Fixing India Achilles Heel - Failure to Deliver Public Services

India's Achilles Heel remains its inability to deliver public services. Without a solution to this critical weakness India's aspiration to be a global economic power will remain unrealized. Why is this problem so particularly acute in India only? Is it political interference and corruption, or is it poorly designed programs and weak administration or is it a much deeper cultural problem of aversion to collective action, often ascribed to individualistic iconoclastic Hinduism.

In a TV program Quest Means Business the question bluntly raised is "Can India Deliver?" India's inability to deliver was on full global display at the Commonwealth Games- where all the ingredients of poor delivery, political interference and corruption and uncoordinated administration were in the mix. China's ability to deliver at the Olympic Games was a striking contrast to India's shambolic performance.

But India has shown it can deliver on a mega scale when the collective goal is shared. India's elections- called "an undocumented wonder" by the former Chief Election Commissioner S.Y.Quraishi are currently on display as over 800 million voters go to the polls over a 6 week period in a largely error free collective action with a coordinated administration and without political interference. Many countries ask for electoral assistance from India and the Election Commission has set up the Institute for Electoral Democracy to provide this assistance to many countries from around the world.

The Kumbh Mela in which over 100 million devotees are provided food, water, shelter, law and order and sanitary facilities over a 30 day period at one of Hinduism's four major holy sites every three years has been described as the "world's largest peaceful gathering " – dismissing Hinduism’s individualistic ethos as a credible explanation for India’ s lack of collective action on basic public services. The event is administered by an NGO and the government provides key public services for the event year after year with no major incident.

India has also successfully handled several major natural catastrophes in the last twenty years without any international assistance and has in return provided help to neighbors to help them deal with their disasters. India has also tackled several important diseases - polio, HIV, malaria quite successfully when the target was well publicized and clear.

So why can India deliver on these events - elections, melas, disaster response - at world class level - but yet fails to deliver basic health, education, water, electricity, roads to a large part of its population. Almost 72 % of rural households surveyed in 7 empowered action group (EAG)states in 2011 ( not including Uttarkhand) were not aware of India ’ s largest flagship program MGNREGS. Only around 15 % of households reported having a tap in or around their house. Almost 72 % were consuming contaminated water with bacteria (fecal coliform test) but were not even aware as 72% respondents expressed satisfaction with water quality. 88% said they defecate in the open and of those with toilets only 49% were using them. 42% of births took place at home not in a health centre. These are the findings in Paheli (not the Bollywood blockbuster) but the acronym for People’s Assessment of Health, Education and Livelihoods, carried out by Pratham/ASER in partnership with UNDP.

The situation is better in some of the southern states and in Maharashtra where health systems work better and public services are delivered but even so need further improvement. In Kerala despite better public schools the demand for private schools is rising and despite relatively better public health systems the demand for private clinics for maternal and neo-natal care is rising. Moreover in many southern states the improvements in social indicators appear to be bottoming out at level still below the best comparators in the region. In Tamil Nadu, the state with better public services, the chief minister Ms Jayalalitha exhorts her officials to do better by comparing themselves not to other states in India but to the East Asian countries like Singapore and Malaysia.

How can we fix India’s Achilles heel in public service delivery? How can we restore some faith in the public delivery system or find alternate ways to deliver basic services to people?

India spends over Rs 200,000 crores (over $30 billion) every year on over 100 national flagship programs, designed to deliver a range of public services. Of these the10 largest - see attached table - take up almost 90 percent of the resources which means that there are many small programs which soak up scarce administrative capacity and are poorly delivered. These so called national flagship programs are designed in central ministries but are delivered in states and in districts and blocks. The typical district administrator does not even know how many programs are being implemented in his/her assigned district let alone know how well they are delivering. The typical administrator does not last long enough in a district to bring about any improvements even if they were inclined to do so. Every ministry wants to have a national flagship program - for example when the Ministry of Urban Poverty Alleviation was created out of the Ministry of Urban Development - the Rajiv Gandhi Awas Yojana was created out of the Jawahar Lal Nehru Urban Renewal Mission (JNNURM). Some like the Ministry of Rural Development manage several rural flagship programs with very little connection between them. So one obvious solution is to reduce the number of programs to at most 10.

India has a sophisticated articulate administrative service which gives the impression that India has considerable strength in public administration. The reality on the ground is quite different - with a large lower level bureaucracy with low productivity, narrow knowledge base and incentives towards meeting procedures rather than outcomes. Reducing the number of programs and devoting top administrative talent towards their objectives will be a necessary though not sufficient step, to better delivery.

The largest 10 programs in terms of outlay for 2013-14 are

1. Mahatma Gandhi NREGA. Rs 33,000 crore
2. Sarva Shiksha Abhiyan Rs 27,258  crore
3. Pradhan Mantri Gram Sadak Yojana Rs 21,700 crore
4. National Health Mission Rs 21,239 crore
5. ICDS Rs 17,700 crore
6. Indira Awas Yojana Rs 15,184 crore
7. JNN Urban Renewal Mission Rs 14,873 crore
8. Mid Day Meal Program   Rs 13,215 crore
9. National Rural Drinking Water Program Rs 11,000 crore
10. RG Grameen Vidyutikaran Yojana Rs 4,500 crore

One lesson from successful programs is clarity and simplicity in objectives. The election commission wants to deliver an error free election, the Kumbh Mela committee a peaceful gathering. There is a clear goal and a measurable outcome. When administrative capacity is limited "keeping it simple" should be the motto. In contrast the MGNREGA – the largest rural program - has at least seven objectives - guaranteed employment, better livelihood and poverty reduction, providing a social safety net, empowerment of women and SC/ST, improving local administration, deepening democracy and drought management. There is no clear metric on any of these objectives so it's almost impossible to evaluate its success. In a further amendment MGNREGA work is now allowed to meet objectives of Indira Awas Yojana or the Bharat Nirman program which is good for completion of those programs but it does risk diluting the objectives of MGNREGA itself.

The JNNURM – the largest urban program- also has no clear goals but a dispersed set of nice sounding but unclear objectives such as focused attention to infrastructure for integrated development, make efficient and improve capabilities of cities by sector, planned development of identified cities including peri -urban areas, urban corridors and out growths, scale up civic amenities and utilities to provide universal access to the poor and urban renewal for old cities to reduce congestion. It is not surprising that both programs named after two of India's greatest icons struggled to achieve clear results.

The focus should also be on value for money rather than on the volume of expenditures. The Korean ’ s educated their citizens not just by building more schools but also by using the same school facilities in three shifts – including at night. In India spending on education and enrollment has increased substantially – but learning outcomes have deteriorated as shown by the ACER survey. In the EAG states only 28% of schools met the PTR norm for the RTE . Only 32 % of Std III children and just over 50% of Std V children could read a Std I level para.

The accountability of programs must be on outcomes – not on money spent.

The central programs are designed with a very rigid blueprint leaving very little flexibility at implementation. So states as diverse as Nagaland, Kerala and Madhya Pradesh get the same template in program after program. Central ministries claim their programs are well designed but states don't implement them well. Some states – Andhra, Tamil Nadu, Kerala, Maharashtra, Gujarat implement most schemes well but others such as Assam, UP, Rajasthan implement most schemes badly with others in between. The variation is not across programs but across states and within states across districts. In many states so called tribal districts often show the poorest results - either because they are remote, people are not aware of their rights or there is apathy among the government officials towards their needs.

Some states do not even appear to have the capacity to fully utilize the funds allocated under various schemes. Jharkhand ’ s utilization rate is only on average 60% - which means it does not utilize 40% of the allocated funds. Some states focus more on certain programs. Chattisgarh, for example puts heavy emphasis on delivering the PDS but lags in delivery of other schemes. MP also does well in many ways but suffers from poor public service delivery in several aspects. Support to states to build capacity to deliver along with more flexibility is needed to ensure better delivery. There is also typically very little learning across states or even across districts. If a scheme is being implemented well in one state or a district there is no systematic mechanism to transfer these positive experiences across states. A new reforms and solutions commission is proposed to provide systematic transfer of solutions and experiences across states.

Many more advanced states are demanding a greater say in the use of funds - some even demand that all development expenditure should be transferred to the state in a block grant to be spent along state priorities.

Accountability with spending lies with the centre or the state so local administrators and local bodies have little say in implementation. Teachers are chosen and paid by the state so that local officials can do little when teacher absenteeism is rampant. Kerala has shown that providing local Sarpanch some say in teacher performance improves teacher absenteeism hugely. Bihar allowed Sarpanch's to hire low cost para teachers which has improved schooling outcomes. District officials say they dare not change the implementation rules as they are subject to audits which follow the central blueprint. Planning Commission officials claim the newer programs do allow greater flexibility where the focus is on outcomes and states are allowed to present their ideas on achieving them - but the bulk of the funding in flagship programs still follows a top down approach.

The rigid manner in which schemes allocate funds does not help. As the Accountability Initiative of the Center for Policy Research shows when schools need toilets they are assigned money for boundary walls. Moreover the discretion to reallocate funds does not exist. Auditing of funds follows the prescribed rules so any innovation at the local level is discouraged. Even if a local official comes up with a better way to deliver the built in rigidity of the schemes does not allow for any deviation from the centrally prescribed scheme. Funds also are delayed so that by the time they do come there is little time to spend them - so typically they are spent quickly on whatever is easy to complete like repainting the walls or increasing the height of the boundary wall instead of what is badly needed in the school such ads purchase of school supplies , building of toilets etc.

Local taxation now raises only 0.7 percent of total tax intake - probably amongst the lowest in the world. Municipalities and local administration starved of revenue must rely on central funds which have no local accountability. In some districts - a good example is Kullu district in Himachal Pradesh active Zila Parishads know how much funding will come to them and plan their priorities three years in advance - but in most districts they spend what they can get without any clear plans. In the worst case scenario such as in Bastar district in MP local administration does not even know how much money was spent in the district let alone how well it was spent. One solution is to authorize an increase in local taxation powers and shift revenue raising to local levels to increase accountability. But this must go hand in hand with local administrative capacity building.

Schemes implemented by well-known NGOs often work much better than government programs in the same area and with similar objectives. Seva Mandir a dedicated NGO in Udaipur has very successful pre-school, school, water supply and toilet programs in the same area where government ICDS, Sarva Shiksha Abhiyan, toilet programs are a disaster. What distinguishes these is the time good NGOs take time to bring the community on board and take ownership of their projects whereas government programs have no local ownership and are viewed as corrupt top down schemes. Of course not all NGO schemes are genuine and many local officials set up pseudo NGOs to access government and donor funds. But by now locals know who works for them and who is there to siphon off the funds. The IBIN ( backbone) programme to bring civil society into helping design and deliver public services which was started recently is an idea worth strengthening and expanding.

Many components of government programs can be outsourced to private, commercial contractors on a competitive basis. If properly designed and monitored these would reduce the cost of delivery and improve performance. E-governance with on line tracking should be introduced wherever possible to increase transparency and reduce corruption. The entire machinery of government should be shifted out of the existing arcane colonial era files to electronic tracking and approvals, with time-bound approvals.

More innovative delivery mechanisms are also needed to deliver subsidies and social assistance. India still retains old style product based subsidies which have large inclusion and exclusion errors and huge leakages. Moreover, they distort the market in known and unforeseen ways and are not portable. The food subsidy delivery system called the public distribution system PDS costs Rs 4 to deliver Rs 1 of food subsidy, 80 % of the fuel subsidy does not go to the poor and the distorted fertilizer subsidy has diminishing returns and is doing long term damage to India's land productivity. India must move to people based subsidies through mechanisms like conditional cash transfers CCTs (called direct benefit transfer in India ) - which have been successfully used all over the world - with clearer targeting and Adhar based delivery. India could save around 2 percent of GDP with better designed subsidy schemes. With migration and urbanization India is likely to have a mobile population of upto 300 million over the next decade and needs to have a more portable social safety net. Only a people based not a product based subsidy system can provide such a safety net.

A symbol of old style top down planning but with very little focus on implementation remains the planning commission. The planning commission as currently setup was designed for a different era, when the government was the main driver of growth. The planning commission is the mechanism by which the centre directs state development plans and controls the flow of plan expenditure to the states. But with changing times the PC has not changed its functioning and is now seen an obstacle to progress by government departments and states rather than a thought leader and driver of development. States are increasingly keen to have their own approach to development with less interference from the PC. They vie with each other in delivering development and exhibit their approaches as the Gujarat model , the Kerala model or the Andhra model and even the Bihar model. This competition for development should be encouraged and good solutions in different parts of the country should be evaluated and emulated.

Government departments do not feel the PC has the cutting edge knowledge of new ideas. Yet interdepartmental themes such as climate change, health systems, connectivity, air and water quality, skills development need new and coordinated approaches. With a more market based economy India does not need old soviet style planning but more radar like indicative planning, integrated systems reforms and a development solutions exchange.

The distinction between plan and non-plan expenditures as recommended by the Rangarajan committee can be done away with and the entire allocation to states can be done by the Finance Commission and the Finance Ministry. The distinction between capital and recurrent expenditure ( not plan and non plan expenditure) remains an important one. For capital allocations across departments a planning cell could be retained in the finance ministry to help allocate resources, establish norms for M&E allocations.

The new organization to replace the planning commission should then focus on three functions a) a solution exchange for what is working in different aspects of development in different states and districts and in other parts of the world b) a generator of ideas for integrated systems reform and c) long range radar system for new and emerging challenges. Such a new organization could be called a Reform and Solutions Commission. A new organization with such features is needed for the 21 st century India. The old Planning Commission is a hindrance to better delivery.

Lack of coordination is another major problem in better service delivery – the railways and ports are not coordinated so delivery is delayed, coal is not supplied to power plants so power generation capacity is underutilized. India did not have a unified transport ministry – it had a separate ministry for railways, roads, aviation and shipping. India does not have a unified ministry for energy – it had a separate ministry for power, petroleum, coal and renewable energy. It has surprisingly two ministry ’ s for urban issues each fighting for turf.

India needs to find ways to consolidate ministry ’ s or create more institutionalized coordination mechanisms – other than the ad-hoc EGOM ’ s which did not work well. Japan has a constitutional restriction of 25 ministry ’ s. If a new ministry has to be added one has to be dropped. Indonesia- which has a Presidential system has created the concept of a coordinating minister – typically of the rank of a deputy prime minister – who coordinate economic affairs, infrastructure, agriculture and rural development etc. Such institutionalized mechanisms are needed instead of ad-hoc attempts at coordination.

Some of the delivery issues would best be handled by creating commercialized entities to handle transport, mining and infrastructure activities, so that their dealings with each other are handled through commercial contracts – adjudicated through regulators rather than as bureaucratic transactions subject to inordinate delays.

Conclusion

Better service delivery is not rocket science – we need to shift the focus away from how much we spend to what produces better outcomes and results. We need to shift from grand schemes to evidence based policies and programs and to incentives that drive accountability and learning. We need to devolve decisions to local levels and tailor programs to local conditions. If we get this right we can deliver public services to improve people ’ s lives and make India a great economic power.

The new government of Prime Minister Modi has already moved in some of these areas. The power, coal and renewable energy ministry's have been consolidated. The shipping and roads ministry have been merged and should coordinate closely with railways. The two urban ministry's have been merged. The minister of state for commerce also serves as minister of state for finance. These are positive moves which should help improve coordination. The EGOM's have been abolished so that the sanctity of cabinet decision making is maintained.

Many other ideas are under consideration and we hope in one form or another will be taken up so that India's Achilles Heel is strengthened and it's inability to deliver public services no longer holds back its aspiration to be a great economic power. Many countries come to India to learn from its elections. We hope to see a day when they will come to learn from its education, health and water and sanitation systems. Then India will have truly arrived on the global stage.

The Author is Director General, Independent Evaluation with rank of Minister of State, Government of India. Views here are personal.