Tuesday, August 12, 2014

Modi Faces Bigger Threat from Wily Civil Servants than Political Opponents

by Prabhu Chawla 

It was a missive, totally un-Modi like, since Narendra Modi has won India and taken full control of BJP through trusted and tested aide Amit Shah. But the citadel that awaits to be stormed is the Delhi-based phalanx of babus, who he is yet to Modify. Last weekend, when the PMO issued a 19-point code of conduct after almost 30 years for India’s steel-framed bureaucracy, it was seen as a warning. Modi is perhaps the first PM who has refrained from mass-scale transfers of senior officials. He surprised his colleagues by deciding to give a six-month extension to Cabinet Secretary Ajit Seth, whose only virtue is his invisibility. Modi has retained all key secretaries in finance, defence, HRD, home and external affairs. He enforced the principle of continuity in the bureaucracy even though some mandarins were UPA loyalists. It is clear that Modi wants to govern through bureaucracy. He has taken over from Manmohan but the Modi government is yet to acquire a shape.

The Indian Civil Services is one of the country’s most powerful institutions. A relic of the Raj, it ensured that politicians would never take any initiative without making babus either partners in power or beneficiaries of the system. The over 20,000-member club of All India Services officers comprising IAS, IFS, IRS, IR&AS, IPS etc. are the unelected rulers of India. They get automatic promotions, perks and salaries and create lucrative post-retirement facilities, which even politicians have failed to do for themselves. When Modi advised bureaucrats to be neutral, efficient and honest, it was like telling a tiger to stop hunting. Insiders say there are enough checks on the civil services in place, without the need for new directives. Even the official code of conduct provides summary dismissal of officials found engaging in political activity. They can be sent to jail if guilty of corruption. In one instance, Yashpal Kapoor, the then private secretary to PM Indira Gandhi, acted as an election agent for her. Mrs Gandhi lost her poll petition because she used a government official for election purposes. Rarely is a senior official transferred due to his or her inability to perform duties correctly, because the steel frame hasn’t allowed any accountability matrix for the bureaucracy. Babus can only be moved out if they fail to do the bidding of their political masters.

Modi, however, added a significant provision to his proclamation, which, if taken to the logical end, would break the civil service-corporate nexus. One directive is that all conflict of interest situations must be avoided and resolved. It is evident the PM has placed a premium on the character of a civil servant. It is, in fact, the conflict of interest—or creation of future interest—which has been the guiding principle for taking official decisions so far. Post-retirement, most civil servants joined the very corporations they used to deal with in their official capacity. A study of retired babus reveals that over 80 per cent of senior officials took up highly paid jobs after superannuation in the same sectors they had been handling, all which benefited by their decisions. One of the most dangerous fallouts of economic reform has been mandarins playing the markets. Either through relatives or on their own, bureaucrats have been making a killing buying and selling scrips. It is the cleverest legal way of making illegal money because babus know in advance which future policies of the government would positively or negatively affect various sectors. There is suspicion in some quarters that it is the politician-babu-corporate nexus that has prevented the government from imposing the capital gains tax so far. India is perhaps the only democracy where promoters and relatives in politics and civil services make crores without paying a paisa as income tax. The power of bureaucracy was evident when two decades ago, it prevented the finance minister from revealing the names of babus who were allotted promoters’ shares by companies at concessional rates. Some officials holding the shares joined the same companies as directors or consultants. Even now, there are officials who have mastered the art of writing pro-private sector documents for PPP and demand royalty for it.

Piercing the steel frame has been a big challenge for all leaders for it’s the apparatchik who makes the apparatus. Modi should remember that the “bureaucracy is a giant mechanism operated by pygmies and cowards”. Therefore, his agenda should have been to replace pygmies with giants. If a party needs a strongman with verve and vision, the bureaucracy needs an equally towering personality to lead it. For past three decades, fearless and innovative officers have lost the battle to sycophants and incompetents. India has seen impressive Cabinet Secretaries and principal secretaries like A N Verma, Brajesh Mishra, B G Deshmukh, Vinod Pandey and Naresh Chandra. They led from the front and were au courant with the mind and mission of their PMs. Since they were first-raters, they also chose first-raters to assist in running the government. Now second-raters have taken over and they look for third-raters so that they do not outshine their bosses.

For a change, the steel frame showed signs of cracks after Modi took over. Initially, they cowered perspiring in their AC rooms for the call from South Block, informing them about their transfers. They were relieved they were not relieved of their jobs. Modi preaches and practises delivery. As Gujarat CM, he successfully rode the bureaucracy tiger. He neither set nor amended any rules of conduct for them. Yet his babus exceeded his expectations.

So, when he walked into 7 RCR, the bureaucracy was expecting its achche din of doing no work about to end. It is used to conjuring up new ideas for the new leader, to generate fresh jobs for themselves and escape scrutiny. Babus understood the real message behind Modi’s slogan ‘Minimum Government, Maximum Governance’ well. It meant he would demolish many departments and secretaries to create a lean, mean establishment. Before Modi could implement his vision, they counselled him to embark on the path of ‘advice first, act later’. The bureaucracy abhors initiative and innovation. It despises any exercise which ensures better results. Modi faces a bigger threat from the wily civil servant than from any political opponent. He must keep it in mind that “powers once acquired are never relinquished easily, just as bureaucracies once created never die or vanish”.

Follow him on Twitter @PrabhuChawla

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