Many observers believe that most public agencies, especially those responsible for essential services, are inefficiently managed. The reference here is to both the incompetence and lack of incentives to perform in the public agencies responsible for service provision. The argument is not that their employees are ill equipped for the job, although that may be a part of the problem. The main contention is that these are poorly organised entities, with antiquated systems and practices, and leaders and workers who are not motivated to perform well. There are instances where populist policies have also contributed to their poor performance. A classic case is that of the state electricity boards in India. Most of them would have gone bankrupt a long time ago but for public subsidies. Public policies that force them to supply electricity to farmers or other groups free or at low cost have also contributed to their woes.
But this alone cannot explain why most of these boards incur transmission and distribution losses of a third to half of their total revenues on a continuing basis. Substantial portions of these losses are alleged to be on account of the theft of electricity, often in collusion with the employees of the boards. It is sometimes argued that low government salaries are partly to blame for this dysfunctional behaviour. Public agencies often find it difficult to attract and retain personnel whose skills are in great demand. On the other hand, there are many people who seek government jobs because of the prestige and security of tenure attached to them. Qualified applicants often exceed the number of positions to be filled. Therefore lack of competitive salaries is not the main constraint.
Even agencies whose function is to deliver essential public services do not plan and allocate resources systematically. Budgetary processes, both annual and long term, seldom meet current professional standards. Expenditures and outputs in most cases are not monitored effectively. Officials are not held accountable for their performance even when output measures are feasible. Auditing of accounts gets delayed by years. Public agencies and departments responsible for services tend to engage in repetitive activities that can be planned and monitored. Specific officials can be held accountable for these activities and outputs. The users of their services often pay for these services and could have been a source of information on their quality and reliability. Nevertheless, service delivery agencies continue to follow the same systems, practices and norms of conduct commonly found in other departments of government whose activities and outputs cannot be easily planned, measured, and paid for by individuals.
Most organisations improve their performance by reviewing their past experience and getting information on similar activities from other sources. But to do so, they need to assemble such information in a systematic fashion. Those in charge of many public agencies with the exception of certain commercial public enterprises have not been able to institutionalise these practices in their organisations. Their frequent transfers from one job to another and the practice of deputing officers on an ad hoc basis have reduced their long term stake in the organisations to which they are sent. It is not uncommon to find major service agencies and enterprises operating without chief executives in position for extended periods. Government seems to take a long time to make these key appointments. This, despite the fact that dates of retirement or expiry of the terms of officials are always known well in advance. The end result of this appalling inertia is that important public organisations remain for long without leaders.
Many public organisations were set up decades ago, continuing with the same old regulations and norms, and without proper planning and performance monitoring. This is true not only of local bodies such as municipal corporations, but also of the larger and technology intensive entities such as Telecom and Electricity Boards. Independent India has borrowed heavily from British laws, systems, and procedures. But reviewing and updating them to respond to changing needs has not been a priority for our political leaders. Government has been quick to set up ceremonial institutions and functions, but hesitant to institute mechanisms and services that could improve public well being.
Dynamic leaders play a dual role in their organisations. They not only produce and deliver the goods and services for which they are responsible, but also improve their organisations and prepare them to respond to the challenges of the future. The first one is a maintenance role. The second is a strategic role, one that calls for learning from the past, identifying the future needs of customers, realigning the legal and organisational frameworks to respond to these needs, and mobilising the resources to achieve these ends. Public managers in India are, for the most part, at the maintenance end of this spectrum. Their record in strategic planning leaves much to be desired.
Many observers believe that the ills of our public agencies have a lot to do with the pressures being put on them by their political masters. The reference here is to the ministers and elected representatives who order and supervise those who manage these organisations. Instead of confining themselves to the policy-making role, they tend to intervene in operational matters and divert services and resources to meet their personal or sectional priorities rather than the public interest. To survive, many bureaucrats go along with these abuses and weaken their organisations. Loyalty rather than competence seems to get rewarded in this setting. The essential features of dynamic organisations such as good planning and supervision, training and customer focus are neglected in the process. Many public agencies are without training departments, leave alone training strategies. Lack of training and job orientation of the staff, particularly at the lower levels, is a yawning gap in many service agencies. Yet these are precisely the staff who interact most with citizens for service delivery.
It is unfair to paint all service providers in the public sector with the same brush. Undoubtedly there are good performers among them, but they are very few. As noted earlier a major reason why many service providers are unresponsive and not quick in adapting to changing needs is the monopolistic nature of their activities. If an agency is the only provider of a service such as telephones, it is assured of its permanent existence. People have nowhere else to go and they tend to tolerate delays, corrupt practices, and sub-standard services.
A striking example of state monopoly is the insurance services in India. Customer complaints about the non-receipt of renewal notices for premium payment have not provoked the monopoly insurance corporations to rectify this problem. Here is a case where people are ready to pay, but the public agencies involved do not make an effort to improve their system for collecting the dues. Lack of resources or skills is not the problem. What is lacking is systematic external pressure (comparable to competition in the market) that would force the agencies to respond. But customers are hopelessly disorganised and poorly informed to play this role. Under the circumstances, it is only the pressure from political and bureaucratic leaders that can goad the service providers to perform better. And that too is absent.
Successful organisations, whether in the public or private sector, are those that learn from their own and other people's experiences. They are sensitive to the changes in their operating environment and are motivated to respond to the demands of their customers. The Government of India has recently promoted the issue of "citizen charters" by all the major service agencies. If well designed and widely disseminated, these charters can be an aid to citizens in availing themselves of services according to the standards specified therein. But if they are mere public relations exercises and the agencies involved have not been reoriented and geared up to deliver according to the prescribed standards, great damage will be done. It is too early to say whether this reform is being implemented well or whether this is all that is needed to shake up the system.
Series : Why are our Public Services Unsatisfactory?