It is probably Reserve Bank of India Governor Bimal Jalan's favourite story. In 1963, A.H. Hanson-a scholar besotted by the idea of a planned economy and an admirer of Indian planners-visited India. Ground reality hit him hard soon enough and he was compelled to ask, "The men are able, the organisation is adequate, the procedures are intelligently devised. Why then have the plans since 1956 so persistently run into crises?"

It's a question you could be asking in 2002. Last month the UN Human Development Report rated China, the other populous nation, 96 while India was at 124. Translation: a fourth of the population lives below the poverty line, a third of the people are unlettered, nine out of 10 households in rural areas don't have access to toilets, one of six villages is yet to get electricity and two out of five don't get drinking water. We could go on. And this is despite the fact that India today perhaps boasts the largest army of civil servants in the world, two of every three workers in the organised sector work for the Government and the total salary bill of government employees-state, Centre and public-sector enterprises-is over Rs 70,000 crore.

The point is not just the humongous sum being spent. The point is that much of the expense is wasteful as there is little or no delivery. And we are not talking just about the power situation in Delhi and the rest of north India. Last year the Public Affairs Centre, Bangalore, and ORG-MARG surveyed 37,000 households in 24 states to focus on the five basic public services in which the Government has invested thousands of crores, including drinking water, health and sanitation, education and child care, the public distribution system (PDS) and road transport. Their findings:

• Just 13 per cent of the users are satisfied with doctors and paramedics.
• Less than 10 per cent are content with the PDS system.
• Barely 16 per cent are satisfied with teachers and an abysmal 5 per cent with sanitation levels in schools.
• Only a fifth are satisfied with the public transport systems.

Bureaucracy

GETTING IT RIGHT « ONE:Privatise-not disinvest-state-owned enterprises, both at the Centre and in the states. Demarcate public services like health, education and infrastructure, and privatise the rest off the books of the Government. This will help cut the size of the Government as administrative ministries will be shut. It will also reduce expenditure and shed sloth. « TWO: Abolish civil aviation, textiles, coal, mines, heavy industries, information and broadcasting, petroleum and natural gas, chemicals and fertilisers, food processing, communications, shipping and information technology ministries. Also decentralise. There is no justification for rural development ministries both at the Centre and in the states. « THREE:Implement the Fifth Pay Commission's recommendations in their entirety. Abolish 3.5 lakh vacant posts, slash number of employees by 30 per cent and reduce decision-making layers from seven to three. « FOUR:Ensure accountability by punishing non-performing civil servants and rewarding doers. « FIVE: The Government needs to be professional. Abolish the IAS and introduce specialists for each ministry. READERS DECIDE In an exclusive reader's poll in this issue, INDIA TODAY gives you an opportunity to decide the most appropriate course of action for India. And alongside, win prizes for your participation. So make a choice-and make a difference.

To get a perspective, consider this nugget extracted from the budget for the year 2002-3. The Government's allocation to the Rural Development Ministry this year is Rs 13,670 crore. Its allocation for just the wages of Central Government employees is Rs 17,861.57 crore, for allowances it is Rs 12,460.44 crore and for travel expenses, Rs 1,268.05 crore. Total: Rs 31,589 crore.

Since the 1980s there have been attempts to stem the rot but every endeavour has been thwarted by a coalition of vested interests-of politicians and bureaucrats-and the stench has only spread wider. Some even question the efficacy of the monolith IAS which now has seven decision-making layers to deliver. Their contention: in the new world, it's specialists and not generalists who can deliver. It is not just the abysmal quality but also quantity that adds to sloth.

In August 1997, the Fifth Pay Commission agreed to hike salaries only if the Government cut decision-making layers from seven to three, slashed staff by 30 per cent across 10 years and abolished 3.5 lakh vacant posts. The recommendations were ignored but the babus got the biggest-ever hike.

More recently, the Expenditure Reforms Commission recommended the abolishing of vacant posts, right-sizing, introduction of technology and freezing of new recruitments. That was in September 2001. This year, employee strength is expected to rise by 21,142 to 33,42,645 and costs from Rs 30,055.61 crore to Rs 31,589 crore (Budget 2002-3).

Unfortunately, most initiatives to trim babudom or slice the sloth have been afflicted by unidimensional approaches. They have focused only on the strength-and-cost argument. The crux of the problem is the architecture of the Government. Should the Government be in the business of baking bread and running hotels? A quick back-of-the-envelope calculation would reveal that if the Government privatises (not disinvests), it could instantly bring down the number of ministries by 11. There is really no rationale for the existence of ministries like coal, shipping, broadcasting or civil aviation in the 21st century. The trick would be to demarcate public services like health, education and infrastructure, and to privatise the rest off the books of the Government. After all, Anglo-Saxon democracies and "tiger" economies of East Asia have less than a dozen critical ministries-unlike India which has one for everything, from food processing to rocket launches, under the spurious pretence of social obligation. Fact is, social obligation is simply a garb for politicians to dip into the public kitty. The Government needs to exit business and strengthen its role as a provider of social infrastructure.

"People often perceive the bureaucracy as an agent of exploitation rather than a provider of services." Atal Bihari Vajpayee, prime minister

« Two of every three workers in the organised sector are employed by the Government. « Average per capita emolument of a public-sector employee is Rs 1,66,592 while per capita income of the country is Rs 22,000. « In the past three decades, while the consumer price index has gone up by 998 per cent, salaries of the employees of public-sector enterprises have gone up by 2,714 per cent. « In 87 of the 256 PSUs, the equity investment has been completely eroded by accumulated losses. The net worth of these companies in March 2000 was a negative Rs 31,841 crore. « Accumulated losses of public-sector enterprises in 1999-2000 were Rs 52,550 crore.

This again depends on changing fundamentally the basic form of the Government into two simple layers: policy and execution. Consider this: between them, the Central and state governments spend roughly Rs 42,000 crore annually on direct poverty alleviation. If this sum was disbursed directly among the five-crore-odd poor families in the country, they would each get Rs 8,000 per annum, lifting them out of the poverty trench. Clearly the theory of percolation is overtaken by evaporation through the layers. There is no justification for parallel empires governing poverty eradication both at the Centre and the states, or for the replication of apparatus in state capitals and district headquarters. The Maharashtra Government, for instance, has transferred 22 critical functions from the state capital Mumbai to the districts successfully. More could be done if panchayats are empowered, as has been tried in Madhya Pradesh.

But no system can be sustained if the execution is immune from accountability. Using a combination of modern management practices, information technology and transparency, the Government must set targets of efficiency-be it the issue of ration cards and passports or the clearances citizens seek. Andhra Pradesh Chief Minister N. Chandrababu Naidu holds weekly videoconferences on targets but they are just a management tool. There is a need for fundamental change.

India perhaps has the rare system in which the mere fact of being employed by the Government affords employees immunity from accountability. Also, there are provisions that govern civil servants on what they should not do but none on what they should do. Very simply, there is a crying need to legislate efficiency benchmarks. The first step would be to abolish the immunity afforded by the concept of a public servant and introduce accountability.

The best way to trigger this may not be through legislative fiat alone but by ensuring people participation. It is accepted wisdom that dissemination of information curbs discretionary and discriminatory practices that lead to corruption. Besides, transparency improves efficiency. Empowerment through the right to information is a good beginning but is not enough. The problem with the right to information strategy is that information would still need to be asked for and could yet be denied.

Last year, the Rural Development Department under M. Venkaiah Naidu wanted to set up bulletin boards in every village and taluka to inform people of the disbursal of funds under Central schemes. This, he believed, would encourage citizens to question both babus and elected representatives. It is an idea worth initiating as a pilot case and then enlarging through legislation from the panchayat level to the Centre. Every decision must be communicated in real time using it and the media. This will spur accountability and trigger public participation.

The simple truth is that without people participation no system, however well designed, can deliver consistently. That really is the answer to Hanson's poser.