Tuesday, Jan 27, 2015

Good governance 101

modi-m By removing independent directors from PSU boards, the government is signalling its disdain for corporate governance, due process and institutional integrity.
Written by Vikram S Mehta | Posted: September 1, 2014 1:46 am

The prime minister has hoisted his administration’s flag on the masthead of good governance. This is a welcome and timely objective. The question is, what does the prime minister mean by “good”? He campaigned on the slogan of “minimum government, maximum governance”. This would suggest that he equates “good” with “small”. There is merit in this equation. Our government is bloated, inefficient and wasteful. It needs to be slimmed down. But I am sure this does not capture the totality of the PM’s intent. He knows that governance is not about big versus small, maximum or minimum. The financial crisis that roiled the Western world in 2008-09 was at least in part the result of slackened government supervision over the financial community. The crony capitalism that led to the 2G scam and “coalgate” was also partly due to the institutional and power vacuum created by delicensing.

“Good” governance 101 for the 21st century is not about size, scope or ideology. It is about getting things done. It is about narrowing the distance between the governor and the governed. It requires strong institutions, rule of law, technology, information and talent. The executive must be empowered; the judiciary unencumbered and capable of providing timely justice; and Parliament functional for debates and legislation. It requires entrepreneurial decision-making and a systemic receptivity to new ideas and innovative solutions. It requires a government that encourages lateral entry of talent and the forging of partnerships and collaborations with business, academics and civic society. It is a government that is “smart” and biased towards action. These are different requirements from those when the world was not so connected, competitive and challenged by problems like global warming that do not respect national boundaries.

The question is, do the prime minister’s political and party colleagues understand the nature of these requirements? Do they recognise that good governance can only be built on the above pillars? I ask these questions because I am perplexed by the logic of decisions that are reportedly under consideration, or have been taken. I do not understand why, for instance, the government would wish to compel the resignation of the independent directors on the boards of large public sector entities simply because they were appointed by the previous government, or why it would wish to circumscribe the autonomy of the IITs by bringing them under the umbrella of the University Grants Commission (UGC). The only explanation I can think of is that some members of the government have not fully appreciated the need to adapt to these new requirements and are stuck in the groove of siloed and self-serving politics.

I know that several ministers have reshuffled their senior civil servants simply because they did not want to deal with appointees of the previous government. I can understand this decision, although I do not support it. I continued…

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