How We Can Enhance India’s State Capacity And Make It More Efficient

The Indian state may be enormous, but it is not known to be strong. This fact becomes apparent whenever it is tasked with executing a policy or delivering a service. We are seeing this right now in fact. The way the demonetisation process is being carried out is a living example of a weak state. It also tells us how even a strong head of government can fail if the state’s capacity is weak.

If people are lining up diligently in ATM queues and not out on streets rioting, it is their faith in Prime Minister Narendra Modi – and not the Indian state – that deserves credit.

Dr V Anantha Nageswaran and Gulzar Natarajan explain in Mint how the failure of state capability manifests itself in India in two ways: implementation deficit and decision-making paralysis.

Nageswaran and Natarajan put the blame for the implementation deficit on rampant corruption, poorly managed public facilities, poor quality of public-service delivery and pervasive failures in the bidding and management of various types of contracts.

For the decision-making paralysis on the other hand, they point out factors such as the actions of judges, anti-corruption investigators and vigilance agencies, auditors and right-to-information administrators.

To bridge the implementation deficit, the duo recommends “reforms to procurements and personnel deployments, extensive use of information technology applications and data analytics, performance-management measures, decentralization of functions to promote accountability and recruitments to bridge acute deficiencies, especially in important regulatory positions”.

For curing the decision-making paralysis, the writers suggest five actions:

1. Proposed amendments pending in Parliament to Section 13(1)(d)(iii) of the Prevention of Corruption Act so that officials can be tried for “criminal misconduct”

2. A review of the Right to Information Act, which has been in place for the last decade, and recommend that communications related to deliberative processes in the government may be exempted from the purview of the act

3. Auditing of policies where the mandate of auditors is limited to examining whether “public money has been spent in accordance with prevailing rules and whether due process has been followed in decision making” (They shouldn’t be allowed to pass judgements on the merits of specific policies.)

4. Investigators and auditors should take care to differentiate between genuine errors and wrong intent. And the investigation should stop once it is established that a decision was reached after following due process.

5. Ushering in reforms to restrain the judicial overreach and striking a fine balance between judicial activism and its excess

Unless we greatly enhance our state capacity and make it highly efficient, we cannot hope to serve our people effectively. And the states that loose the capability to serve their people loses the authority to exist. Let the demonetisation drive be a wake-up call for our policy makers to get to work to build capacity for the Indian state. We need a Chanakyan model in which the state is strong but limited and not a weak, all-pervasive Nehruvian state.