Citizens' Issues
Red Tape vs Red Carpet –Part2
Red Carpet to investors has to go along with reasonable and adequate regulations so as to avoid adverse socio-economic consequences, whether you call it Red Tape or otherwise 
 
 
Political corruption has always influenced the quality of bureaucracy more so in countries freed from colonial rule because of social and economic factors. As a result, political and economic considerations started affecting bureaucratic governance in course of time.  On the one hand, liberal European economists were alarmed at the proportions of the State bureaucracy and its increased intervention in the economic sphere destroying free enterprise and democratic institutions; there are those who attribute increasing bureaucratisation and decline of democracy not to the state’s interference but to the internal dynamics of the capitalist economic system.  
 
In a typically bureaucratic administration, the arbitrariness of the rulers is believed to be curtailed by the existence of legal norms and regulations. For instance, the tenure of a bureaucrat is often pre-determined by rules and hence the bureaucrat cannot be dismissed due to whims and fancies of the superior.  Similarly, an ideal bureaucrat can refuse to obey orders that go against established rules and standards.  In so far as general policy making is concerned, the bureaucrat is expected to be a mere tool that should put aside his own preferences while executing the orders in a neutral manner. The delicate blend of professional autonomy with political neutrality in bureaucracy is indeed an ideal (and its chief merit) but ironically does not often exist in actual practice. Weber himself saw clearly that such a balance could easily be shattered in actual situations. There is therefore, a built-in tension between the bureaucrat and the legitimate ruler.
 
A mature and well-organised civil service is high on the agenda in the list of needs of the rulers coming out of the shackles of colonialism and embarking upon quick economic development because in many of these countries, entrepreneurial spirit is weak, private capital is scarce and standards of management inadequate. In such circumstances, governments opted for a system where the civil service could play a larger catalyst role in promoting industry, trade and commerce. Ironically, in actual practice, bureaucracy in these nations turned out to be synonymous with red tape, inefficiency, nepotism and corruption.  
 
Further, as stated by Edward Shils that owing to the increasing needs of State responsibilities, the governments liberally recruited to the civil service at a dizzying rate without caring for high standard. There is also a view that the political leaders in developing countries are willing to sacrifice values and traditions of a mature civil service in order to placate political ideologies and interests. As a result, the blame for failures of bureaucratic performances due to external reasons is attributed conveniently and generously to bureaucracy.   No wonder bureaucracy does not function with the efficiency and neutrality implied in Max Weber’s ideal.
 
Turning to the conditions in India, the existing bureaucracy owes its beginning to the British rule. Prior to the British rule, the bureaucracy was mainly confined to the requirements of small kingdoms and feudal chiefs. There is evidence of a reasonably efficient bureaucracy during the Maurya rule as is seen from Kautilya’s Arthasastra. Kautilya refers to the existence of bureaucracy with fixed tenure and official accommodation for administrators, decentralization of powers and a large network of intelligence system with enforcement machinery at District levels.  According to Kautilya, the State comprises of eight elements- King, Minister, Country, fort, treasury, army, friend and enemy. And State's prime function was to maintain law and order, ruthlessly punishing wrong doers and protecting subjects.  However, after the Maurya dynasty, there was no centralised administration in large parts of India due to the emergence of small kingdoms over a period. Although some of these rulers were enlightened, cultured and educated in certain parts of India where bureaucracy performed diligently and efficiently (e.g., Baroda, Mysore, Jaipur, Pune and Trivandrum), there were many other regions where feudal culture prevailed, which was not public friendly. Thereafter, with the Moghul rule and subsequent British colonial rule the purity of public administration seems to have had a nose-dive with a feudal bias. 
 
When the East India Company started playing a role in Indian administration, its representatives like Robert Clive and Warren Hastings have themselves admitted to looting the native kings by viciously interfering in their administration. The British Government, after taking over the East India Company, initially brought civil servants from the UK and later realised the need to develop bureaucracy locally.  Since the focus of attention of the British rule was only law and order, bureaucracy was not geared to meet the needs of economic development and social justice. Post-independence, the government reorganized the civil service however borrowing heavily from the British model.  Further, in order to give representation to various classes of citizenry merit was not always the criterion in recruitment and promotion. While this is justifiable for a country aspiring for social equality especially because of the reservations provided for in the Constitution for socially backward persons, the top echelons of service did suffer from the consequences of such policy often twisted for political gains.
 
The government failed to take adequate steps to make good this deficiency by proper periodical theoretical and on-the job training, along with inculcating ethical values through senior officers.  Moreover, the distance between the civil servants and the people especially in the rural areas was dominated by a feudal attitude both by senior officers and the new young entrants to the civil service.  Even though in Western nations the style of public administration changed substantially from the point of view of transparency and accountability, the Indian bureaucracy has been functioning based on archaic and outdated rules and procedures very often based on suspicion and mistrust. It appears that the hangover of the feudal rulers seem to have percolated to the administrators and continued to be prevalent even after independence. With the increased activities of the State due to developmental needs and the consequent ballooning of the civil service by large number of entrants, bureaucracy in India turned out to be a huge white elephant both in terms of increasing expenditure and inadequate output. It is not that the government was not aware of the inadequacy of the bureaucracy. A number of Committees and Commissions were appointed periodically more as a ritual to recommend measures for improving the civil service and yet many of these recommendations went unnoticed by the various governments. 
 
It is also necessary to refer to the Report of the Shah Commission immediately after withdrawal of emergency in 1977 which observed that there were number of civil servants “who were willing to crawl even when they were required to bend” in order to curry favour with political masters.  It is also true that governments from time to time competed in setting up new Committees but the same zeal was not shown in implementing the salient recommendations.  As a result, 83 retired civil servants under the able leadership of TSR Subramanian, former Cabinet Secretary, filed a petition before the Supreme Court for implementing some of the important recommendations of these Committees and
 
Commissions to make public administration fair, transparent and accountable without any political interference.  The Supreme Court delivered its judgement on 31 October, 2013 to the following effect.
 
(i) Fixed tenure of bureaucrats will promote professionalism, efficiency and good governance 
 
(ii) Much of the deterioration in the functioning of bureaucracy is due to political interference
 
(iii) The Centre and state governments to pass an order within three months on giving fixed tenure to civil servants
 
(iv) Top bureaucrats should record in writing the oral instruction of political bosses on files so as not to be hounded later on for a particular decision. Such recording of political instructions by bureaucrats will also help in promoting transparency and will allow general public to access correct information.
 
The impression that bureaucracy per se is only an impediment to economic development and social justice is no doubt a distorted and prejudiced view.  Just as Dr Babasaheb Ambedkar mentioned that if our Constitution failed, it was not because of the deficiency in the Constitution but it was due to persons who were vile. Bureaucracy in any country will be a failure not because of inherent deficiency of bureaucracy but due to misuse of the system and the persons involved in operating the system. One of the important adverse consequences of bureaucracy in modern public administration is its size. An oversized bureaucracy especially in developing countries is the first invitation to public criticism and contempt.  An unfairly recruited, ill trained, politically tainted and rule-bound bureaucracy without scope for any discretion in humane exercise of power can result only in Red Tape.  Very often, these deficiencies in bureaucracy as distinct from it being an organized civil service have brought a bad name to bureaucracy, which is collectively described as Red Tape. A well-oiled bureaucracy where merit, integrity and efficiency are recognized, encouraged and rewarded can be a boon to any political system. 
 
As observed by our former President APJ Abdul Kalam “Good governance is, in the end, carried out by individuals and teams.  The quality of people who provide governance decides the success or failures of schemes.  Good people lead to positive results in governance.”(Governance for Growth in India- Rupa 2014) It would therefore be appropriate to say that bureaucracy like fire is a good tool but a bad master. 
 
The dictionary meaning of Red Carpet is “a special treatment or hospitality”.  Red Carpet in this context is used to mean a liberal approach of the Government to investors so as to incentivise investment resulting in employment and growth. When a Government promises Red Carpet to investors, it is obviously keen to simplify procedures and processes to promote investment.  It would therefore follow if major deficiencies in a functioning bureaucracy such as inefficiency, incompetence, indifference and injustice can be surgically eliminated, such a bureaucracy will automatically usher in Red Carpet for policy-making.  This also leads us to the question whether Red Carpet means total absence of any restriction and/or regulation.  It has to be borne in mind that in most of the developing economies, total absence of restriction or regulation of business entities would normally result in chaotic consequence such as economic inequality, environmental hazards and social conflicts.  It is therefore desirable that in the context of developing countries especially in Asia and Africa, Red Carpet to investors has to go along with reasonable and adequate regulations  so as to avoid adverse socio-economic consequences, whether you call it Red Tape or otherwise.   To put it in a nutshell, an efficient, neutral and responsive bureaucracy is a necessary requirement to provide Red Carpet to investors.
 
India can boast of having everything- human and material resources, a vast market, a reservoir of scientific and technological expertise, substantial entrepreneurial talent and management competence.  In spite of this being so, the country suffers from deficiencies in the quality of governance probably due to historical and attitudinal factors.  While governance means different things to different people and has many dimensions, it can be said without any hesitation that the fruits of freedom and development have really not reached all the poorer sections of society.  Development has been lopsided and consequently societal reforms are far from satisfactory.  Equality before law and equality of status and opportunity cannot be said to have been achieved in full measure. Justice, social, economic and political is also yet to be adequately realised.  
 
It is therefore, necessary that immediate action should be taken to reform public administration with a clear, coherent and comprehensive roadmap. The root cause of poor governance in India lies in the design of the democratic administration and leadership deficiencies of political and administrative masters.  Hence, any attempt to improve the quality of governance calls for a totally new approach to public administration by which the legal framework is suitably modified to make it unambiguous and people friendly, the mind-set of the administrators and the politicians is changed to make it transparent and accountable, and a systemic regulatory mechanism is implemented with minimum discretion to officials. This new approach is also referred by some as New Public Management.
 
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(TS Krishna Murthy is Former Chief Election Commissioner of India, and also a Trustee on the Board of Moneylife Foundation)

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COMMENTS

vswami

2 years ago

"...it was not because of the deficiency in the Constitution but it was due to persons who were vile." That came to happen so soon after, during the life time of its chief architect itself, is the saddest commentary.Many of the tallest leaders e.g. Dr Rajendra Prasad and CR have voiced serious concerns and words of the utmost caution on such turn of events have been blatantly and consistently ignored. As N A Palkhivala lamented remorsefully, it is not the Constitution that failed, but it is THE PEOPLE themselves who have failed the Nation's basic charter. Another matter of that great humanist and law expert's critical concern as used to be stoutly advocated against is that it has been subjected to several drastic and reprehensible amendments,albeit absolutely unwarranted, from time to time, over the last decades, which has gravely marred the very fabric, nay weakened the rich cultural heritage.

Vishal Modi

2 years ago

If RBI has God on their side, we have our revered trustees at Moneylife!

A young optimist,

‘Do one thing for the girl child today’, says Shaheen Mistri

Speaking at International Women’s Day at Moneylife Foundation, Shaheen Mistri from the Teach for India said she is convinced that this country will change, if each and every one of us can play the role we can and do a little bit more

 

Shaheen Mistri of Teach for India was felicitated by Moneylife Foundation on International Women’s Day 2015. In her acceptance speech, she appealed to one and all in the audience to “Do one or any good thing, for the girl child today.” She said that one could buy the girl child something to eat, or one could educate a girl. Anything. Whatever one can do in his or her capacity. She added, “I am convinced that this country will change, if each and every one of us can play the role we can and do a little bit more” for the cause of children’s education.
 
Shaheen Mistri founded the first Akanksha Center in 1989, enrolling fifteen children and persuading college friends to volunteer. It eventually evolved into the Akanksha Foundation, a non-profit education project that provides after-school tutoring to disadvantaged children at more than 60 centres, formal education at six schools in Mumbai and Pune for 4,500 students. 
 
Teach for India was launched in 2008. With sheer conviction and enthusiasm, Shaheen has motivated hundreds of college students and young professionals to join the Teach for India movement and devote two years of their lives to end educational inequity in India. Transforming the US concept to a system as complex and diverse as India was, as one can imagine, a huge challenge. Over the years, Teach for India has recruited 1,700 enthusiasts for its two-year teaching Fellowship. 
 
In her acceptance speech, Shaheen began with thanking all the people who have been part of her journey for 24 years towards the cause of children’s education. She felt that she was overwhelmed with gratitude when she saw the video of her children – the images of the children she has been teaching, whose lives have now changed for the better. She thanked all those in the audience who had done something or other in their own way for children.
 
Highlighting the importance of education, “We can educate every single child in this country when all of us feel connected to that goal,” she said. 
 
We, at Moneylife, hope that Shaheen’s appeal is heard by all our readers and we all do something for the cause of education of children in our country.
 

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COMMENTS

SUNIL KUMAR HEMNANI

2 years ago

A genuine hero in todays world.She has the heart to want to help others in such a personnel manner which is a inspiration to all of us.All the best to her and the organization .

Can India work out a currency swap trade with Russia?
Alrosa, the world’s largest diamond supplier is willing to offer rough diamonds to 12 of India's diamond processing companies. In addition, with a rupee-rouble currency swap arrangement, the import costs for rough diamonds would come down as it would avoid European middlemen
 
Due to its recent involvement in Ukraine in the past few months, Russia has been lying low in the international political scene because of western opposition and condemnation. There has been hardly any important activity in trade between India and Russia, except for the significant fall in the rouble value against the dollar. And the Indo-Russian trade, which has been dominated by the dollar, has hovered around $11 billion.
 
Because of this fall in value, which has given an edge for Indian imports from Russia, and to work out long term trade strategies, both the nations have been working on designing a new mechanism for rupee-rouble trade.
 
It appears that a currency swap arrangement would be an ideal base to start, which could later on be converted into settlements in both currencies, by some sort of mutual agreement. A working group, according to media reports, is already keen to come up with an appropriate solution during the 2015-16 fiscal.
 
It may be remembered that due to the efforts of Brazil, Russia, India, China and South Africa (BRICS), there is already an established mechanism for rouble-yuan trade.  In due course, it is expected that US dollar dominated trade may find a place in the back burner and the currencies of BRICS may begin to play a significant role in their trade, eliminating the need to bring in the US currency.
 
At the moment, Indo-Russian trade currently involved engineering, agricultural commodities, defence equipment, crude oil and gas as the principal items in the trade basket. Chances are that when the Working Group comes up with its final recommendations, these may include other items that would be of mutual benefit.
 
In recent times, some sparkling news has come from the Russian Diamond trade. It may be remembered that while India is the world's largest diamond processing industry, Russia's Alrosa is the largest supplier of rough diamonds. Until recently, these roughs used to be routed through European channels, from where they would be re-routed to India.  Thanks to Alrosa's recent change of policy, in their willingness to offer rough diamonds to 12 of India's diamond processing companies from the eight companies which had this privilege, import costs would come down by avoiding European middlemen.  The diamond transactions are in US dollars and the recent depreciated rouble value has benefited the importers.
 
India imports 150 lakh carats of rough diamonds every year and Alrosa expects to supply around $700 million worth of these for the next three years.  According to Vipul Shah, Chairman of Gem and Jewellery Export Promotion Council, securing these high quality roughs directly would help increase India's exports in this area.
 
After his planned visit to China, it is expected that Prime Minister Narendra Modi would be keen on meeting the Russian leaders, not only to talk to them about the developments and happenings in the BRICS countries, but also to increase the trade value between India and Russia. After having met the Chinese President, it is likely that there will be a similar summit with the Russian President.
 
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)

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