India's government is going through a major, if imperfectly understood, period of restructuring. The division of power between the Centre and states is being overhauled. Several policy initiatives have come together to shape this increase in federalism. The Fourteenth Finance Commission, responding to terms of reference that encouraged it to study the division of both Plan and non-Plan spending, awarded an unprecedented increase in their share of tax revenue to the states. Meanwhile, the government began in the Interim Budget of 2014 to disburse control of some centrally-sponsored schemes to the states. Now, the Centre has also passed funding responsibility for several of the schemes onwards. Finally, the Planning Commission, which oversaw some of the states' implementation, has been disbanded. The combination of these factors means that several state governments are unsure of their exact resources and responsibilities - but, hopefully, that will sort itself out before the end of this financial year, if the Centre exerts itself to clear up the confusion.
However, this major devolution has not been accompanied by the rethinking of the Centre's own role. If, for example, responsibility for supervision and funding of major welfare schemes have been passed on to the states, then why is the size of the relevant ministries in New Delhi unchanged? Surely, there should have been redistribution and rationalisation of resources as a consequence of a dramatically changed mission profile. It is worth remembering that Prime Minister Narendra Modi swept into power with the motto "minimum government, maximum governance". There is a chance here to, if not minimise government, then at least to cut it down to a more rational size. There is no reason why vast ministries should continue to exist when their functions have been devolved elsewhere. Indeed, the staff in those ministries, if they have developed some competence in the administration of the schemes that are now housed elsewhere, could in fact be distributed between the state capitals that are desperately short of capacity to match their new powers.
In general, there are questions of administrative reform that this government has not even begun to address. The absence of such reform was a major black mark against the previous United Progressive Alliance government. But the latter did at least start work on a template, which now exists. The National Democratic Alliance has a packed agenda, which it has only just begun to implement. Regardless of the energy of its leaders and the competence of the bureaucrats they choose, that agenda will nevertheless be difficult for an unreformed bureaucracy to conceptualise and implement. Many of the problems that led to the confusions and errors of the UPA's later years emerged, in fact, from this very problem. The higher bureaucracy, in particular, must be opened up to more competitive promotion; posts should no longer be rendered exclusive to particular services or cadres, but left open to an appointments process supervised by someone accountable. This will allow area experts a way into a system hitherto dominated by generalists. Another salutary effect of such openness is that it will also reduce the pressure to preserve the status quo absolutely unchanged even when circumstances change - exactly what is happening at the moment, as the administrative structure in New Delhi is yet to accept that devolution has even happened.
