<b>Rahul Jacob:</b> Reforming our civil service

A friend recently described an all-morning encampment at Punjab National Bank in New Delhi while she tried to help open a bank account for her maid. The problem was that her domestic help’s Aadhaar identity card showed her home to be in a village in Jharkhand. Banks reject the Aadhaar as proof of residence — and thus reject it de facto as a proof of identity — for someone seeking a bank account in a city that is not their hometown. To complete the KYC (Know Your Customer) requirements, the bank manager demanded a rental agreement between my friend and her maid, who occupies servant’s quarters, before she could open an account.

Defeated by this circular illogic, there was nothing to do but opt for a Jan-Dhan account. These, far from being building blocks to a digital economy, are riddled with so many restrictions on deposits and withdrawals that I had just spent that morning discussing how impractical they are with Partha Mukhopadhyay at the Centre for Policy Research. Mukhopadhyay had likened the effect of such KYC requirements for migrant workers to the Chinese hukou, or residency permits. Without a hukou for the state in which they are working in, Chinese migrant labourers are denied government health care services and their children cannot attend free local government schools. In India, public food distribution services are already linked to where one’s hometown is rather than where one lives. Digitalising the economy is an empty boast without first clearing the hurdles of mindless bureaucratic requirements or the lack of connectivity first. The Wall Street Journal recently described how a shopkeeper in rural Uttar Pradesh had to shinny up a tree to be able to connect his point of sale machine to the weak mobile signal in the area.

You do not need to be a genius to have anticipated these problems, but being a specialist in, say, financial inclusion to solve the problem my friend’s maid from Jharkhand encountered or utilising unused spectrum to massively ramp up connectivity would have helped. The trouble is the rigidities of the Indian bureaucracy make lateral entry for specialists very difficult. This is a problem that long precedes the current government, but the lack of specialists is especially glaring because its ambitions are so large. The “flailing state” as a description for India’s governance was used long before Narendra Modi became prime minister and it will likely endure for 70 years longer if we do not bring in outside talent in areas as diverse as financial inclusion and education and health. (The current secretary overseeing drinking water and sanitation has a missionary zeal about the subject and was parachuted in from an assignment outside the country.) One of my most dispiriting experiences ever was interviewing a health secretary of the central government whose knowledge of public health issues was so banal that even I could have done better with a week’s preparation. Immediately after, I met the head of an international non-governmental organisation, who had specialised in public health issues for a decade and took the discussion to another level.

Pronab Sen, the economist who joined the government himself as a lateral entry, observes that “successive governments have reduced the scope for outside advice except through committees”. As any visitor to the corridors of North Block can attest, there are a number of 20-somethings visible, who look like graduate students from Indian and US universities. The stints look good on their CVs, says Sen, but it is less clear what their brief tenures do for the Indian government. “You have to have someone who has the self-confidence to look a government officer in the eye and say, ‘You’re wrong.’”

This is the need of the hour as the government pushes ahead with converting its highfalutin ambitions into action, be they making India a digital economy or the universal basic income. If universal basic income is not to blow the budget, it will have to be pegged at something like Rs 1,000 per month. If it is to take the place of inefficient fuel and food subsidies using the backbone of Aadhaar, why not simply call it a cash transfer instead and target it better? As for becoming a less-cash economy, a nicer euphemism for a country of mostly grindingly poor people than less-developed, it’s worth noting that India has less than 1,100 pay points for cashless transactions per million people compared with 7,189 in Mexico and 16,602 in China, which is also much further along with Alibaba’s equivalent of e-wallets through Alipay (with well over 400 million registered users in China) than India is with Alibaba-owned Paytm.

Without wholesale administrative reform, the musical chairs as senior civil servants hop ministries and assignments leaves little time for specialisation. “Civil servants are often… able to talk about any area. But familiarity is different from mastery,” observes Manish Sabharwal in a recent column. The fact that three-quarters of civil service officers eventually become joint secretaries means there is little leeway to promote on the basis of performance.

Regardless of who is in power, the annual Budget speech, with its plethora of initiatives and this government’s assiduously awesome alliterative agendas, is a triumph of rhetoric over experience. To match ambition with action, we need a radically reformed civil service.