Thursday, April 29, 2010


Political compulsions, and its after effects..

Let me start my column this time with an interesting statistic. Post Independence, the number of ministries have almost doubled from 42 to 79! And not just ministries but the same holds true for regulatory bodies as well! The compulsions of coalition government is so pressing that new ministries are doled out every now and then without any rationale, of course with an objective of pleasing the coalition partners!

And that’s been the reason that today, India has a bloated ministerial framework looking after different micro-areas of concern ranging from agriculture to coal to HRD to Oil to energy and so on and so forth. In the horde of making more ministries, various governments have further split the HRD ministry and have created separate ministries for Minority Affairs, Women and Child Development, North-East development etc. Likewise, we have separate and discreet ministries for coal, petroleum, energy and power and non-conventional energy. Though the underlying logic with respect to creating more ministries is bring in better focus and operational efficiencies. In fact, in reality a few ministries have become almost redundant, but then they still exist. For example the Ministry of Steel has done nothing substantial post liberalization of the sector. We have a Ministry of Food Processing, yet just 3 per cent of the fruits and vegetables are processed! Similarly, it is intriguing to have a Ministry of coal as well as a Ministry of Mines. In fact, this illogical explosion in creation of ministries to serve coalition compulsions is quite contrary to other nations wherein most of the developed world has curtailed the number of ministries. For instance, in the US, the Cabinet normally has 15 executive departments while in the UK; there is a council of 19 ministers.

The bigger predicament is the cost that the nation incurs on these ministries. One set of costs are direct in nature which is required to sustain them and the other set of costs are typically incurred with respect to their operational inefficiencies. As per reports, the Indian government incurs a cost of about Rs.2 crores on an MP, for a period of five years!! And not just the cost that a minister typically incurs on the exchequer, a few ministries are very high even on the staff on rolls. A case in point is the Ministry of Agriculture which employs a staggering 10,000 people. Moreover, inefficiencies are so high that a budgetary allocation analysis reveals that most of the time, these ministries are not able to utilise the funds allocated to them by the end of financial year – sometime they are left with as high as two-third of allocated funds. Of late, a similar trend is also visible with respect to regulatory bodies. We have 36 regulatory bodies, employing over a few hundred people directly. Amidst this workforce and organisational structure these regulatory bodies have rarely been able to insert check and balances in their respective sectors barring a few.

In the last six decades, we have created a mesh of administrative framework which has been predominately serving the need of the political class. Even now, it is not difficult to merge similar ministries to make them look more comprehensive and make them accountable. This would not only reduce costs but would also reduce the intra-ministerial conflicts, which is one of the catalysts for inaction at all levels. For operational efficiencies, it’s a simple three tier process – consolidate ministries, restrict the number but empower the regulators, and create more independent auditing bodies like CAG and empower them to scrutinise one and all! But then, all this makes sense, if and only if, governance is the priority!


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