Choosing the right policies, programmes and projects is only half of the story. The precise translation of broad policies into concrete laws, rules and regulations, and the effective delivery of programmes and projects depends on the implementation process. This is where governance is critically important.…
…Implementation is integral to nearly everything that the government does. Good policies can be subverted if they are not translated into appropriate laws, rules and regulations. Delivery of every service by central and state governments, whether it is related to health, education, infrastructure, international trade, tax collection, defence, rule of law or dispensation of justice, depends on the process of implementation and quality of personnel along the chain of delivery.
The central government in India has far too many ministries. Based on data gathered by my student Vishnu Narasimhan in early 2018, India had a total of 53 ministries. Out of 19 major countries, only Sri Lanka, with 51 ministries, came close to India. For the next position, Canada and South Africa were tied with 34 ministries each. Twelve out of the 19 countries on which Narasimhan collected data had 25 or fewer ministries. At 13, Germany had the smallest number of ministries followed by France, which had 16.
The large number of ministries is detrimental to governance for at least three reasons. First, ministries judge their importance by how much they get to spend. Therefore, they compete within the government for as large a share in the total expenditure as possible, regardless of the social good they might do with those resources. This competition often leads to inefficient allocation of resources, with some high-return areas.
Second, it slows down the decisionmaking process in the government.
This happens because too many ministries end up having jurisdiction over any given decision that the government must take. Because senior bureaucrats often pursue the narrowly defined interest of their ministries — sometimes even their own interests, such as maximising power and influence within the government, or improving prospects for the next promotion —which often do not coincide with the national interest.… Divergence between what serves the national interest and what actually transpires rises with the number of ministries.
And third, more ministries aid mission creep in administration. The government gets centrally involved in sectors that should be off limits to it. The existence of a large number of sectoral ministries in areas that should be the exclusive preserve of the private sector illustrates this point.
Nothing Mini in Ministries
Unlike most countries, India has ministries for steel, textiles, electronics, information technology, food processing, heavy industries, mines, chemicals and fertilisers. These ministries perpetuate and expand the scope of public sector enterprises in these sectors. They also become focal points for lobbying by narrowly defined special interests.
The existence of ministries that buy from or sell to other ministries sometimes gives rise to gross inefficiencies.
For example, the railway ministry is a buyer of steel and the steel ministry is a seller. Because both activities are a part of the government, it is expected that the railway ministry would buy steel from the steel ministry, even if it is a costly supplier.
There have been feuds between the two ministries, with the steel ministry crying foul at the insistence of the railway ministry to buy steel from private sector suppliers. When public sector steel companies perform poorly, the ministry also manages to convince the government to impose all kinds of duties on imported steel. That makes steel costlier still for the railway ministry, and dents progress in the expansion of railway lines.
Sectoral ministries have also been principal barriers to the closure of many loss-making and sick enterprises.
For instance, textile firms acquired by GoI during the 1980s continue to impose a cost on the taxpayer, even though they have not been engaged in any manufacturing for years. At the same time, valuable land owned by these firms remains unused, despite scarcity of land for new private sector enterprises.
There is a need to phase out many of the ministries and amalgamate others to create more encompassing ones. For instance, replacing the numerous sectoral ministries by a ministry of industry and a ministry of services would make it more difficult for narrow special interests to successfully lobby them. Such ministries would not be able to do favours to individual sectors such as steel, textiles or information technology. Instead, they would have to address broader interests of industry and services as a whole.
Honey, I Shrunk the Grids
Similar amalgamation could also be done to bring several other ministries together to create larger, more encompassing ministries. A single transport ministry could replace the ministries of roads, shipping, civil aviation and railways. An energy ministry could be created by merging coal, power, petroleum and gas, and new and renewable energy.
Numerous social welfare-related ministries such as minority affairs, tribal affairs, women and child development, and social justice and empowerment could also be consolidated into a single ministry. Likewise, the skill ministry could be merged with the human resource development (HRD) ministry.
This is an edited extract from the author’s new book, India Unlimited: Reclaiming the Lost Glory The writer is professor of economics, Columbia University, US