What’s right with Indian bureaucracy

Bhave resigned from the IAS in 1996, to take up what was then seen as a rather low-profile job — to create India’s first share depository, even though he had the option of going there on deputation. “The job needed full-time commitment from me and from the team I was recruiting. How would I get it, if I did not burn my boats myself?” he says. (via Lunch with BS: C B Bhave).

Colonial institutions

The RBI, the IAS and the IFS are three services which have remained colonial and have a complete choke on Indian policy framework. There is something about their structures which is not allowing them to shed their colonialism. The Railways have changed - as have many Governement organizations like Public Sector banks, Air India-Indian Airlines, etc.

And this extract confirms the conclusions made by 2ndlook and posted 1 year ago.

RBI, IAS and IFS

On April 1st, 1934, while the ‘Squeeze India’ campaign was under execution - choreographed by Montagu Norman, Neville Chamberlain, Winston Churchill (some sickness … some racism) Lord Willingdon, India’s banking authority was set up.

The objective of setting up RBI - this colonial money authority, was to devise a policy structure for creating a ‘money famine’ needed by colonial British masters. From that April Fool’s day till now, RBI character has not changed. RBI resorts to creating these money famines every few years - even today. The last RBI ‘money famine’ in 1996 saw inter-corporate interest rates shoot to 40% - and a recession that lasted for 4 years.

The IAS (a successor to the colonial ICS) and the Planning Commission are the other two. The IFS has been pre-occupied with diplomatically engaging the West, fixated with Pakistan, while India’s relations in neighbourhood are at a historic low. But the English speaking, Indian bureaucracy is another matter. Having dragged India to the bottom of global corruption pervasiveness ratings, they cover their owns misdeeds, under the ‘umbrella’ of the neta. This is one colonial institution that India has tried digesting, without succes. IAS (ICS during colonial times) a venal, corrupt cadre, has tied up India into knots - which have taken us decades to even start disentangling.

Compare the successful bureaucracies

Compare that with the brilliant track record of modern Indian regulators and organizations like the SEBI, TRAI. Or even the IPS. India has the lowest prison population in the world - and also the lowest police-to-population ratio.

Till 1990-95 Indian stock trading was largely done done through the open outcry system, physical paper settlements, long settlement periods - and rampant manipulation. Indian stock trading systems was a closed club - and did not attract any serious investors.

Between, 1900-1995, SEBI, NSE, BSE and NSDL designed and managed the transition from the physical platform with the open outcry system to a complete electronic trading platform of the NSE and BSE.

Today, the BSE/NSE trading system is the most advanced in the world - in terms of trade volumes, transaction volumes and automation.

By 2000, India had less than 4 crore phones. Most of the 100 crore (1billion) Indians were unconnected - and disconnected from the world. Governments monopolies, BSNL and MTNL, ruled the roost. By 2000, India had less than 4 crore phones. Most of the 100 crore (1billion) Indians were unconnected - and disconnected from the world. Governments monopolies, BSNL and MTNL, ruled the roost.

By 2001, the BJP led Government came to power. The telecom regulator in a series of bold moves, changed policies - and equations. Tariffs declined by nearly 5000% - from roughly 50 cents to 1 cent per minute. User base ballooned to 20 crores - from 4 crores. In 7 years more telecom users were added than in the previous 70 years. For the first time, the poor in India are beginning to benefit from technology.

It took a non-Congress Government in 1977 to change the face of Indian Railways. Prof.Madhu Dandavate, the Railway Minister in the 1977 Janata Government started the railway renaissance in India. 3rd class railway travel was abolished. Wooden-slat seats were abolished. Cushioned 2nd class seating system was made minimum and standard. Train time tables were re-configured. Reservation systems improved. Railways started getting profitable.

The de-colonization of Indian Railways began effectively in 1977 - 30 years after British departure. Symbolically, that was also the year that the Rail Museum was set up. The progress after that has been remarkable. Today for a US$5, an Indian can travel for a 1000 km.

All this when only 25% of Indians travel by rail at least once a year.

Smear the neta

From colonial times, the Indian neta has been a favorite target of smear campaigns, innuendo and propaganda. Colonial administration in India worked hard to undermine the credibility of the Indian ‘neta’ - for obvious reasons. Colonial bureaucrats (and their successors, the IAS) covered their incompetence and corruption with this lopsided image of the neta. Indians politicians are possibly as corrupt as any others in the world.