Streamline the Bureaucracy

Recently, Finance Minister P. Chidambaram gave away sops worth Rs 5,300 crore to the export sector, but not before quipping that trimming staff strength was a short-sighted approach.

Rather, exporters need to come to terms with the reality—both on the currency front as well the extent of government aid. The rising rupee reflects greater integration with the global economy.

No one denies the fact that monetary reforms are painful—job losses are estimated at 200,000 this year—and industry must learn to cope with and embrace globalisation. However, the fact remains that transaction costs, arising out of interaction with government agencies, drag down its competitiveness. The problem is an old one—a sloppy and corrupt bureaucracy—and so is the solution: a stiff dose of reforms. So, what makes the situation any different now? A couple of dozen applications by bureaucrats seeking the State’s nod to serve a stint in the private sector.

Does it help? It does, for it offers a trigger for the government to set out transparent norms that allow officials to use their experience in areas other than lobbying. Currently, there is an advisory that makes little sense—it bans an officer from stepping out into a sector where he or she has worked in over the last five years in the government fold. The result: a case-by-case approach that requires political approval.

That the market is meeting the rising aspiration of officers is not entirely hard to explain—the booming infrastructure sector requires talent that is best found in the government pool. The senior officers have also become adventurous—a recent decision to offer assured two-year tenure to additional secretary level officers has dampened the spirits of those below this level, as this grievously injures their career prospects.

So, how does it benefit the government to allow temporary flight of talent? A return ticket for the officer will only enrich the gene pool— over time, this will offer a chance for a cultural cleansing of the system, where efficiency and delivery become the rule and not exception.

As much as officers are allowed to step out into the private sector, the bureaucracy must also gear up to accept talent that excels the peer group.

But it will upset the prevailing caste system, where the elite administrative service takes the top slot. Conviction can be drawn from the initiatives in the British civil service, on which our system is fashioned. The Brits have allowed lateral induction for a while. Compensation is a minor irritant in this initiative. But, the government knows that its wage bill is not inflated by the white-collar employees. It’s the rest of the lot—drivers, secretarial staff. Their package, for most part, betters private sector.

Surely, Chidambaram would not be averse to kicking off this reform initiative, for it will help the economy nudge past the GDP growth target of 9 per cent. After all, in an earlier stint, he presided over the HR functions of the bureaucracy.