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15 Aug, 2013, 11.03AM IST Post a Comment

Is freedom from bad governance as important as freedom

from foreign governance?

Tryst with destiny: How the bureaucracy comes in the way ofIndia's economic freedom

Srivatsa Krishna

Is freedom from bad governance as important as freedom from foreign governance? As

India prepares for its 67the Independence Day this question stares us squarely in the face.

India's bureaucracy, more specifically the Indian Administrative Service(IAS), is much

maligned, sometimes for good reason, but many a time, without. There is no gainsaying

that the IAS is by and large one of the finest higher civil services in the world, with some

honourable exceptions, presiding over one of the worst lower bureaucracies in the world,

again with some honourable exceptions. This piece looks at the games lower bureaucracy

plays - sometimes on its own, at other times in collusion with the top - which kill

entrepreneurship and capitalism in India.

Skanray is India's only USFDA certified medical equipment manufacturer, founded by ex-General Electric employees. They make

astonishing products including the lowest radiation x-ray machines in the world, which they sell to some of the biggest medical

companies globally. They bought land from the government in a designated industrial zone, yet local politicians resorted to violence to

make them abandon the land and pay 'protection money' .

Likewise labour department inspectors showed up asking for bribes, or else they would file a 'use of child labour' complaint during the

construction phase to penalise them. Approvals were delayed at the single-window , in part because of description of the factory area in

square feet instead of square metres! One of the most prominent global multiplex chains in the world faces significant issues wherever

they try to open entertainment complexes, starting with the fire department, municipal corporation, deputy commissioners' offices, home

department /police and so on.

Recently, in a major Indian city, they found that the mall in which they were located had its fire clearance withdrawn and yet the mall

continued to function. But, located in the same mall, they were not given the clearance to open, due to the absence of a fire no objection

certificate (NOC). Finally, after positive, strong intervention from wellmeaning IAS officers, permission was granted. On a capex of Rs 15

crore, the two-year delay cost them about Rs 2 crore along with about another Rs 50 lakh in bribes to babus and NGOs.

The Vinod Khosla-funded drip irrigation company, Driptech , offers an excellent, innovative , affordable solution to Indian farmers at a

fraction of the cost of higher-end solutions. Deployment of the latter gets huge subsidies from the government, which dealers in

partnership with babus cream off in part, making farmers wait for months before giving them the rest. No wonder mass adoption of drip

irrigation remains a distant dream.

Take the case of the Foreign Regional Registration Offices (FRROs) where every foreign national, including CEOs, are expected to report

periodically. In several major cities such as Chennai and Mumbai, honest young IPS officers head the FRROs but the 'system' moves

differently. Most CEOs who complain about corruption in front of television cameras, use ' facilitation agents' who include the bribe to be

paid as part of their own fees.

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Everyone's happy - the MNC has not violated the US Foreign Corrupt Practices Act since they have only paid legitimate fees and not a

direct bribe, the inspector gets his fees, and in the flood of applications the young honest officer finds it impossible to monitor each and

every one, no matter how correct he is. Large companies have copies of entire files pertaining to their cases and they often 'guide' the

lower levels while putting up a file for a decision . This is true outsourcing of government decision-making .

The lower bureaucracy is the jagadguru of red tape and corruption . Given their long tenures in one department they have the ability to

conjure up precedents or rules and make them disappear, freely. Further, since they are highly unionised, try taking them on and you

will find files disappearing or 'lost' , or false cases lodged against complainants against corruption , not to mention unions going on

'strike' against tough officers . They have no fear, for their strength lies in their ability to disrupt work at wil l, when things get tough for

any one of them.

But some lessons emerge. First, the dividing line between exercise of discretion and abuse of power is often very thin. What sets apart

the exceptional administrator from the good one is to know where that line is and how not to cross it. Second, the greatest negative

fallout of the Hazare-Kejriwal movement is not that it has scared off the corrupt (who have probably simply added an "Anna premium" to

their fees), but it has scared off the honest official from taking decisions, lest it is opened up for scrutiny under very different

circumstances, many years later.

When 122 of the 600 joint secretary-level officers face a probe, chances of speedy decision-making are remote, for, invariably it would

include some names which shouldn't be there at all. Lastly, no amount of deregulation, removal of discretion and introduction of

technology is a substitute for sound human character. Indeed, no system is better than those who run it. Independence Day is a good

day to remember that lesson and build strong institutions instead of destroying them. Durga Sakthi has done just that by one act of

upholding the law and restoring faith in the institution of SDM.

The writer is an IAS officer. Views are personal.

with destiny: How the bureaucracy comes in the way of India's econ... http://economictimes.indiatimes.com/opinion/comments-analysis/t

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