Dismantling the steel frame

BS OPINION

Some states are doing better than others in alleviating poverty. Everybody is in a fiscal mess, which makes it even more difficult to put resources into essential public services, which, in turn are critical for poverty alleviation.

As a consequence, unless things take a dramatic turn, India is unlikely to meet the Millennium Development Goal of halving poverty by 2015.

One issue that the report focuses on is reforming the civil service, critical for improving the delivery of public services, on which the poor depend for both immediate quality of life and the enhancement of their human capital.

The latter will allow them to take advantage of the opportunities created by reforms. One sensible and indeed important recommendation is that the proportion of civil servants between administrative and support personnel and front-line service delivery be drastically altered in favour of the latter.

The report further suggests that the government put in place a far more flexible wage regime for civil servants, and do away with the regular hikes that the Pay Commissions awards and, instead, benchmark wages for different categories of skills to local demand and supply conditions.

Taken to its logical conclusion, this means a shift from the relatively centralised hiring process to one that allows individual government agencies to hire people based on their needs, and to pay what market conditions warrant.

The report goes on to argue that, to the limited extent that information technology has been deployed, its impact has been diluted by the inability of agencies to re-deploy staff and restructure internal processes.

In effect, simply paying out the salaries of redundant or sub-optimally productive employees has become the de facto objective of most government agencies.

This is a compelling argument as well as a roadmap for change. It is consistent with the increasing perception that more localised authorities, given the human and financial resources, will manage infrastructure and public service delivery far better than larger aggregates.

Some data provided in the report suggest that the average wage for many professions in the public sector, relative to the private sector, is even higher than it was in the early 1990s.

While this may not square with popular perception, if it is indeed true, government jobs at all levels must still be attracting reasonable talent. Getting the most out of that resource is what the structural reform must aim to do.

And, if one way of doing it is to raise the profile and status of local agencies, thereby allowing them to attract career-oriented professionals, it must be given a chance.

But then, the World Bank should be willing to put its money where its mouth is. Reform that involves displacing and redeploying many people will cost a lot.

It can also completely gum up the system. Restructuring while maintaining acceptable levels of service delivery is a challenge few will take on without financial and organisational inducements.