Pay it forward

The Prime Minister8217;s Independence Day bonanza to our babus has put administrative reform back on the map.

The Prime Minister8217;s Independence Day bonanza to our babus has put administrative reform back on the map. There is little argument that government salaries, particularly at the higher end of the scale, need to be made competitive with the expanding private sector if the government is to retain talent and improve performance. However, as many 8212; including this newspaper 8212; have argued, higher wages do not in themselves create conditions for better performance. In fact, government employees at the lower end of the scale have always earned far higher than their private sector counterparts 8212; a factory worker in a central government owned establishment makes 2.5 times more than in a private sector establishment as do government teachers 8212; and look what that8217;s done for performance! It is thus critical that these new pay packages are accompanied by radical restructuring that induces accountability and incentivises government employees to perform better. The question the country faces now is how this might be achieved.

Much of the debate and public push for reform is focused on the recommendations of the pay commission to introduce performance-related incentives. No doubt, performance incentives are an important mechanism for improving accountability as they create tangible, measurable indicators against which employee performance can be assessed. However, this system fails to address the most fundamental structural flaw with the Indian government system 8212; that it is accountable internally 8212; reporting up to its own hierarchy rather than externally to the public it serves.

Public accountability is crucial to improved governance because it ensures that citizens are made aware of government operations, can track performance and exert pressure for improved outcomes. As is well known, efforts to create internal accountability fail in the absence of external pressures. After all, it is only logical that employees will have a greater incentive to act if they know that people care and are pushing for change. Thus the performance incentive scheme will only achieve desired results if it is complemented by efforts to place information on performance in to the public domain and open this to public scrutiny.

Public reporting on service performance standards is common practice in most countries around the world. In the United States for instance, the White House has developed a program assessment rating tool that is drawn to conduct objective evaluations of all government programs. Departments are given performance ratings across key parameters. In 2007, over 1000 programs, amounting to 98 per cent of the federal budget were assessed and ranked. This information is made publicly available through the internet and other media. Over the years, several government departments have responded to these rankings and worked to improve performance.

There is no reason why similar performance reporting systems cannot be institutionalised in India. The right to information act provides the legal framework through which this can be achieved. Section four of the act mandates that all government departments proactively report on a number of organizational and decision making issues to the public. This clause could be leveraged to push departments to report on key performance benchmarks. For citizens to be able to meaningfully track performance and departments to comply with performance standards, care needs to be taken to ensure that indicators developed are clear, concise and quantifiable. More crucially, innovative mechanisms will need to be developed to ensure that performance standards and information on progress is regularly and widely disseminated across the country.

The effectiveness of such a system will depend on the extent to which compliance can be enforced. At the departmental level this can be achieved by tying budgetary allocations to reporting on performance. At an employee level this could be achieved by introducing indicators that measure citizen satisfaction and responsiveness to consumer needs- such as response rate on right to information applications, response rate on citizen grievances 8212; and incorporating them in to the performance related incentive scheme.

In his maiden speech as prime minister, Manmohan Singh promised the nation that the UPA would pursue radical administrative reform. Yet in choosing to focus on the politically expedient measure of implementing the narrow salary raise provisions of the sixth pay commission he seems to have forgotten his promise. By following up on the other recommendations of the sixth pay commission and going beyond it to push for a broader reform agenda that would strengthen public accountability, the PM now has one last opportunity to make good his promise to the people and ensure lasting impact. Let8217;s hope he keeps it.

Story continues below this ad

The writer is a senior research fellow at the Center for Policy Research