The Telegraph
Since 1st March, 1999
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Few brains, too many hands in babudom

Chennai, Sept. 15: If you thought size was the problem with India’s civil service, you could be mistaken. Rather, its “composition and cost” are to blame, according to the World Bank’s latest report on India.

At the first public presentation of the report, titled India —Sustaining Reform and Reducing Poverty, the lead author, Mark Baird, said India’s civil service was not “particularly overstaffed” when compared to that of other countries.

Baird said the over 13.4-million-strong army of civil servants made up around 1.4 per cent of India’s population which was less than the Asian average of 2.6 in the 90s and 7.7 for OECD (Organisation for Economic Cooperation and Development) countries, a Paris-based think tank.

Of the 13.4 million, 3.4 million were central government employees, six million were with state governments and around four million were either teachers or health workers in government or grant-in-aid institutions.

Baird, who presented the report today at a joint forum here organised with the Madras School of Economics, however pointed out that 93 per cent of India’s civil service comprised Class III and IV employees. He said Class III encompassed not only frontline delivery workers, but also included a large number of clerical staff, while Class IV employees functioned entirely as support workers. This “overabundance” at the lower levels, he stressed, existed alongside “chronic shortages of skilled staff in rural schools and health centres”.

Baird said the implementation of the Fifth Pay Commission’s recommendations, and the compensation paid to civil servants which rose by about 40 per cent between 1996-98, made the fiscal situation in the states even more difficult.

He pointed out that the average wages for nurses and teachers in the public sector doubled that of their private sector counterparts. At the same time, the higher wages at the lower levels did not necessarily reflect in better services to people, he argued. According to him, it would be better for governments to have a “permanent pay commission” making periodic recommendations rather than successive pay commissions coming up with different recommendations.

Baird said the average number of departments with central and state governments were more in India than in the OECD countries. Uttar Pradesh, for instance, had more than 70 departments. With that degree of fragmentation, “it would be difficult to get the best from the civil service”, he contended.

The World Bank expert also expressed concern about the “looming crisis” in the pension sector, which, according to one World Bank estimate, was approaching 25 per cent of India’s gross domestic product.

Baird cited figures to show that higher government spending on education and health has not been matched by qualitative changes in these sectors, while another “fundamental problem” haunting India’s civil service was its failure to use staff productively. “Absentee rates” for teachers and medical service providers were high, particularly in poorer states, he said. In Bihar, for instance, surprise visits to schools indicated that as many as 26 per cent of the teachers were not present. The figure was double for medical practitioners.

Several experts present at the forum reacted in different ways to the World Bank report. While former RBI governor S. Venkitaramanan said civil servants at the upper end were still paid lower than their private-sector counterparts, Tamil Nadu finance secretary . Narayanan said the state was determined “to do something” to correct the fiscal imbalances in employee costs and pensions.

Fiscal expert and founding-chairman of the Madras School of Economics Raja Chelliah said Bihar could easily be converted into a “rice bowl” with sufficient flood-control measures and land reforms. But the money, he added, would have to come from the central government.

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