The article highlights the role bureaucracy can play in the development of the country and suggests the ways to deal with the challenges faced by the bureaucracy.

Background of the PSU’s

• In the 1950s and ’60s, the private sector had neither the capability to raise capital to take the country on the path of industrialisation.
• The state had to take on the role of industrialising the country by establishing PSUs.
• The civil services became the natural choice for establishing and managing these units.
• They delivered substantially, if not fully.
• Even after privatisation, the bureaucracy would be required for the transition of PSUs from the public to the private sector.

Need for structural transformation agenda

• The goal of making India a $5-trillion economy needs a coherent structural transformation agenda and extraordinary implementation capacity.

1) Dealing with crony capitalisms

• Since Independence, the political survival of Indian regimes has required pleasing a powerful land-owning class and a highly concentrated set of industrial capitalists.
• The elites of business houses and land owners share no all-encompassing development agenda.
• Can the present regime find a way out of this conundrum?

2) Implementing the development agenda

• While the agenda is an outcome of political choices, the thinking goes that market mechanisms should be used as far as possible to make economic choices.
• This argument is at the heart of the privatisation of state assets.
• However, markets operate well only when they are supported by other kinds of social networks, which include non-contractual elements like trust.
• Particularly in industrial transformation, there must be an essential complementarity of state structures and market exchange.
• Only a competent bureaucracy can provide this.
• It is for this reason that Max Weber argued that the operation of large-scale capitalist enterprise depended upon the kind of order that only a modern bureaucratic state can provide.

3) Removing the constraints on the bureaucracy

• The political and permanent executives had to work as a team through mutual respect for each other’s roles as defined in the Constitution.
• Every deviation from these ideals has lowered the capacity of the state to deliver.
• This is the result of electoral politics where the essence of the state action is the exchange relationships between the incumbent governments and its supporters.
• All this is achieved by undermining the impartiality of the bureaucracy in implementing rules and giving opinions frankly.
• The power to transfer is weaponised to bring the bureaucrats to heel and it works because authority sits with the position not the person.
• The pressure on officials to behave contrary to the ostensible purpose of the department undermines to a great extent the ability of the state to promote development.
• If privatisation is to work, then the corruption-transfer mechanism and its effects on the bureaucracy has to go.

4) Corporate coherence

• Corporate coherence is the ability of the bureaucracy internally to resist the invisible hands of personal maximisation by undercutting the formal organisational structure through informal networks.
• If this goes too far, then everything becomes open to sale and the state becomes predatory.

Consider the question “What are the issues facing civil services in India? Suggest the ways to deal with these issues.”

Conclusion

We need to fight the increasing tendency to grab public resources and restore to the bureaucracy its autonomy of action as envisaged in the Constitution by de-weaponising transfers.

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