The Telegraph
Monday , June 11 , 2012
Since 1st March, 1999
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- Applying corporate management to social schemes

Indian bureaucracy and academia have a disdain for industry and its experiences. Government administration does not learn from corporate experiences and does not apply some of the lessons when implementing social welfare schemes. This has led to wrong identification of target beneficiaries, wastage and the large-scale theft of government funds.

Since Independence, governments have spent lakhs of crores on schemes to improve the life of and opportunities for the poor and downtrodden. Various social welfare schemes were introduced. They included distribution of food products, fuel, cloth, and so on at well below market prices; providing free or cheap healthcare and education; distributing nutritious supplements to pregnant and lactating mothers; providing doles to the aged and educated unemployed; guaranteeing employment in each household at a minimum wage for a few days in the year, and others.

A common feature of all these well-meant schemes is that they are rolled out at one time to cover all or most of the country. There is no prior testing to identify obstacles, opportunities for misuse and abuse of schemes, or for funds being diverted into private pockets. There is little attempt to introduce a scheme on a limited scale so that methods are found for identifying desired beneficiaries and ensuring they are all reached. There is no testing of alternative ways for economic procurement of whatever is to be given to the target population, and efficient transportation, storage and distribution of these. Limited testing could help understand how government servants skip beneficiaries to divert funds, and enable diversion of benefits and theft. Testing in a limited area could help devise measures to reach the schemes to the maximum number of desired beneficiaries.

It is not surprising that neither government nor non-government efforts have over the years made a serious dent in the deprivation and lack of opportunity for many millions of people. The United Nation’s annual human development reports publish numbers that show India behind most Asian countries on all human development parameters —from per capita income to literacy and particularly female literacy, life expectancy, infant mortality, especially of female children, the delivery of quality education, entry into higher education, delivery of good health services, sanitation, safe drinking water, opportunities for earning livelihoods, and so on.

Companies aim to maximize legitimate profits. Social schemes aim to improve people. How can corporate experience help the government and NGOs to improve delivery of benefits from social welfare schemes?

Companies introduce new products, projects, innovative processes and procedures. Rare is the company that will introduce them in one sweep all over, or in national markets, or applicable to all employees as the case may be. Their first step is to get opinions from a sample of those most likely to be affected. Then a limited test is done to find out what are the hitches and bottlenecks that could make for failure. This learning is then translated into a detailed plan of action or actions required, a schedule of who will be responsible for each part of the work, how they will be monitored and supervised, and the costs. These go into a budget along with evaluation objectives. A monitoring and evaluation system is put in place. It is only after all this that there is a roll out into the country/company as a whole.

Assume your company has developed a new product. You will have market researched the product concept with prospective customers. The feedback would have helped eliminate unwanted features and introduce other features. When the product/project is finally developed you will pick a small and isolated market into which you will introduce it. If you have an attractive alternative approach you will introduce them in different markets. You will lay down parameters in advance for measuring progress and success. You will discount for the extra effort that the test will get from your people in such a limited area, since that effort will not happen when there are many other products to be handled in a national situation. So when you market it nationally you have a good idea as to what to look for, what might go wrong and needs special attention and systems.

There is also a similar area selected as control to see what the differences are as one gets the social schemes. Or there is good baseline data for evaluation.

This corporate approach could be used with a social welfare scheme of the government. Say it is applied to the national rural employment guarantee scheme. You will first check out ground realities and establish what the poor really need — how many days’ work, what wage, what employment is needed for building farm assets, infrastructure, and so on. You will take account of what is most desirable, and affordable for the government, check out the prospective implementing agencies, devise systems to ensure that there is back checking of beneficiaries and the implementers have your independent inspectors on the ground to measure both honest implementation and effect, and then you will introduce it.

But the introduction will, to start with, be in a limited area. You will first collect baseline information on the actual situation in the selected test area —how many need jobs, what should be the wage, what assets have to be built in the village from the employment, what is the present earning of each of the poor households and so on. You will introduce the scheme in this limited area and measure periodically implementation and benefits derived.

After this limited introduction has been done for a while, you will examine what lessons have been learnt and what benefits derived as compared to the baseline data and if possible, compared to the control area. In this process you will have established avenues for theft and leakage, methods to combat them, oversight mechanisms, and so on. You will modify the scheme design and implementation accordingly.

You are now ready to introduce the scheme to a much larger geography. All this initial testing may not altogether avoid mistakes, poor implantation and theft. In any large scheme implemented over vast areas by thousands of government officials and elected representatives, these will happen. But they can be minimized and when found, stopped. It is good that government with the World Bank is adopting this approach in its ambitious National Rural Livelihoods Mission.

It will be argued that corporate experience cannot be applied to government and social welfare. This is nonsense. These corporate techniques are value neutral and can apply to any situation and ideology. They are part of good management.