Tag: Covid 19

Need for innovative solutions

In the backdrop of insufficient piecemeal governance reform attempts of the past, the pandemic offers an opportune time for a more holistic framework

I am a great admirer of the writings of Gurcharan Das and rate his work “The difficulty of being good” as outstanding. He is a liberal thinker who believes that a business environment should be free of unnecessary government controls and regulations. I enjoyed reading his piece in the Times of India a day before, where he spoke about the imperative of the Central Government honouring its commitment of minimum government and maximum governance. He emphasized the need for structural reforms in the bureaucratic system to enable it to respond adequately to extraordinary situations like the current pandemic. I fully agree with him that instead of piecemeal dabbling like the half-baked lateral entry into the government, or privatization of some public sector corporations, the government must focus on systemic reforms.

Unfortunately, whenever there is a discussion on governance reforms, people tend to focus almost entirely on the civil services, particularly IAS. It almost appears as if the root cause of the system not delivering is the existence of a service like the IAS. My first take on this is that IAS is only a small part of the government machinery. Several Central services, state services, secretarial services and even technical services form the bulk of the government servants. If we feel that the government is not responding promptly to the governance challenges of the 21st century, including the response to the pandemic, the problem is not with any one service but the entire government machinery and its working culture. The second wave has indeed found the bureaucracy wanting in its response. Things like availability of oxygen, ICU beds and provisioning of medicines are issues that could have been handled much better. The entire government, including the political executive and civil servants, along with doctors and experts could not assess the severity of the second wave and even dismantled many of the arrangements made during the first wave, leading to an unmitigated disaster with people dying not because of the disease but due to lacking life-saving facilities. Even the care, concern and compassion expected in the crisis were absent. It was almost as if the government system abdicated and left the people to fend for themselves. It became a question of survival of the fittest. There is no doubt that many people rose to the occasion and volunteered to provide help to the needy. This has been captured very well in the recent edition of India Today which featured courageous and committed efforts of good samaritans. I must also point out that the doctors and the health workers did a tremendous job and many of them attained martyrdom in the process. There are also encouraging stories of IAS officers like the Mumbai Municipal Commissioner, Iqbal Singh Chahal who have distinguished themselves by leading from the front.

Major structural reforms always come as a response to a crisis. For years, we have been talking about the unsatisfactory level of public service delivery and the need for administrative reforms. The recommendations of two administrative reforms commissions have been implemented to improve the working of the government but that hasn’t sufficed. Some of the bolder recommendations were not favoured by the government which did not find those practical or implementable. The pandemic has allowed us to go for major governance reforms to enable a responsive, prompt, effective as well as a result-oriented bureaucracy.

In the recent past, lateral entry has been tried as a reform measure but it seems to be based on a wrong diagnosis of the problem; also, its implementation hasn’t been result-oriented. For instance, at the Joint Secretary level, ten people were selected of which only nine have joined who seemingly lack special domain expertise. A lateral entry system should identify specific areas and domains for which people having exemplary expertise could be selected, with clearly laid out expectations from them. Lateral entry would yield results if it creates an environment where genuine experts of great calibre join the government. Whenever people talk of lateral entry, they mention Manmohan Singh, Montek Singh Ahluwalia, Vijay Kelkar or Raghuram Rajan. However, the present system is not bringing in any such luminaries into the system. I feel the current half-hearted effort would create more problems than providing solutions. Similarly, there was a suggestion to make civil servants focus on training by allotting them a service after adding marks obtained in the training academy. This would obviously lead to vitiating the merit-based system of selection and bring in personal bias which would erode the credibility of the civil services. These are two illustrations to show how governance reforms should not be attempted.

The basic reform, in my opinion, must relate to evolving a fair, transparent and scientific performance evaluation system that would enable only the best civil servants to reach the top. The Government of India has implemented a 360-degree evaluation system whereby only about 30 per cent of the officers in a particular IAS batch reach the level of Secretary to the Government of India. The promotion is no longer automatic and seniority-based but is a reflection of merit and integrity. However, most officers still find the system opaque; it definitely needs improvement. Performance is always related to reward and punishment and having the right person at the right place. The biggest government reform would be to have such a performance evaluation system in place which would incentivize those officers who deliver results and constantly acquire new knowledge. From the level of the joint secretary, domain specialization should be encouraged in broad areas like the social sector, infrastructure and finance. A civil servant has to ensure that the government does not work in silos, therefore, a very narrow specialization would run counter to the need for good governance. A multidisciplinary approach is required at the top level even in the private sector.

The most important thing is to change the working system in a manner that officers are accountable for giving results and the system should encourage prompt decision-making and visionary thinking. The civil servant should be able to work and take decisions fearlessly without the sword of CAG, CBI, CVC and the courts hanging over his head. The system should enable the entire bureaucracy to function professionally. Political intervention is necessary in a democracy but political interference, which has eaten away the vitals of bureaucracy like a termite, has to be removed. The government should not, and cannot, function as a private sector organization but there is no reason why it cannot have a work culture of efficiency and effectiveness. A complete re-engineering of government processes, procedures, rules, regulations and systems is required to enable result-oriented decision-making and leadership. Innovative models of governance, including the setting up of autonomous and accountable executing agencies, are required. Various programmes would need to be implemented in a mission mode. There is a need for a broader framework for structural reforms in governance. Piecemeal interventions and incremental reforms would not help. A major re-imagination of governance is required.

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All-encompassing plan

India needs to eliminate the mismatch between its growth and employment by formulating data-backed comprehensive policy best-suited to its economic situation and demographic dividend

Recovering from the Covid shock the Indian economy is showing great resilience and we are now witnessing a V-Shaped recovery. The GDP growth for the fourth quarter is likely to be positive and for the entire year 2020-21, it should be in the region of -7 per cent. The following year promises a growth rate of anywhere ranging from 10-12 per cent at current prices but even then the economy would just be back to the pre-covid level by March’22. The biggest issue that has been thrown up has been that of unemployment. Large scale unemployment was a result of the covid crisis. Even before that, unemployment was becoming an important issue that needed a policy framework to tackle. India is reaping the demographic dividend with the median age being 28.4 years and also about 8-10 million new entrants are entering the labour force every year. The magnitude of the problem is clear. The CMIE (Centre for Monitoring Indian Economy) comes out with data for unemployment and their data shows that the unemployment rate went as high as 23.5 per cent during the first two months of lockdown. The position is much better today with the February data shows that the overall unemployment rate in India is 6.9 per cent (7.74 per cent in urban and 6.55 per cent in rural). One of the main objectives of the twelfth five-year plan (2012-17) was the generation of decent and productive employment in the non-agriculture sector. The employment policy in India has so far laid emphasis on self-employment whereas a much more comprehensive analysis of the problem and a policy prescription is required.

It is high time India follows the footsteps of several other countries which have a comprehensive national employment policy. The policy emphasis in various countries is different according to their economic situation. East and South-East Asian countries like Singapore, Indonesia or Philippines have policies geared towards global integration as a core element of growth and employment. African countries have focused on employment friendly anti-poverty strategies while some of the Arab countries have moved from active labour market policies which were limited to young college graduates to more comprehensive policies addressing other employment challenges faced by the region. Many countries in Eastern and Central Europe have also formulated comprehensive national employment policies which include steps like improving employment services, promoting skills training and other ways to develop human capital. Latin American countries like Brazil and Argentina have also focused on the informal economy. India has to understand the needs of its own population and the economy and evolve a national economic policy that will answer the challenges the countries faces.

If we analyze the employment scenario in India it throws up certain interesting highlights. The first is that even as GDP growth rates have risen the relationship between growth and employment generation has become weaker over time. In the 1970s and 1980s when GDP growth was around 3-4 per cent, employment growth was around 2 per cent per annum. However, after the 1991 reforms and particularly in the 2000s the GDP growth has accelerated to 7 per cent but employment growth has slowed down to 1 per cent per annum. Thus it is clear that growth by itself will not lead to higher employment generation but specific policy interventions would be required. The philosophy behind the current budget of the Union Government is that growth has to be focused on and all other things will follow. However, looking at the trend over the last 40 years, this may not be true and there is an urgent need for a National Employment Policy. Another point to note is that most of the manufacturing sector is becoming increasingly capital intensive meaning that more manufacturing may not necessarily lead to more employment. Further, it is disturbing to note that though labour productivity in organized manufacturing has increased by six times over the past three decades the wages have increased by only 1.5 times. The result is that the labour share of income in organized manufacturing has fallen down to about 10 per cent. It may also be further pointed out that the labour participation rate of women has declined in recent years and is currently at a low level of 27 per cent.

We have in India policies both at the central and state level which relate to industries, agriculture, skill development, tourism and education and each of them is connected to the issue of unemployment. Industrial policies talked about generating more investment and there are incentives for this. However, it is important to link the incentives in an industrial policy more to the generation of employment than merely the figure of money invested. Similarly, policies relating to an increase in productivity of agriculture aim to free labour from the agriculture sector to move to the non-agriculture sector. Major policy intervention in rural areas has been the MGNREGA policy (Mahatma Gandhi National Rural Employment Guarantee Assurance) which seeks to employ all job seekers. This scheme was a great asset in the time of Covid. Policies related to skill development and tourism create demand for such persons. Above all the education policy is important for determining the type of human capital that is produced. The education policy should come out with young boys and girls who are employable and suitably equipped with domain knowledge as well as soft skills.

Even though all the above-mentioned policies correlate with the generation of employment, there is no doubt that we need a national economic policy that would have a vision in consonance with the overall growth objectives of the nation and be responsive to all the challenges and opportunities. We must be clear that a national employment policy is much more than merely a job creation programme because it has to take into account the whole range of social and economic issues and consider every aspect of the economy. It has to bring together all these schemes, policies, programmes and institutions which influence the demand and supply of labour and the functioning of the labour markets. Decent work has to be provided in which international labour standards, social protection and workers fundamental rights are given as much weightage as is given to job creation. The national employment policy will have to tackle the very important issue of huge informal sector employment, jobless growth, the threat of automation and the changing nature of new jobs along with the gender parity issue.

We must evolve a national employment policy that will bring about a synergy between various sectors of the economy and focus on education and skill development. It should also endeavour to enhance the labour participation rate of women. The crucial problem of disguised unemployment in our agriculture sector needs urgent attention to make productive use of each person as also the issue of underemployment which is persistent in the Indian economy and is highlighted by the fact that even PhD students apply for a class four level job in government.

The most important thing for any sustained policy intervention for employment requires data about the number and category of people looking for jobs and matching them with the demand for jobs in various sectors of the economy. The policy will have to lay adequate emphasis on developing an effective labour market information system that will identify skill shortages, training needs and available employment opportunities. We need to evolve employment portals rather than have the existing moribund employment exchanges at the national and state level.

If India has to become truly Atma Nirbhar and if we have to make the 21st century an Indian one then it is imperative that we focus on the crucial problem of unemployment and evolve a national employment strategy that attends to all aspects of supply and demand of labour across all sectors.

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Hard knocks

Though India nears the proverbial ‘light at the end of the tunnel’, the pandemic has, nevertheless, imparted several lessons on the need to overhaul public health infrastructure

The biggest learning of COVID-19 for India has been the imperative of focusing on public health. Policymakers, experts, doctors and intellectuals need to sit down and urgently apply their mind on responding to this challenge. There is no doubt that public health infrastructure in India needs a lot of improvement and the worse is that there are huge regional variations with the southern states being in a far better position as compared to states like UP and Bihar. This is borne out by the differences in the figures of infant mortality, maternal mortality and total fertility rate where the southern states can compare with the best in the world while the backward ones are in the same quadrant as Sub-Saharan Africa. The nation is indebted to the sagacity of its political leadership, acumen of the administrative machinery, the brilliance of the scientists and the dedication and courage of the doctors and paramedic staff along with the remarkable patience and fortitude shown by the common citizen, which has helped it handle the seemingly insurmountable challenge of Corona reasonably well. Looking at the huge population that we have, our figures for the total number of people infected, recovery rate and crude fatality rate compare favourably with the best in the world. Of course, a young population and a naturally high level of immunity have helped matters but you cannot take away the credit from all those involved in fighting the Corona menace.

At the moment, it appears as if the threat of Corona is slowly declining and with two vaccines having been approved, it is possible that sometime towards the middle of 2021 we should have come out of this crisis. Mercifully, the economy is also rebounding faster than anticipated largely due to the innovative spirit and courage of entrepreneurs and farmers. We can heave a sigh of relief but there is no room for complacency to set in. One does not know when another pandemic might invade our lives and we have to be ready to respond to it keeping in mind the learnings of the battle against Corona. The Corona crisis has also led to a situation where because of the focus of our limited resources on the pandemic the other health care problems suffered including immunization of children and battle against diseases like TB. It is now clearly written on the wall that India has to accord the highest priority to public health in the years to come so that we can handle any emergent situation and bring about a vast improvement in the quality of life of its people. The first intervention can start with the current Union budget likely to come within a month which should focus on the health care sectors and come out with innovative schemes and above all significantly raise the percentage of expenditure on public health in general and as a percentage of GDP. In the year 2020-21, the budget allocation for health as a percentage of total expenditure was 5.4 per cent (65,001 crore) which was only 1.6 per cent of GDP. This figure has been more or less constant for the last five years since 2016-17 though the overall amount has gone up from 37,061 crore in 2016-17 to 65001 cr in 2020-21. India has been targeting an expenditure of 2.5 per cent of GDP on public health by 2025 but this was a vision when things were moving normally. The Corona pandemic has been a huge shock necessitating a total re-think and reconsideration of priorities. Even the 15th Finance Commission has highlighted this issue and called for an increased allocation on public health. We should now aim to reach this figure of 2.5 per cent at least two years in advance of our original target and this intent has to be brought out in the budget priorities for 2021-22. It is significant to point out that the figures for public health expenditure are 17 per cent of GDP in the USA, 11.7 per cent in Germany, 11.2 per cent in France & 11.1 per cent in Japan and I read somewhere that even Bhutan and Ethiopia spend more as a percentage of GDP than India. The per capita public health expenditure for India in 2020-21 is only Rs 1,944.

The areas for concern are quite clear. We have to significantly increase the number of beds per 1000 people from the current figure of 0.6 and fully equip and modernize as well as operationalise our 1.5 lac primary health centers (PHC) and 29,144 health and wellness centers. For this purpose, significant investment is required to upgrade the infrastructure of the PHCs. Above all, we need many more doctors as our current ratio is 1 doctor for 1,457 people against the WHO norm of 1:1000. This means that many more medical colleges will have to be opened and in particular, the scheme of converting district hospitals into medical colleges has to be given a major fillip. We need to add many more seats to existing medical colleges by upgrading their infrastructures. A peculiar feature of India is that the private sector share in health care is far more than the public sector amounting to 78 per cent in urban areas and 71 per cent in rural areas. There is a definite need for increasing the share of public health spending and there is also a huge need for regulating the private sector to enable it to cater to the needs of the weaker sections of the society. Innovation and regulatory reform hold the key.

The out of pocket expenditure for citizens in India is 62.4 per cent against the governments spend of 30 per cent. Compare this with the UK where the corresponding figures are 9.7 per cent and 83.1 per cent; for the US the figures are 11 per cent and 48.1 per cent, for Brazil 25.5 per cent, 46 per cent and for China 32 per cent and 55.8 per cent. Almost 52 per cent of this out of this pocket expenditure goes for medicines, 10 per cent for diagnostic labs and 22 per cent on private hospitals. This is quite an anomaly for a developing nation where almost 15 per cent of people are still living in absolute poverty. The situation has to be remedied on an emergent basis. Otherwise, low-income people would be pushed further into poverty by spending more on health. A strange phenomenon I have noticed is that even people with low levels of income do not avail of the free facilities being provided by government hospitals as they have no faith in them and spend huge amounts in consulting private doctors or even quacks.

Increasing public expenditure is only one part of the solution. My experience of more than three decades of governance has clearly shown that the absorption capacity of these funds is an area where huge improvement is required. Significantly, it is the less developed states where the capacity to spend the funds is constrained by issues relating to governance and poor management leading to poor quality of public health delivery and huge leakages of funds. One can just analyse the working of the National Health Mission to prove this point where a lot of funds were year marked for the states but the quality of spending and even the amount of money spent varied from state to state. There is, in my opinion, a great need to bring about governance reforms in the health sectors which would require a lot of training and orientation in issues related to public health as well as the qualities of leadership, planning, coordination and execution amongst the officers involved in the process. Robust institutional mechanisms for service delivery have to evolve and be nurtured; and technology has to be used in a big way to prevent corruption as well as to increase the range of quality health care facilities. Unless we look after our human capital by making them healthy we cannot expect them to participate equitably in the process of democratic governance as well as economic growth. A healthy nation is a happy nation and that is the goal that we must aspire for.

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