The bureaucracy may be far from faultless, but it is hardly the sole culprit in discouraging foreign investors from investing in India. Its function is to assist State and Central activities, and its performance is dependent on effective political leadership as well as the legal framework under which it operates
“If you are going to sin, sin against God, not the bureaucracy. God will forgive you but the bureaucracy won’t” - Hyman Rickove
“Bureaucracies are inherently anti-democratic. Bureaucrats derive their power from their position in the structure, not from their relations with the people they are supposed to serve. The people are not masters of the bureaucracy but its clients”. - Alan Keyes
A controversy has been generated in recent times about the role of bureaucracy as hindering economic development. Prime Minister Narendra Modi is reported to have stated that hereafter there will be less red tape in attracting foreign investments into India and that such investors will be given a red carpet reception. This means that rigid bureaucratic hurdles will be removed and attractive incentives will be provided so as to encourage foreign investments. There is a widespread perception that India is an attractive destination for investment because of its vast market potential and scientific and technological talent. However, many investors are reluctant to invest in India because of the bureaucratic hurdles, policy uncertainty, legislative complexities and judicial delays. Viewed in the light of Ease of Doing Business Index compiled recently by the World Bank, India ranks 142 out of 189 countries surveyed. It is indeed unfortunate that a country with rich resources, both human and natural, should rank inferior to countries like Botswana, Cambodia, Cyprus, Ethiopia, Indonesia, Iran, Nepal and even Pakistan. Ranking wise India is only next to Uzbekistan (141) and just ahead of West Bank and Gaza (143). While this statistic reveals the pathetic state of affairs in relation to India, it also highlights abysmal governance deficiency in the country.
Bureaucracy, which is critical to governance, is perceived as the major obstacle in attracting foreign investments and promoting business and employment opportunities. There is indeed a universal impression that Indian bureaucracy is unhelpful, rigid, unfriendly, rule-bound and insensitive to the public. Bureaucracy is also blamed because of its rigid adherence to rules, procedures and indifferent, arrogant attitude. It is perhaps easy to blame the entire bureaucracy because it is too general and a vague description covering a wide range starting from the lowest level officials and ending with the topmost civil servants. In my opinion, this wholly negative outlook seems totally unwarranted and seems to be based on certain misconceptions. Firstly, the reluctance of investors is not only because of bureaucratic hurdles but also due to other political, economic and social reasons such as political corruption, judicial delays and labour disputes. This is not to say that the bureaucracy is blemish less in its performance. However, to tarnish the entire bureaucracy as the villain in public administration is neither fair nor factually correct. At any point of time, we can always find some bureaucrats helpful, sympathetic, efficient and fair minded in spite of the many rigidities in the system. However, in a country like India, where we have an oversized bureaucracy created to meet increasing activities of the State (both at federal and local level) as also other political and social compulsions, the number of civil servants with negative attitude is disproportionately high. This is presumably because of the high discretion given to civil servants, fear of audit, vigilance and ineffective supervision.
Many of us fail to note that bureaucracy is only a tool in public administration. Its usefulness and effectiveness or otherwise is dependent upon the system and the environment in which it operates and the leadership that is provided by the political masters. If the system (viz., rules and regulations) is rigid and insensitive, naturally bureaucracy cannot be public friendly. Similarly, if the environment is hostile, it cannot be effective. If the political leadership is corrupt and/or incompetent, the bureaucracy tends to be vitiated in its attitude and performance. This essential aspect of bureaucracy is very often forgotten or ignored.
Perhaps it is worthwhile to go briefly into the evolution of bureaucracy especially in western countries. According to Encyclopedia Britannica, “In every day usage, the term bureaucracy connotes ‘red tape’ and inefficiency that one often experiences in dealing with large-scale organizations, especially with a state administration. As a sociological concept, the term has a less pejorative, a more ‘neutral’ meaning. It simply refers to a type of formal organization. ………… Thus, purposive design and goal specificity seem to be two crucial criteria differentiating formal organizations from other types of social groupings.” It is therefore commonly understood that a bureaucratic organization is characterised by a rational and impersonal regulation of inferior-superior relationships as distinct from a feudal or patrimonial organization. The most important ingredient of bureaucracy is the existence of a system of control based on rules and regulations for achieving maximum efficiency with neutrality and high integrity. Although the evolution of bureaucracy in Western Europe is surrounded with mystery because of the frequent influence of religion and royalty, it can be stated without any doubt that at every stage it got organized meeting the demands of the time and the needs of services of the State. Political corruption and its impact on governance were all too evident. Oliver Cromwell’s well known address (as stated below) to the British Parliamentarians is a case in point.
Is there a single virtue now remaining amongst you? Is there one vice you do not possess? Ye have no more religion than my horse; gold is your God; which of you have not barter'd your conscience for bribes? Is there a man amongst you that has the least care for the good of the Commonwealth?
In the name of God, go!”
(TS Krishna Murthy is Former Chief Election Commissioner of India, and also a Trustee on the Board of Moneylife Foundation)