The document discusses India's system of public administration and governance. It makes three key points:
1) India's system of public administration evolved over millennia as a system of imperial authority and revenue extraction. The modern system established by the British further centralized control.
2) Today, India spends a large portion of its budget (over 10%) on salaries for central government employees. However, many departments are understaffed due to the high costs of wages slowing hiring.
3) There are concerns that India's system favors centralized control and revenue extraction over good governance. High employee costs and understaffing of key departments like health and revenue collection undermine the government's ability to effectively serve the public.
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Is India Failing?
1. Is India FailingIs India Failing??
Mohan Guruswamy
At Manthan
November 23, 2018
2. In common parlance we use State and
Nation inter-changeably, when that
should not be the case.
They are as different a chalk and cheese
.
State and NationState and Nation..
3. What is the State?What is the State?
The most commonly used definition is Max Weber’s, which
describes the state as a compulsory political organization with a
centralized government that maintains a monopoly of the
legitimate use of force within a certain territory. employing a
variety of justifications for their existence (such as divine right, the
theory of the social contract, etc.).
Another commonly accepted definition of the state is the one given
at the Montevideo Convention on Rights and Duties of States in
1933. It provides that "the state as a person (a) a permanent
population; (b) a defined territory; (c) government; and (d)
capacity to enter into relations with the other states."
Governments are the means through which state power is
employed. States are served by a continuous succession of different
governments.
Patel strove to unite India by bringing many states under one.
The most commonly used definition is Max Weber’s, which
describes the state as a compulsory political organization with a
centralized government that maintains a monopoly of the
legitimate use of force within a certain territory. employing a
variety of justifications for their existence (such as divine right, the
theory of the social contract, etc.).
Another commonly accepted definition of the state is the one given
at the Montevideo Convention on Rights and Duties of States in
1933. It provides that "the state as a person (a) a permanent
population; (b) a defined territory; (c) government; and (d)
capacity to enter into relations with the other states."
Governments are the means through which state power is
employed. States are served by a continuous succession of different
governments.
Patel strove to unite India by bringing many states under one.
4. A nation is a stable community of people, formed on the basis of a
common language, territory, economic life, ethnicity, or
psychological make-up manifested in a common culture.
A nation is a spiritual principle. Two things constitute this spiritual
principle. One lies in the past, one in the present. One is the
possession in common of a rich legacy of memories; the other is
present-day consent, the desire to live together, the will to perpetuate
the heritage. A nation is therefore a large-scale solidarity.
Ambedkar defined nation as a people who have a shared perception
of history and united by common aspirations.
Nehru sought to make India a nation of shared aspirations.
A nation is a stable community of people, formed on the basis of a
common language, territory, economic life, ethnicity, or
psychological make-up manifested in a common culture.
A nation is a spiritual principle. Two things constitute this spiritual
principle. One lies in the past, one in the present. One is the
possession in common of a rich legacy of memories; the other is
present-day consent, the desire to live together, the will to perpetuate
the heritage. A nation is therefore a large-scale solidarity.
Ambedkar defined nation as a people who have a shared perception
of history and united by common aspirations.
Nehru sought to make India a nation of shared aspirations.
What is a Nation?What is a Nation?
5. A failed state is a political body that has disintegrated to a point
where basic conditions and responsibilities of a sovereign government
no longer function properly. Likewise, when a nation weakens and its
standard of living declines, it introduces the possibility of total
governmental collapse
The term also means that the state has been rendered ineffective and is
not able to enforce its laws uniformly or provide basic goods and
services to its citizens because of (variously) high crime rates,
insurgency, extreme political corruption, an impenetrable and
ineffective bureaucracy, judicial ineffectiveness, military interference
in politics, and cultural situations in which traditional leaders wield
more power than the state over a certain area.
Other factors of perception may be involved. A derived concept of
"failed cities" has also been launched, based on the notion that while a
state may function in general, polities at the sub-state level may
collapse in terms of infrastructure, economy and social policy. Or when
a State effectively loses its monopoly over power
A failed state is a political body that has disintegrated to a point
where basic conditions and responsibilities of a sovereign government
no longer function properly. Likewise, when a nation weakens and its
standard of living declines, it introduces the possibility of total
governmental collapse
The term also means that the state has been rendered ineffective and is
not able to enforce its laws uniformly or provide basic goods and
services to its citizens because of (variously) high crime rates,
insurgency, extreme political corruption, an impenetrable and
ineffective bureaucracy, judicial ineffectiveness, military interference
in politics, and cultural situations in which traditional leaders wield
more power than the state over a certain area.
Other factors of perception may be involved. A derived concept of
"failed cities" has also been launched, based on the notion that while a
state may function in general, polities at the sub-state level may
collapse in terms of infrastructure, economy and social policy. Or when
a State effectively loses its monopoly over power
What is a Failed State?What is a Failed State?
6. The evolution of India’s extractive systemThe evolution of India’s extractive system..
• India, as one state, has never been larger.
• Its system of public administration evolved over the millennia as a
system of exercising imperial authority, maintaining law and order,
and extracting revenues. In return the state offered security and
stability, leaving the myriad communities to manage their everyday
affairs in the traditional manner.
• Since land was the main source of income for the state, the
maintenance of land ownership records and a continuous stream of
information pertaining to its productivity, produce and prices
became the central aspects of administration.
• Since taxpayers are, irrespective of the age, extremely unwilling to
part with even a part of their earnings, the most appropriate
coercive mechanism to enforce this went hand in hand with revenue
administration.
• India, as one state, has never been larger.
• Its system of public administration evolved over the millennia as a
system of exercising imperial authority, maintaining law and order,
and extracting revenues. In return the state offered security and
stability, leaving the myriad communities to manage their everyday
affairs in the traditional manner.
• Since land was the main source of income for the state, the
maintenance of land ownership records and a continuous stream of
information pertaining to its productivity, produce and prices
became the central aspects of administration.
• Since taxpayers are, irrespective of the age, extremely unwilling to
part with even a part of their earnings, the most appropriate
coercive mechanism to enforce this went hand in hand with revenue
administration.
11/26/18Mohan Guruswamy 6
7. The modern extractive systemThe modern extractive system..
• All this ended with the 1857 war. It marked not just the
end of the Mughals and Maratha power in central India,
but also the end of East India Company rule.
• Imperial and authoritarian government, racial arrogance
coupled with superior education made the ICS a superb
instrument to serve British interests.
• The bedrock of this system were the 400 district officers,
variously called Collectors and District Magistrates or
Deputy Commissioners, who administered the districts,
each with an average size of 4430 square miles
conciliating disputes, dispensing justice and collecting
revenues.
• All this ended with the 1857 war. It marked not just the
end of the Mughals and Maratha power in central India,
but also the end of East India Company rule.
• Imperial and authoritarian government, racial arrogance
coupled with superior education made the ICS a superb
instrument to serve British interests.
• The bedrock of this system were the 400 district officers,
variously called Collectors and District Magistrates or
Deputy Commissioners, who administered the districts,
each with an average size of 4430 square miles
conciliating disputes, dispensing justice and collecting
revenues.
11/26/18Mohan Guruswamy 7
8. The steel frame!The steel frame!
• In addition to the British District Officer, each district in British
India was henceforth to have a British superintendent of police.
• The ICS was divided into separate departments: the executive,
which administered the districts, and collected the land revenues
and taxes; the judicial, which provided judges for the district and
high courts; the political, which provided officers for the diplomatic
corps, residents and agents in the princely states; and the
secretariat, which provided senior officials for both the central and
state governments.
• Below this came the largely Indian and un-covenanted civil servants
of the police, medical and forestry services, and in the agriculture
and engineering departments, all adding up to another 2000 civil
servants.
• This much-vaunted steel frame of India consisted of no more than
4000 British and Indian officers at even the worst of times.
• In addition to the British District Officer, each district in British
India was henceforth to have a British superintendent of police.
• The ICS was divided into separate departments: the executive,
which administered the districts, and collected the land revenues
and taxes; the judicial, which provided judges for the district and
high courts; the political, which provided officers for the diplomatic
corps, residents and agents in the princely states; and the
secretariat, which provided senior officials for both the central and
state governments.
• Below this came the largely Indian and un-covenanted civil servants
of the police, medical and forestry services, and in the agriculture
and engineering departments, all adding up to another 2000 civil
servants.
• This much-vaunted steel frame of India consisted of no more than
4000 British and Indian officers at even the worst of times.
11/26/18Mohan Guruswamy 8
9. 11/26/18Mohan Guruswamy 9
An institutional divergence took place in the early days
with the implications lasting into the present day.
One system evolved to milk the land for the colonial
masters in Europe, while the other evolved due to the
colonization by the settlers and for their benefit.
While economic institutions are critical for determining
whether a country is poor or prosperous, it is politics and
political institutions that determine what economic
institutions a country has.
Standing in sharp contrast to the nations dominated by
extractive political institutions are the nations based on
inclusive political and hence economic institutions.
An institutional divergence took place in the early days
with the implications lasting into the present day.
One system evolved to milk the land for the colonial
masters in Europe, while the other evolved due to the
colonization by the settlers and for their benefit.
While economic institutions are critical for determining
whether a country is poor or prosperous, it is politics and
political institutions that determine what economic
institutions a country has.
Standing in sharp contrast to the nations dominated by
extractive political institutions are the nations based on
inclusive political and hence economic institutions.
The case of the two halves of Nogales.The case of the two halves of Nogales.
10. The systems of Government.The systems of Government.
11/26/18Mohan Guruswamy 10
11. A sum of Rs.1,74,081 crore has been earmarked to
pay the central government's employees this
financial year - about 10.45 per cent of its overall
expenditure.
Combining pay, allowances and travel expenses for
central government and railway employees, the
State spent just under Rs.1,00,000 crore in 2011-
12,
a number that ballooned to Rs.1,13,785 crore in
2012-13 and Rs.1,24,646 crore in 2013-14.
A sum of Rs.1,74,081 crore has been earmarked to
pay the central government's employees this
financial year - about 10.45 per cent of its overall
expenditure.
Combining pay, allowances and travel expenses for
central government and railway employees, the
State spent just under Rs.1,00,000 crore in 2011-
12,
a number that ballooned to Rs.1,13,785 crore in
2012-13 and Rs.1,24,646 crore in 2013-14.
Cost of Central GovernmentCost of Central Government..
11/26/18Mohan Guruswamy 11
15. India has 1,622.8 government servants for every 100,000 residents. In stark
contrast, the U.S. has 7,681.
The Central government, with 3.1 million employees, thus has 257 serving
every 100,000 population, against the U.S. federal government's 840. The
state governments employ 18.5 million employees.
This figure dips further if the 1,394,418 people working for the Railways,
accounting for 44.81 per cent of the entire Central government workforce,
are removed. Information technology and communications services account
for another 7.25 per cent of the Central government's staff.
Then, there are only about 125 central employees serving every 100,000
people.
India has 1,622.8 government servants for every 100,000 residents. In stark
contrast, the U.S. has 7,681.
The Central government, with 3.1 million employees, thus has 257 serving
every 100,000 population, against the U.S. federal government's 840. The
state governments employ 18.5 million employees.
This figure dips further if the 1,394,418 people working for the Railways,
accounting for 44.81 per cent of the entire Central government workforce,
are removed. Information technology and communications services account
for another 7.25 per cent of the Central government's staff.
Then, there are only about 125 central employees serving every 100,000
people.
11/26/18Mohan Guruswamy 15
Do we have too much Government?Do we have too much Government?
16. More Government and less Governance?More Government and less Governance?
11/26/18Mohan Guruswamy 16
17. For the most part, India's relatively backward
States have low numbers of public servants. This
means staff members are not available for the
provision of education, health and social services
needed to address the worst kinds of poverty.
Bihar has just 457.60 per 100,000, Madhya
Pradesh 826.47, Uttar Pradesh has 801.67, Orissa
1,191.97 and Chhattisgarh 1,174.62. This is not to
suggest there is a causal link between poverty and
low levels of public servants: Gujarat has just
826.47 per 100,000 and Punjab 1,263.34.
For the most part, India's relatively backward
States have low numbers of public servants. This
means staff members are not available for the
provision of education, health and social services
needed to address the worst kinds of poverty.
Bihar has just 457.60 per 100,000, Madhya
Pradesh 826.47, Uttar Pradesh has 801.67, Orissa
1,191.97 and Chhattisgarh 1,174.62. This is not to
suggest there is a causal link between poverty and
low levels of public servants: Gujarat has just
826.47 per 100,000 and Punjab 1,263.34.
Less Government and less Governance?Less Government and less Governance?
11/26/18Mohan Guruswamy 17
19. The high cost of wages has also slowed down intake
into government and most departments are hugely
understaffed.
For instance the Revenue collecting departments
are under strength by as much as 45.45%, Health by
27.59%, Railways by 15.15% and that the MHA is
under strength by only 7.2% speaks volumes about
how much has gone wrong in our system.
We have a saying that the main business of
government is to collect taxes so that they may be
spent for the benefit of all the people. Thus we see
the main business of government is now its least
concern.
The high cost of wages has also slowed down intake
into government and most departments are hugely
understaffed.
For instance the Revenue collecting departments
are under strength by as much as 45.45%, Health by
27.59%, Railways by 15.15% and that the MHA is
under strength by only 7.2% speaks volumes about
how much has gone wrong in our system.
We have a saying that the main business of
government is to collect taxes so that they may be
spent for the benefit of all the people. Thus we see
the main business of government is now its least
concern.
High wages slows Governance.High wages slows Governance.
20. Centralization in India: Administrative Expenditure
Central
Govt.
State
Govt.
Local
Govt. Central Govt. share
in Total
Administrative
Expenditure
(%)(in Rs. Crores)
1960 365 525 141 35.00
1965 990 881 339 44.80
1970 1514 1540 630 41.10
1975 3072 2935 993 43.89
1980 4589 6029 1702 37.25
1985 11112 13075 3047 40.80
1990 22815 28653 6410 39.42
1995 44850 55746 12746 39.57
2000 99965 120190 27250 40.41 11/26/18
22. Where does all the money go?Where does all the money go?
23. 11/26/18Mohan Guruswamy 23
How big is theHow big is the “black” economy?“black” economy?
• The previous NIPFP official study commissioned by the
government in 1985 estimated it be equal to about 21% of the GDP
in 1984 or Rs. 36418 crores out of a then GDP of Rs. 173,420
crores.
• In 2016 India’s GDP is estimated to be over $ 2.30 trillion
($1=INR67) or about Rs.156L crores.
•
• In 2015 the Government of India was expecting to collect taxes and
duties amounting to Rs. 13.64 lakh crores.
• This only means it is not collecting additional taxes and duties
amounting of about Rs. 10-12 lakh crores.
• This is huge sum and any government will drown in salivation
thinking about all the good it can do with that money.
• The previous NIPFP official study commissioned by the
government in 1985 estimated it be equal to about 21% of the GDP
in 1984 or Rs. 36418 crores out of a then GDP of Rs. 173,420
crores.
• In 2016 India’s GDP is estimated to be over $ 2.30 trillion
($1=INR67) or about Rs.156L crores.
•
• In 2015 the Government of India was expecting to collect taxes and
duties amounting to Rs. 13.64 lakh crores.
• This only means it is not collecting additional taxes and duties
amounting of about Rs. 10-12 lakh crores.
• This is huge sum and any government will drown in salivation
thinking about all the good it can do with that money.
35. In 1956-57 BS Minhas computed India's poverty rate to be 65% (215
million)
The Suresh Tendulkar Committee calculated the poverty line based on
per capita consumption expenditure per month. For rural areas, it was
Rs 816 per month. For urban areas, it was Rs 1000 per month. Using
this methodology, the population below the poverty line in 2009-2010
was 354 million (29.6%) and in 2011-2012 was 269 million (21.9%).
It made Dr. Manmohan Singh very happy. The rest of the country
laughed.
So the Rangarajan Committee set new poverty threshold for rural areas
at Rs 972 per month. For urban areas, it was Rs 1407 per month. Now
the population below the poverty line in 2009-2010 was 454 million
(38.2%) and in 2011-2012 was 363 million (29.5%).
Based on a 2014 World Bank data, 21.3% of Indians or about 276
million people, lived below $1.25 per day on purchasing power parity.
In 1956-57 BS Minhas computed India's poverty rate to be 65% (215
million)
The Suresh Tendulkar Committee calculated the poverty line based on
per capita consumption expenditure per month. For rural areas, it was
Rs 816 per month. For urban areas, it was Rs 1000 per month. Using
this methodology, the population below the poverty line in 2009-2010
was 354 million (29.6%) and in 2011-2012 was 269 million (21.9%).
It made Dr. Manmohan Singh very happy. The rest of the country
laughed.
So the Rangarajan Committee set new poverty threshold for rural areas
at Rs 972 per month. For urban areas, it was Rs 1407 per month. Now
the population below the poverty line in 2009-2010 was 454 million
(38.2%) and in 2011-2012 was 363 million (29.5%).
Based on a 2014 World Bank data, 21.3% of Indians or about 276
million people, lived below $1.25 per day on purchasing power parity.
The absolute increase of PovertyThe absolute increase of Poverty..
36. The government tries to downplay the numbers by having
a somewhat self serving index (now 22%), other measures
such as the UNDP’s $1.25 a day suggest that almost 37.5%
of Indians live in dire poverty.
At $2 a day as much as 70% of India is below an
internationally determined basic standard of living index.
Others indices are just as damning. India's abysmal track
record at ensuring basic levels of nutrition is the greatest
contributor to its poverty as measured by the new
international Multi-dimensional Poverty Index (MPI).
About 645 million people or 55% of India's population is
poor as measured by this composite indicator made up of
ten markers of education, health and standard of living
achievement levels.
The government tries to downplay the numbers by having
a somewhat self serving index (now 22%), other measures
such as the UNDP’s $1.25 a day suggest that almost 37.5%
of Indians live in dire poverty.
At $2 a day as much as 70% of India is below an
internationally determined basic standard of living index.
Others indices are just as damning. India's abysmal track
record at ensuring basic levels of nutrition is the greatest
contributor to its poverty as measured by the new
international Multi-dimensional Poverty Index (MPI).
About 645 million people or 55% of India's population is
poor as measured by this composite indicator made up of
ten markers of education, health and standard of living
achievement levels.
The incidence of poverty in India.The incidence of poverty in India.
11/26/18
37.
38. The Riot of Democracy.The Riot of Democracy.
In 2016 the overall 66,042 riots and 9970 unlawful
assemblies were reported in India. In 2005 this was 56235.
Agrarian riots jumped 327% from 628 to 2683 in 2015
Bihar (13311) followed by Maharashtra (8,336) and Uttar
Pradesh (6,813).
Kerala tops the crime rate list, with 16.3 riot cases per lakh
people, followed by Bihar (12.9) and Karnataka (10.6).
More than half of the total 1,960 political incidents occurred
in Kerala.
Uttar Pradesh had the maximum number of caste conflicts
(724) followed by Tamil Nadu (426).
In 2016 the overall 66,042 riots and 9970 unlawful
assemblies were reported in India. In 2005 this was 56235.
Agrarian riots jumped 327% from 628 to 2683 in 2015
Bihar (13311) followed by Maharashtra (8,336) and Uttar
Pradesh (6,813).
Kerala tops the crime rate list, with 16.3 riot cases per lakh
people, followed by Bihar (12.9) and Karnataka (10.6).
More than half of the total 1,960 political incidents occurred
in Kerala.
Uttar Pradesh had the maximum number of caste conflicts
(724) followed by Tamil Nadu (426).
46. The Indian subcontinent boasts nearly half the world's hungry people.
Half of all children under five years of age in South Asia are
malnourished, which is more than even sub-Saharan Africa.
More than 65 per cent of the farmland consists of marginal and small
farms less than one hectare in size.
Moreover, because of population growth, the average farm size has
been decreasing. The average size of operational holdings has almost
halved since 1970 to 1.05 ha.
Approximately 92 million households or 490 million people are
dependent on marginal or small farm holding.
This translates into 60 per cent of rural population or 42 per cent of
total population.
The Indian subcontinent boasts nearly half the world's hungry people.
Half of all children under five years of age in South Asia are
malnourished, which is more than even sub-Saharan Africa.
More than 65 per cent of the farmland consists of marginal and small
farms less than one hectare in size.
Moreover, because of population growth, the average farm size has
been decreasing. The average size of operational holdings has almost
halved since 1970 to 1.05 ha.
Approximately 92 million households or 490 million people are
dependent on marginal or small farm holding.
This translates into 60 per cent of rural population or 42 per cent of
total population.
The flipside to the great Indian agriculture story.The flipside to the great Indian agriculture story.
47. Over 58 per cent of the rural households depend on agriculture as
their principal means of livelihood. Census 2011 says there are 118.9
million cultivators across the country or 24.6 per cent of the total
workforce of over 481 million.
In addition there are 144 million persons employed as agricultural
laborers. If we add the number of cultivators and agricultural
laborers, it would be around 263 million or 22 percent of the
population.
As per estimates by the Central Statistics Office (CSO), the share of
agriculture and allied sectors (including agriculture, livestock,
forestry and fishery) was 16.1 per cent of the Gross Value Added
(GVA) during 2014–15 at 2011–12 prices.
This about sums up what ails our Agriculture- its contribution to the
GDP is fast dwindling, now about 13.7 per cent, and it still sustains
almost 60 per cent of the population.
Over 58 per cent of the rural households depend on agriculture as
their principal means of livelihood. Census 2011 says there are 118.9
million cultivators across the country or 24.6 per cent of the total
workforce of over 481 million.
In addition there are 144 million persons employed as agricultural
laborers. If we add the number of cultivators and agricultural
laborers, it would be around 263 million or 22 percent of the
population.
As per estimates by the Central Statistics Office (CSO), the share of
agriculture and allied sectors (including agriculture, livestock,
forestry and fishery) was 16.1 per cent of the Gross Value Added
(GVA) during 2014–15 at 2011–12 prices.
This about sums up what ails our Agriculture- its contribution to the
GDP is fast dwindling, now about 13.7 per cent, and it still sustains
almost 60 per cent of the population.
What are the people doing?What are the people doing?
52. “The interference of the state power in
social relations becomes superfluous in
one sphere after another, and then ceases
of itself.
The government of persons is replaced by
the administration of things and the
direction of the processes of production.
The state is not “abolished,” it withers
away.”
“The interference of the state power in
social relations becomes superfluous in
one sphere after another, and then ceases
of itself.
The government of persons is replaced by
the administration of things and the
direction of the processes of production.
The state is not “abolished,” it withers
away.”
Freidrich Engels in Part 3, Chapter 2,Freidrich Engels in Part 3, Chapter 2,
ofof Anti-DühringAnti-Dühring..
11/26/18Mohan Guruswamy 52
Traditional forms of organization were left alone. Village self governed by a system of hereditary duties and responsibilities. The panchayat. Imperial rulers only provided security in exchange for taxes.
ICS. Followed in 1947 by a multiplicity of services. Supposed to also be a meritocracy.
The nature of the regime determines the outcome.
Withering away of the state is a concept of Marxism, coined by Friedrich Engels, and referring to the idea that, with realization of the ideals of Socialism, the social institution of a state will eventually become obsolete and disappear, as the society will be able to govern itself without the state and its coercive enforcement of the law.