Plus&Minus

"A weekly column: Plus&Minus will be published in Hindustan Times, Jaipur Live. This will speak to the ordinary reader on contemporary economic issues in a simple format".

Bureaucracy Hampers Growth
Hindustan Times, Jaipur Live, September 14, 2009                             <<Archive>>

By Pradeep S Mehta

Nandan Nilekani, the newly appointed Chairman of the Unique Identification Authority of India in the rank of a union cabinet minister, refused to put a red beacon light on his white official car, which was given to him recently. He does not need a false sense of secured identity as is the problem with our polity and bureaucracy.

Sometime ago we saw pictures of newly appointed ministers worshipping the red light on their cars just before entering them. The pictures were not obscene but the visuals were. In fact one would not even engage some of these ministers as babus, as such is their calibre. But we hardly have a say on the type of ministers who get appointed. They need not appear in any interview or have a university education or even pass any tests, except getting elected.

Fortunately, our babus (civil servants) at the federal level are appointed through a highly competitive, transparent and rigorous process. In our states, the process may not have the same integrity. Yet, as they pass over a long protected career, many tend to degenerate or the Peter Principle applies i.e. they reach their levels of incompetence much before they have to retire. In fact, one can see how many of our babus often behave in a high handed manner and most of the times excel in ‘ifs and buts’ rather than moving forward with a positive and constructive attitude.

In a survey done in 2007 by the Hong Kong-based Political and Economic Risk Consultancy released in the first week of June this year, India was at the bottom of the pit, as its suffocating bureaucracy was ranked the least efficient by the survey. It said that working with our civil servants was a slow and painful process, and that should come as no surprise to anyone. “They are a power centre in their own right at both national and state levels, and are extremely resistant to reform what affects them or the way they go about their duties”, said the report.

Singapore’s bureaucracy was adjudged as the most efficient among their peers in 12 Asian countries. In terms of the ranking, Hong Kong was at second place followed by Thailand, South Korea, Japan, Malaysia, Taiwan, Vietnam, China, Philippines, Indonesia and India.

Evidence of the Indian malaise can also be seen in the latest Global Competitiveness Report released on 8th September, 2009. India has been placed at the 49th position, while the other 11 Asian countries, as narrated above, shows that Singapore was at 3rd position, Japan at 8th, Hong Kong at 11th, Taiwan at 12th, South Korea at 19th, Malaysia at 24th, China at 29th, and Thailand at 36th. We beat Indonesia (54), Vietnam (75), and Philippines (87), but that should not be of any consolation. This index is prepared on the basis of a matrix which looks at a host of factors, such as institutions, infrastructure, macro economic stability, and market size .

If one looks at the 2008 Corruption Perception Index done by the reputed non-government organisation: Transparency International, which is good indicator of the quality of our institutions, we are at 85 out of 179 countries. This is a pervasive aspect of our politics and bureaucracy. Of the 12 Asian countries listed above, Vietnam (121), Indonesia (126) and Philippines (141) beat us from the bottom, while all the others are much above our ranking. Singapore is at 4, Hong Kong at 12, Japan at 18, South Korea at 40 and Malaysia at 47.

The perception index is debatable because it is based on subjectivity. Alas, there is no method available to do a statistical analysis because illegally earned wealth is never reported in anyone’s income tax return.