world. One had to rely upon the figures given out by the official agencies. It was quite common for many intellectuals in India to highlight the poor performance of India as compared to China.

Around that time one of my friends, Virmani, a Climatologist in ICRIASAT (International Crop Research Institute for Semi-Arid Topics) located at Hyderabad went as member of an official delegation to China. On return he told me that an average agriculture graduate was about four years behind ours in his knowledge of the subject. The reason was that China had closed all contacts with the outside world and did not let even knowledge of advances made in science penetrate the country.

The Four Modernizations

The myth of China’s greater progress was exploded in 1978 when its leader, Deng Xiaoping launched the program of ‘Four Modernizations’. They were to cover agriculture, industry, science and technology, and national defense. The goal was to make the country a relatively advanced industrialized nation by 2000.

One of the methods of accelerated development adopted was the creation of ‘Special Economic Zones’. Four such Zones in small coastal areas were established in 1979 to promote economic development and introduction of advanced technology through foreign investment. Special preferential terms and facilities were offered to outside investors in taxation, land-use fees, and entry and exit control for joint ventures, cooperative ventures, and enterprises with sole foreign investment. These SEZ’s were given greater decision-making power in economic activities than provincial-level units. Since then, their number has increased manifold. The Stock Exchange, which was closed by Mao Zedong, was opened in 1992.

Comparison with India

Post- Modernization, once again people started making comparisons with India and again China was shown as overtaking India. Lately, we have seen our markets flooded with goods made in China. Fears have been expressed that it will kill our manufacturing industry.

When a topic becomes hot, it lands up in seminars and workshops. It was therefore appropriate for the Economic Forum at the Indian School of Business to pose the question ‘Will the 21st Century belong to India and China?’ to an International Conference last month. It was attended by prominent business leaders, academic scholars from abroad, and, amongst others from India, a member of the Planning Commission.

A study done by Mackenzie quoted there noted that the growth of per capita GDP since 1990 had grown to 2407 in India as compared 3829 in China. The share of manufacturing and the GDP in 1999 was only 6% in India compared to 19% in China. The Chinese manufacture - and exports - comprises largely bicycles, toys, leather goods and computers. The increase in growth of manufacture in China was largely due to increase in productivity which was three to five times that of India. For example where as an Indian worker produces three pairs of shoes per man-day, the Chinese production is eleven. The growth in manufacture is not due to exports as is commonly believed, but due to domestic consumption. The average per capita consumption of consumer goods in China is three times that of India. Prices of consumer goods are cheaper by 14% in the case of motorcycles to 53% for DVD’s compared to those in India. The study pointed out that lower prices where not due to subsidy and marginal costing but because of fundamentals like lower indirect taxes, lower import duty and lower interest rates. It rubbished the myth that the Chinese products are of poor quality. If that were so they would not be such an increase in exports particularly to quality conscious countries like the United States.

China has also attracted more foreign direct investments than India. The lesson from Mackenzie was that a reduction of prices of consumer products would increase the market. There is a need for reducing import duties to 10%, introduce VAT and to reform labor laws. These measures will improve employment and raise exports considerably.

The Prospects

John Talbott, currently consultant at the Indian School of Business, provided the antithesis to this analysis and approach. He believes that the statistics given out by China are not reliable. In China, he said that nobody could publish statistics because he would be jailed for revealing ‘state secrets’! China is a repressive dictatorship. Only eight countries rank lower than China in political freedom. Even Internet access in China is restricted. There is an absence of social benefits and of regulations on pollution. China’s military expenditure is high and will outgrow that of America in a decade. He therefore thought that China was a poor model for development.

China today is the manufacturing hub of the world; India the IT platform. The Asian Development Bank believes that India would catch up with China by 2020. The FICCI View is that by 2050 China would be the largest economy of the world followed by U.S and India.

The Indian Constraint

There was general agreement that India’s greatest handicap is lack of proper infrastructure. For that FDI should be encouraged. However the left parties which today constitute an important ally of the ruling coalition at the Centre are opposed to it. The Common Minimum Programme of the ruling United Progressive Alliance talks about the imperative of consensus on these critical issues.

Management experts per se need to develop a greater appreciation of the context in which the economy operates. China and India represent two different, contrasting models of growth. India is a democracy where there is debate and dissent arising out of diversity and pluralism. The constraint of democracy is compounded by the compulsions of coalition. Democracy provides for opposition in the legislature; coalition brings it into the political executive. That retards further the speed of decision-making. A dictatorship, suffers from no such handicap. It also lacks a system of feedback to provide for a corrective mechanism for mistakes in time.

Our reforms will have to start with politics because that constrains economics. If we can lay down that only parties with a clear-cut majority will rule the Centre and the States we will have removed the greatest obstacle in the way. That will strengthen the establishment and relieve it of its constant search for a consensus beyond the bounds of the parliamentary system. The difference between the two countries is symbolized by the peacock, which is our national bird, and the dragon which is China’s traditional mascot

Next time there is a debate of this type of topic, I hope to see some political scientists, or better still, some active politician to moderate it.

***

Archived by www.mygoldencopy.com